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Greenspan's Words Reassure Wall Street; Is Bush's Harken Stock Sell-Off a Non-Issue?; Will Congress Pass Prescription Drug Legislation?

Aired July 16, 2002 - 16:00   ET


JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington.

Well, you just saw how Wall Street responded to Fed Chairman Alan Greenspan's reassuring words. But what about the rest of the nation?

New poll numbers out today show Americans' expectations for the stock market and the economy have taken a dramatic downturn.

Our Bill Schneider has been charting the polls and the political influences on the markets -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well Judy, greed has contaminated the stock market. And today, Alan Greenspan took on the same mission as the Centers for Disease Control: to keep the contamination from spreading.


(voice-over): President Bush speaks on Wall Street; the market tumbles.

Chairman Greenspan testifies; the market goes up.

What they said was not really so different.

Mr. Bush:

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We need men and women of character who know the difference between ambition and destructive greed.

SCHNEIDER: Mr. Greenspan:

ALAN GREENSPAN, FED CHAIRMAN: An infectious greed seemed to grip much of our business community.

SCHNEIDER: But Greenspan, who has longstanding authority, went on to answer the big question. So what does this mean for the economy?

GREENSPAN: The effects of the recent difficulties will linger for a bit longer. But as they wear off, and absent significant further adverse shocks, the U.S. economy is poised to resume a pattern of sustainable growth.

SCHNEIDER: Corporate greed has infected the stock market. The problem is to keep it from infecting the economy.

There are already signs of trouble. The public's view of the stock market has clearly deteriorated. A bear market outlook has taken hold.

It has contaminated people's views of the nation's economy. With the stock market crisis, the number who think the economy is getting worse has shot up from 40 to 57 percent, the highest level sense last fall.

Greenspan tried to boost confidence in the economy.

GREENSPAN: The fundamentals are in place for a return to sustained, healthy growth.

SCHNEIDER: And thereby contain the infection.


SCHNEIDER: What matters when people vote is how they think things are going in the country. The White House will not be out of trouble until those expectations for the economy we just saw turn around.

In other words, until the economy is decontaminated from the toxic impact of the stock market -- Judy.

WOODRUFF: All right, Bill Schneider, thank you.

Well, we go to Congress now, where the House today overwhelmingly voted to add stiff new criminal penalties for corporate crooks to reform legislation that it passed back in April. The measure would mandate more jail time in some cases than the corporate crackdown approved by the Senate just yesterday.

Well, as politicians compete to be the toughest on business scandals, questions continue to be raised about President Bush's financial past.

Let's bring in CNN's Brooks Jackson.

Brooks, what about this Associated Press story today, that the president signed a paper while he was on the board of directors at Harken Energy -- this is a little over a decade ago -- that he would not sell his stock.

What's the significance of this?

BROOKS JACKSON, SENIOR CORRESPONDENT: Well what, the AP story says is this raises new questions because Bush turned around and sold it two-and-a-half months later, not six months later.

But if you read that story carefully, it's kind of typical of some of the thin reporting that we've had on this. Bush signed that letter as part of a deal in which Harken Energy Corporation was going to sell stock to the public.

Investors want assurances that people who own big blocks of stock aren't going to just turn around, dump them on the market and drive the price down. But Harken canceled that deal, and so the letter became irrelevant.

End of story.

WOODRUFF: All right. Let me ask you also, Brooks, about these allegations that the Securities and Exchange Commission back at that time gave Bush, at some point along the way, a clean bill of health -- said that they didn't see any conflict here.

JACKSON: You know, we've been dealing with this for a long time now. Let's check the basic facts first. These have not been in question for a decade.

Bush sold 212,000 shares of Harken in 1990 for $4 a share. That was the market at the time. Harken then announced unexpected an $23 million loss. The SEC, which was responding to press accounts, investigated and they took no action.

Now, reading over a memos -- internal memos which had been out for a couple years -- the Center for Responsive Politics got these on -- excuse me, the Center for Public Integrity got these on the Freedom of Information Act. These internal SEC memos show that the career staff at the SEC concluded they couldn't come close to making a case against Bush.

First off, they concluded Bush didn't know the big loss was coming at the time he made the sale. Nobody in management did. He sold the stock eight days before the quarter in question ended, and almost two months before the quarterly loss was announced.

The investigators wrote, quote: "The evidence indicates that Bush did not have advanced notice of most of the information contained in the earnings announcement."

And if he didn't have advanced knowledge, no case on that basis alone.

WOODRUFF: In fact, there was some indication there were going to be losses, but not apparently of the magnitude that they were.

JACKSON: Nowhere near that magnitude.

WOODRUFF: And Brooks, as you said, you've been looking into this. There were some other reasons that the SEC decided not to move forward.

