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Politicians Turn Attention to WorldCom Scandal; Pledge of Allegiance Ruled Unconstitutional

Aired June 26, 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, where many politicians' eyes are popping over the WorldCom accounting scandal. I will ask House Minority Leader Dick Gephardt if the Democrats plan to pounce.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: I'm John King with the president at the G-8 summit. Mr. Bush calls WorldCom's conduct egregious. It's a tough line influence not only by concerns about the economy but concerns about the November elections.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: I'm Bob Franken in Washington with details of a stunning federal appeals court ruling that the Pledge of Allegiance is unconstitutional.

WOODRUFF: Also ahead, we'll talk to the star of a hot new video in political circles right here on INSIDE POLITICS.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: All the action is going to be popping.

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

WOODRUFF: Thank you for joining us.

We begin with that federal appeals court ruling declaring unconstitutional what many Americans see as an act of patriotism, and a hallowed tradition in our schools, the reciting of the Pledge of Allegiance. All because of two words that were added half a century ago.

Our national correspondent, Bob Franken, is here now with more on the ruling. Bob, where did this come from?

FRANKEN: Well, the two words, of course, Judy, are "under God," added by Congress in 1954 as a way of contrasting with what they called then godless communism. An avowed atheist, Michael Newdow, filed suit because he has a child in school, claiming that because of the coercive effects of that, it violated the First Amendment guarantee of a separation of church and state.

And today, the 9th Circuit Court of Appeals in San Francisco, by a 2-1 margin, went along with that. The judge, Alfred Goodwin, writing that it is "in the context of the pledge, the statement that the United States is a nation under God is an endorsement of religion. It is a profession of a religious belief. Mainly, a belief in monotheism."

Of course, there was a descent in this 2-1 decision. And that came from Judge Ferdinand Fernandez, who said, "we will soon find ourselves prohibited from using our album of patriotic songs in many public settings, 'God Bless America' and the 'America the Beautiful' will be gone for sure. And while use of the first and second stanzas of 'The Star-Spangled Banner' will still be permissible, we will be precluded from straying into the third. And currency beware."

This is almost certain to be appealed as already a political uproar, but legally, there would next be a request to go to the full 9th Circuit Court of Appeals which, by the way, is the most liberal in the country by most estimations and by an objective standard, the one that is more often than not overturned by the Supreme Court. Ultimately, Judy, this could find its way to the Supreme Court.

WOODRUFF: Well, Bob, we are hearing from our correspondent Kate Snow at the Capitol that Republican staffers are already urging Republican members to blame, in their words, liberal Democrats like Tom Daschle for not filling judicial appointments and saying this is what happens when you leave these judicial voids.

FRANKEN: Well, one of the problems is that is that Judge Goodwin, who authored the majority opinion here, was appointed by Richard Nixon in 1971, shades of Earl Warren. The dissenting opinion was by Judge Fernandez, who was appointed by Bush one, President George H.W. Bush in 1989.

WOODRUFF: All right. Bob Franken, thanks very much.

Well, Republicans, as you can imagine, are gearing to fight today's ruling on the pledge. The National Republican Campaign Committee, as I just mentioned, is set to send a memo to every Republican member of Congress and every congressional candidate. And it will urge them to contact their local school boards and to tell them to, quote, "nullify the decision by allowing the pledge to be recited as is in classrooms." The memo will go on to urge Republicans, quote, as I just said, "to blame liberal Tom Daschle for holding up judicial nominees."

Now to the WorldCom accounting scandal. It is hitting Americans like a punch in the face. From workers with dwindling 401(k)s and Enron fatigue to the president of the United States. The disclosure that the telecommunications giant falsely reported almost $4 billion in profits is enough alone to generate outrage, and to prompt a slew of investigations.

Adding to the fallout, WorldCom's plan to layoff 17,000 workers by this Friday. And the fact that the company had the same accounting firm as Enron, Arthur Andersen. And perhaps it's no wonder then that Mr. Bush joined the chorus of WorldCom critics, while attending the G- 8 summit in Canada. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today, the revelations that WorldCom has misaccounted $3.4 billion is outrageous. We will fully investigate, and hold people accountable for misleading not only shareholders, but employees as well.

There is a need for renewed corporate responsibility in America. Those entrusted with shareholders' money, must, must drive for the highest of high standards.

(END VIDEO CLIP)

WOODRUFF: Our senior White House correspondent, John King, is with the president in Canada. John, fairly unusual for the president to be so specific. Why did he speak out that way?

