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President Vows to Crack Down on Corporations; Democrats Hitting Hard on Corporate Abuse

Aired July 9, 2002 - 16:00   ET


JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington. The first MBA president vows to crack down on corporations that cook the books.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider in Washington. Our new poll shows why Mr. Bush needs to bolster America's confidence in the economy and in himself.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill, where Democrats are hitting hard on corporate abuse and hoping to weaken the Republicans' bottom line.

JEFF GREENFIELD, CNN SR. ANALYST: I'm Jeff Greenfield on Wall Street with a political question. Are the rich about to become political targets of opportunity?

WOODRUFF: Also ahead, Hall of Famer and Senator Jim Bunning has some angry words for baseball players considering another strike.

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

WOODRUFF: Thank you for joining us.

Well, you don't need to be an accountant to know that something has gone very wrong in parts of corporate America. And you don't need to be a political scientist to understand why President Bush went to Wall Street today to say enough is enough. In the wake of the WorldCom and Enron scandals, our new poll shows the public is divided over whether Mr. Bush is more interested in ordinary Americans or in large corporations. Less than two weeks ago, more Americans said they felt Mr. Bush sided with the little guy.

So now, the former businessman is promising to use the full weight of the law to expose and root out corporate corruption.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: At this moment, America's greatest economic need is higher ethical standards, standards enforced by strict laws and upheld by responsible business leaders. The lure of heady profits of the late 1990s spawned abuses and excesses. With strict enforcement and higher ethical standards, we must usher in a new era of integrity in corporate America.


WOODRUFF: The president proposed doubling the maximum prison time for fraud by corporate leaders, along with strengthened penalties for mail fraud and document shredding. Mr. Bush announced the creation of a financial crime SWAT team to investigate corporate abuse. And he urged Congress to beef up the budget of the Securities and Exchange Commission.

Mr. Bush is now back at the White House. So is our Suzanne Malveaux. Suzanne, first of all, there are some observers who are saying the language the president used today seemed to be deliberately vague. What are you hearing about that?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, that's right, Judy. The president's language was intentionally vague. That is because while the House has introduced its own get-tough legislation, the Senate, Democratic-controlled, has yet do so in its final version. And, of course, it will go to conference committee.

But the bottom line is the president doesn't know what he is going to get across his desk. But aides do say that he is going to sign this. This is very similar to the case of campaign finance reform. The pressure so great on Congress as well as the administration to win back public support, confidence in the economy, turn this thing around, that, in fact, he is going to go ahead and sign that when it comes across his desk, intentionally trying to be vague on the language, not actually to go against anything that comes across his desk later in the weeks or months to come.

WOODRUFF: Suzanne, privately, what are the people around the president saying about how potentially damaging this is to the president as a political issue?

MALVEAUX: Well, it could be potentially very damaging. As you know, Bush Sr., when he was president, political strategists widely believing that he lost the re-election because he focused too much on the Gulf War and not enough on the economy. What Americans were really interested in hearing, they don't want that to happen with this Bush in two years for re-election. And also, as you know, just in a couple of months, we are going to be facing those midterm elections. The Republican Party has been linked as the party with big corporations. But they don't want to be linked with big scandals. They are very much aware of that.

WOODRUFF: Suzanne Malveaux, thanks very much.

Well, believing the president and his party are vulnerable in this issue, the Democrats are coming on strong, perhaps stronger than they have at any time since September 11. Here now is our congressional correspondent Jonathan Karl -- Jonathan.

KARL: Well, Judy, as the president went to New York to preach corporate responsibility, Democratic Senate leader Tom Daschle accused his administration of working with the accounting industry to water down congressional reforms. It was a charge that set the tone for the Democrats all day long.


(voice-over): Even before the president's speech, Democrats were on the offensive, sounding what they hope will be an effective campaign theme for the November elections.

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: This is a Republican majority in the house that is of, by and for corporate America.

KARL: Although the president on Wall Street echoed many longstanding Democratic ideas, Democrats said he didn't go far enough.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: We need the president to lead on this issue. And giving a speech long on rhetoric and short on details, failing to support legislation in front of the Congress, that is supported by Democrats and Republicans, was a lack of leadership this morning.

REP. GEORGE MILLER (D), CALIFORNIA: The president has failed his responsibility of leadership to the American people in one of the worst economic crises that American families have suffered in recent times.

SEN. PHIL GRAMM (R), TEXAS: I think it is clear that no matter what the president does or says, that the Democrats have decided to try to make this a partisan political issue.

KARL: In fact, Republicans are resigned to the fact that Congress will pass and the president will sign Democratic bills tightening restrictions on the accounting industry. Many Republicans don't like these new regulations, but feel political pressure to support them anyway.

REP. TOM DELAY (R-TX), MINORITY WHIP: The Democrats would like to regulate everything, would like to run everything. What we are going to do is not tie people's hands behind their back. We're going to shackle them and take them to jail.