JACKSON: That's right. You have you to prove more than just one thing. And one of the things that has been reported in a funny way here is that the stock price went down. Well, the SEC looked at a minute-by-minute analysis of the stock price on the day that the earnings announcement came out. And contrary to the way it's often reported, the news really didn't affect the stock price. It opened it $3 a share that day. And normally this kind of news, if it's important, makes the stock tank within minutes.

But Harken stock stayed at $3 for hour after hour until afternoon. Kind of drifted down to $2.38 at the end of the day, and then the next day climbed right back up, closed right at $3 a share, right where it had opened before the earnings announcement.

The SEC staff concluded this showed the market, the investors really didn't consider this news announcement all that material. And if it wasn't material on that basis, no case against Bush.

WOODRUFF: And Brooks, this is all there is to know from the SEC back then, right?

JACKSON: Well, there's one more thing. They had to prove that he had criminal intent. And since he -- to make a case -- and since he consulted Harken's lawyers, they concluded they couldn't prove that either.

WOODRUFF: OK, Brooks Jackson, thanks very much.

Well, turning now to another potent issue in this congressional election year: the Senate debate over expanding prescription drug coverage for older Americans got bogged down today in partisan firestorm.

Our congressional correspondent Jonathan Karl watched the whole thing. He watched the sparks fly.

Hi, Jon.


Well, in what may be a sign of things to come on this issue, the debate over prescription drugs started with a lot of sound and fury, but no action.


(voice-over): The debate over prescription drugs is especially impassioned because many members of Congress got elected by promising to help seniors pay for them.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Every single day that we fail to enact a prescription drug benefit program that is affordable and accessible, available to seniors, we are violating that solemn commitment and promise to our seniors.

Every day. Every day. Today, tomorrow. And that is a solemn commitment.

KARL: But on day one of the debate, the two sides are already predicting failure.

SEN. TRENT LOTT (R-MS), MINORITY LEADER: Unfortunately, Senator Daschle is bringing this up in a way that is sort of mutually assured destruction that will produce an issue, unfortunately, and not a result. And it is, I think, a tragedy to do that to our elderly, poor or sick people that need this help.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: This is what we are going to see, I think, for the next two weeks, Republicans slowing down Senate efforts to pass legislation that controls costs and provides benefits. That's the plan. Slow it down, and then blame Democrats.

KARL: Last year, the Senate agreed to spend $300 billion over the next 10 years on prescription drugs. But the two major drug plans under consideration both cost more than that. The Democratic plan would cost approximately $600 billion and would be run by the federal Medicare program. All seniors would be eligible. A so-called tripartisan plan, supported by most Republicans as well as one Democrat and one Independent, would cost $370 billion and would be privately run by insurance companies. All seniors would also be eligible.


KARL: There is one plan that would come within that $300 billion limit the Senate voted on last year. And that's a plan by Chuck Hagel and John Ensign, both Republicans. It follows very closely what President Bush campaigned on in campaign 2000. It basically would target its benefits at low-income seniors using a discount card and would cost about $160 billion a year. But that plan has the least support of the three.

And, Judy, right now, any of these plans to pass would need 60 votes in the U.S. Senate, and it is clear that none of them at this point are even close to that mark.

WOODRUFF: So, this just goes on?

KARL: This just goes on. And we've got two weeks to debate. It is only day one, so there is always room, you know, for compromise down the road. But right now, a very, very tough start to this debate.

WOODRUFF: All right. Jon Karl, reporting from the Capitol. Thanks.

Two backers of these competing Senate bills join me now from Capitol Hill, elsewhere on the Hill. They are Michigan Democrat Debbie Stabenow and Iowa Republican, Senator Charles Grassley. Senator Stabenow, to you first. A primary feature of these bills is that one would channel prescription coverage through Medicare, the other would do it through private insurance. Which of these is going to provide cheaper coverage for seniors?

SEN. DEBBIE STABENOW (D), MICHIGAN: Well, the plan that I'm supporting that would have a guaranteed benefit under Medicare. It would cover about 65 percent overall of the cost for seniors. It's really the plan that our senior groups are supporting, AARP and others, as opposed to the House plan that was written by the drug companies, would cover less than 20 percent of the cost for seniors, and does it in a way that does not guarantee a benefit.

We have two goals in this Senate. We want to provide real, meaningful Medicare prescription drug coverage. And then, also, lower prices for everyone. Every small business that has seen their premiums go up for health care, it's because of prescription drugs.

WOODRUFF: Senator Grassley, what about this question of which plan is going to be better for seniors in terms of how much they have to pay? Do you agree with Senator Stabenow that it is her plan?

SEN. CHARLES GRASSLEY (R), IOWA: Well, I'm not going to be critical of anybody else's plan. All I want to say is that the bipartisan plan that your program has described is the only program that is bipartisan. You have got the House Republicans, the House Democrats, you got the president's plan, you got a Senate Democrat plan.

