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CNN INSIDE POLITICS

Bush and Cheney Tout Economic Policy; White House Aide Defends Cheney's Record on Halliburton; Dingell Crushes Competition in Michigan

Aired August 7, 2002 - 16:00   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.
JOHN KING, GUEST HOST: I'm John King in Washington. President Bush and Vice President Cheney give tag team speeches on the economy. I will ask Cheney adviser Mary Matalin about their strategy and the vice president's potential baggage.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl in southeast Michigan where the old guard Democrats faced off against the new, and the old won.

BRUCE MORTON, CNN CORRESPONDENT: I'm Bruce Morton in Washington. As Democrats and Republicans scout 2004 convention sites, I'll look back at some of the best and worst places for the parties to party.

KING: Also ahead, are Nevada cops endorsing smoking pot? Thanks for joining us. I'm John King in Washington. Judy is off this week.

We should let you know we are standing by at the UCLA Medical Center in Los Angeles. We expect shortly an update on the remarkable surgery for two one-year-old twins from Guatemala joined at the head until surgery just yesterday. We'll bring that update live when we get it. We begin here on INSIDE POLITICS with the newest twist on the Bush administration's efforts to talk up the economy and come down hard on corporate crooks. Today the president took his message to WorldCom country and Vice President Cheney broke his recent silence on an investigation that involves his tenure as a corporate CEO.

(BEGIN VIDEOTAPE)

KING (voice-over): The president went first. Tough talk about corporate corruption in a Mississippi congressional district that is not only a midterm election battleground but also home to the now bankrupt long distance giant, WorldCom.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Here in Mississippi, you know what I'm talking about. You know what it means to be let down by shady corporate practices.

KING: Minutes later, the vice president joined the administration counter offensive. Speaking in San Francisco, Mr. Cheney said Americans worried about the economy should remember things went south on Bill Clinton's watch. RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: It is now clear from the data that when President Bush and I took office, the nation slid into a full blown economic recession.

KING: Simultaneous speeches, a deliberate echo.

BUSH: We will not rest until we have economic security for everybody who lives in America.

CHENEY: We will not rest until every person who wants work can find a job.

KING: The president's party traditionally suffers in the midterm election years, and Republicans worry turmoil on Wall Street and headlines about corporate corruption will make things worse. The vice president's speech drew protesters, and inside a few hecklers suggested questions about Mr. Cheney's role as a CEO make him a poor champion of corporate reform.

(END VIDEOTAPE)

KING: Both the president and vice president upbeat about the outlook for the economy looking ahead. Both say growth is strong, better days ahead. No new policy initiatives from either man, the president or the vice president. These speeches all part of a month- long focus on the economy that includes a major economic forum next week in Waco, Texas.

After Cheney's speech today the vice president did respond for the first time to public questions about his tenure at the Halliburton company but he refused to directly comment on a Securities and Exchange Commission probe of the firm's accounting practices.

(BEGIN VIDEO CLIP)

CHENEY: There currently is an inquiry underway by the SEC with respect to Halliburton's accounting practices. I am of necessity restrained in terms of what I can say about that matter because there are editorial writers all over America poised to put pen to paper and condemn me for exercising undue improper influence if I say too much about it since this is a matter pending before an independent regulatory agency, the SEC. If you are interested in the facts of the Halliburton situation, I would refer to you the Halliburton Web site.

(END VIDEO CLIP)

KING: Well, we are interested in the facts and we asked CNN's Brooks Jackson, our senior correspondent, to go to the Web site. What does it show?

BROOKS JACKSON, CNN SENIOR CORRESPONDENT: Well, John, what the vice president was referring to is an audio recording on that Web site of Halliburton executives who briefed securities analysts late last month at the time the company announced its second quarter earnings. In that July 24 telephone conference call, the company CEO, David Lesar, said the preliminary SEC inquiry is quote, "about politics. It is not about business."

He said the company's accounting practices are absolutely legal and furthermore said the same accounting method now being questioned at Halliburton is also used by at least 10 of the 15 largest publicly traded construction companies. They also said most of Halliburton employees are quote, fighting mad about what he called unfair media coverage of the SEC inquiry.