KARL (on camera): The Democratic accounting reform bill is expected to pass as soon as this week in the Senate with overwhelming support from Republicans. But Democrats hope to keep the issue alive a lot longer than that in part by pushing another piece of legislation in the fall, a piece of legislation that will target 401(k) reform and keep the Senate and the Congress debating that issue closer to the November elections -- Judy.

WOODRUFF: All right. Jon Karl at the Capitol. And I will be asking the president's chief economic adviser in a moment about that Senate legislation.

Well, our new poll shows President Bush's job approval rating is holding steady at 76 percent. So, is he vulnerable or not? All right, Bill Schneider. You are with me. Was the president in any political trouble going into this speech?

SCHNEIDER: Well, let's take a look at President Bush's ratings on his handling of the economy. His rating on the economy, like all the president's ratings, soared after the attacks last September, 72 percent. By January, it had dropped a bit to 64. In late June, still 63 percent approved.

But just in the past 10 days, that number has taken a dip, 58 percent now approve the way President Bush is handling the economy. That's the first time it's dipped below the 60s since September. I think it is a sign that the business scandals and the stock market jitters are beginning to worry people.

WOODRUFF: So, does that give the Democrats an opening?

SCHNEIDER: Well, I think it does as long as they stick to the economy. President Bush is not a juicy target for criticism because very high numbers continue to see the president as honest and trustworthy.

Now, how about big business as a target for criticism? Our polling does show that resentment of big business is up, the highest it's been in almost 40 years, almost as high as resentment of big government. And, you know, that's saying something.

WOODRUFF: What is it, Bill, that people resent about big business?

SCHNEIDER: Well, it's behavior, of course. About three-quarters of Americans believe that it is a widespread practice for auditors of big corporations to hide damaging information, and for top executives to take improper actions to benefit themselves at the expense of their corporations.

And now, let's look at what has happened to Martha Stewart. Last month, opinion of Ms. Stewart was still positive, 46 to 27. Now, she is under investigation for insider trading, and the public has turned negative, 39 to 30, unfavorable. Apparently, most Americans don't think she is perfect any more.

WOODRUFF: So, are we talking about an issue of resentment here?

SCHNEIDER: No. What we are talking about is an issue really of self-interest. Sixty percent of Americans are now invested in the stock market. And a majority of stock owners told us that they lost money on their investments in the past year. But two-thirds of them did not take any money out of the market. They are really trapped in the market. Bush's policy is aimed at restoring investor confidence and getting the market numbers up. That's the real test of this policy, more than getting a bill through Congress is.

WOODRUFF: Bill Schneider, thanks very much.

Up next, we will talk about the politics of corporate responsibility with White House economic adviser Larry Lindsey and Senate Democrat Christopher Dodd. Also ahead, after all his efforts to reach out to African- Americans, is the NAACP's harsh criticism of the president justified?

He was a star pitcher. Now Senator Jim Bunning is threatening a walkout of his own if baseball players go on strike.

And later...


AARON BROWN, CNN ANCHOR: You would think that the people who count here, the casino owners and the big-time politicians, would never bet on a losing proposition.


WOODRUFF: Aaron Brown on the battle over storing nuclear waste in Nevada as the Senate nears a vote.




WOODRUFF: ... adviser Larry Lindsey. Mr. Lindsey, the markets are down and some Wall Street professionals are reacting with skepticism. We see one quoted as saying, we need more action, less talk. Another, the head of trading at UBS Warburg, quote, he says, "actions speak louder than words. If someone goes to jail, maybe people will take corporate America a little more seriously."

This must disappoint you that the reaction isn't more positive.

LAWRENCE LINDSEY, WHITE HOUSE ECONOMIC ADVISER: Not at all. I think people are going to go to jail. Remember, we have a justice system that has a lot of protections in it. It takes a long time. It takes a long time even in cases of extreme violent crimes. We all know that.

But where people have broken the law, they're going to go to jail. What the president is proposing to do is to go further than that and say, not only do you have to obey the law, but you have to be accountable to a higher standard. That's why he is asking CEOs to justify their compensation, which when things are going up is fine. But when things are going down, it's going to be a little bit harder. He is asking people for higher prison terms, if they do break the law. He is asking in his 10-point plan that we modernize our accounting system.

We have actually had more prosecutions since the president first addressed this issue four months ago than we had in any year during 1990s. So, I think people are going to go to jail.

WOODRUFF: Let me ask you about what the Democrats are saying, some of them echoing some of the same criticism we're hearing from Wall Street, saying unless the president supports tighter oversight of accounting standards, like in the bill that's moving through the Senate, the Sarbanes bill, the words don't mean anything. Where do you stand on that?

LINDSEY: Judy, the president led on this issue four months ago with a proposal for an independent accounting board, and one that works. The House has already passed that. The Senate hasn't approved it. The Senate hasn't acted on the $20 million for the SEC for the current fiscal year that the president asked for four months ago.


