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American Morning

Interview With Rep. Cliff Stearns

Aired August 22, 2002 - 09:47   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BILL HEMMER, CNN ANCHOR: Well, she is back today. Maybe she never left. Martha Stewart back on the front page today. In fact, here is "The Daily News." New Yorkers love this story. A shareholder now from her own company is suing Martha Stewart for insider trading on her own stock. Meanwhile, she is still being investigated by Congress, that House panel, for a possible role, a possible role in insider training of ImClone stock back in December.
Her lawyers turned over documents that a congressional committee wanted, but perhaps not exactly in the condition they expected.

From D.C. now, one member of the House Energy and Commerce Committee looking into that matter, Representative Cliff Stearns, a Republican from Florida.

Sir, good morning to you. Good to you have with us today.

REP. CLIFF STEARNS (R), FLORIDA: Good morning, Bill.

HEMMER: Listen, some of these documents redacted, essentially blacked out. The lawyers say they are go ahead and redo it, and give you what you're looking for. At this point, is that satisfactory?

STEARNS: Well, there is a lot of documents that have been redacted. Of course, this just means simply that they have been edited. Of course, they have been edited under the reason of privacy. But what happens is you go back and talk to the defense council for Martha Stewart, and you try to go through each of these documents to understand, is this private or not? And the other thing, it gets a little complicated, because it gets a little subjective of trying with trying to decide whether it's important or not.

HEMMER: What is the inference then? Do you think she's hiding something, or is it justified?

STEARNS: Well, I think she has a certain justification to redact that information which is personal about her own life. We are not interested in that.

But as you know, this started out as a routine investigation, we called Martha Stewart. We sent a little notice to her. We would like to come to talk to her. She declined to do that again and again. So it was just a routine investigation. At this point, we decide, well, we got to get this information, so we told her we want all of her phone records.

HEMMER: Are you suggesting, though, that she's brought this on herself then?

STEARNS: I would say a little bit, because if she would have cooperated in the beginning, this would not have been a problem. At this point, if we find the information that has been redacted that we want, and she won't provide it, we'll have to subpoena her.

HEMMER: Is that going to happen? I tell you why I ask, because James Green, a representative, who sits on the same committee, who was with us here during AMERICAN MORNING, he strongly hinted that is a strong consideration, very high on the list right now. Can you clarify more?

STEARNS: Well, I don't think I can. I think we just got the records, you know, all of this information, but I can tell you this, that if we can't get clarification of some of this redacted information, then she is going to have to explain or somehow provide answers. And at that point, it's going to be a possibility where she might take the advice of her counsel and not do so, then we would have to subpoena.

HEMMER: Listen, I want to go to Enron quickly, because I want you to try to clarify something for us. The people who were looking into the story indicate that the U.S. government and its investigators absolutely, positively need an insider to help weed and weigh through the thousands of documents that apparently is extremely complicated stuff. Do you have this same opinion, knowing that Michael Kopper apparently is agreeing on some fronts starting yesterday?

STEARNS: Well, I am chairman of a committee that deals with financial accounting standards. We had the dean of the Dartmouth school of business say it took him two weeks to understand the Enron footnotes, 16 pages, and he could not understand it. So without an insider like Michael Kopper, you cannot possibly understand this PNL that Enron put out. So I think that the government has done a great service to this country to get someone to explain it to us.

HEMMER: We were talking earlier today with Paula. In fact, we were having a conversation about how complicated it is. Are we pushing too tough on prosecutors to push to heavy for an indictment, knowing that it is complicated right now. Are we being in patient?

STEARNS: No, Bill, I think there is a perception in this country that there is two classes of investors. One, the people that have inside information to get wealthy. And the rest of us are trying to understand the profit law statement, and put up the hard-earned money, whether it is for investment or our 401(k). And that can't be. We must have a level playing field, in which everybody has an equal chance, and we can only do that if we get the CEOs to be morally responsible. And at this point, it shows a lot of them are not doing that.

HEMMER: Sir, in a word or two in the time we have left, Ken Lay, Andrew Fastow, will you go after them with the same intensity?

STEARNS: Well, I think with Michael Kopper, you go after Andrew Fastow, then you go up to Jeff Skilling, and from Jeff Skilling, you go up to Kenneth Lay, and that would be the logical.

HEMMER: So they are all on the target list, then, is that what you're saying?

STEARNS: I am not saying -- target list is not the right word. But those are people that can explain this better, and if they don't explain it and help us to understand this, then, obviously, we' re going to have to subpoena their records, and the whole process starts to reiterate. So I think the Justice Department is to be commended for getting Michael Kopper to help out.

Thank you, sir.

Cliff Stearns, representative from Florida with us this morning.

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