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CNN CAPITAL GANG

Iraq Submits Weapons Declaration; Bush Administration Sacks Two Top Economic Officials; Kerry Kicks Off Presidential Campaign

Aired December 7, 2002 - 19:00   ET

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

ANNOUNCER: Live from Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to CAPITAL GANG.

I'm Mark Shields with the full CAPITAL GANG, Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Iraq's government submitted its 12,000-page weapons report today, meeting the deadline set by the United Nations and contending it has no weapons of mass destruction. Saddam Hussein today appealed to Kuwait not to support U.S. military action in Iraq. Is war likely?

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That's the question that you should ask to Saddam Hussein. The question is whether or not he chooses to disarm. And we hope he does. For the sake of peace he must disarm.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP, "NIGHTLINE," ABC)

TARIQ AZIZ, IRAQI DEPUTY PRIME MINISTER: There is a plan to attack Iraq. There is a plan not to regime change in Iraq, the plan for region change, the whole region, to serve imperialist purposes of the United States and to serve the purposes of Israel.

(END VIDEO CLIP)

SHIELDS: Meanwhile, the U.N. and weapons inspectors expressed satisfaction with their progress.

(BEGIN VIDEO CLIP)

DIMITRI PERRICOS, U.N. WEAPONS INSPECTOR: We have done a very good arrangement and a good accomplishment, that in such a short time, we're able to start up the inspection scheme again that got stopped for four years.

(END VIDEO CLIP)

SHIELDS: Kate O'Beirne, didn't the Bush administration already reject the Iraqi report before reading it? KATE O'BEIRNE, CAPITAL GANG: No, Mark, I don't think they have. I think the only thing the Bush administration has rejected is the policy of the '90s, which held that Saddam Hussein can continue to defy the U.N., remain in possession of weapons of mass destruction, and therefore remain a lethal threat. That they have rejected.

Now, if this 12,000-page report, which was accompanied by oral declarations on the part of Iraq that they don't hold any weapons of mass destruction, which no one west of Baghdad, with the possible exception of Bob Novak, believes, if that indeed is the case, that they are not making a complete and candid disclosure, then, under the latest U.N. resolution, that's a material breach.

A material breach is grounds for war. Prior to this, George Bush has said whether or not there'll be a war is up to Saddam Hussein. Is he finally willing to comply with U.N. demands?

Now, if he's not, the decision's up to George Bush.

SHIELDS: Bob Novak, did the Bush administration reject the report before reading it?

ROBERT NOVAK, CAPITAL GANG: I think they did. I think, I think they're saying, Unless you admit you have weapons of mass destruction, you're lying.

Now, the point, the point of the matter is, they've never been able to prove that there's weapons of mass destruction there. This goes back all these years and three administrations they've now been able to.

You know, Tariq Aziz is a very smart guy. This not a nice regime at all, it's a dictatorial, brutal regime. But Tariq Aziz, when he says that what this government wants is regime change through the whole area to fit the design of the United States and Israel, that's a fact. It has really very little do with -- weapons of mass destruction.

SHIELDS: Margaret Carlson, and Tariq Aziz went on to say region change, I mean, not just regime change...

(CROSSTALK)

SHIELDS: ... but region change.

(CROSSTALK)

MARGARET CARLSON, CAPITAL GANG: Yes, region, regime, these R- words. You know, Bush has said on several occasions that Saddam is already in material breach, as if he's hoping for one and wouldn't accept anything else. He's the -- he's like the princess and the pea. Now matter how many mattresses you put between him and the pea, he's going to find a material breach.

However, if there is some disclosures, if there aren't any disclosures in these reports, it's like a Rorschach test. Where do you stand on the spectrum? Do you want to find that some disclosures are enough to get you in and to find something and then disarm? Or do you want to say that, Oh, if it's not full disclosure it's a material breach, and so we can go to war.

I think it is -- we're still in a position of where you stand on the spectrum of, do you want war with Iraq or do you want to try to disarm? And I think Bush is over here, wanting to have a reason to go to war with Iraq, and you have Powell and others on the other side saying, Let's negotiate and -- our way out of this.