WOODRUFF: But you know there is tougher language on accounting reform.

LINDSEY: No, it is not tougher, Judy. The issue is not tougher. The issue is whether or not we have effective language. What the Sarbanes bill proposes is overlapping jurisdictions between this independent body, the accounting board and the SEC. And, Judy, you have been in Washington as long as I have. And you know that...

WOODRUFF: A long time.

LINDSEY: ... when have you overlapping jurisdictions, what you get is a lot of turf wars, a lot of finger-pointing and things falling through the cracks. The real issue is which of the two proposals is more likely to actually get changes in the accounting profession. And we think it's ours.


WOODRUFF: Well, for the view from the Democratic perspective, we turn to Capitol Hill where Senator Christopher Dodd of Connecticut is standing by. Senator, you hear Larry Lindsey saying the president is doing everything he can. It is not just waiting for people go to jail, the president started months ago to get ahead of this problem.

DODD: Well, I wish it were so. The silence has been deafening, as I mentioned earlier today. Why didn't the president today take advantage of the opportunity to endorse this bipartisan bill? You are right, I am a Democrat. But I'm working on a bill that was endorsed by 17 members of the United States Senate, Democrats and Republicans coming out of the banking committee, that believe we need a much stronger accounting reform bill than what the president has advocated, what the SEC has come out with or the House has.

Let me tell you the differences. What Mr. Lindsey is talking about a part-time board that would be a self-regulating board. Well, we have seen the problems with that. He said you may get duplication when you have a permanent board that has the responsibility to be linked with the SEC where's there is some cop on the beat.

We have gone through these SROs in the past, and look at the mess it's got us into. Billions of dollars have been lost by shareholders. Billions of dollars have been lost by pension holders in their 401(k)s at Enron and elsewhere. The present system is broken terribly. We need leadership. The market today I think was a reaction to a very weak speech by the president. We need him to support this bill, to get behind a bipartisan effort here, to respond to the lack of confidence in our markets. He didn't do it today.

WOODRUFF: Well, Senator, the White House has not said -- in fact, they are saying quietly that the president will probably sign whatever comes to his desk.

DODD: Well, there is a big difference when the president of the United States goes to Wall Street. He had an opportunity to hit the ball out of the park today and really contribute to the restoration and confidence. To silently sign a bill behind his desk some day down the road isn't what the country needs right now. We need the president to be strong on this issue. And, unfortunately, he wasn't today.

WOODRUFF: Senator, let me ask you also about what your fellow Democrat from the state of Connecticut, Joe Lieberman, is saying. He is warning that this strategy on the part of Democrats could back fire, that it is wrong to be too tough on business. And I'm just quoting at one point. He said, "you can't be pro-jobs and anti- business." And he said, "we should be trying to keep business honest but not strangle it."

DODD: Well, Joe is, of course, making a good point, that you can't be pro-jobs and be for the status quo either. We have seen what the status quo has cost us here. And the lack of confidence is profound, and it is getting worse. We need to respond to it. That's what the Sarbanes bill does. It is what we are trying do with the Leahy bill on the criminal penalties here.

The president today called for a part-time board, another task force and about $100 million for the SEC. We talk about over $300 million for the SEC, a permanent board and then having some real reforms for the first time in years for the accounting industry.

WOODRUFF: Let me cite another Democrat, one of your colleagues in the Senate, John Kerry, worrying this latest Democratic response -- the Democratic response to these scandals is, in his words, "too sweeping and too class-oriented." Is -- does he have a point there?

DODD: You know, when you have the Business Roundtable supporting the Sarbanes bill, I don't think this is -- and you have 17 members of the Senate, Democrats and Republicans, as opposed to four who oppose the bill, you are likely to have 80 votes for this bill in the next several days on the floor of the Senate. I don't think that is sweeping. I don't think it's class warfare.

We have a serious problem here that needs to be addressed. We are not saying that every corporation -- there's 16,000 public companies in this country. When you have the "Good Housekeeping" seal of approval on a public company, that's an indication to investors that their money is going to be relatively safe. They may lose money, but the structures are going to be sound. When you have the thievery that went on here with so many of these companies, you need to respond to it. That is not class warfare. That is trying to get our economy back on its feet again.

WOODRUFF: Senator Christopher Dodd, thanks very much. Good to see you.

DODD: Thank you. Good to see you.

WOODRUFF: Meantime, the Senate nears a final vote on storing nuclear waste. An update on the Yucca Mountain debate next in our "Newscycle."

Also, a dramatic rescue at sea during a Pacific typhoon. How the drama played out when we return.