KING: Because the White House views this, Judy, as a rising policy debate, but also a rising political debate. Remember, a few weeks back when we received access, thanks to the Democrats, for that presentation Karl Rove was making to rally Republicans this year. He said in that there was no evidence that the Democratic attacks on Enron as yet are having any impact on the president or on the Republican Party. No evidence of any impact yet, but evidence just by the fact that it was mentioned in that presentation that Republicans are worried about that.

If you look at the polling, this president is very popular, but his single biggest weakness remains to be the people view him as too close to big business. What the Republicans are worried about in the mid-term elections is that the Democrats who will say, it is the Republicans who de-regulated the energy industry, de-regulated the telephone industry. It is the Republicans who are the friends of big business. So, this president stepping right out of the box.

He was not even asked a question about WorldCom today. He raised it himself first and he promised a very thorough federal investigation and he said Americans have every right to be worried about the stock market because he said some companies, and he said relatively few, but some companies are lying about their finances.

WOODRUFF: John, when the president says there is going to be an investigation, what exactly does he mean by that?

KING: Well, the Securities and Exchange Commission already is having an investigation, and Democrats criticize that agency. But the president says the SEC will have a very thorough investigation of WorldCom specifically, and the broader issue of whether accounting rules need to be changed.

And the president suggesting today that the Justice Department will look into this as well. We don't have any details yet as to exactly how that would proceed, but you have a president right out of the box again, trying to reassure the American people that his government, his administration, will look into this aggressively. It is a reflection of the concerns the White House from a legitimate economic standpoint. The president, any president's political standing is tied to the fate of the economy and the fate of the economy. Mr. Bush trying to make the case that he believes overall, the economy is still quite strong. But he does acknowledge that this fear of investors, that they are not getting truthful accounting from their companies, is effecting how people invest. And that is affecting the stock market. And you see it in the numbers today.

WOODRUFF: All right. John King, traveling with the president in Canada. Thanks.

Now we go to Capitol Hill, where some Democrats already, as John mentioned, may be trying to turn the WorldCom accounting scandal into a political weapon against Republicans.

Here's our congressional correspondent Kate Snow.

(BEGIN VIDEOTAPE)

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT (voice-over): By late morning after an early morning conference call with their staffs, both Democratic leaders were on-message.

Seizing on the news of another corporate scandal, Senate Majority Leader Tom Daschle:

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: We are dismayed and we are angered with the news of WorldCom today. We don't know yet whether laws were broken, but there must be aggressive enforcement of the law. And if the laws were broken, somebody needs to go to jail.

This is reprehensible.

SNOW: Daschle blames Securities and Exchange Commission Chairman Harvey Pitt, an appointee of President Bush, saying he's too cozy with the industry he regulates.

Minority Leader Dick Gephardt's attack was even more direct -- aimed squarely at Republicans.

REP. RICHARD GEPHARDT (R-MO), MINORITY LEADER: In 1995 when the Republican leadership came in, both Newt Gingrich and Tom DeLay made statements that the main goal of their effort was to try to deregulate corporate America.

Well, they did a lot of that in the last years. And now we see some of the results of that.

SNOW: On the heels of the Enron collapse, Andersen's guilty verdict, even Martha Stewart accused of insider trading, the news about WorldCom is, in way, a Democrat's dream.

One Democratic operative called it a "lucky break." WorldCom, Democrats's say, is another metaphor for corporate greed run amok. (END VIDEOTAPE)

SNOW: And Democrats have been trying to hammer that message for several weeks now. Well before this latest WorldCom scandal they've been blaming Republicans for creating what they call, the environment that allows corporate greed to flourish, and hoping that that message will convey through the 2002 midterm election.

But Republicans say, that's nothing more than a scare tactic. One aide said to us today, if Democrats think it's going to work to send a populist message this time around, it will probably work as well as it did for Al Gore. Another aide saying, every time it rains the Republicans get blamed for it.

Like Enron, Republicans say, this is nothing more than a corporate scandal. This is not political.

We do have a statement out from the chairman of the House Energy and Commerce Committee, Representative Billy Tauzin. He says that he'll look into this; he'll have his investigators look into it.

He says: "In many respects this case appears to be eerily similar to the accounting hocus pocus that occurred at Enron. Once again, it seems as if the accounting rules were manipulated to hide debt and inflate income, violating all accepted accounting standards and, perhaps, violating federal law as well.

"This was not a simple bookkeeping mistake, he says clearly it was an orchestrated effort to mislead investors and regulators, and I am determined to get to the bottom of it."