SHIELDS: Al Hunt, I mean, is there a consensus in the administration for war?

AL HUNT, CAPITAL GANG: Well, I don't know if it's a consensus yet, Mark. But look, this has all been preseason so far. This is this predictable skirmishing. And now we're about to hit the crunch time.

If Saddam is stupid enough to say that I have no weapons of mass destruction, Kate is absolutely right, you know, virtually no one believes that. U.N. inspectors have found weapons of mass destruction in there before. Defectors, high-level defectors, you know, a number of them have talked about the programs he has.

He has them. And so if he's dumb enough to do that, then it's incumbent, however, upon the administration not just to say, You're in breach, but to see -- but to, but to be as -- to engage as much specificity, give us the information, do an Adlai Stevenson, 1962...

NOVAK: Well, why don't they do that, Al?

HUNT: Well, now wait a minute, Bob, I'm saying if we reach that point. I think one thing some people say is because we're waiting to see what he says. But if he says -- if Kate's right and he says he has nothing, then they have to come back with great specificity, because the one thing I do believe, you -- two things. You can't let Saddam get away with another big lie, because I think he has weapons. But this must be a broadly based action...

NOVAK: I would really...

HUNT: ... if you're going in.

NOVAK: ... I would really like to see one time where they show some weapons of mass destruction. This has been going on for years. I just...

O'BEIRNE: But he's used them. He has used them.

NOVAK: Oh...

O'BEIRNE: What more do you need beyond the fact that he has used these weapons on his neighbors...

NOVAK: (UNINTELLIGIBLE)...

O'BEIRNE: ... and the previous inspectors have found biological, found chemical, in the early '90s they found his nuclear program.

NOVAK: You know, the experts I talk to who are not, who are not...

O'BEIRNE: Are they based, are they...

NOVAK: ... peace...

O'BEIRNE: ... Baghdad?

NOVAK: ... they're not peace. No, they're Americans, they're Republicans. And they say there is no chemical weapons, there's no biological weapons. The only thing you worry about is the possibility of a nuclear development. And that's speculative. We have no proof on it.

The one thing I would like to add, though, on this region change, I think that is a huge -- If we're going to war to make the Middle East safer for Israel, we ought to tell the American people about it.

SHIELDS: Well, it, let me say, say this. Say we do find weapons, or we find him in material breach. We are not ready for war. Right? We have (UNINTELLIGIBLE) call 200,000 reservists up, we heard this week, and then the United States is not ready to go to war in any sense of the word.

HUNT: Mark, we can be ready in six weeks.

SHIELDS: Oh, boy.

HUNT: I think, I think most military experts say you can get ready to mount that kind of campaign within six weeks.

Kate, I'm much closer to Kate's view on this than I am to Bob's, but I do think that to do it unilaterally or unilaterally (UNINTELLIGIBLE) plus, plus two or three allies really would be fraught with peril afterwards.

SHIELDS: Last word, Al Hunt. THE GANG of five will be back with the Friday morning massacre.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

On Friday morning, the Bush administration sacked its two top economic officials. Treasury Secretary Paul O'Neill and national economic director Lawrence Lindsey submitted their resignations on the day after they were demanded.

No replacements were named immediately.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president's going to look for people who are expert in the marketplace and financial matters, that have the confidence of the marketplace, that have knowledge of government service, and are well versed in both fields.

(END VIDEO CLIP)

SHIELDS: Bob Novak, why were these two men George Bush had chosen fired?

NOVAK: Well, Paul O'Neill was a total disaster. You could tell he was going to be a disaster by his record. He was a -- he was not a Republican, not a conservative, not a supply-sider. He was a bureaucrat and a CEO who was pro-tax. He didn't believe in the Bush policies. And he was an incompetent administrator.

Now, poor Larry Lindsey, who was a loyal supporter of Bush, he was collateral damage. They didn't think he was selling the program correctly.