WOODRUFF: Among the stories in the "Newscycle," the Senate is nearing a final vote today on a plan to dispose tons of nuclear waste at Yucca Mountain in the Nevada desert. The plan will end decades of debate over how to secure the tons of radioactive waste piling up at sites nationwide. I will discuss the issue with Nevada's governor, Kenny Guinn, later this hour.

Rescuers off the coast of Taiwan plucked more than 100 fisherman from a burning boat while battling high waves and gusty winds, all started by a typhoon. The boat was being used for housing by Chinese fisherman who work on Taiwan fishing boats. It is not clear how the boat caught fire.

Here in the U.S., President Bush traveled to Wall Street this morning and called for a new era of integrity in corporate America. Among other reforms, Mr. Bush proposed doubling the prison terms for people convicted of corporate fraud.

With us now from the CNN "CROSSFIRE" set at George Washington University, Paul Begala and Tucker Carlson. Tucker, the president is trying to get ahead of the curve on this issue. Is he doing enough?

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Well, I don't know, I mean, if he is doing enough politically. I mean, he has said -- John King reported today that he has agreed, on background anyway, to sign Democratic legislation, reform legislation. So, it is not exactly clear what the Democrats are whining about. I mean, sort of desperately casting about over the last six months for any campaign issue to ride into the midterm elections. They finally settle on this one.

I'm just not sure it is a winning message. It's not a pro-growth message. It's not an optimistic message. It's sour and it's phony. So, I don't think it works.

WOODRUFF: Paul, I'm sure you agree with Tucker.

PAUL BEGALA, CO-HOST, "CROSSFIRE": I agree that it's phony, but it's phony on Bush's part. You know, I'm told the Secret Service asked him to move the speech indoors lest he be struck by a thunderbolt from God Almighty. From the hypocrisy of this guy, who was only cleared on insider trading charges because his daddy was running the Securities and Exchange Commission, now lecturing other people about how to run their businesses. It was astonishing.

And also, I think substantively, it was a pretty empty speech. I actually had hoped that he'd come closer to the Democrats' position on the reform that's on Capitol Hill, Judy. So, yes, it was a disappointment all the way around.

WOODRUFF: Let me ask you -- let me turn you to both to a very different subject, and that is the president's relationship with African-Americans. Some very tough criticism of the president coming out this week from African-Americans, in particularly from the National -- the NAACP. And I'm going to quote something that Kwesi Mfume, who is the president of that organization, says, "you can't be president of all the people when you only want to be the president for some of the people."

Now, after -- this is at a point when the president was asked at a news conference just yesterday, he was asked, you know, Mr. President, what do you say about the fact that you won't go to speak to the NAACP and they are criticizing your civil rights record. His answer was, let's see, there I was, sitting around the table with foreign leaders looking at Colin Powell and Condi Rice. What's going on here? What is this relationship all about? What does it signify, Tucker?

CARLSON: Well, I -- first off, that's a pretty lame response from the president really and sort of insulting to Colin Powell and Condoleezza Rice. And what exactly -- you know, I was sitting with black people when I was criticized. I mean, that's not much of a defense.

That said, the attack itself is ludicrous, and it's also so tired. I mean, since the Johnson administration, it's one note, Republicans are racist, Republicans are racist. The president is not racist. The criticism of his civil rights record had no substance in it at all. And, again, I mean, you could have written it six months ago. It's the same every year. Bush already went and spoke to the NAACP, going this year to be criticized on the basis of nothing. I mean, I don't see why he would -- what he would gain from that. Good for him for not going.

WOODRUFF: Paul, why should the president walk into a place where he knows he is going to be criticized?

BEGALA: Because he's the president and that's his job. It's the oldest and most respected civil rights organization. He went two years ago. And you couldn't have given that speech. The NAACP couldn't have criticized him two years ago the way they did this week because he does have a good heart on race issues. And, you know, he just has not had a very good record.

But you got to go. His old man used to say, 90 percent of the job is just showing up. When you are the president, you ought to go and defend your record even to people whom you've disappointed. Given the way that he came into office, the controversy over alleged disenfranchisement in Florida, he owes a special debt, I think, to African-Americans to reach out to them. It's an enormous mistake not to go. And, usually, he's got a much better political ear...

CARLSON: What in the world does that mean? What in the world does that mean, Paul? When the Republican Party spends literally half its time thinking of ways to appeal...


That is a lie and a slander. That's outrageous that you would say that, imply that they're racist. There's no evidence for that at all and you know it. And actually, it is very tiresome to hear that again and again and again, when in their own sometimes pathetic way, bumbling way, but still I think genuine way, they're trying to think up ways to appeal to black voters. It's not working, but they are trying. And they're not racist. And if you say they are, total outrage.

BEGALA: You are the one who used the word race, racist.

CARLSON: You are the one who said they were racist.

BEGALA: You saw yesterday, his response was tokenism. He points to two very accomplished black people who are at the top of his administration, as if that should eliminate any criticism.


CARLSON: I agree with you, and that's why I just said that.

