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American Morning

Bush to Speak to Birmingham Business Leaders

Aired July 15, 2002 - 07:17   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: As the president continues to deal with his dealings at Harken Energy a decade ago, Mr. Bush heads to Birmingham, Alabama this morning, talking up the economy and trying to reassure Americans rattled by a wave of corporate scandals. Embattled SEC Chairman Harvey Pitt refuses to resign.

(BEGIN VIDEO CLIP)

HARVEY PITT, SEC CHAIRMAN: I am the right person for the job, and the American public expects me to be there pitching in for them and making sure that they get a fair deal.

(END VIDEO CLIP)

ZAHN: Americans, meanwhile, are bracing for a new week on Wall Street and wondering, how low can it get?

Joining us now from Washington, senior political analyst, William Schneider, and back with us after a nice vacation, Andy Serwer of "Fortune" magazine -- welcome back -- good to see you this morning, Bill.

Bill, I want to start off with you this morning. Harvey Pitt making it very clear that he doesn't plan to go. You have John McCain out there, a Republican, again calling for his resignation. Where do you see this going from here?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: As long as the president sticks with Harvey Pitt and he seems determined to stay on the job, I think he stays. The problem is, you know, is there any evidence that the conflict of interest has interfered with his ability to do his job? The only thing that has happened is that he has had to recuse himself from a number of SEC decisions, because he served a lot of clients that are under investigation, including the Big Five accounting firms.

The Democrats and John McCain are calling for his resignation, because of those conflicts of interest. But the question is: At what point do they interfere with his performance? He says, they haven't yet.

ZAHN: Well, Bill, what do you make of the defense he used yesterday that he recused himself even less than his predecessors in that cooling-off period that he described as the first year on the job?

SCHNEIDER: Well, the first year on the job, he did do that. The question is: What happens now? He has been in there almost a year. Will he continue to recuse himself from these cases? Because there are going to be a lot more cases. Will he still feel the need to say, there is a conflict of interest here, and I cannot make these decisions? If that's the case, then it's going to be difficult for him to continue to serve in this position. That's what the Democrats and some Republican critics are saying, and therefore, they say the SEC can't be very effective.

ZAHN: Let's move on to the Harken Energy controversy now. SEC Chairman Harvey Pitt saying yesterday that if the president asked him to release his file on Harken Energy, he would.

Let's look at these statistics that the latest Time-CNN magazine poll show. Essentially it says that 23 percent of those polled say that President Bush's -- or then businessman Bush's sale of Harken stock was proper; 43 percent say improper, but not illegal; 15 percent say illegal.

What is the president up against here, Andy?

ANDY SERWER, "FORTUNE" MAGAZINE: Well, I really think it is an old issue. I think it's important, but I think given the times we are in, it looks bad. I think John King hit the nail on the head. None of this stuff is going to get the president nailed, I don't think. It's very hard to prove insider trading. With regard to the Aloha transaction, it looks a little dicey. But so what?

ZAHN: The SEC already investigated that, did it not?

SERWER: Exactly. It did. It did. And you know, it's going to be very hard for the Democrats to make real hay (ph) of this. I think they are going to keep going at him with this, but I don't really think they are going to be able to get anywhere with this. They are going to continue to use this as we head towards the fall elections, though.

ZAHN: How vulnerable do you think the whole Republican Party is on this, Bill? You know, you look another statistic in this poll, which basically shows that the folks polled say that the Democrats by a 44 percent to a 33 percent margin among Republicans are better able to handle these accounting scandals.

SCHNEIDER: Certainly, the Republicans are saddled with an image of being very close to big business, and compared to the Democrats, the Democrats really have an advantage on this issue. But when asked who do you think will handle it better, President Bush or the Democrats? The result is virtually a tie.

Look, here is where I think it comes out: I don't think Democrats are going to be able to get very far by trying to prove that President Bush is corrupt or dishonest, unless some very startling evidence comes out. I think what the road that they are likely to travel is to say that he is not corrupt, he is clueless. He doesn't have a plan for getting us out of this economic mess, the same charge that was brought against his father.

And that is why the president is headed down to Birmingham today to have meetings with high-level executives, local business leaders, to try to show everything is under control. We have a plan for turning the economy around. We are not going to let the stock market worries infect the economy. We want to keep consumer confidence up, just to prove to the American people he is on the job, and he knows what to do. The cluelessness is a problem.

ZAHN: Final thought, Andy...

SERWER: Yes.

ZAHN: ... on what the president has to do. There are people out there saying, OK, enough of the words, show me some action.

SERWER: Right, exactly. I think that is the point, Paula. Enough jawboning, we need specifics, both from the president and from Chairman Pitt. We need some specific proposals when it comes to stock options, when it comes to an oversight board, when it comes to putting people in jail.

You know, being regulatory is against the nature, I think it's fair to say, of both the president and the chairman. They are laissez-faire people, who believe in self-correcting mechanisms of the market here, and I don't think the American public or Congress needs that right now.

ZAHN: Andy Serwer, thanks so much. Bill Schneider, good to have you back on the air with us too -- appreciate your time.

SCHNEIDER: Pleasure.

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