But now they, they're -- they look like they're starting to walk down the same path, and they're talking about a Wall Streeter named Stephen Friedman, who is a switch hitter, that means he gives to Democrats and Republicans, not known as a tax cutter. He is the probable guy to replace Lindsey. So it makes you scratch your head if people make the same mistake twice.

SHIELDS: Margaret Carlson, the Bush family is renowned for its loyalty. But there'd been nobody more loyal than Larry Lindsey. He'd been his mentor economically. And he was humiliated yesterday, and drummed out, and then they spelled bad stories about being a bad manager.

CARLSON: Right. And, you know, he wrote a fairly gracious statement, whereas poor Paul O'Neill didn't even say the thing about, I want to spend more time with my family. And it was done rather harshly. You know, there was no pretense that these two guys were taken to the woodshed and told to go.

You have to wonder why Bush chose Paul O'Neill...

NOVAK: I'll tell you why.

CARLSON: ... given just how out of it it was. Bush likes a Main Street guy, not a Wall Street guy, and it turned out not to be, not to be the right guy for the right time. And he gathered too much publicity around him, going off with Bono and, you know, making intemperate remarks.

And Larry Lindsey, by the way, harping on how much the war was going to cost.

NOVAK: Once. (UNINTELLIGIBLE) once.

CARLSON: Well, you only need to do it once if it's too overt...

SHIELDS: He spread the ugly truth.

CARLSON: ... if it's, if it's too...

SHIELDS: The war's not supposed to cost anything, (UNINTELLIGIBLE).

CARLSON: If you say it's once and it's to a reporter, that's kind of -- it gets harped on.

(CROSSTALK)

O'BEIRNE: Fundamentally for different reasons, I think, the president lost confidence in both of them. And Larry Lindsey, of course, is a very solid guy, solid conservative, with the president all during the campaign. But last August, when they really needed somebody out making their case on the economy, they sent out Dick Cheney and they sent out Don Evans because Larry Lindsey, I think, was less, less gifted, less able in making the public case. And so that, unfortunately, inhibited his usefulness.

Paul O'Neill, I think, has been a problem since appointed. But I'll tell you this, the Democrats ought to be pretty sorry he's not like his father, who should have fired Dick Darmin (ph) and never did. This president is willing to spot a mistake and correct it and move on. And hopefully he'll appoint people and it will be an improvement.

SHIELDS: Al Hunt.

HUNT: How can Kate -- how can be so -- Kate O'Beirne be so right in the first segment and so wrong in the second segment? Kate, I'll tell you, and I'll tell Bob, I'll tell you exactly what's happened. This president doesn't know what his policy is. He's not even sure what he wants his policy to be. He knows it's dismal. It's not a case of selling something, it's the record, unemployment is up 50 percent, the stock market is down 30 percent, real household income, the lowest level in seven years.

A dismal economic record. Nobody could sell that. That's just rotten dog food. And the problem was that this guy now goes -- Paul O'Neill was supposed to have a meeting with political strategists Friday morning. He had no idea what hit him. And Larry Lindsey, you're absolutely right, this idea that he's a bad manager, that's a staff job.

But Bob, what's interesting about Steve Friedman, the former chairman of Merrill Lynch that they're considering appointing to this job...

NOVAK: Not Merrill, Goldman Sachs.

CARLSON: Goldman Sachs.

(CROSSTALK)

HUNT: ... I'm sorry, Goldman Sachs, is not that he gave a little bit of money to some Democrats. He gave a lot more to Republicans. It is that he's the vice chairman of the Concord Coalition, which says that these tax cuts are a disaster. NOVAK: Let me just...

HUNT: This is a president who doesn't know what he believes, Bob.

SHIELDS: But I have to ask you, Bob...

NOVAK: Is a bad, bad (UNINTELLIGIBLE)...

SHIELDS: ... Bob...

NOVAK: ... a bad choice to me.

SHIELDS: ... Bob, I got to tell you, I mean, we just completed the November numbers, where manufacturing for two years plus now has been hemorrhaging jobs, another 45,000 jobs gone. We're heading into Christmas retail season, 39,000 retail jobs going. Bob, this economy...

NOVAK: Well...

