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Stock in Paul O'Neill and Harvey Pitt May be Headed Downward

Aired July 24, 2002 - 13:02   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.
KYRA PHILLIPS, CNN ANCHOR: The markets are up this hour, but stock in Paul O'Neill and Harvey Pitt may be headed downward. Critics have portrayed the two officials as poster boys of Wall Street panic. And, today, signs have emerged that the White House is tired of the bad pr.

CNN's Suzanne Malveaux joins us live from the White House Lawn to explain what's happening -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, at this moment, Kyra, White House spokesperson Ari Fleischer is holding a briefing. He says he's talking about presidential priorities, that the president, first of all, was pleased with the arrest of five corporate executives for alleged fraud, saying this only demonstrates how the administration is serious about cutting back -- or rather cutting back down on those who are guilty of corporate abuse, but he also said and acknowledged that there was a battle that was going on with SEC chairman Harvey Pitt.

As you know, Harvey Pitt was asked by Congress if he could submit some recommendations for the corporate responsibility bill working way through Congress. He did that in a memo with five suggestions, but one of those suggestions was to enhance and upscale his own agency to a cabinet-level department.

Well, an SEC official says that was not to promote Harvey Pitt himself, but rather to give investors a sense of confidence that in fact it was being taken seriously, that they were playing a primary role in cutting at the corporate abuse. But White House spokesperson Ari Fleischer really dumping some cold water on that idea. Democrats only taking advantage of the opportunity, again, to call for his resignation.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECY.: The president is focused on strengthening of the SEC's structure and ability to fight fraud that the Congress passed. That's what he has asked for. He's pleased that will be signed into law. That's where his focus is. He's not focused on that issue.

SEN. THOMAS DASCLE (D-SD), MAJORITY LEADER: You've got businesses that are on the rocks. He's talking about a cabinet-level status? That he needs some elevation? I mean, this is further proof and a clear illustration of why it is many of us feel the time has come for a change in that position. I am surprised and saddened by the insensitivity of Mr. Pitt.

(END VIDEO CLIP)

MALVEAUX: Now, Ari Fleischer was also asked whether or not there was any consideration of making the SEC some sort of cabinet-level department. Fleischer responded by saying they have the status that they need to enforce the law -- Kyra.

PHILLIPS: Suzanne Malveaux, another note, Treasury Secretary Paul O'Neill, why did he cancel his plans -- or postpone his trip, rather, to Latin America?

MALVEAUX: I spoke with his spokesperson earlier this morning, who said that, first of all, there is a lot that is going on with Congress, as you know, the homeland security bill, as well as corporate responsibility, that they are dealing with a number of issues, that he was not going to leave town or leave this country with those type of issues on the table. We also heard from Fleischer, saying that the president did request that O'Neill stay in town to work on those items. As you know, he has been under some criticism lately for his trips overseas, and for not speaking out more forcefully at this time on the stock market is declining on a daily basis.

PHILLIPS: Suzanne Malveaux, live from the White House. Thank you.

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