Just to remind everybody what the SEC is questioning is Halliburton's practice of claiming as income money that it has not yet received from customers but which it expects to collect once billing disputes over construction cost overruns are resolved.

Now that's legal so long as the company makes reasonable assumptions. And Halliburton says that its assumptions are reasonable and in fact have withstood the test of time. Of the $89 million in disputed billings that it booked as income four years ago, for example, it says it has already collected $39 million and is still pursuing $31 million more, which isn't bad. The most troublesome issue for the company is clearly the fact that it did not disclose that it had changed its accounting to this more liberal method until a year after it was adopted.

Now the company says the amounts involved were no big deal at first but when they got larger Halliburton disclosed the change. The company's chief financial officer, Doug Foshee, conceded that might have been a mistake, not disclosing and he said quote, "in perfect hindsight could someone disagree with that? Yes." End quote -- John.

KING: But Brooks, the CEO says this is about politics, not about business. The SEC investigation was begun during the tenure of a Republican administration. The vice president is the former CEO. The chairman of the SEC is President Bush's appointee. Do they explain what they mean by politics, not business?

JACKSON: It doesn't explain, but what I assume he meant is that things like certain Democrats calling for congressional hearings on this matter, the fact that the SEC feels constrained to go into every question that is raised and this was first raised by a newspaper report, is part of the politically charged atmosphere in which we are now. The SEC felt it could not not investigate.

KING: An atmosphere likely to continue until they close the investigation or the November elections.

JACKSON: Exactly, whichever comes first.

KING: Brooks Jackson, thank you very much.

I talked about Halliburton, the economy, and other issues today with Mary Matalin, the vice president's top political adviser. I began by asking if the vice president did not do anything wrong during his tenure at Halliburton, why can't he just say so?

(BEGIN VIDEOTAPE) MARY MATALIN, COUNSELOR TO VICE PRES. CHENEY: The inquiry has nothing to do, and we've not been contacted by, the SEC. Why he doesn't want to say anything is he understands we're in a political season, and the nanosecond he says anything, it will be misinterpreted as his trying to influence inappropriately an independent regulatory board.

That's why he did, however, refer those who are interested in the facts of this generally accepted accounting practice employed by Halliburton go to their Web site and look at what they told their analysts on July 24 on their second quarter earnings report.

So there are facts out there. He is -- he did say there that he is very proud of his service at Halliburton, the people who work there, some 85,000 strong, and I think what might be disconcerting to him, though he didn't say it is, he understands that he is a political target. That's the price of public service today. What is not so easily accepted is that a solid corporate citizen like Halliburton can become a target simply because of association with him.

KING: In the speech today the vice president said the economy was fundamentally strong, that economic growth was returning. He also said, though, and it seemed to be way to remind any Americans, any voters who might be worried about the economy -- this recession started, the vice president said, in the Clinton Administration.

Is that part of the political debate about the economy, that as Republicans run in these midterm elections, to remind people that the recession began before Bush-Cheney came to Washington?

MATALIN: I have to tell you the truth, John. This vice president and this president work on results, they work on policy. He is not really focused on the politics of this. The reality is, and he predicted it, he, the vice president, on "Meet the Press," and was roundly criticized by our opponents for it, that we were on the front end of a recession. For policy makers to know where we were, where the economy was, and to be able to put in place policies to shorten and make shallower the recession, which is what the administration did across the vortex -- cut the stimulus package in conjunction with monetary policy of the consecutive interest rate cuts -- that got us out of the recession faster than should have been the case.

And what he was saying today, what the administration is doing going forward, is putting policies in place for the future that will build on this pro-growth platform where we are today.

KING: Let me change the subject to the issue of Iraq. The vice president brought it up in his speech and he was questioned about it on more than one occasion. Let's listen first to what the vice president had to say when it comes to this administration's posture vis-a-vis Saddam Hussein.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: In the case of Saddam Hussein, we have a dictator who's clearly pursuing these capabilities and who has used them both in his war against Iran and against his own people. As President Bush has made very clear, the government of the United States will not look the other way as threats accumulate.