SHIELDS: ... is not working.

NOVAK: ... well, this, I -- you know, I know this isn't where you get your information, but this is the Democratic line, of course, that it's the problem with the economy, it's not the problem with these, with these people.

The president, Al, knows what he's doing. He's going -- going to go for a big tax cut, he's going to go for a cut in the dividend taxes, so it -- to reduce the double taxation, which will be very good for invest...

O'BEIRNE: Expanded IRAs.

NOVAK: ... in, invest, investment...

HUNT: And wealthy, wealthy people.

NOVAK: ... it's going to be a -- And he knows that. And as far as this coming as a huge surprise, if they had read my column two weeks ago, I said they were both going. Did you read that column?

HUNT: No, I did, Bob, and that's why we're usually ahead of the, ahead of George Bush...

CARLSON: "TIME" magazine...

(CROSSTALK)

CARLSON: ... said it six weeks ago...

(CROSSTALK)

CARLSON: ... it was no secret. HUNT: He doesn't read your column, but I want to say, I think -- remembering, I've heard that Steve Friedman's quite a good man, it's just that...

NOVAK: I'll bet you...

(CROSSTALK)

HUNT: ... aren't what Bob Novak would like...

CARLSON: Right, right.

NOVAK: Or George Bush, or George Bush.

(CROSSTALK)

HUNT: ... Bush doesn't know what he believes...

NOVAK: Well, that's a...

(CROSSTALK)

HUNT: ... he doesn't have a policy yet.

Mark, what I find -- I think they're probably going to name some replacements on Monday or Tuesday. But most people we know who are top financial people or top (UNINTELLIGIBLE) are Republicans. And yet this Republican administration can't get an economic team. Not -- can't get a Treasury secretary, no SEC chairman, no White House economic aide. (UNINTELLIGIBLE) kind of bankrupt.

NOVAK: Well, there, there...

SHIELDS: Let me just say...

CARLSON: Yes.

SHIELDS: ... let me say one thing, Bob. What they're doing, they're getting rid of Paul O'Neill, who upsets the corporate mythology by having come out of government and saved Alcoa to the point where it's now studied in business schools, his success there. They (UNINTELLIGIBLE), they do this Bob, they're changing the (UNINTELLIGIBLE), they're blaming the finger puppets instead of the hand.

NOVAK: Let me tell you, let me...

(CROSSTALK)

NOVAK: ... let me tell you, let me tell you something...

CARLSON: Right, right.

NOVAK: ... that Paul O'Neill was a disaster in every standpoint. He didn't support the president. The morale at the Treasury is just horrible... (CROSSTALK)

NOVAK: ... absolutely terrible. And he's an incompetent administrator.

CARLSON: But the biggest complaint against him is, he wouldn't sell tax cuts, and neither is Steve Friedman.

SHIELDS: Well, where's Robert, where's Robert...

NOVAK: If he doesn't...

(CROSSTALK)

SHIELDS: ... where's Robert Rubin, Bob, when you...

CARLSON: Yes.

SHIELDS: ... need him, you know?

Next on CAPITAL GANG, John Kerry, candidate, and Bill Clinton, former candidate.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Senator John Kerry of Massachusetts kicked off his own campaign for the Democratic presidential nomination by unveiling his economic program.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS: I don't believe that fairness is class warfare. It's wrong to give tax cuts to those who have been most rewarded over the last 10 years at the expense of working families and the middle classes.

(END VIDEO CLIP)

SHIELDS: Meanwhile, former president Bill Clinton delivered his own postmortem of Democratic defeats in the midterm elections.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Thank you.

The problem with our message was that to weak Democrats and independents, we were missing in action on national security, and we had no positive plan for America's domestic future.

(END VIDEO CLIP)

SHIELDS: Margaret Carlson, has Senator John Kerry become now the early Democratic front runner? CARLSON: Well, let me say first, Bill Clinton still has a way of stealing people's thunder, even as an ex-president. I don't think he said that many things during the campaign quietly to help any of the Democrats, as he (UNINTELLIGIBLE) in his speech.