Judy, we should note that Tom DeLay was mentioned by Mr. Gephardt in that piece, we are trying to get in touch with Mr. DeLay and get his comments. A spokesman, or an aide to DeLay says that he feels very strongly this is nothing more than criminal activity that needs to be looked at. But again, not a political scandal -- Judy.

WOODRUFF: All right, Kate Snow, reporting for the Capitol. Thanks Kate.

And up next I will ask House Democratic Leader Dick Gephardt about the WorldCom scandal and the political maneuvering surrounding it.

Plus: We'll ask Gephardt why he's singing a new tune, along with some other big political names.

We'll have much more on that appeals court ruling on the Pledge of Allegiance. Our Candy Crowley and Bill Schneider with look at the politics of the pledge.

And later I will talk to a woman who is fighting a very personal battle on the Hill to help put the attackers of fellow rape victims behind bars.

(COMMERCIAL BREAK) WOODRUFF: Well, while congressional leaders and others pitch for a new promotion to urge Americans to visit Washington over the Fourth of July holiday, thousands of protective masks are being placed around Capitol Hill. Capitol police have bought 25,000 masks. They'll be used, they say, to protect members of Congress, staff members and tourists in case of a chemical or biological attack.

With us now for "On the Record" discussion, House Minority Leader Dick Gephardt.

Mr. Gephardt, conflicting signals there: telling people to visit the nation's capital, but at the same time these protective masks are being given out?

GEPHARDT: Well, it's an odd coincidence; but it's really kind of where we are, I think, in the country, and have been since September the 11th.

And that is, we are encouraging citizens to go back to normal life, to travel, to visit, to engage in normal activities; but at the same time we've got to be careful and make sure we try to prevent further terrorist attacks, and equip our citizens to deal with problems like that.

WOODRUFF: But you're equipping members of Congress, the staff and any tourists. What about the rest of Washington, New York City and other places that may be vulnerable?

GEPHARDT: Well, ultimately that may be necessary, and that may be done. As you know, the capital is a particular possible target of terrorism. We had anthrax in the Capitol a few months ago.

And so they're trying to -- the sergeant-at-arms, the people that do security here, the Capitol police -- are trying to have in place the equipment they think that may be needed in the capital.

If it's seen as needed in other places, then police departments, fire departments and other agencies will probably be trying to get this equipment in people's hands.

WOODRUFF: And you're comfortable with the capital being first?

GEPHARDT: Well it, again, is a special target. We know that. It already has been, of terrorism. And we worry about being able to withstand further attacks.

WOODRUFF: The WorldCom scandal came out -- news came out last night, but before that, you and other Democrats were saying, this is a problem for Republicans. As you know, Republicans are saying it's a corporate scandal, it's not a political scandal.

How can you say that is political?

GEPHARDT: Well Judy, this is not just a political issue. It is an issue for the whole country. I have businesspeople all the time come up to me and say, please do something to solve this problem because we're all getting smeared with it.

The well-run corporations which, thankfully, are the great majority, are getting hurt along with the one that misbehaved.

This is a case, in my view, where the facts are the facts. In 1995, Tom DeLay, Newt Gingrich, after they won the House, said their main goal was to deregulate corporate America. And then they did a lot of things, or in some cases didn't do things, which has, in large part, contributed to the environment in which a lot of these things were done in misbehavior by corporate executives, and now we're reaping the bitter harvest of those actions.

And we need, as a Congress, to now go back and put in place reasonable rules so that corporate behavior is what it always should have been, and we get the trust of the people back.

WOODRUFF: But in terms of corporate political contributions -- and we've got some numbers here we can show our viewers -- WorldCom gave pretty equally to Democrats and Republicans running for office. We know that Enron gave more to Republicans, but Global Crossing, another company in big trouble, gave more to Democrats.

So aren't, really, both parties complicit, in some ways, in terms of being beholden to these companies?

GEPHARDT: Well Judy, again, the facts are the facts. And we're going to get these facts in front of people, and they can make up their own mind.

Yes, both parties got corporate contributions and so-called nonfederal money. But the question is: What happened after they got the contributions? Who took the actions to try to help these special interests, and who tried to do the right thing?

And I think if you look at the record, you will see again and again that the majority of Democrats were trying to do the right things. We had a head of the SEC under Bill Clinton, Arthur Levitt who, with Democrats, tried to get a lot of the right things done, and we couldn't get them done.

WOODRUFF: I want to ask you about this ruling by a federal appeals court in California this afternoon that the Pledge of Allegiance is unconstitutional because of the two words, "under God." They're saying, basically, that it is unconstitutional because it violates the language requiring a separation of church and state.

