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CNN Sunday Morning

Will Republicans Be Hurt by Corporate Scandals?

Aired July 14, 2002 - 09:08   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.
MILES O'BRIEN, CNN ANCHOR: From the war against terror to the war against corporate corruption and how misdeeds in America's board rooms are perceived on Main Street.

In a new CNN/"TIME" poll, 72 percent say the corporate scandals indicate a pattern of deception, 20 percent say they're isolated difference. Forty-four percent of those polled say they trust the Democrats to handle the scandals better. Thirty-three percent say Republicans will do a better job.

Now let's get White House reaction to that poll and some other matters. Kelly Wallace joining us from there.

Good morning again, Kelly.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Good morning again, Miles.

The administration certainly looking at those polls and trying to do what it can to prevent Republicans from being hurt in the November elections. That is why we will see President Bush hit the road tomorrow, traveling to Birmingham, Alabama, where he will talk about the economy and corporate responsibility.

At the same time, though, there are new questions about the man President Bush has chosen to lead the new corporate fraud task force. We are talking about Larry Thompson, the deputy attorney general.

We now know that Mr. Thompson served on the board of a credit- card company that was forced to pay more than $4 million to settle allegations, including allegations of questionable business practices.

You see Mr. Thompson there after meeting with President Bush at the White House on Friday.

The Justice Department is defending Thompson saying he only learned about the company's problems after regulators started doing an inquiry and that he led the effort to make sure the company did the right thing. President Bush, we are told, believes that Thompson will do an excellent job leading the task force.

But Mr. Bush himself continuing to come under fire over his tenure when he served on the board of Harken Energy more than a decade ago. Questions also continuing to dog Vice President Cheney, who was chief executive officer of the Halliburton Financial Services Company.

A conservative watchdog group has, in fact, filed a lawsuit against the vice president and Halliburton raising questions about the company's accounting practices and we know the Securities and Exchange Commission is investigating Halliburton.

Miles, all of this has the Democrats saying that this administration does not have the credibility to lead on this issue, saying that Mr. Bush and Mr. Cheney, when they served as corporate leaders, did not practice what they are now preaching -- Miles.

O'BRIEN: All right. Kelly, take us behind that blue curtain there for a moment and give us a sense of some of the discussions and the political strategies here.

George W. Bush is ever so cognizant of what happened to his father, George Herbert Walker Bush, when it is widely believed he didn't pay enough attention to the recession, or at least gave that impression, and impressions are what count here. It is, after all, politics.

Do you have the sense that this is squarely on the front burner in the halls of the administration and that they are going to take -- well, seize the moment politically? Put it that way.

WALLACE: It is on the front burner. It is Topic A, Miles.

Certainly, as you said, this administration looking at the experience of the president's own father. It is viewed that the former president lost reelection because he did not talk enough about the economy and convey his concerns about the slowdown.

That is why I'm told, Miles, we will see the president continuing to talk about the economy but also trying to boost consumer confidence, trying to get the message out that economists believe the fundamentals of the economy are strong.

He will also say this administration is doing what it can, along with Republicans and Democrats, to stop corporate abuse. But, yes, this is Topic A at this White House. These advisers know the November elections could be decided by how Americans feel about the economy -- Miles.

O'BRIEN: CNN's Kelly Wallace at the White House.

Thank you very much.

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