But nothing gets through the Senate that isn't bipartisan. And so, we have to start with something that has a chance to get passed. Now, in regard to the question that you asked, we would have a 74 percent subsidy for our plans, and that plan would, quite frankly, be better than we even have as senators for our federal employees benefit plan.

WOODRUFF: But what about, just quickly, Senator Grassley, what about what seniors are paying? Which plan is better for them?

GRASSLEY: This plan would be a plan that would be universal. It would have the lowest premium of any of the plans on the Hill at $24. It would have the $250 copay, and 80 percent of the seniors would not fall into any plan that would have a donor (ph).

WOODRUFF: OK, what...

STABENOW: You know, Judy, if I might just say...

WOODRUFF: I was just going to say, we are throwing a lot of numbers around here, Senator Stabenow, so if we can just stick to this basic question for just a second about...

STABENOW: Absolutely. Absolutely. There are two choices: the plan that we have, which is the senior group support, or their other plans with the drug companies' support. I think that's very simple. It is very clear. It's a choice between what is good for seniors and what's good for drug companies that, frankly, right now, are tripling -- are raises prices three times the rate of inflation.

GRASSLEY: Judy, that accusation about what the drug companies support is a description that some people have given to the House Republican plan. Whether that's accurate or not, I don't know. But remember, our plan is a plan that we have written in a bipartisan way that is meant to give -- guarantee universality to drug coverage for every senior and also to be voluntarily, and also to be competitive so that you drive down prices.

This isn't something where the government is going to fix prices. This is where the competitive marketplace and the competition among the plans is going to drive the drug prices down for the senior citizens, so everybody benefits even beyond the subsidy of 74 percent.

WOODRUFF: Senator Stabenow, what about the cost of this? We know that the budget blueprint that came through Congress just a couple of weeks ago allocated $300 billion for this. Your plan calls for 500, $600 billion. How in the world are you going to pay for this?

STABENOW: Well, this is all a question of priorities, Judy. I sit on the budget committee. We make decisions about priorities every day. And it is time to make lowering prices of prescription drugs a priority. Medicare was set up to provide health care for older Americans. It doesn't really do that today because it doesn't cover the way health care is provided, which is prescription drugs.

So, it is a matter of priorities. We can do it if there is the will to do it. I invite people to be involved. We have a Web site called We encourage people to come and get involved and help us get this done.

GRASSLEY: Judy, the fact is that the plan that you said could cost about $600 billion, in fact, has not even been scored by the congressional budget office. So, we don't know what it costs yet. And if the congressional budget office did score it, I think the sponsors of it would be laughed out of town. But we have had ours scored.

STABENOW: Judy, what we do know is what the seniors are paying. We know that seniors are paying two, three, $400 a month. I have a senior with a $900 income with an $800 prescription drug bill. We do know those, and we know it is too much, and we know it is time to act.

GRASSLEY: Under our plan, people under the property guidelines would have 95 percent of their drug costs paid for under our plan.

WOODRUFF: Senators, we know that both of you are passionate about this, and that's why we appreciate your coming on this program and talking about it. Thank you so much. Good to see both of you.

STABENOW: Thank you.

WOODRUFF: Senator Stabenow, Senator Grassley, thank you.

Question: Is the Bush administration weakening clean air laws? Coming up, Senator Patrick Leahy's charges and EPA chief Christie Whitman's response. Also ahead...

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley in Washington. Who is leading the early Democratic presidential race? I follow the money. JEFF GREENFIELD, CNN SR. ANALYST: I'm Jeff Greenfield in New York. President Bush's business background has made his political life a lot more complicated. That background also makes him stand out in modern presidential history.

WOODRUFF: Plus, we will get in tune with movie mouse Stuart Little and his connection to Capitol Hill. This is INSIDE POLITICS.


WOODRUFF: Beyond prescription drugs, the environment was another contentious topic today on Capitol Hill. Critics say the administration is going soft on polluters by scaling back clean air regulations.

Judiciary Committee Chairman Patrick Leahy held a joint hearing on the issue. He joins me now from Capitol Hill.

Senator, I know you and others say they are scaling back, but Christie Whitman, who is the EPA administrator, says what they are doing by issuing these new regulations is going to end up -- we're going to end up seeing emissions reduced -- in other words, it's going to make the air cleaner than it otherwise would have been.

SEN. PATRICK LEAHY (D-VT), JUDICIARY COMMITTEE CHAIRMAN: Well, I disagree. I remember the EPA started off by saying we're going to allow more arsenic in the water, we're really going to be better off for that. And then everybody hollered about it, and they immediately backed off.

When we're talking about the Clean Air Act, we're talking about something that was put together 25 years ago in a careful compromise between the major power companies that do a lot of the polluting in Midwest and the states in the Northeast, like my own state that, that are hit with all of the mercury poisoning and everything else.