Do you agree with this ruling?

GEPHARDT: I don't agree with the ruling. I haven't read it, but from what I've heard about it, it doesn't make good sense to me.

I don't see how having those words in the Pledge of Allegiance, or those words above the speaker's chair in the House, "In God We Trust" is an establishment of religion, or violates the separation of church and state. I think the decision is poorly thought-out, and that's why we have other courts to look at decisions like that. I hope it gets changed.

WOODRUFF: We know that Republican campaign staff are already sending a memo out to Republicans on the Hill to, among other things, blame, quote, "liberal Tom Daschle" for holding up judicial nominees, and saying, this is what happens when you leave these judicial seats empty.

GEPHARDT: Well, I think that's really a stretch, and over the line.

As I understand it, one of the judges who wrote the decision was appointed by President Nixon. So I think that's really a specious argument.

As far as I know, Tom Daschle has gotten more of the judges that George Bush has appointed at this point in his presidency than the Republicans put through at this point in Bill Clinton's presidency.

WOODRUFF: Well, we are -- those are some of the things you know we're going to be looking at in the next day or so.

GEPHARDT: Absolutely.

WOODRUFF: Representative Dick Gephardt, House minority leader, thanks very much. We appreciate you being with us.

GEPHARDT: Thank you.

WOODRUFF: Thanks.

Just ahead: The Carlsons, Margaret and Tucker, will take a stand on the Pledge of Allegiance decision.

Plus: There is word from the Middle East that Yasser Arafat has made a decision on whether he will seek reelection as Palestinian Authority president. The story ahead in our "NewsCycle."

(COMMERCIAL BREAK)

WOODRUFF: Checking our INSIDE POLITICS "NewsCycle," a federal appeals court in San Francisco has ruled the Pledge of Allegiance is an unconstitutional endorsement of religion, and cannot be recited in the nation's public schools. The ruling could end up before the U.S. Supreme Court. A Justice Department lawyer says the agency is seeking further review of the matter.

A firestorm in the Western United States keeps getting bigger. The wildfire near Show Low, Arizona now has topped 400,000 acres. That's bigger than the city of Los Angeles.

Two days after President Bush's speech on the Middle East, Palestinian officials announced today that presidential and legislative elections will be held in January. An aide to Yasser Arafat says the Palestinian Authority president will run again. In his speech, Mr. Bush called for new Palestinian leadership.

A disclosure by the secretary-biggest long distance company in the U.S. rattled stock markets around the world. WorldCom, now spiralling toward the brink of bankruptcy, says it has erroneously reported almost $4 billion worth of profits. Its auditor during the period was Arthur Andersen. Federal officials promise a full investigation. President Bush lashed out at WorldCom, calling the revelation "outrageous."

With us now, Margaret Carlson of "TIME" magazine, Tucker Carlson of CNN's "CROSSFIRE."

Tucker, the appeals court in California ruling that the Pledge of Allegiance is unconstitutional. Is this a ruling that's going to stand?

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Well I, for one, feel safer, don't you Judy? I mean, knowing that the dastardly Pledge of Allegiance will be taken out of schools along, I hope, with U.S. currency and the Constitution and the Declaration of Independence and all other documents that contain the word "God."

No, of course not. It's going to -- I think it's going to be overruled, and I think it ought to be. It's insane, as are most attempts to regulate speech in public forums. They're wrong.

WOODRUFF: Margaret, wrong?

MARGARET CARLSON, "TIME" MAGAZINE: I think it may be overturned, actually, because there wasn't even agreement on this three-judge panel.

However, there is the fact that "under God" being said by school children is coercive of those children who don't believe in God. And children are completely unable to be quiet. Children are not able to distinguish themselves from their peers in this way.

The other thing is that there are a lot of other gods other than God believed in people here. And we should be very sensitive, in fact, to the fact that there are lots of religions in this country going to public school.

WOODRUFF: Tucker?

T. CARLSON: And yet, I guess the question is not whether it makes some people uncomfortable. Doubtless, it does. And that's understandable.

But whether it constitutes establishment, or an attempt to establish a religion, as prohibited by the Constitution -- and of course it doesn't.

Saying the word "God" is not a federal effort to make a state religion, so it doesn't strike me that it can be unconstitutional.

M. CARLSON: Well... WOODRUFF: The WorldCom -- good ahead Margaret.

M. CARLSON: I was just going to say, as far as separation of church and state, however, we need to be sensitive now that we have countries who hate us because they because in a certain religion and hate ours, I think should give us pause when you have theocracies and you see what the Taliban and al Qaeda can do.