John Kerry has a war record, which, for a Democrat, is a precious thing to have, among the political class we now have, most of them evaded military service. And so this gives -- makes him look more like a commander in chief. And he gives a very good speech.

What he didn't do particularly well was, in the rollout on "Meet the Press," hone his answers to the questions. It's not an Oxford Union debate. It's more like a pop quiz. And he tried to have it too many ways on the tax cut and on the death penalty and in particular on Iraq.

I think he needs to be -- you know, you cannot be Gore-like, you have to be in contrast to Gore. He is a better candidate than Gore, but he is going to have to be totally straight down on his answers on these questions.

SHIELDS: Kate O'Beirne, John Kerry, the Democratic front runner?

O'BEIRNE: Excuse me.

CARLSON: It wasn't that bad an answer, Kate.

O'BEIRNE: For some of the reasons Mark had mentioned, this party dying to have a war hero, somebody with a military history. I think Mark is right, he's sort of at the moment the flavor of the month.

But I would remind the Democrats the public can hold two notions at the same time. George McGovern was a war hero in World War II and weak on national security. Just this past November, Max Cleland, grievously injured in the war, was tossed out by Georgia voters because they didn't perceive him as being strong enough.

So the biography only carry so far. And I wouldn't be surprised if veterans line up with somebody who didn't serve overseas, whose national security views they share, rather than with a Vietnam against the war, Vietnam vet against the war type.

And so he's going to have to move into issues. The biography's not going to be enough. And when he does, he makes a classic class warfare argument, for instance, on the economy. People who benefited, profited during the '90s passively, as though it has nothing to do with their own efforts, at the expense of other people. He's got to sound like a left-wing Massachusetts liberal.

SHIELDS: Bob Novak.

NOVAK: I think he is got a head of steam going right now. How long it lasts, I don't know. As far as the veteran thing, Mark, there's a lot of aging veterans who remember him throwing away his medals, his ribbons, at the time that his comrades were still dying in the paddies of Vietnam. He says he didn't want to play class warfare, wage war, class warfare, but he did. He did, and he said, he said people who make a lot of money are rewarded, rewarded with it. That's, that's the kind of Marxist rhetoric that has not gone over with the American people.

And I must say that the, that the candidates who have won recently, Carter and Clinton, didn't use it.

SHIELDS: Al Hunt.

HUNT: Oh, gosh. Look, there -- the Massachusetts liberal stuff is just nonsense. It's hardly Marxist to espouse a income tax where the top rate is 39.6 percent. I mean, that's hardly confiscatory tax rate. It may be harder for those people who are very wealthy not to have a 35 rate or not to pay any taxes, as some of them are able to do.

I think the war record is important only because of 9/11. Clinton proved in '92 it didn't matter, but the 9/11, I think, for a Democrat, it's really a almost essential credential now to have some kind of national security, you know, heaviness, and Kerry has that.

Mark, what it does, it gets him an audience. Now he has to have something to say. I don't think it matters whether he goes on a TV program and has it all finely honed right now. But he has to have a message. Plenty of time to do it. Clinton was really kind of an awkward candidate...

NOVAK: Well, what about throwing away his ribbons, Al? What do you think of that?

HUNT: ... at this time. Well, first of all, it wasn't his medals, it was someone else's medals.

NOVAK: Well, what do you think about that? You don't...

(CROSSTALK)

NOVAK: ... that'll be brought up?

(CROSSTALK)

SHIELDS: ... I'll tell you this...

HUNT: Bob, I think, I think John Kerry was a great hero who risked his life.

O'BEIRNE: (UNINTELLIGIBLE).

HUNT: I don't know where George Bush was or most of us were back then.

CARLSON: Yes.

HUNT: But I'll tell you something, if you want to pit him in 1968 or '69 or '70... NOVAK: You don't think that'll be brought up, then, huh?

HUNT: ... against George...

(CROSSTALK)

HUNT: ... listen to me, if you want to pit him against George Bush, circa 1968 or 1970, I think most veterans would go with...

CARLSON: (UNINTELLIGIBLE).