BEGALA: He's had a record on economic issues, he's had a record on health care issues, he's had a record on civil rights issues that has been bad for African-Americans.

CARLSON: Give me three examples.

BEGALA: He ought to...

CARLSON: You're making this up. You're pulling it out of nowhere. He's a Republican. Therefore, he's racist. You have nothing to back that up and neither do they. That's a lie.

BEGALA: There is a difference between saying someone is racist -- which you keep throwing out there. It is a huge red herring.

CARLSON: That is what you are saying.

BEGALA: This is what -- this is what -- no, this is what you are saying.

The truth is, the guy has had a bad record for African-Americans and for other working people across the board. He doesn't want to defend that. He ought to have to. He's the president


CARLSON: It simply is slander with nothing to back it up. And you ought to be ashamed for repeating it.

WOODRUFF: Gentlemen, we are going to leave it there. Clearly, the two of you have more to discuss on this.

CARLSON: We don't agree, it turns out.


WOODRUFF: Paul Begala, Tucker Carlson, good to see both of you. Thanks.

BEGALA: Thank you.

CARLSON: Thanks.

WOODRUFF: A Senator cries foul. When we return, Baseball Hall- of-Famer Jim Bunning will be with us to vent his frustration with today's players and owners.


WOODRUFF: Tonight is baseball's All-Star Game in Milwaukee, but much of the attention is being focused on a possible players' strike as soon as next month. It would be the second work stoppage in eight years if the players walked out. Among the key issues holding up a new labor agreement: revenue-sharing to help teams with less money and steroid testing.

Well, with us now from Capitol Hill: the Hall of Fame pitcher and now U.S. Senator Jim Bunning.

Senator Bunning, what's wrong with the players threatening to go out on strike? They say revenue is a big issue with them.

SEN. JIM BUNNING (R), KENTUCKY: Well, first of all, I sat on the -- across the table from the owners for 12 years in negotiating. And revenue-sharing is always a big issue. But the fact of the matter is, I don't think anyone can feel sorry for either an owner or a player in this day's world of baseball, because both of them are making too much money.

WOODRUFF: Well, what's the way to resolve this? Isn't this -- they're negotiating, they're negotiating, and if they don't come to an agreement, there's going to be a strike. Isn't that the way things work?

BUNNING: Well, that's, unfortunately, the way things have worked in baseball historically since 1965. It is not the right way to do it. There ought to be some reasonableness in sitting down and negotiating a reasonable contract.

In 1976, the owners gave away the store when they lost the reserve rules. And they've been trying to get them back ever since. That's not going to work. And the players, in their right mind, if they go out on strike again, they will never, never get the fans back interested in professional baseball at the Major League level. WOODRUFF: Do you really mean that?

BUNNING: I absolutely mean it. I wouldn't go to a baseball game if my life depended on it.

WOODRUFF: But, I mean, like anything else in the world of business labor relations, people have a right to go on strike, don't they? If they have an agreement and they don't agree and they can't reach...

BUNNING: Of course they have a right to go on strike. But the sensibility of going on strike and killing the playoffs and killing the World Series is not a reasonable thing to do.

The reasonable thing to do is to negotiate. Let the owners put on new working conditions. And then, in spring training, resolve it by not reporting for spring training. The unfortunate thing here is that we have two intransigent sets: the owners and the players. They both feel they're right. And they're both wrong.

WOODRUFF: What about this whole question of steroid use, Senator? How should that be resolved, do you think?

BUNNING: Well, I'm not used to that. I never experienced it in 22 years of professional baseball. So, I don't know anything about it except what I read in "Sports Illustrated" and other journals. And I think, if you can't be tested for illegal steroids as a player, there's something the matter with you.

WOODRUFF: In other words, you're saying any position other than that is unreasonable?

BUNNING: Absolutely.

WOODRUFF: All right, finally, Senator, I'm going to ask you for a prediction. Who is going to win this game tonight?

BUNNING: The American League has won five in a row. I don't see any reason to think that the National League will overcome and win. I think the American League will win.

WOODRUFF: All right, we have you on the record. Senator Jim Bunning, a former Hall-of-Fame pitcher, thanks very much. Good to see you.

BUNNING: Thank you, Judy.


Well, U.S. Health and Human Services Secretary Tommy Thompson met privately with 10 AIDS activists in Barcelona, Spain, today, just hours after he was booed at the International AIDS Conference.


TOMMY THOMPSON, HEALTH AND HUMAN SERVICES SECRETARY: .. sending me this invitation to speak this afternoon.



WOODRUFF: At least 100 protesters carrying signs and megaphones rushed the stage. They drowned out the rest of Thompson's speech about the United States' contribution to the global fight against AIDS. Thompson said later he understands that people are passionate about this cause and want to blame the U.S. But he rejected charges that he and President Bush are neglecting people infected with HIV.