Now, the Clinton administration tried to enforce that. A lot of these polluters were starting to clean up. They were paying huge fines into the billions of dollars. They were being forced to clean up.

And so the Bush administration comes in and says, well, we're going to review this. Maybe we won't be as tough on you as you thought.

And all of a sudden everybody is backing off. They don't -- even the press is reporting even today they're backing away from settlements they were making, clean-up steps that they were taking because they feel that the Bush administration simply will not enforce the law.

WOODRUFF: Well Senator, let me read you, among other things, what an official with the National Association of Manufacturers said about this.

He said, quote: "These overdue reforms should help promote safer, cleaner and more efficient power plants, refineries and factories."

LEAHY: Well, just tell that to the parents of children in the Northeast who are afraid that their children are drinking water or eating fish with mercury in it, and seeing power plants that could have, and should have been cleaned up, should have been retrofitted years ago, and now they hear that they want to continue to avoid having to take the steps necessary to stop the pollution from coming into the Northeast.

Of course they don't want to do it. It's going to cost them money to have plants that do not pollute.

But the money is a lot less than what it's going to cost for the health care for children with asthma and people with mercury poisoning and everything else.

WOODRUFF: But Senator, as you know, a number of these companies that have been under the gun on this issue are saying now that they have these new regulations, they know what they're expected to do, they are going to be able to make the kinds of adjustments, to make the kind of changes in their equipment that will allow them to be cleaner, in effect.

LEAHY: They've know what they needed to do for 25 years, and they haven't done it. And the only reason they started doing it is when they were facing huge fines. It was going to cost them more in fines than it would be to clean up. Then they started complying.

As soon as the Bush administration started backing off from that, they stopped complying.

I don't buy it. It seems like a bait-and-switch attitude to me.

WOODRUFF: Senator, where does this go from here?

LEAHY: Well, we'll keep pushing. I hope, like what we saw when they wanted to allow more arsenic in the water, the American public responded very strongly, the administration backed off.

I hope if enough evidence comes out about how this is just going to cause more mercury pollution throughout the Northeast, I hope the administration will back off and start enforcing the law that's on the books.

WOODRUFF: Senator Patrick Leahy, good to see you sir.

LEAHY: Good to be with you.

WOODRUFF: We thank you for talking with us.

And in just a short while we're going to be talking with -- get the administration view. We're going to talk with EPA Administrator Christie Whitman.

The so-called 20th hijacker could now face the death penalty. Details on that, plus update on today's attack in the Middle East, in the "Newscycle."

Also, the questions surrounding Vice President Cheney's days as a CEO. Bob Novak and James Carville consider the political fallout.


WOODRUFF: Among the stories in our "Newscycle": A federal grand jury has re-indicted Zacarias Moussaoui. He's the man first detained on immigration charges, whom investigators now say would have been the 20th hijacker on September 11. The new indictment clears the way for a jury to impose the death penalty if Moussaoui is convicted at trial.

At least seven people died and 15 others were wounded when three Palestinian gunmen dressed as Israeli soldiers opened fire on a bus today in the West Bank. Israeli defense forces have mounted a search to hunt down the attackers. Several pro-Palestinian groups have claimed responsibility for the attack.

Here in Washington, President Bush today unveiled a national strategy for homeland security. The document includes the creation of the new Department for Homeland Security. It also calls for new steps to protect the nation's food supply and the creation of a drug stockpile to minimize the threat of a biological attack.

With us now from the CNN "CROSSFIRE" set at George Washington University, James Carville and Bob Novak.

James Carville, the president's strategy today on homeland security, does this change the equation in terms of the president's ability to get this new department created?

JAMES CARVILLE, CO-HOST, "CROSSFIRE": I don't think so. I mean, I think this thing was rushed out to try to interfere with the testimony of the FBI agent that was testifying that day.

But there's some merit to it, and I think that the Democrats are looking very closely at it in the House. And my understanding is they're going to shut off all debate and ram it down. And I suspect when it gets to the Senate we'll find out a lot more about this.

But, you know, he's the president; he's entitled to make his case for this. And I think when it gets to the Senate, they're entitled to look at it judiciously and carefully, and make sure that what they do does more good than harm.

WOODRUFF: Bob, unveiling the strategy today, does this change anything?

ROBERT NOVAK, CO-HOST, "CROSSFIRE": Well, it makes the Democrats unhappy because this is the strong suit for the president. He's having a tough time on the stock market, and all of this battering of the corporate executives.

But people still like him because of the war on terrorism. And any time he can change the subject to this, it's good. And it frustrates the partisan Democrats, some of whom are seated at this table.

CARVILLE: Bob, I can tell you I'm honestly not frustrated by it at all.

WOODRUFF: All right, we're going to quickly change the subject.

Corporate responsibility, specifically to the White House -- the president, the vice president, questions about Harken Energy, questions about Halliburton Energy, the company the vice president headed.