KING: Some Democrats worry that "not look the other way" means that there could be military action before the November elections. Already some buzz among Democrats, watch out for October surprise. What say you?

MATALIN: Well, the premise of that suggestion is that there would be a political motivation. That is absolutely absurd, absolutely ridiculous. What the vice president made clear today is this president has made no decisions on Iraq, but reiterated the administration's policy. America cannot leave in place a regime that is lethal to this country. Nor can civilization, nor can that region.

So a regime change is necessary. How that takes place has yet to be determined, but all Americans in the civilized world need to understand the weapons of mass destruction being hooked up with terrorists -- we know that effort is underway. A madman like Saddam Hussein having nuclear capability, those are serious, serious issues which this president is not going to turn -- look away from, and some preemptive action may have to take place to secure us. That's their number one responsibility. What shape that takes is undetermined.

KING: The vice president also was asked, what about 2004. His focus now on the midterm elections, but will he be at the president's side in the campaign for reelection for 2004? Let's listen.

CHENEY: Well, I suppose two people are going to figure very prominently in that decision. One is obviously the president. The other is my wife. If the president is willing, and if my wife approves, and if the doctors say it's OK, then I'd be happy to serve a second term, but I emphasize again, that's the president's call, not mine.

KING: Happy to serve a second term. Any doubt in Mary Matalin's mind that Dick Cheney will be on the Bush ticket in 2004?

MATALIN: I have no doubt. But as he said, there are two other people who figure in that decision, and obviously most prominently the president. I do see them working together, side by side, day after day, and I know the vice president enjoys the confidence of the president. So we'll see when we get there. But I do think Lynne Cheney will have something to say about it, too.

KING: And no doubt Mary Matalin will be on that plane in 2004?

I don't -- well, I don't confer with my husband on these decisions, but we take it one day at a time here, John.

KING: Your husband being the Democrat James Carville. Mary Matalin, thank you for joining us today on INSIDE POLITICS.

MATALIN: Thanks, John.

(END VIDEOTAPE) (INTERRUPTED FOR LIVE EVENT)

Up next here on INSIDE POLITICS, the big Michigan primary. Is there a message about the state of women in politics? Jeff Greenfield will be along next. And I'll ask Michigan gubernatorial nominee Jennifer Granholm about her success last night and the tough battle ahead.

As congressional investigators threaten to subpoena Martha Stewart, we'll have a debate on the politics of corporate scandal and the Bush administration's response.

And law enforcement officers want it make it legal to inhale in Nevada. Later, we'll talk about pot, punishment and politics.

(COMMERCIAL BREAK)

KING: Now, the latest primary results from election 2002, including a resounding victory by the longest serving member of the House, Michigan Democrat John Dingell.

(BEGIN VIDEOTAPE)

KING (voice-over): In the end it wasn't even close. Fourty- seven-year incumbent John Dingell won the right to run again in the fall, easily beating Congresswoman Lynn Rivers in Michigan's newly created 15th district.

Rivers and Dingell were forced into the primary when the Republican-controlled legislature combined their districts. Dingell had union muscle, and that proved decisive.

ED SARPOLUS, MICHIGAN POLLSTER: He's the last of the congressmen who has a political machine. Ten days ago if you win in that district all things change. Everywhere it was John Dingell, the phone banks, the social clubs, the union labor people getting out there.

KING: The district is heavily Democratic and Dingell is expected to win handily in November. In the Democratic gubernatorial primary, Attorney General Jennifer Granholm was the easy winner, defeating Representative David Bonior and former Governor James Blanchard, and winning almost as many votes as the two men combined.

SARPOLUS: It was the new vision. I'm the new person, and I represent you across the state. It was quite phenomenal to watch that last night.

KING: Granholm now faces Lieutenant Governor Dick Posthumus, the easy winner in the Republican primary. In Kansas, another woman, Kathleen Sebelius (ph) won the Democratic primary for governor. Democrats have a big roster of high profile women gubernatorial candidates. Granholm and Sebelius are the first to win their primaries. Hoping to follow them, Janet Reno in Florida, Kathleen Kennedy Townsend in Maryland, Janet Napolitano (ph) in Arizona, and Shannon O'Brien (ph) in Massachusetts.