Now checking the headlines in our "Campaign News Daily": Georgia Democratic Senator Max Cleland has unveiled the first television ad in his reelection campaign. The ad highlights Cleland's service in Vietnam and links him to President Bush and fellow Senator Zell Miller, two popular figures among Georgia voters.

A new poll in Missouri finds Democratic Senator Jean Carnahan leading her Republican challenger, Jim Talent. Carnahan now has an eight-point edge over Talent, a former Republican congressman; 12 percent of the likely voters who were surveyed say they are undecided.

In Michigan, state House member William Callahan said his congressional primary opponent, Democrat incumbent Sander Levin, should not represent the newly-redrawn 12th District. Callahan noted that Levin is Jewish and the district is now more conservative and more Catholic than before. In Callahan's words -- quote -- "That man has never owned a Christmas tree. He's not a Christian. And I'm thinking, how can he represent me then?" -- end quote. Callahan has since apologized. And he told "The Detroit Free Press" his published comments were -- quote -- "grossly out of context. "

The stars of the roaring '90s come back to Earth. Up next: our Jeff Greenfield on the American tradition of making Wall Street a political target.


WOODRUFF: Today's presidential address in New York conjured images of a recurrent theme in American history.

Our Jeff Greenfield has more from Wall Street.


JEFF GREENFIELD, CNN SR. ANALYST: President Bush's speech on Wall Street today is a stark reminder of just how much the financial -- and, therefore, the political -- climate has changed in the last couple of years: $6 trillion in wealth gone, once-celebrated CEOs on the griddle.

So, this political question: If it's no longer true that greed is good, as Gordon Gekko said in the movie "Wall Street," are the rich about to become political targets? Clearly, this has happened before. (voice-over): It was a century ago when Teddy Roosevelt railed against malefactors of great wealth and put the government to work reining in captains of industry and finance like J.P. Morgan and John D. Rockefeller.

It was 70 years ago when FDR proclaimed that the money-changers have been driven from the temple, as the Great Depression put one- quarter of the country out of work. Harry Truman won an upset victory in 1948 in part by making the titans of Wall Street the target of his wrath. And it was President Kennedy who, in the middle of a fight with the steel industry, said: "My father told me all businessmen were SOBs, but I never believed him until now." He did not use the initials.

But during his presidency, Bill Clinton presided over an unbroken era of prosperity. As the rising tide lifted most of the boats, corporate leaders like Microsoft's Bill Gates and GE's Jack Welch were lionized. Even with the government's antitrust suit against Microsoft, it was very hard to argue that the software giant had somehow made the poor poorer.

But these days, newspapers routinely list major companies that face very tough questions about their ethics, even their legality. "The New York Times" tells us of whistle-blowers who warned of shady practices and were fired for their trouble.

So does this portend a new political attack on the moneyed classes? Maybe not. Democrats might like to point to Vice President Cheney, who got rich as an oil company executive, or, for that matter, President Bush himself. But Senator and presidential hopeful John Edwards made millions as a personal-injury lawyer. Senator and presidential hopeful John Kerry married into massive wealth. And Democratic National Chair Terry McAuliffe made millions by investing in, then selling Global Crossing stock well before that company collapsed.

(on camera): Of course, just because you have money doesn't mean you can't attack money. Both Roosevelt and President Kennedy were born to great wealth. But when you remember how much money it takes to mount a political campaign these days and where that money is likely to come from, I'm not really sure either party is all that interested in a new round of class warfare.

Jeff Greenfield, CNN, on Wall Street.


WOODRUFF: Well, these days, he's the man taking heat from all directions, but the SEC chairman enjoyed glowing reviews upon his nomination to the post.


SEN. CHARLES SCHUMER (D), NEW YORK: He could well be described as the Zeus of his field.


WOODRUFF: Up next: a profile of Harvey Pitt, the man responsible for policing corporate misconduct.


WOODRUFF: The chairman of the SEC, Harvey Pitt, is at the center of the storm over corporate misconduct as the man responsible for protecting the interests of investors and ensuring American markets are fair.

Well, CNN's Brooks Jackson has more on Harvey Pitt and his first year on the job.


BROOKS JACKSON, CNN CORRESPONDENT (voice-over): A year ago, Harvey Pitt was being praised, even by a leading Democrat, who said Pitt had an almost godlike reputation.

SCHUMER: He could well be described as the Zeus of his field.

JACKSON: Pitt joined the SEC fresh out of law school. And, by age 30, he had risen to be its youngest general counsel ever. Then came private practice. Pitt's clients included inside trader Ivan Boesky and scores of corporations and all the major accounting firms. He made $3 million in his last year of private practice, but he told the Senate that's no problem.


HARVEY PITT, SEC CHAIRMAN NOMINEE: My only influence will be the public interest and not a single client that I have ever represented.