I want to quote to you something -- this came out in "Newsweek" magazine this week. The current CEO of Halliburton says in an interview, quote: "The vice president was aware of who owed us money and he helped us collect it." As we know, Halliburton is being investigated by the SEC now for accounting irregularities.

Are these questions -- James Carville, are these questions that the vice president should be being asked to answer? Is this something that's a big deal or not?

CARVILLE: Well, first of all, let's remember that it was the Bush-Cheney campaign that made his tenure at Halliburton a big deal. And so now people are coming back and have every right to question his tenure.

They are the ones that pumped it up. And they said all these things happened. And now we find out that some of the decisions that were made -- I think a lot of this -- some of this is the Bush people trying to deflect some heat to Cheney because they don't want to answer the question of why won't they release that SEC file, which they're desperately doing everything they can.

Harvey Pitt, the head of the SEC, said if the president asked him, he would release it. I don't know what the big deal is. What they need to do is start focusing on that, release that file. By doing that, it would go a long way toward getting this behind us.

WOODRUFF: Bob, what should the vice president do?

NOVAK: That's such garbage, saying that Cheney is being hit in order to protect President Bush. As a matter of fact, Judy, as you've seen on this program, Brooks Jackson, the great investigative reporter for CNN, said there's absolutely nothing to these charges against President Bush. I wrote it about a week ago. It is just absolute nonsense.

And, as far as the Cheney stuff goes, this was a small accounting question. It's a footnote in a document. It is such mini-garbage that it makes no difference. And all this to try to have an attack on Bush and Cheney is cheap politics.

WOODRUFF: What about the call for both the president and the vice president to get these documents released, when it comes to Halliburton, when it comes to...

NOVAK: All the documents are out there that are necessary. And there's no need for any more.

You see, the problem is, Judy, that the Democrats come up with these old grandmother stories. And the press asks the questions. And they're the handmaidens of the Democrats when they keep pressing these non-stories.

CARVILLE: Judy, I don't know what the problem is. Just call Harvey Pitt and say: "Mr. Pitt, release the whole file," because the file is going to that show that Bush knew about this. Brooks was wrong. Bob was wrong. The SEC was wrong. We now knew Bush knew in advance. But what's the problem?

If he's so innocent, pick up the phone and say: "Mr. Pitt, I'm an honorable, honest man. I'm being attacked by the likes of Mr. Carville and that whole partisan outfit out there," and release and it let the public see it. And let's see if James Carville is right or Books Jackson and Bob Novak. And I'll guarantee you, it's James Carville is right.

NOVAK: That's a war room spin. It has nothing to do with reality.

WOODRUFF: But, Bob, what is the argument for not releasing it?

NOVAK: With the economy in trouble, it's silly to talk about this sort of thing.

CARVILLE: Go ahead. You'll be right. You can look at me and say, "I was right." Release it.

NOVAK: That's spin, James.

CARVILLE: Why? How it is


CARVILLE: ... to pick up the phone and say, "Release it"?

NOVAK: It makes me sick. You've said it seven times. I don't want to hear it again.

CARVILLE: I'll say it again. Release it. Release it. Release it. Release it. Release it.

NOVAK: That's 10 times.

WOODRUFF: All right. I did have a follow-up, but that was such a good ending, we're going to leave it there.

Bob Novak, James Carville, thank you both. We'll see you on "CROSSFIRE."

And you can give us your opinions on these topics and a lot more. Go to Plus, don't forget to e-mail Bill Schneider with your ideas for this week's "Political Play of the Week." That's on Friday. Question: Is Arnold Schwarzenegger thinking about a run for political office after all? I will have the "Inside Buzz" next.

And, in cash they trust: Based on the latest fund-raising figures, we will tell you which Democratic presidential prospect may need to watch his assets.


WOODRUFF: Arnold Schwarzenegger created quite a buzz by telling some GOP governors yesterday that he is still interested in running for California governor some time in the future.

Well, the publicist working with him on an after-school initiative on the ballot this November tells me today that Schwarzenegger's political plans have not changed since I interviewed the actor and Republican activist back in March. Schwarzenegger decided not to challenge Democrat Gray Davis this year, citing his movie contracts. But Schwarzenegger is promoting, as we said, an after-school initiative on that November ballot -- his publicist saying that was the main purpose of his remarks to some Republicans attending the National Governors Association Conference in Idaho.

Sometimes money speaks much louder than a potential candidate's words when you are trying to gauge his political prospects.

Our Candy Crowley has been looking over the latest fund-raising reports from Democrats thinking about a run for the White House.


CROWLEY (voice-over): Inside these pages, in line after line of mind-numbing, down-to-the-last-cent, eye-glazing numbers, the first presidential primary of 2004 is under way.

