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American Morning

Bush Meeting With Newly Minted Corporate Fraud Task Force

Aired July 12, 2002 - 08:16   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.
PAULA ZAHN, CNN ANCHOR: President Bush today is meeting with his newly minted corporate fraud task force. The gathering comes just days after the president told a Wall Street audience he's going to get tough on corporate fraud.

In the same speech he called for the end of company loans to corporate officers. But the president himself took those kinds of loans from Harken Energy Company when he was one of its directors back in the late 1980s.

Has the president just walked into a political minefield? Let's toss that one out at senior analyst Jeff Greenfield -- good morning, Jeff.

JEFF GREENFIELD, CNN CORRESPONDENT: Good morning.

ZAHN: Put this into context for us, if you would. What the president did at the time, when he was on the board of directors, he was a businessman, was perfectly legal, correct?

GREENFIELD: Perfectly legal. The amount of money involved was a whole different order of magnitude than some of the loans we've been hearing about lately, yes.

What makes this, I think, potentially a problem, both for the president and the vice president, is we don't normally have presidents who come from the business community and make money this way. If you think about it, they either inherited wealth like the Roosevelts and Jack Kennedy, or they had no money, like Harry Truman and Bill Clinton, or, in the case of Lyndon Johnson, he hid the fact that he owned a radio and TV station and claimed it was all his wife.

So the idea that a president may in the past have been involved in high level business dealings -- this is particularly true of Dick Cheney with Halliburton. It's just something we haven't faced before. And that's why in the current context, where the business community, where CEOs don't look nearly as admirable as they did two years ago when this ticket was running, puts it into a different political matrix.

ZAHN: But how does this one play out at a time when the president is trying to do away with those very kinds of loans he benefited from? Can't he not argue that the economy has changed considerably and the corporate climate has changed considerably since the late '80s?

GREENFIELD: The problem -- one of the things I think that people are now talking about, and it may be unfair, is the fact that the president got up to speak and you could literally second by second and then day by day watch what happened to the markets. They're down about 470 points, the Dow is, which suggests that for whatever reason, they weren't convinced that the president had the answer. And I think one of the reasons was -- and this is why politics is considered a full context sport -- you've got a whole other party out there that has been looking, particularly since September, for some vulnerability by a president who is the commander-in-chief in a time of conflict. If you're going to...

ZAHN: With some of the highest approval ratings we've ever seen, by the way.

GREENFIELD: Absolutely, and sustained job approval ratings. This they see as a possibility. And the other real clue is the fact that the Speaker of the House yesterday, Denny Hastert, broke with the Republican bill for corporate reform and went with the Democratic Senate bill. When members of your own party say, you know, we're going to have to protect ourselves because we are up in November in these midterm elections and you've got two years and change, that's a sign that the Republicans as a party aren't all that convinced that they have protection from the president on this.

ZAHN: Isn't it also true, though, for the Democrats there is a potential fallout if they pile on too much?

GREENFIELD: Absolutely. I mean I think this is one of the things that for some reason, I don't know whether it's in the drinking water in Washington or what, but it is amazing how often political parties handed a golden opportunity overplay their hand.

It happened classically with the Republicans in 1998. I mean Bill Clinton was literally caught with his pants down in the most embarrassing conceivable way. And because the Republicans, you could just sense that they had the, they could sense the blood in the water, the voters responded by increasing the Democratic membership of the House of Representatives that November.

If the -- the one thing I think that the public almost never forgives, even though it happens all the time, is the sense that somebody's piling on, somebody's taking what is now a very serious issue, the state of the economy, the retirement plans of millions of Americans, and turning it into politics.

ZAHN: Sure. That is the great -- that's where the greatest cynicism comes from.

GREENFIELD: Yes.

ZAHN: Seeing that all politicized.

Close with a thought about the relevance of this Judicial Watch lawsuit against Dick Cheney and how vulnerable that makes the vice president at a time when, as he suggests today, he doesn't want to be distracted as any planning goes forward towards a potential attack on Iraq.

GREENFIELD: I have a hard and fast rule. I don't believe much in political rules, because there is no such thing as political science. But one of the rules I do believe in is your own man says so. When I was playing stick ball in the streets of New York, we had no umpires. So if you got into a fight, which we did all the time being New Yorkers, if a guy on your own team said yes, we're wrong, that ended the argument.

The fact that Judicial Watch is generally considered, probably rightly, a conservative watchdog group -- they were part of Hillary Clinton's vast right-wing conspiracy -- the fact that they are calling the vice president to account and suggesting he may have broken the law is going to make it much harder for the normal Republican response, which is this is all partisan politics.

This may be, in some sense, and I'm not, you know, I don't do predictions here.

ZAHN: No.

GREENFIELD: But in terms of potential vulnerability you were asking about, the fact that it is a guy from their side of the political fence raising these rather sharp questions, is not helpful.

ZAHN: But the White House continues to say this suit is absolute nonsense. How do they bury it? Or can they?

GREENFIELD: Well, you know, the thing, at this point, you don't bury it. At this point, you know, the SEC is going to look into it and the press is in full battle cry. You know, the scent of scandal, whether real or not, is in the air. And they're just going to have to ride this one out and hope that the evidence is, in fact, that Halliburton is OK.

ZAHN: Meanwhile Larry Clayman, the man who files the suit, said you're not going to get any satisfaction out of the SEC, in his words, and that's why he had to file this suit.

GREENFIELD: Yes, I just always find it interesting, it's something that I always keep an eye on is when somebody, in effect, breaks ranks, somebody from your side of the fence says you did something wrong. This is not good news for the White House. But as you, you know, you said the piling on factor could also protect them.

ZAHN: Looking for any visible scars from the stickball matches. I see none. You must have been a very gentle player, Jeff.

GREENFIELD: You play stickball with a Spalding rubber ball, or as we say in New York, Spal-ding.

ZAHN: Spal-ding. But that could...

GREENFIELD: It's very hard to get... ZAHN: ... that could rap you pretty good at the wrong angle.

GREENFIELD: It's very hard to get injured unless you run into a fire hydrant trying to go back for a fly ball.

ZAHN: Yes, that's the biggest obstacle.

Thanks, Jeff.

Have a good weekend.

GREENFIELD: OK. Thanks.

ZAHN: And congratulations. A newly married man.

GREENFIELD: Oh, right. Thank you.

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