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CNN Live Today

Bush Telling Execs: Do As I Say, Not As I Did

Aired July 11, 2002 - 12:14   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.
DARYN KAGAN, CNN ANCHOR: Part of Wall Street's problem, many experts believe, is a newfound lack of confidence in corporate accounting. On Tuesday, President Bush gave a hard-hitting speech on Wall Street, demanding higher corporate ethics, but today appears he's telling executives to do as I say, not as I did.

CNN's Kelly Wallace joins us from the White House.

I'll tell you from Bush to Cheney, they've got their hands full, Kelly.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: We certainly do, Kyra, but at issue here is the fact that the president received loans from Harken Energy when he served on the company's board of directors. The president, though, is now saying such loans to corporate officers should come to an end, and this has Democrats accusing the Bush White House of hypocrisy.

First, the background, it was in the late 1980s when Mr. Bush received two low-interest loans from Harken Energy, totaling more than $180,000, to purchase shares of Harken stock. White House aides say these loans were legal, appropriate, and were designed to encourage directors to have a long-term commitment to the company. Aides say the president repaid the loan by returning the stock a few years later.

Still though, Mr. Bush on Wall Street on Tuesday said that companies should put an end to these loans to corporate officers. Now, aides say the president is not being hypocritical here. They say he is simply reacting to recent cases where the administration believes the practice has been abused, cases such as WorldCom, where a company executive borrowed nearly $400 million from the company. Still, Democrats are seizing an advantage, or trying to seize an advantage here. They say there is really a credibility problem for Mr. Bush.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D) MAJORITY LEADER: Well, it puts him in a difficult position to criticize others, if that is what happened. I think it would be -- maybe there is some distinction. If there is, I don't know what it is, but he apparently criticized the effort in his own -- I shouldn't say apparently. He did criticize the effort in his speech, and yet it appears that that's what he did himself. (END VIDEO CLIP)

WALLACE: And there is another potential political headache for the White House. A conservative watchdog group filing a lawsuit yesterday against Vice President Cheney and the Halliburton Energy Services Company that is the company where Vice President Cheney once served as a chief executive officer, raising the question about the company's accounting practices.

Now, the White House says this lawsuit is without merit and is dismissing it, but the Securities and Exchange Commission is investigating Halliburton's accounting practices and, Kyra, there are a few Democrats who are starting to voice the word "special prosecutor," raising the question about whether the SEC under Mr. Bush's choice, Harvey Pitt, can carry out a fair and impartial investigation. White House aides expect the SEC to conduct a thorough investigation, but again some Democrats raising questions about that. Kyra.

PHILLIPS: So, what's the president doing today, Kelly?

WALLACE: The president on his way to Minneapolis, Minnesota, another trip by this president. He'll be talking about prescription drugs for seniors, another important political issue as we approach the November elections. He'll also be doing his best to help Republicans try and win control of the United States Senate, doing some fund-raising for a Senate candidate in Minneapolis. Kyra.

PHILLIPS: Kelly Wallace, live at the White House, thanks Kelly.

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