T. CARLSON: But I think that's the key difference, though, is that those are theocracies, the countries that hate us, and ours is not.

WOODRUFF: Quickly to the WorldCom scandal. The revelation last night they've overstated earnings by something like $4 billion.

Tucker, we just heard Dick Gephardt saying, you know, it's not a political thing, it's the facts. It's the fact that Republicans have been arguing for deregulation, and that's led to some of these abuses.

T. CARLSON: Well, I mean, the attempt -- maybe this will be as effective as Enron was. The Democrats desperate to find a campaign issue. I think they'll probably do pretty well without it. I doubt this going to work. The fact is that Clinton made it allowable for Democrats to embrace big business. That's one of the reasons he was politically a successful president. But it makes it much harder to argue that the Republican Party is still, in this 1970 sense, the party of big business. The world has changed.

WOODRUFF: Margaret, quick word?

M. CARLSON: Than Republicans -- all polls show that -- that President Bush is more identified with business than -- than Democrats. And you know, the -- there's going to be a cultural shift away from lionizing businesspeople. I mean, they might as well go into banks with ski masks and guns on. These are not victimless crimes, they're stealing money from shareholders and other people. And I hope there's some way to punish them.

WOODRUFF: We're going to leave it there. Margaret Carlson, Tucker Carlson -- we'd never punish the two of you. Thanks very much.

T. CARLSON: Well, thank you, Judy!.

M. CARLSON: Thanks, Judy.

(LAUGHTER)

WOODRUFF: Sorry for that terrible play.

(LAUGHTER)

M. CARLSON: It's all right.

WOODRUFF: Thank you both.

T. CARLSON: See you. WOODRUFF: Thank you both. We'll see you.

The man who sued to have the Pledge of Allegiance declared unconstitutional -- his name is Michael Newdow. He joins Connie Chung tonight at 8:00 Eastern right here on CNN.

Up next: Our Candy Crowley will focus on the political battle already underway over today's court ruling rejecting the Pledge of Allegiance. Also ahead: He could be the long-lost cousin of Austin Powers. We'll talk to the man who's getting laughs in political circles by playing "Boston Powers."

(COMMERCIAL BREAK)

WOODRUFF: These are some pictures we're going to show you from Calgary and Canada, where President Bush is attending the G-8 summit, leaders of the industrial nations. We're told the president has a statement that he wants to make about that appeals court ruling out in California, and the statement will be read by his press secretary, Ari Fleischer. But we don't see Ari Fleischer yet. We'll go back there as soon as he appears.

In the meantime, on that ruling today out in California that the Pledge of Allegiance is unconstitutional -- well, echoing the developing Republican line, House Speaker Dennis Hastert says the decision underscores the need for the Senate to confirm some, quote, "common sense jurists."

Our political correspondent, Candy Crowley, is here with more on the early political maneuvering. Candy, there are political waves already coming out of this decision.

CANDY CROWLEY, CNN POLITICAL CORRESPONDENT: Absolutely. And there actually, on the issue of judges, have been waves for this past, say, six months. This is a great issue for the Republican base. Who do you want to have come out in November? The Republican base. So ever since May, when there was sort of the one-year anniversary of, you know, a number of nominees from the president, the Republicans have been pounding this home because this is very good. Nothing gets the base conservatives more upset than judgeships, not just how they rule, but who gets to put them in.

So this is a good thing, you know, because here's the reminder. Gee, Tom Daschle's in charge. If a Republican were in charge, perhaps we could fill up some of these seats with more conservative judges who wouldn't make this kind of ruling.

WOODRUFF: So even though it was a Nixon appointed who wrote the opinion and was one of the two in the majority...

CROWLEY: It's beside the...

WOODRUFF: You're saying that doesn't matter.

CROWLEY: Yeah, it's beside the point, really.

WOODRUFF: Doesn't matter.

CROWLEY: I mean, it doesn't matter who did it. The idea is, look, judgeships are the coin of the realm, really, when -- for power. And that's something that the conservatives really want to have changed after eight years of Democratic rule. So it's sort of beside the point, and it's something that the president has been talking about all along. And all along, people have said to me, "You know what gets our people out? It's the judgeships."

WOODRUFF: Will -- will Democrats be to inoculate themselves at all by disagreeing with the decision? We had Dick Gephardt on the show a few minutes ago saying he disagrees with it, thinks...

CROWLEY: I think that you're going to see...