HUNT: ... John Kerry.

(CROSSTALK)

SHIELDS: Let me just say, let me just say, let me just say, I mean, Dick Cheney said he had other things to do during the '60s, all right? This is a man who went to Vietnam, not only fought, not only was wounded three times, won the Silver Star, OK? And came back and, like Bob Kerrey, a Medal of Honor winner, turned against that war.

I mean, those are credentials you can't take away. He's a prosecutor who put people in jail. He killed people. I mean, if you want to, if you want, I mean, if you want to have...

O'BEIRNE: (UNINTELLIGIBLE)...

SHIELDS: ... if you want to have blood lust, Bob...

O'BEIRNE: His (UNINTELLIGIBLE)...

SHIELDS: ... he certainly passes that of Trent Lott and Newt Gingrich.

O'BEIRNE: Mark, his having served in Vietnam is not going to inoculate him against the charge that he's weak on national security. He's flip flopping all over Iraq. And after he came back, he threw (UNINTELLIGIBLE) he threw himself in with the types who were spitting...

NOVAK: Bob Kerrey did not.

O'BEIRNE: ... on fellow veterans.

(CROSSTALK)

NOVAK: Bob Kerrey did not do that.

SHIELDS: He did not, he did not throw himself in with anybody. He gave perhaps the most telling statement delivered before the Senate Foreign Relations Committee, Kate, where he said, Who is going to tell anybody to be the last American to die for a mistake? That was the question, and it was never answered by an administration, Democrat or Republican.

HUNT: He was right on Vietnam. (CROSSTALK)

CARLSON: He was right on Vietnam. And so many people agree with that now...

(CROSSTALK)

CARLSON: ... and he had the standing...

NOVAK: ... just -- wait a minute, well, just, just so we all...

CARLSON: ... to criticize it.

NOVAK: ... just so we don't have the impression...

CARLSON: You think it was right.

NOVAK: ... it's unanimous, I think he was wrong on Vietnam.

CARLSON: On Vietnam.

NOVAK: OK?

CARLSON: Yes.

SHIELDS: OK. And you think...

NOVAK: (UNINTELLIGIBLE)...

SHIELDS: ... Dick Cheney was right.

CARLSON: Right.

SHIELDS: Yes, Dick Cheney was all for that war but didn't want to go.

We'll be back with our CAPITAL GANG classic, to bomb Saddam Hussein or not to bomb him? And that's 10 years ago.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

More than 10 years ago, after a three-week delay, Saddam Hussein's government let U.N. weapons inspectors into the Iraqi agriculture ministry. The inspectors found no nuclear secrets, but President George Bush issued a new warning with a threat to bomb Baghdad.

Your CAPITAL GANG discussed this on August 1, 1992. Our guest then was, ironically, Democratic Senator John Kerry of Massachusetts.

(BEGIN VIDEO CLIP, August 1, 1992)

HUNT: Margaret, who won this faceoff, Bush or Saddam? MARGARET WARNER, "NEWSWEEK": I think Saddam won in two big ways. First of all, we forget that he intimidated the inspectors into leaving that building in the first place. When they finally got back in, there was nothing to find.

But more importantly, for the first time under this compromise negotiated by the U.N., Saddam got to dictate the makeup of the inspection.

HUNT: Given the fact it's an election year, don't you think if you were a betting person, you'd bet that George Bush will be bombing Baghdad...

NOVAK: And I think that would be a huge...

HUNT: ... (UNINTELLIGIBLE)...

NOVAK: ... mistake...

There's a case can be made the U.N. was -- inspectors made a mistake on going to the agriculture ministry, that they were wrong in the first place, and that Saddam was right.

KERRY: George Bush declared he was going to destroy Iraq's economy, not the economy of the United States. What has happened is that since the war, Saddam Hussein has violated every single one -- not one, not the agriculture industry, but every single one of the requirements of the U.N. resolution.

UNIDENTIFIED FEMALE: Bombing is not a viable option. We bombed all the targets that were worth bombing during the war. It won't have any effect on him, it won't work. So that's not the option. It's helping the guerrillas who are already there...