(END VIDEOTAPE)

KING: For more on the primaries and this dynamic of women in politics, let's go now to New York for Jeff Greenfield's "Bite of the Apple." Jeff, I gather you think the significant political news from yesterday is that there wasn't a lot of excitement about this gender story.

JEFF GREENFIELD, CNN SENIOR ANALYST: Yeah, I think you look at Jennifer Granholm's thumping primary win over that ex-governor and the number two Democrat in the House.

As you mentioned Kathleen Sebelius' primary win in Kansas. I guess we could throw in the fact that Jean Carnahan's virtually unopposed renomination to the Senate and it didn't kick off a whole lot of, look at the women excitement. I don't think anybody ascribes Lynn Rivers' loss to Congressman Dingell as gender based, as we've heard. That was an old fashioned turnout and money and constituency victory.

And I think the point here is that unlike the days when Ella Grasso of Connecticut or Dixie Lee Ray of Washington state were anomalies, look at that, a woman who's governor, get accepted as the norm. Women govern in Arizona, Delaware, Montana, New Hampshire, Massachusetts. They may wind up as nominees in half a dozen states this year for governor. I think it's become part of the norm.

KING: So women candidates the norm running for major office, but women can run into trouble on gender grounds, can they not?

GREENFIELD: Jane Swift, when she was acting governor, became a mother. And there was talk about maternity leave. Was that a good idea for a state official? She got into some real trouble when she was charged with using some state aides and state logistics for child care purposes. In fact, she became so politically vulnerable, she didn't even run for a full term. You all remember Mitt Romney challenged her and she stepped aside.

But I still think that is an exception and hardly the rule.

KING: Any clues here in the debate about a woman as a potential president?

GREENFIELD: I think it tells us this is something that is more and more likely.

You go back to 1984, when Congresswoman Geraldine Ferraro was put on the ticket by Mondale. It was pretty clear that happened because she was a woman. It was a Hail Mary pass by a man way behind in the polls. You've now got, what, a dozen women senators, half-a-dozen women governors, two women on the Supreme Court. A woman has served as secretary of state. There is one now as national security adviser, which kind of knocks down that war-and-peace barrier.

And I really do believe that it is going to come to the point where, like Sherlock Holmes' dog, it doesn't bark in the night. It just isn't going to seem all that remarkable. And my feeling is, that is really the best measure of when a social revolution really takes hold.

KING: All right, Jeff Greenfield, "Bite of the Apple" from New York today -- thank you very much, Jeff.

GREENFIELD: OK.

KING: Plenty more INSIDE POLITICS ahead, including, when we come back, a live interview with Jennifer Granholm, the attorney general of the state of Michigan, now the Democratic nominee for governor.

Stay with us.

(COMMERCIAL BREAK)

KING: With me now on INSIDE POLITICS: one of the women who enjoyed a big victory in yesterday's primaries, Jennifer Granholm, Michigan's Democratic nominee for governor.

Thank you for joining us. And congratulations, first and foremost.

JENNIFER GRANHOLM (D), MICHIGAN GUBERNATORIAL CANDIDATE: Thank you.

KING: This no small task. You beat David Bonior, a congressman, once the No. 2 man of the Democrats in the House of Representatives, and former Governor Jim Blanchard, who was popular as a governor of your state a decade ago.

Was this because you're a new face, a female face? Tell us why it happened.

GRANHOLM: You know, I'm not exactly sure why. And I think it's a great thing. And I think it's a good message for change.

Certainly, I represented change. I had very formidable adversaries. And I don't think that it is because I'm a woman. I think that the exit polling demonstrated that about 2 to 3 percent voted based on gender. And that didn't indicate whether they voted for or against based on gender. I just think that it is a message about wanting to see a whole new face of leadership after 12 years of an administration which many Democrats are very tired of.