WOODRUFF: ... it's specious reasoning.

CROWLEY: ... all of them disagree. I mean, I think anybody who's going to run for president -- I think Joe Lieberman -- I think all of them are going to say this is silly. But again, it's -- all it does is, just the mere fact that there is a judge out there who would do this that's liberal, he's from San Francisco -- it just -- it fits the mold. It just reminds those conservatives that people -- they need to come out and vote and give them back the Senate and keep the House, reminds them about how important these judgeships are and how they really need this Republican majority Senate.

WOODRUFF: All right. Candy Crowley, our chief political correspondent, thank you. Appreciate it.

We are going to change gears now and have a few laughs, maybe. Yesterday, we told you about a video spoof shown to members of the Democratic National Committee in hopes of convincing them to hold their 2004 convention in Boston. Well, here's another clip of the city tour that hosted by "Boston Powers."

(BEGIN VIDEO CLIP)

TIM DALTON, "BOSTON POWERS": Hello. Welcome to Boston (UNINTELLIGIBLE) Do you fancy a cab? We'll whisk you downtown to all the finest restaurants and hotels in our city in no time at all, baby. Trust me, it's right where all the action is. Yeah!

Welcome to the Fleet Center, people, where every seat in the house is a great seat, including this one. Hello, hello! (UNINTELLIGIBLE) get your podium passes for all access. Boston Powers, baby. So what do you say we get down to the arena floor, where all the action's going to be popping!

(END VIDEO CLIP)

WOODRUFF: We liked the spoof so much, we wanted to meet the man who portrayed "Boston Powers," so we asked him to join us, and he's with us now. His name is Tim Dalton. He is in Boston.

All right, Tim Dalton, how did you get Austin Powers down so perfectly?

DALTON: Oh, well, you know, it wasn't too hard at all. First of all, let me start by saying you look smashing, Judith!

(LAUGHTER)

DALTON: But just, you know, saw the movie a couple times, decided who better to be for Halloween than Austin Powers? So I said, you know, maybe here's my long-lost twin, and I'm Boston Powers, baby.

WOODRUFF: So how did you get mixed up with the Democrats in promoting Boston as a possible convention city?

DALTON: Well, you know, I grew up in the town of Arlington, Mass., (UNINTELLIGIBLE) to my (UNINTELLIGIBLE) in the hood, baby. You know, Paul Revere drove through my town on his way to Lexington and Concord, baby, so I've been around politics my entire career.

WOODRUFF: All right, here's the tough question, Tim Dalton. Is Austin Powers a Democrat, or is he a Republican?

DALTON: I'm not going to lie to you, I am a Democrat. You can check my voter registration papers, people!

WOODRUFF: All right. Do you think the convention ought to come to Boston or not? I'm assuming the answer is yes because you live there and it'd be good for the city.

DALTON: There's no question about it. All the events should come to Boston because I live there and I want the see them all. We had the National Hockey League All-Star game. We had the baseball All-Star game in 1999. We've had many groovy events, baby! And I love people. So come to my city so I can get to meet you, baby. Yeah!

WOODRUFF: All right. OK. Tim Dalton, otherwise known as "Boston Powers," helping out the DNC this week, promoting Boston as a convention city in '04. Thank you very much, Tim Dalton, Boston. Good to see you.

DALTON: The pleasure was all mine. Thank you, Judy. Love you!

WOODRUFF: Take good care.

DALTON: I'll try.

WOODRUFF: And now we want to -- we want to check the headlines in our Campaign News Daily. After two days -- or that is, two days after being convicted of corruption, Providence, Rhode Island, Mayor Buddy Cianci says that he will not run for a fourth term this year. Today was the deadline for Cianci to declare himself a candidate. He decided to bow out, even as he held out hope that a federal judge will overturn his racketeering conspiracy conviction next week.

In Alabama, voters have given five-term congressman Earl Hilliard the boot. Hilliard lost yesterday's Democratic primary run-off. He had drawn criticism for, among other things, his ties with Palestinian and Arab groups.

Former federal prosecutor Arthur Davis defeated Hilliard 56 percent to 44 percent, with the support of out-of-state pro-Israel donors. The win is tantamount to election, since there is no Republican nominee in the mostly black and Democratic 7th district.

And in South Carolina, former congressman Mark Sanford will face off with Democratic governor Jim Hodges this fall. Sanford won a landslide victory in yesterday's Republican primary run-off over Lieutenant Governor Bob Peeler.