(END VIDEO CLIP)

SHIELDS: Al Hunt, should the first President Bush have let the bombs fly 10 years ago?

HUNT: In 1992, I don't think there was sufficient multilateral support for that, Bob, in hindsight -- or Mark, excuse me -- in hindsight is -- I think it's clear that he -- the first President Bush ended the Gulf War too soon.

SHIELDS: Bob Novak.

NOVAK: It is sort of a pattern. The inspectors inspect, they can't find these weapons, and they say, We can't find the weapons, therefore if you don't show us your weapons, we're going to bomb you. It's- it -- I'd like to see some of the -- some proof for these weapons. Maybe he's got them. I'd like to see some proof.

SHIELDS: Kate -- Margaret.

CARLSON: Well, Saddam Hussein is counting on the -- this Bush being like the other Bush, and saying, Well, you know, you -- we, we, we can't find them, and so therefore you don't have them, and threaten to bomb but not do so. But I don't think that's going to happen this time.

SHIELDS: Kate?

O'BEIRNE: I think Al's right. The first President Bush should have gone on to Baghdad in '91. And all during the '90s, Bill Clinton should not have permitted Saddam Hussein to continue to have these weapons that pose such a threat to us. Now it's up to this President Bush.

SHIELDS: Let me just say that George W. -- George Herbert Walker Bush should not have gone to Baghdad. We were not ready to do it, it was not part of the deal. The coalition was signed on for driving them out of Kuwait. And I think it's unfair to retroactively -- retrospectively...

O'BEIRNE: Some of us said so at the time.

SHIELDS: ... condemn him. Well, very few of them, and very few of them were under arms at the time either.

Coming up in the second half of CAPITAL GANG, our "Newsmaker of the Week" is veteran South Carolina political reporter Lee Bandy telling us about Senator Strom Thurmond's 100th birthday.

"Beyond the Beltway" looks at the counterattack by Saudi Arabia's royal regime with magazine, "TIME" magazine reporter Romesh Ratnesar.

And our "Outrage of the Week," that's all after the latest news following these important messages.

(COMMERCIAL AND NEWS BREAK)

ANNOUNCER: Live from Washington, THE CAPITAL GANG.

SHIELDS: Welcome back to the second half of CAPITAL GANG.

I'm Mark Shields with the full GANG, that's Al Hunt, Robert Novak, Kate O'Beirne, and Margaret Carlson.

Our Newsmaker of the Week is veteran South Carolina reporter Lee Bandy, who came to Washington this week to attend Senator Strom Thurmond's 100th birthday celebration as a guest of the Thurmond family.

Lee Bandy, age 67, residence Columbia, South Carolina, religion Presbyterian. Undergraduate degree from Bob Jones University, master's degree in journalism from Columbia University in New York. Washington correspondent for "The State" newspaper of Columbia, South Carolina, for 30 years, and chief political writer for "The State" newspaper since 1992.

And he has covered Strom Thurmond for 41 years.

Earlier this week, Al Hunt interviewed Lee Bandy from Columbia. (BEGIN VIDEOTAPE)

HUNT: Lee Bandy, you were the only reporter that spent time with Strom Thurmond this week. Describe the interview you had with him.

LEE BANDY, "THE STATE," COLUMBIA, SOUTH CAROLINA: Well, he was very frail. I was told before I went in to interview him that he might not be with it that day, and if he were in that kind of condition, that we had to bag the interview. But he was very sharp that day...

HUNT: Strom Thurmond has lived through more than 40 percent of American history. Does he have any legacy other than longevity, Lee?

BANDY: I think that's what he'd be known for most, that is, longevity. But he does have, I think, a dual legacy that he leaves, and one is a legacy here in South Carolina, and of course that's his famed constituent service. And the other legacy he leaves is, I think, he blazed the trail for the Republicans in the South.

HUNT: He went from an FDR Democrat to a race-baiting segregationist candidate for president to one of the first of the new Southern Republicans. Was there any common thread or rationale?