JACKSON: But then Pitt told one of his old clients, the American Institute of Certified Public Accountants, that the SEC -- quote -- "has not of late always been a kinder and gentler place for accountants." He added: "We want to have a continuing dialogue and a partnership with the accounting profession." He's never lived that down.

He spoke the very same day Enron revealed the SEC was asking questions, starting a cascade of accounting scandals, including Pitt's ex-client Arthur Andersen, WorldCom, and others. Pitt also took fire for personal meetings with executives of companies where the SEC was investigating irregularities: meetings with the top executive of another ex-client, KPMG, and with Anne Mulcahy, CEO of Xerox, even with Donald Trump. Pitt broke no ethics rules, but critics called him insensitive.

Pitt's enforcement record, on the other hand, has been aggressive. The SEC fined Xerox $10 million, a record. New rules will soon require much faster disclosure of key events, such as the firing of a chief financial officer, and faster enforcement. Within 36 hours of WorldCom's first disclosure, the SEC had a court order forbidding payments of bonuses -- unprecedented.

Securities lawyer Dixie Johnson worked with Pitt for 15 years. And she says he has actually pushed the limits of his authority by proposing that CEOs be required to swear to the accuracy of financial statements.

DIXIE JOHNSON, FORMER PITT LAW PARTNER: I'm not surprised that Harvey has been aggressive. That's part of who he is. And the fact that they would use authority in a way that I think is questionable does not really surprise me.

JACKSON: But critics still fault Pitt for not pushing his old accounting clients to divorce their auditing work from their consulting work.

TRAVIS PLUNKETT, CONSUMER FEDERATION OF AMERICA: Well, our view is that, on the issue that matters the most, he has been a disaster. And that is the question of conflicts of interests at the audit firms.

JACKSON: A year ago, Pitt was confirmed unanimously. But how times have changed.

(on camera): A year ago, Senator Schumer said Pitt was almost godlike. Now he says Pitt needs to get religion soon.

Brooks Jackson, CNN, Washington.


WOODRUFF: Well, as the Senate nears a vote on dumping nuclear waste at Yucca Mountain, we will ask Nevada's governor, Kenny Guinn, what he will do next if, as expected, the vote does not go his way.

But now let's take a look at what is coming up on "WOLF BLITZER REPORTS" -- hi, Wolf.


A new development in the case of alleged police brutality: Could the videotape that made national headlines spark a national investigation? Also, Osama bin Laden's P.R. person has haunting words for Americans and for Jews. What is al Qaeda working on? I'll ask a U.S. senator privy to the nation's top secrets.

It's all ahead right at the top of the hour, right after INSIDE POLITICS.


WOODRUFF: These are live pictures from the floor of the United States Senate. This is Nevada Senator John Ensign speaking. The Senate is expected within the hour to approve President Bush's plan to bury radioactive waste deep inside Nevada's Yucca Mountain. And many officials from the state who oppose the project already are conceding defeat. But they're vowing to fight another day.

Here now: CNN's Aaron Brown.


AARON BROWN, CNN CORRESPONDENT (voice-over): You would think that the people who count here, the casino owners and the big-time politicians, would never bet on a losing proposition. But after nearly 15 years of vehement opposition, the state of Nevada and the gambling industry seem close to losing their biggest battle ever, the federal government's plan to store tons and tons of nuclear waste here inside the mountain named for a desert plant.

GOV. KENNY GUINN (R), NEVADA: It is an ill-conceived plan, and we want America to know that.

BROWN: Welcome to Yucca Mountain, a spot 90 miles north of Las Vegas that gives new meaning to the word ``desolation. ''

After years and years of testing and construction, President Bush has agreed with the Department of Energy that spent fuel rods from the nation's nuclear power plants should be entombed here forever.

PATRICK ROWE, SENIOR ENGINEER, YUCCA MOUNTAIN PROJECT: We know more about Yucca Mountain than any other mountain in the world. We have spent 20 years characterizing this site, and tremendous amount of money doing this to understand exactly what we have here.

BROWN: This five-mile-long tunnel, the thousands of experiments at Yucca Mountain, have cost more than $4 billion so far, and that is just the down payment. If nuclear waste is ever buried here, the total price tag over the project's lifetime will be close to $50 billion.

ROWE: We use the past in order to help predict the future. And we can do it with quite a bit of confidence, because it has been stable for millions of years, and that gives us a lot of confidence that it will continue to be stable for millions of years.

BROWN: But critics say Yucca Mountain, scientifically speaking, at least, is all wrong. Its rocks are too porous to actually protect anything. Therefore, the critics argue, the important thing are the hardened cases which hold the nuclear waste, and they could be stored anywhere.

ARJUN MAHKIJANI, INSTITUTE FOR ENERGY AND ENVIRONMENTAL RESEARCH: By the Department of Energy's own calculations, the geologic formation at Yucca Mountain is practically worthless. Almost all of the containment of the radioactivity is now projected to be done by these engineered barriers, this huge metal container, that is supposed to do almost the whole job.