KING: Some problems for you, though, if you look at the exit polls. You are favored today, but you ran third in Detroit according to the exit polls. To what do you attribute that? And what must you do? Obviously, you are going to have to carry Detroit by large margins if you are to win a competitive election in Michigan.

GRANHOLM: Absolutely. Yes, absolutely.

And I attribute that to the fact that it was the most hotly contested battleground. That's where most of the candidates spent their time and money. And there was an awful lot of negative ads that were run in Detroit. And because I was doing well in the polls, I was the one who was targeted by those negative ads. So, they were effective, to a certain degree.

But I'm very confident that I'll be able to get Detroit back. I consider myself a Detroiter through and through. So I'm very comfortable that that will come back in the general election.

KING: You are the favorite the day after the primary, but your opponent is off and running, the lieutenant governor, the Republican. Dick Posthumus says he is convinced he will win in November because he believes the voters do not want property taxes, in his words, to go up again. A fair critique?

GRANHOLM: Well, I agree with him. Voters don't want property taxes to go up again, although that is not a critique that is directed at me. I certainly haven't advocated any raising of taxes.

I think what is going to happen is, you're going to see in Michigan a huge comparison. There's a great contrast here between myself and the Republican. And he's been pro-vouchers. He's certainly got a lot of explaining to do regarding the administration squandering our prosperity in Michigan. They're leaving us with a billion-dollar budget deficit next year. So, I think it is going to be a very interesting general election.

KING: Tell us about that budget deficit. And, if you will, try to put the race into a national context: Michigan, a critical battleground across the country as we look at the midterm elections and at the next presidential election.

You have a budget problem that your current governor would say is because of the slowdown in the national economy. What is the political impact of the economy and all this corporate-corruption debate in your race for governor?

GRANHOLM: Oh, clearly, it is a huge issue. The next governor, whoever she is, is going to have to really fight to protect our jobs, the jobs we have, and to grow the economic base, which is why we have got to be talking about creating a high-tech, high-wage economy in Michigan, which has been obviously a very strong manufacturing base, when we have seen our manufacturing jobs go overseas.

And we have to focus on our intellectual capital. And, truly, in Michigan, if we are not focusing on the technology, especially the technology that flows into the 21st-century automobile, then we're missing the boat. So, the economy is going to be critical. And this administration that we're currently leaving, and certainly that my opponent on the Republican side will have to do some explaining about, is, why is it that they're leaving us with this enormous budget deficit?

They've continued to cut taxes, but they have not cut spending. And, therefore, leaving us with a structural deficit is something he has got to take responsibility for.

KING: On this day, Jennifer Granholm, we will stop there and say congratulations.

GRANHOLM: Thank you very much.

KING: We'll check in on this race again.

You are welcome.

We'll check in again as the race continues. Thank you very much.

GRANHOLM: Very good.

KING: Details on Congressman Bob Barr's encounter with a loaded gun later in "Campaign News Daily."

Up next: The president tries to inspire confidence in the economy and vows to battle the economic impact of fear and fraud.

(COMMERCIAL BREAK)

KING: With us now: Terry Jeffrey, former campaign manager for Pat Buchanan and the editor of the weekly "Human Events"; and former Clinton economic adviser Gene Sperling.

Gentlemen, both the president and the vice president out today talking up the economy, but also a political context. I want you to listen quickly to the president. Obviously, as the voters go to the polls in November, he wants them to think, if you're mad about the economy, worried about the economy, blame his former boss, not the current president.

Let's listen to the president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When I took office, our economy was beginning a recession. That's what the facts have shown.

(END VIDEO CLIP)

KING: Gene Sperling, the facts do show that, do they not?

GENE SPERLING, FORMER CLINTON WHITE HOUSE ECONOMIC ADVISER: I think that what you're seeing here is, the president and vice president are very worried. They have a very weak economic record.

And what they're trying to do is cast the blame anywhere else they can. The fact is, they hurt confidence by talking down the economy before they came in. They've hurt confidence by having a very poor record on fiscal discipline. Their stimulus was actually weak and only put in at the very end at the request of Democrats. They never had an economic-stimulus plan.