Just ahead, our senior political analyst, Bill Schneider, weighs in with some political history in the wake of today's ruling on the Pledge of Allegiance.

(COMMERCIAL BREAK)

WOODRUFF: Politicians in Washington falling all over themselves right now to denounce this ruling from a federal appeals court in California this afternoon. Here now is what the president's spokesman had to say about the president's reaction.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: The president was informed at the G-8 summit about the San Francisco court decision pertaining to the flag. The president's reaction was that this ruling is ridiculous. The Supreme Court itself begins each of its sessions with the phrase "God save the United States and this honorable Court." The Declaration of Independence refers to God or to the creator four different times. Congress begins each session of the Congress each day with a prayer, and of course, our currency says "In God we trust."

The view of the White House is that this was a wrong decision, and the Department of Justice is now evaluating how to seek redress.

QUESTION: The National Republican Congressional Committee is urging all Republican House members to tell school districts to ignore this decision. Does the president support that?

FLEISCHER: Well, of course, this decision is a decision of a circuit court, which has an impact on the area of the circuit court. It is not a national decision. And I think people very naturally are going to react strongly opposed to this. It's notable. Yesterday, when the president was in Arizona comforting the families who lost their homes in the fire, the thing he said that brought to most warmth to those people gathered in that high school was, "Have faith in God almighty." That more than anything brought a reaction from people who were looking for help, and I think this decision will not sit well with the American people. Certainly, it does not sit well with the president of the United States.

QUESTION: But does he support this call by the national Republican Congressional Committee to tell school districts, even in California and Oregon and in the (OFF-MIKE) circuit, to ignore the law? FLEISCHER: I don't think it comes down to what anybody is telling people. People are going to feel very strongly about this themselves and take the actions that they're going to take. I think most Americans have faith in God, and they're going to express it in the Pledge every day that they can.

Thank you.

(END VIDEO CLIP)

WOODRUFF: Presidential spokesman Ari Fleischer describing President Bush's reaction, saying "It's ridiculous."

As we were saying, politicians starting to fall all over themselves here in Washington and elsewhere to criticize this ruling by the federal appeals court in California. We know that Senate majority leader Tom Daschle has -- we're told has introduced a resolution denouncing the decision and, in effect, calling on the Senate legal counsel to, quote, "seek to intervene in the case to defend the constitutionality of the Pledge of Allegiance." So we have Democrats and Republicans saying that this ruling was at least wrong- headed.

This ruling opens up a whole new chapter, you might say, in the politics of the Pledge. Our Bill Schneider's here with a little history of the Pledge. All right, where did it come from, Bill...

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well...

WOODRUFF: ... the Pledge of Allegiance?

SCHNEIDER: ... here's something you may not know (UNINTELLIGIBLE) as they say. The Pledge of Allegiance was written by a socialist. Yes, a man named Francis Bellamy, a Baptist minister who was pressured into leaving his church in Boston in 1891 because of his socialists sermon. Now, in 1982, Bellamy wrote the Pledge to be recited by public school students across the nation at a flag-raising ceremony to commemorate the 400th anniversary of Columbus's discovery of America.

Congress officially recognized the pledge in 1942. A year later, the Supreme Court ruled that children could not be required to recite it. The words "under God" were added in 1954, after a campaign by the Knights of Columbus, and that was at the height of the cold war.

WOODRUFF: Now, refresh our memories. Was the pledge an issue in the 1988 campaign?

SCHNEIDER: Oh, you bet it was. In 1977, then Massachusetts Governor Michael Dukakis vetoed a bill requiring school teachers to lead students in reciting the Pledge. Dukakis cited an opinion from the state supreme court saying it was unconstitutional. His veto was overridden by the Massachusetts legislature.

In 1988, Vice President George Bush, the current president's father, assailed Dukakis on the issue, even going to flag factories to make the point.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH (R), THEN-PRESIDENTIAL CANDIDATE: Should public school teachers be required to lead our children in the Pledge of Allegiance? My opponent says no, and I say yes!

MICHAEL S. DUKAKIS (D), THEN-PRESIDENTIAL CANDIDATE: I think somebody ought to ask him a very direct question, and that is whether, if he were president of the United States, he would sign a bill the Supreme Court had told him was unconstitutional.

(END VIDEO CLIP)

SCHNEIDER: Dukakis was arguing the law, Bush was arguing the politics. In a campaign, the politics trumps the law.

WOODRUFF: Now, where is public opinion? Now, where does it stand with regard to the law?