RON FAUCHEUX, "CAMPAIGN AND ELECTIONS": If you want to run for president in 2004, you have to have your money raised in 2003. And we are getting close to that point where the serious money-raising has to begin.

CROWLEY: The money race is dutifully tracked by the FEC: Who is raising how much, from whom?

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: They are early political activities which show some strengths, maybe some vulnerabilities. But this is barely spring training, let alone early innings.

SEN. JOHN EDWARDS (D), NORTH CAROLINA: I'm fine. How you doing?


EDWARDS: Nice to see you.

UNIDENTIFIED FEMALE: Hey, how's it going?

EDWARDS: It's going great. It's going great. Good to see you guys.

CROWLEY: Senator John Edwards, the rookie in this game, seems to have a knack for cold cash. Showing $2.6 million in the last quarter, he remains the top overall fund-raiser, unless you don't count soft money, the big, unregulated contributions soon to be illegal.

In that case...

SEN. JOHN KERRY (D), MASSACHUSETTS: I've been here for 10 seconds and I've got to pitch.

CROWLEY: John Kerry takes the top money-raiser slot. Between his Senate reelect coffers and his political action committee, Kerry collected almost $1.5 million in hard money last quarter.

After that and in order: Gephardt, Edwards, Lieberman, Daschle, Gore, and Dean. You heard that right. In the last three months, Al Gore out-raised only Vermont's governor, Howard Dean. For once, the guy near the bottom of the list is getting more buzz than the one at the top. Gore's second-quarter fund-raising was more than $200,000 short of his first quarter and just a little over half of what Joe Lieberman, his 2000 running mate, posted. Said one Democratic official, "Gore tanked."


CROWLEY: Gore supporters disagree with a vengeance and a blizzard of arguments that: A, he has been busy writing a book; and, therefore, B, held fewer fund-raisers this quarter; and, besides, C, the figures for most of these other guys include a reelection campaign and a political action committee, and Gore has only one coffer. Moreover, D, it is easier to raise money if you're a member of Congress. And, E, Al Gore already has name recognition and a financial network, so who needs to prove anything?

So there you go.

WOODRUFF: But not that they wanted to set the record straight or anything.

CROWLEY: No, not at all -- and there's two more quarters in the year -- two more, in fact.

WOODRUFF: Oh, OK. Good. Well, we appreciate that.


WOODRUFF: All right, Candy Crowley, thanks a lot.

We keep our eye on the money in our "Campaign News Daily": Vermont Governor Howard Dean, who Candy just mentioned, says he treats the public's money as if it were its own. And he says his personal finances prove his point. Dean has released his financial records, which place his net worth at about $4 million. The governor says $4 million is a lot of money, but -- quote -- he says, "I am not Bill Gates." Howard Dean is among the Democrats considering a White House run who trail President Bush in their own home states. In a new poll, Mr. Bush has double-digit leads over most of the leading Democrats among their home-state voters. His largest lead, 18 points, is over Majority Leader Tom Daschle in South Dakota. The two potential candidates who lead President Bush in their home states: Senator John Kerry in Massachusetts, by 23 points; and Senator Joe Lieberman in Connecticut, by three points.

Out in California, Republican Bill Simon is sidestepping questions about his past use of a specific tax shelter. Simon has refused to say how much he may have saved in taxes by using the tax shelter, which is now being challenged in court case by the IRS. Simon has described the matter as a dispute between the IRS and his accounting firm. And, we note, he has not been accused of any wrongdoing.

Coming up next: EPA Administrator Christie Whitman on criticism of moves the government is making on clean air.

We'll be right back.


WOODRUFF: A little earlier, you know we talked with Senator Patrick Leahy about today's joint hearing on clean air regulations.

With me now for the administration perspective on this matter: the administrator of the Environmental Protection Agency, Christie Whitman.

Ms. Whitman, among other things, Senator Pat Leahy -- and we're going to show just a portion of what he said a minute ago -- says that what you all are trying to do is, in essence, let companies do what they wanted to do for so long, which is get by with minimal standards and just continue polluting.

CHRISTINE TODD WHITMAN, EPA ADMINISTRATOR: Well, actually, the exact opposite is true, because what the president has proposed in his Clear Skies proposal initiative that he has put forward is a mandatory program that would require mandatory reductions of SO2, nitrogen oxide and mercury by the utilities -- no way to get out of it, mandatory.

It would drop the emissions of those three pollutants by 70 percent over the next 10 years. That's the cleanest, best way to attack the issues that we have in front of us, those issues that cause ozone-alert days and asthma attacks in children and premature deaths. We have to get at this. And the best way to do it is to ensure that we impose mandatory standards on those utilities. And that would require even those old coal-fire plants that have been out from under, gotten out from under the Clean Air Act for so long to actually take action.

WOODRUFF: Here is just a portion of what Senator Leahy had to say. And I'd like you to hear this.