So, what you're seeing right here is trying to deflect their relatively weak economic record and the lack of coordination they've had on their economic team by trying to cast the blame elsewhere. But, ultimately, voters will judge people by how they handle the hand that was dealt them. And I don't think they will judge them well. KING: Just go. You don't need me.

(LAUGHTER)

TERRY JEFFREY, EDITOR, "HUMAN EVENTS": Well, Gene Sperling talks about fiscal discipline. I bet he can't name right now a single federal agency he or the Democrat Senate would close down.

Can you?

SPERLING: That we would close down. I'll tell you what I will mention. We had a $290 billion deficit when we came in. We left with the strongest surplus.

JEFFREY: Can't do it.

Then you signed the biggest tax increase in history.

(CROSSTALK)

JEFFREY: Look, you go back two years ago, you'll find the vice president-elect Dick Cheney and president-elect Bush were saying that we may be on the leading edge of a recession, and the way to deal with that was to quickly enact a tax cut they had pledged to the American people.

Gene Sperling went on a media campaign to say that they were talking down the economy. Bush and Cheney were right. Sperling was wrong. History does show we had a Clinton recession. You know what? We grew out of that recession after two things: the tax cut being enacted, and even the September 11 attacks. It's a tribute to the industry and ingenuity of the American people that, despite September 11, with a tax cut, they were able to make the economy grow.

The economy is growing right now, Gene, right? Is the economy growing?

SPERLING: The point that I was making was that they could have a self-fulfilling prophesy by talking down the economy in December. And, secondly, let's you and I make a deal right now.

(CROSSTALK)

SPERLING: Listen, let's you and I make a deal right now. I will take -- on behalf of the economic team, we'll take responsibility for everything wrong that you want to attribute to Bill Clinton. And you also give us credit for the longest economic expansion in history, the lowest unemployment and inflation, a doubling of productivity, and the best fiscal situation.

But guess what? You can't have it both ways. You can't blame everything wrong...

(CROSSTALK)

KING: Time out. A little bit of history. Let's listen to Gene Sperling at the end of the Clinton administration and the beginning of this administration. Let's listen quickly.

(BEGIN VIDEO CLIP, DECEMBER 21, 2000)

SPERLING: I think that, to talk down your own economy just because you think it might help your political positioning or put a little more blame on your predecessor or try to give you a little more credit is really a very short-term strategy.

(END VIDEO CLIP)

KING: Let's not talk about what they did then. We're not going to settle that debate, it is clear, between the two of you.

What about now? Some Democrats are talking -- you could argue are talking down the economy, trying to seek political gain against this administration. If it was bad for Bush and Cheney, is it bad for the Democrats now?

SPERLING: I think the important thing is to have creditability and to have an economic plan.

I think that what President Bush ought to do is call for a grand compromise, where he talks about delaying some of the tax cuts for the most well off. Ask Democrats to pull back on some of their initiatives, including prescription drugs, not make it as expensive. And do a little more right now to help some of the states, so they don't have to raise taxes or cut education.

KING: Quick final word.

JEFFREY: The key to this, John, is that, in both cases, the Democrats ignored the economic reality. In both cases, they wanted higher taxes.

In December of 2000, economic indicators were going down. Growth was down. We were heading into a recession. Now growth is up, interest rates are down, inflation is down, unemployment is holding steady. Alan Greenspan has told the Congress he expects 3.5 to 3.75 percent growth this year. And the Democrats are saying the economy is going down. They want higher taxes. Irrational.

KING: OK, gentleman, we can continue this in just a minute, but I need to stop it here for now.

Congressman Bob Barr and a smoking gun, that story still ahead -- plus, the "Inside Buzz" on a move to decriminalize marijuana possession in Nevada.

(COMMERCIAL BREAK)

KING: To some, it may seem like an odd alliance. Nevada's largest law enforcement group has sided with supporters of a state ballot initiative that would legalize the possession of up to 3 ounces of marijuana. The Nevada Conference of Police and Sheriffs says it endorsed the measure because it would give officers more time to go after violent criminals and terrorists, instead of pot smokers. A poll this week showed likely voters in Nevada are evenly divided for and against the marijuana initiative.