SCHNEIDER: The public says that the court ruling that students cannot be required to recite the Pledge -- that does not sit well with the public. Almost 80 percent of Americans disagree with that ruling. I don't think many serious candidates, Democrats or Republicans, as we just heard, are going to defend today's rulings, and I would call that the Dukakis legacy.

WOODRUFF: All right, Bill Schneider, thank very much.

SCHNEIDER: Sure.

WOODRUFF: Well, a push is under way in Congress to get rape investigations moving along more quickly. When we come back, we'll hear from a rape victim who whose so-called "rape kit" was not processed until six years after the crime.

(COMMERCIAL BREAK)

WOODRUFF: Lobbying successfully for a piece of legislation requires skill, but sometimes it also takes raw courage. That is certainly the case for Debbie Smith, a Virginia woman who is pushing the bill to help clear a serious backlog in the processing of rape kits. Now, these are used by law enforcement to gather DNA and other physical evidence after a rape's been committed. Right now, that evidence can sit on police shelves for months, even years, before it's analyzed, leaving rapists free to commit other crimes.

Debbie Smith has a personal stake in the bill. It was named after her because 13 years ago, she herself was brutally raped. I spoke to Smith and the congresswoman who introduced the bill today on Capitol Hill.

(BEGIN VIDEO CLIP)

DEBBIE SMITH, RAPE VICTIM: In some ways, it was very difficult because I'm a very private person, a very shy person. But when I realized that so many victims don't have a voice -- and somebody needs to stand up and talk for us. So I decided that that was going to be what I would do, that that's the least I could do for other victims who are out there hurting and whose hearts are breaking because they don't have the answers that I got.

And so I guess, in a lot of ways, it's out of gratitude to the scientific field, to our government, and most of all, to rape victims to be of any help that I can be to them.

WOODRUFF: You've talked about how it wasn't just the experience, it was the aftermath of going for so long and not knowing where this person was who had raped you. What about the matching that finally occurred, the DNA matching? How much difference did that make in your case and in your personal -- your peace of mind?

SMITH: It made the difference between life and death for me. Before, I simply lived going through motions. I was scared to death for my life. I was scared to death for the life of my family because this man had promised that he would come back and get me and kill me if I told anyone. So I thought if he couldn't get to me, then he'd try to get to my children or my husband. So I lived in constant fear.

So when the match came across, which we had no other evidence other than DNA -- when the match came across and my husband came home and told me, I -- the way I've always put it was I -- for the first time in six and a half years, I could -- I deliberately took a breath. And I could feel the breath withinside of me, and I began to live again. And that was really the beginning of my healing process.

WOODRUFF: Representative Maloney, how will this legislation make a difference in other rape cases...

REP. CAROLYN MALONEY (D), NEW YORK: It will...

WOODRUFF: ... like Debbie Smith's?

MALONEY: It will convict and put rapists behind bars. And what's so important is that many rapists are repeat offenders. They will strike eight to twelve times. And we have this evidence languishing, collecting dust across the country. They estimate there ares roughly 500,000 DNA kits, and if they were processed, you could make a match. DNA doesn't forget. It's factual. It can't be intimidated by a defense counsel. And DNA is accurate.

SMITH: It's very difficult to get a rape victim to even go to the hospital to have a rape kit taken. And yet, after she's gone through that humiliating ordeal, we've as much told her it doesn't matter because we've put that kit on that shelf, and there it sits, where she already feels like people don't care. This represents -- these papers represents people who do care. There's over 45,000 signatures that say we do care, and they are behind this bill and they believe in this bill, and they know that it will make a difference for rape victims.

(END VIDEO CLIP) WOODRUFF: The Debbie Smith Act is now waiting action in a House subcommittee. Its biggest drawback, the price tag, some $400 million for training nurses and DNA testing over four years.

I'll be back in a moment, but first let's go to Wolf for a look at what's coming up on "WOLF BLITZER REPORTS."

Hello.

WOLF BLITZER, HOST: Hi, Judy.

Much more on the Pledge of Allegiance, a staple for many of us growing up as kids. Could it be phased out by this court's decision? We'll have a debate on this afternoon's critical ruling out of San Francisco. And a communications giant comes tumbling down. What does it mean for your company and your money? And a discussion every parent will want to hear: spank or not to spank your kids?

All that coming up at the top of the hour, right after INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: The man who sued to have the Pledge of Allegiance declared unconstitutional, Michael Newdow, joins Connie Chung tonight at 8:00 Eastern right here on CNN.

That's it for INSIDE POLITICS. Wolf Blitzer's next. Thanks for joining us. I'm Judy Woodruff.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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