LEAHY: I hope, like what we saw when they wanted to allow more arsenic in the water -- the American public responded very strongly. The administration backed off. I hope, if enough evidence comes out about how this is just going to cause more mercury pollution throughout the Northeast, I hope the administration will back off and start enforcing the law that's on the books.


WOODRUFF: What about that?

WHITMAN: First of all, as the senator knows, we never tried to back away from a standard on arsenic. We just tried to make sure that we had it at the right place. Whether it needed to go lower or we needed to do more was part of that review.

But we are -- the president is committed to cleaning up the air. And he feels that we need to do it faster than we can do it now under the current Clean Air Act. Today, we see ozone-alert days. Today, we see enormous problems, even though we've made progress. And that's with the Clean Air Act in full implementation, a full implementation of new-source review.

And yet we have a very cumbersome process that results in lawsuits, that allows some of these companies not to do anything for five or six years while they fight us in court, whereas, if we were to establish mandatory standards that were clear for everybody -- "This is what you can emit, nothing more" -- then we will actually get the kind of action and results that we want.

WOODRUFF: Let me just cite to you, Ms. Whitman, from a column not too many weeks ago in "The Bergen County Record." This is on your record when your were governor of New Jersey.

It says: "As governor, Ms. Whitman took a tough line against these Midwest polluters, joining several other governors, suing to make the plants live up to requirements. Now, as head of the EPA, she says relaxing the regulations instead of enforcing them will make it easier for companies." It says, "How does relaxing the rules encourage these owners to clean up?" And it also goes on to accuse you of a flip-flop.

WHITMAN: Oh, it accuses me of a lot of things. I've been accused of a number of things since I have taken this job.

But it's not at all true. We didn't have the Clear Skies proposal before us as a tool when I was governor. I would have loved to have seen that. I would have been one of the first to endorse it, because, in New Jersey, I could have closed down every industry and not reached the Clean Air standards because of transport. The issue here is, we have to get at everybody here.

The confusion comes -- in part of the Clean Air Act is a program called new-source review. It applies to all, everybody who emits into the atmosphere. It's not just utilities. We have proposed going forward with some proposal originally made under the Clinton administration back in '96, that really -- actually, the three things that we're proposing going final with don't affect the utilities.

There is one recommendation that we're making that would require full regulatory review and it would require full public process, that we haven't even started yet, that would impact utilities. But this is an effort to try to streamline, to make sure we get these things done faster. But, really, the answer is to pass something like the Clear Skies Initiative. That's much the best, fastest way to get the kind of results we all want.

WOODRUFF: All right, EPA Administrator Christie Whitman, we appreciate you joining us. Good to see you again.

WHITMAN: It's a pleasure to see you again.

WOODRUFF: Thank you for stopping by.

WHITMAN: Thank you.

WOODRUFF: Thank you.

As the parties narrow their lists of potential convention sites, one of the cities in the running looks to repeat history. Up next, the mayor of Miami talks about his city's possible role as political host in 2004.


WOODRUFF: The two political parties have narrowed their list of cities vying to play host to the 2004 political conventions. The Democrats will choose among New York, Miami, Detroit and Boston. The Republicans say they are considering New York, Boston, Miami, New Orleans and Tampa-Saint Petersburg.

Miami is one city to have hosted both conventions in the same year once before. That was 30 years ago, in 1972.

With me now to talk more about playing host to conventions: Miami's mayor, Manuel Diaz.

First of all, Mr. Mayor, why would Miami be a good place for these parties to meet, to convene?

MANUEL DIAZ, MAYOR OF MIAMI: Well, as we told them today during the presentation..

WOODRUFF: Mr. Mayor, I am going to have to interrupt you. I apologize.

But we want to go out to California, the sheriff of Orange County, about a little girl who was abducted there.

Let's listen in.

(JOINED IN PROGRESS) MIKE CORONA, ORANGE COUNTY SHERIFF: ... that has been put out. The subject description stays the same: a male, Latin, 25 to 40 years of age, black hair that has been greased back, a black mustache, at the time wearing a powder blue button-down shirt.

The vehicle description has changed only slightly. Currently, we're looking for a two-door light green, possibly a Honda or Accord -- Acura, I'm sorry -- a light green, possibly Honda or Acura, with chrome wheels, with an H on the back of it and the chrome wheels on the car. This is a change in the description of the vehicle.

However, I have to tell you, our best witness at this point in time is a 5-year-old young lady. While she has done a magnificent job in being able to brief the investigators on this case, it is a 5-year- old's description. We will take any information leading to the arrest of this individual, any help that the public can be.

But, again, the basic description: a male Latin 25 to 40 years of age, black hair greased back, black mustache, power blue button-down shirt. And we're looking for a two-door light green Honda or Acura.

The first individual we would like to bring forward is the mayor of Stanton, Mayor Brian Donahue.