Andy Anderson is president of the Nevada Conference of Police and Sheriffs and a retired Las Vegas police officer. He joins us now live on INSIDE POLITICS.

Sir, to many people, this will seem ludicrous: the cops saying it is OK to possess marijuana. Explain.

ANDY ANDERSON, PRESIDENT, NEVADA CONF. OF POLICE AND SHERIFFS: No, we're not -- our organization isn't endorsing the use of marijuana.

What we're saying is that, if you possess 3 ounces or less, you shouldn't be arrested. There's a growing trend here. Last year in Nevada, the state legislature passed a bill that made possession of 1 ounce or less a misdemeanor. They've almost decriminalized it. And it's not even a misdemeanor that you can get arrested for. It's just one you get cited for. They're treating it like a traffic ticket. So...

KING: Obviously, sir, something -- let me interrupt quickly -- obviously something that would cause a great deal of national debate, even though it is a statewide initiative.

This quote from John Walters -- he runs the president's Office of National Drug Control Policy. He said, if it passes -- quote -- "Nevada would become the vacation spot for drug-traffickers."

You obviously don't believe that, but you have to understand the political environment you're in now.

ANDERSON: Right.

I do understand that. And I disagree with him totally. I don't think it is going to change anything from what it does today. I think what it basically says is that our reason for supporting this is because it does free up time. Our attorneys office, our district attorneys don't prosecute for less than 5 ounces of marijuana. So, if they're not prosecuting and we've decriminalized less than an ounce to a misdemeanor, why are we wasting our time arresting people for 3 ounces or less?

(CROSSTALK)

KING: Make the distinction for us. Three ounces, how significant is that? What are we talking about? An individual holding 3 ounces of marijuana, in your view, that is a recreational user, not a trafficker or dealer?

ANDERSON: I believe it would be a recreational use.

You are not going to -- if you're trafficking, you're going to have a lot more than 3 ounce. They figure 3 ounces is anywhere between 60 and 150 cigarettes. I guess the 3 ounce -- and I'm not up on the 3 ounce issue -- but they were trying to look for a month's use of medical marijuana. That's where it is all coming from. How much would it take? If you were on a medical marijuana thing, how much would you use in a month? And that's where they came up with the 3 ounces.

KING: All right, Andy Anderson, because of time, we need to stop it there.

ANDERSON: OK.

KING: Thank you very much for your time today, though.

ANDERSON: Thank you.

KING: We'll check on this initiative again as the election gets closer. Thank you very much.

ANDERSON: All right, thank you.

KING: Now checking the headlines in today's "Campaign News Daily": Florida Governor Jeb Bush is expected to share the stage with Israeli Prime Minister Ariel Sharon at a Miami rally next month. The event is intended to raise public support for Israel, but is also expected to raise the governor's profile among the state's traditionally Democratic-leaning Jewish voters.

The dispute over Florida's Democratic primary ballot has already been resolved. Monday we told you party officials were worried the phrase -- quote -- "vote for one pair" would cause voters to choose two candidates for governor. Democrats filed suit. And yesterday a circuit judge approved a plan to change the ballot to read "vote for one."

In Georgia, Congressman Bob Barr had a close call with a loaded gun last Friday. It was at the home of a campaign supporter. The host of a Barr reception handed the congressman a loaded antique pistol. And the gun accidentally fired. The bullet struck a nearby glass door, but no one was injured. Barr is on the board of directors of the National Rifle Association. He says the mishap underscores the need for gun safety.

Still ahead on INSIDE POLITICS, Jon Karl has more on the latest victory for Congressman John Dingell, the longest-serving member of the House.

(COMMERCIAL BREAK)

KING: Information now on a developing story certain to influence the turmoil on Wall Street, also the corporate-corruption debate we see in the nation's politics right now: the U.S. attorney's office in Manhattan announcing today that ex-ImClone chief executive officer Sam Waksal has been indicted for insider trading, obstruction of justice, perjury, and bank fraud, that indictment returned in Manhattan late this afternoon -- more coverage later today on CNN, including tonight on "LOU DOBBS MONEYLINE."