BROWN: Apart from disputes about the science of Yucca Mountain, its opponents are counting on public jitters about simply getting the nuclear waste to Nevada in the first place. The government's preferred method is by train, and if not that, then by truck.

ANNOUNCER: With over 50,000 nuclear trucks and train loads moving through our streets, even the government admits nuclear accidents are inevitable. And terrorist attacks will become harder than ever to prevent.

BROWN: The state of Nevada is financing this commercial that plays to those fears.

GUINN: I don't think it's scaring, I think it's factual, and I think we should give consideration to that.

BROWN: For its part, the nuclear industry says tons of low-level nuclear waste have already been trucked safely over the nation's roads over the past few years. But critics say every time the government runs into a problem, it has a simple--too simple--solution.

MAHKIJANI: The government's response and the DOE's response, instead of moving to a new place to look for a repository, has been to change the rules.

BROWN: Congress first anointed Yucca Mountain as the nation's likely nuclear waste repository in the mid-'80s. Back then, Nevada was given a one-of-a-kind provision. It could veto any presidential decision to make it permanent.

Now the House has overwhelmingly overridden that veto, and the Senate's decision comes next.

ANNOUNCER: Only the Senate can stop this now. Call your senators today.

BROWN: Nevada has paid for this ad too, aimed solely at the state of Vermont, whose two senators are presumably more environmentally oriented and would vote against the Yucca Mountain project.

But the odds are long, and Nevada's governor knows it. Not one but four Nevada lawsuits are planned against the federal government.

GUINN: We are well organized. We have a very fine litigation team. We are funded. And we will see our day in court. And as all good Americans, once the court rules one way or the other, we're going to get on with it, and we'll be good, patriotic Americans one way or the other.

Aaron Brown, CNN, New York.


WOODRUFF: Nevada Governor Kenny Guinn is with us now from Reno.

Governor, we know very much don't want the waste in your state. But the Bush administration says, if not there, it is going to be shipped to many sites around the country that would be of far greater risk to the public.

GUINN: Well, that's true, Judy. Certainly, we don't want the waste here in Nevada. And we have put up, I think, a very valiant fight. Our two senators, Senator Reid and Senator Ensign, have been doing an outstanding job. And the battle is not over until the vote comes in, probably within the next hour.

But I can tell you that there are other systems that could be used in America, such as a dry-cast system. So there are other methods. And that's why we have been working so hard to promote the issue throughout America about the need to really know about transportation of high nuclear waste throughout America.

WOODRUFF: Well, if not Yucca Mountain, where do you believe this waste should be buried?

GUINN: Well, actually, it has been proven with a dry-cast system that you can leave it in place where it is produced for at least 100 years.

And even though they would be transporting some 77,000 tons of high nuclear waste to Yucca Mountain here in Nevada, they will still have high nuclear waste in every one of the plants, because it has to be cooled. Once these spent rod fuels come out of the nuclear plant, they have to be cooled on site for about five years. So, they are going to be in the same location. And all we're really adding is a tremendous responsibility of keeping it safe while transporting it for thousands and thousands of train loads and ship loads, not only through the tracks, but the railways and the highways.

WOODRUFF: But, Governor, you know the argument on the other side, that they believe it is far safer to have it in one government- operated, secure facility than scattered in all these other place around the country, even if, as you suggest, the residue might cause temporary problems.

GUINN: Well, there's no doubt about it, that, if you could get it to one place, and it had followed the law -- under Yucca Mountain, under the law that we're operating under, was to be determined to have to be, Judy, a geological site. It hasn't been proven to be a geologically-safe site.

So, the government, through the Department of Energy, has changed the rules and said, "Well, we'll make manmade canisters." Well, if that is the case, they could put it any place and not have to transport it throughout the country. There are certainly issues to both sides of this, but we've been trying to bring forth through what I think is a reasonable process as Americans. And, certainly, we know it's an uphill battle in the Senate today. And we have been cautiously optimistic. But we've made a strong case.

WOODRUFF: And, Governor, just quickly, if you lose in the Senate, what's next, just quickly?

GUINN: Well, we're already in court. And, certainly, we have always felt that our best case will be in court. You see, the president of the United States has been very active in this program. He just called in two senators to the White House and talked to them about this issue. And we don't have the political base to do that. And it's a part of the system. But I assure you, once we get to court, that no president can summons any federal judge to the White House.

WOODRUFF: All right, Nevada Senator (sic) Kenny Guinn, we'll be watching along with you. Thanks very much, Governor. Good to see you.

GUINN: Thank you. Thank you.

WOODRUFF: We appreciate it.

Tomorrow on INSIDE POLITICS: House Minority Leader Dick Gephardt.

That's it for today. "WOLF BLITZER REPORTS" is next. We thank you for joining us. I'm Judy Woodruff.


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