Our entire community supports the Runnion family with our thoughts and prayers. It is unthinkable that anyone would come into our safe and peaceful neighborhood and do this terrible act. Rest assured that our Orange County Sheriff's Department is doing everything and will do everything possible to seek out this criminal and return Samantha to her parents.

We are establishing a reward program to assist in her safe return. Again, our prayers are with the family.

Thank you.

CORONA: Thank you, Mayor.

Next up: one of the great partners that we have in law enforcement, not here in this county, but across the nation is the Federal Bureau of Investigation. The FBI has stepped in in a major way in this investigation. And I'd like to bring forward the special agent in charge, Richard Garcia.

RICHARD GARCIA, FBI: Good afternoon.

Thank you, Sheriff.

This is a tragic event, when a 5-year-old, 6-year-old child is taken by somebody that they don't know. The FBI is here and has extended an extensive amount of assistance to the sheriff's department. We have contacted our offices throughout the country, as well as assisted in the international aspects of getting our partners in Mexico as well. Any information you can have regarding this child, the location of the child, the suspect and such, please call it in. The information is being broadcast through the help of the media. There's a lot of people out there watching, a lot of people looking. I implore you to call. If you have cell phones out there, use them, so we can hope to bring this child back and safely returned.

Thank you.

CORONA: Ladies and gentlemen, let me go through with you what has taken place in a very short period of time and the cooperation that we have not only in the community, but in law enforcement in this county.

As you well know, a little before 7:00 yesterday evening, Samantha Runnion was abducted right here in this complex. There was a 5-year-old little girl that she was playing with that has become the best witness in this particular investigation, was able to describe for us not only the individual, but the car.

This is a heinous crime. And it is one that we responded to very, very quickly. I can tell you that the Orange County Sheriff's Department patrol responded within minutes to this location. There was a broadcast that was put out on our red channel, which is a countywide communication system. Operational personnel were deployed to this location and began a canvassing of the neighborhood.

Immediately, our air unit was up. And we received support from Costa Mesa Police Department with another helicopter in the air. Reserves from the Orange County Sheriff's Department were dispatched and began a canvass of not only the community, but also businesses close by.

A CARE alert was put out thanks to the media. Again, a child abduction regional emergency was announced. That was put out by the radio and electronic broadcast. In addition to that, bloodhounds were deployed in the community to start looking for our victim. Investigative resources were brought into play. The investigators from the Stanton division of the Orange County Sheriff's Department were here on scene. And the criminal investigative division larger from the sheriff's department were brought in.

Neighborhood canvassing, the businesses, parole and probation checks were done. We have begun a search of all of the businesses, looking for any active video monitoring equipment that may be -- may have been employed by local businesses that could be of help to us.

The FBI stepped in. They brought in over 30 agents to this particular program. Not only did they bring their agents to help out in terms of manpower, but they brought in technical expertise to be able to analyze the data that we're getting. They have also contacted their resources cross-border so that, in fact, if there is a location either here or in Mexico, the FBI will be working with their counterparts to make sure that our victim is returned.

The flier that we have given to all the media has been posted on the Web page. It also has been posted with the National Center for Missing and Exploited Children. It has been printed in Spanish and is being currently translated into Vietnamese.

We have over 150 personnel that are involved in looking for Samantha. It is 10 days from her birthday. I can guarantee you that all the resources available to law enforcement and the county of Orange, the Orange County Sheriff's Department and the FBI will be put forward to bring Samantha home before her birthday.

You commit a crime in Orange County, we will do everything in our power to make sure that you're brought to justice. And, in this case, we're going to do everything in our power to make sure that Samantha comes home to her mother. That's a guarantee.

But we need your help. We need the public's help to identify any potential witnesses, any potential leads, any potential vehicles. If you have any information, please call the Orange County Sheriff's Department at area code 714-628-7000.

I'm more than happy to answer any questions.


CORONA: The (OFF-MIKE) registrant, the 290 registrations have been pulled. And we're going through that one by one, not only here for those that may reside in the city of Stanton or in the county of Orange, but broadly. Since this individual was in a vehicle, we're looking not only here in Orange County, but throughout the state.

WOODRUFF: Mike Corona is the sheriff of Orange County, California, telling about another tragic kidnapping of a child, this one 5-year-old Samantha Runnion, kidnapped from an apartment complex where she was playing early last evening with a friend -- the police saying that much of the information they have about the suspect, about the car he drove off in, from a 5-year-old friend of Samantha's, a young girl she was playing with -- another tragedy.

And they are looking for an Hispanic man, 25 to 40 years old, driving a light green Honda or Acura.

That's it for INSIDE POLITICS. Our apologies to the mayor of Miami. We'll try to get back to that story in a moment.

Coming up next: "WOLF BLITZER REPORTS," Kate Snow filling in for Wolf.

I'm Judy Woodruff. Thank you for joining us.


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