Now, as we told you earlier, Michigan Congressman John Dingell won yesterday's Democratic primary. Dingell took 59 percent of the vote to fellow Congresswoman Lynn Rivers' 41 percent.

But, as CNN's Jonathan Karl explains, this victory was unlike any other in Dingell's long career.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A legend survives, as Southeast Michigan Democrats vote to send John Dingell back to Washington for the 25th time.

REP. JOHN DINGELL (D), MICHIGAN: Our people here are, in the words that my dad used to use, as loyal as dogs. They are wonderfully faithful and great friends.

KARL: The Dingell legend began with John Dingell Sr., an FDR loyalist elected in 1932, who spent more than two decades in the House. After his death, his son, just 29 years old, was elected to replace him. After his victory speech, Dingell said he was just following dad's formula.

DINGELL: He says: "Son, I take care of the people between election time. They take care of me at election time."

KARL (on camera): The Dingell name is gold among senior citizens in Southeast Michigan. Consider this: Dingell's father helped FDR pass Social Security. And Dingell himself cast a vote to help LBJ pass Medicare.

UNIDENTIFIED MALE: Who do we support?

CROWD: Dingell!

UNIDENTIFIED MALE: Who do we support?

CROWD: Dingell!

KARL (voice-over): Dingell mobilized African-American voters, in a replay of his last competitive election, way back in 1964, when he was attacked for his vote in favor of the Civil Rights Act.

With more than 30,000 members in Dingell's district, the United Auto Workers provided the ground troops. And he needed all the help he could get to fend off a challenge from fellow Democrat incumbent Lynn Rivers, who was supported by an impressive lineup of Democratic interest groups that poured well over $1 million into the race.

EMILY's List, the organization dedicated to electing Democratic women, spent more than a half-a-million dollars on TV ads; the Sierra Club about a quarter-of-a-million dollars. And gun-control groups weighed in against Dingell, too. But the old-line call seemed energized by the prospect of his toughest fight in nearly four decades. DEBBIE DINGELL, WIFE OF JOHN DINGELL: I don't think that he had any sense of entitlement. Every two years, you run. That's how you stay in touch with the people. That's how you know what your constituents want.

KARL: Dingell's son -- yes, there's another one -- state legislator Chris Dingell, explains there are two things his father never considered: losing or retiring.

CHRIS DINGELL, SON OF CHRIS DINGELL: I just couldn't imagine him retiring. It's just not part of the man. It is just not something I could envision him doing. What would he do with himself?

KARL: No need to wonder about that. Mr. Dingell goes back to Washington.

Jonathan Karl, CNN, Dearborn, Michigan.

(END VIDEOTAPE)

KING: "Back to Washington," of course, assumes victory in November -- Mr. Dingell, though, heavily favored now in that Democratic district.

I'll be back in just a moment, but now let's take a look at what is coming up on "WOLF BLITZER REPORTS." Miles O'Brien is sitting in for Wolf this week -- hello, Miles.

MILES O'BRIEN, "WOLF BLITZER REPORTS": Thank you very much, John. Hello to you.

Coming up on our program: a CNN exclusive look at Osama bin Laden's fighting forces. We have new videotape -- you're seeing some of it here -- of al Qaeda at work. Mike Boettcher has our exclusive report. Stay with us for that. Also: surviving West Nile. We'll speak to a man who has fought the virus and is a bit worse for the wear as a result -- those stories, plus the sound of September 11: why an audio recording is letting the public hear the terror from that day.

We'll see you at the top of the hour, right after INSIDE POLITICS.

(COMMERCIAL BREAK)

KING: Why is the town of Paducah, Kentucky, in the eye of this campaign season's perfect political ad storm? David Peeler will tell us tomorrow on INSIDE POLITICS. Also, we'll get Bruce Morton's take on the best convention city.

That's it for INSIDE POLITICS today. I'm John King in Washington. Thanks for joining us. "WOLF BLITZER REPORTS" is up next.

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