BANDY: I don't really think so, but as you pointed out, he's been a little bit of everything. He's been a race-baiter, he's been a presidential aspirant, he's been a Goldwater Republican. You name it. He's been a womanizer.

And I think that Thurmond is a politician, the best politician, bar none. And he has been able to read the tea leaves better than most people, and so he's been a step ahead of everybody else. And as you know, he was the first Southern senator to break the color line and hire an African-American in a senior position on his staff.

HUNT: When he became a Republican in 1964, as you know, he Washington one of the very first. The South was overwhelmingly Democratic. And then by the '70s and early '80s there was all this talk about of the new South and moderate Democrats, Jimmy Carter, Reuben Askew, Bill Winner, Jim Hunt, and Dick Riley in your state.

But that fizzled, and the South is now a Republican stronghold. Why?

BANDY: I think that we have to go back to the early civil rights days. The Southern Republican Party was built on race. Richard Nixon's famous Southern strategy, which, by the way, was developed by Strom Thurmond and his top aide then, Harry Dent. And that was based solely on race. That Southern strategy has run its course now. And that -- the Republicans down here are a little bit more progressive on race, and (UNINTELLIGIBLE) to reach out to the African-American voters.

HUNT: Is race still, however, a central element to Southern politics?

BANDY: Oh, yes, the race card gets played every election, and I don't know what -- whether that -- when that's going to change...

HUNT: Are the Democrats by and large doomed in the South?

BANDY: The pendulum always swings back. And it will swing back again. But I do think that, at least here in South Carolina, the Democrats were set back about 30 years. They were put back to the point where the Republicans were in this state about 30 years ago.

But I'm not prepared to write their obituary yet.

HUNT: Give us your favorite Strom Thurmond anecdote from over 40 years of covering him.

BANDY: Boy, there's so many of them, Al. Wherever he goes to a reception, he is famed for going around and eating just about everything he can find on the table. But a lot of times he will take food off the table, wrap it in a napkin or whatever. Sometimes he takes with him a Zip-Lock bag and fills is up.

One story I remember, Al, was in Dallas, Texas, at the Republican National Convention.

HUNT: Right.

BANDY: There was this elaborate reception, ice sculptures and so forth. And there was a setting of artificial fruit on that table that looked so real, and so Strom Thurmond, he was putting food in his pocket, and he spotted this apple, not knowing it was artificial. He put it in his pocket, not knowing that it was attached to the tablecloth.

And he started to walk off.

HUNT: He had an eye for the well-turned ankle.

BANDY: He did have an eye for the pretty women. I asked him about that in an interview that I had with him, and I said, You know, you have a reputation of being a ladies' man. Is that a fair assessment? He said, Oh, yes. He says, I have a crush for the ladies.

(END VIDEO CLIP)

SHIELDS: Al Hunt, that's great to listen to Lee Bandy. But beyond his historic -- his longevity and his legendary constituent service to South Carolinians, what is Strom Thurmond's legacy?

HUNT: Well, it's survival, Mark. He was, as Lee said, he's a guy who was able to see, to see ahead, and he was able to adapt. You know, as despicable as his segregationist past was, he was one of the first of the Southern Republicans to turn. And as Lee also told me (UNINTELLIGIBLE), he was the first one to name a black judge, Matthew Perry. He really went with the times.

NOVAK: The first Evans/Novak weekend column in May of 1962, that's -- '63, it's 39 years ago, we referred to Strom Thurmond as a race baiter. Ran in "The Washington Post" on Sunday morning, and he called up my late partner, Rollie Evans, on Monday morning. He said, "Well, they -- you're way out of date. That is not true any more. That was 40 years ago." He didn't want to be called a race-baiter.

SHIELDS: Kate?

O'BEIRNE: To white liberals, the Republican South is inherently illegitimately racist, and Lee Bandy's the latest one claiming outrageously that the race card was still played in every election this past November.

When Republicans in the South -- when people in the South are (UNINTELLIGIBLE) Republican, so too were ethnic Catholics in the Northeast and the Midwest.

CARLSON: (UNINTELLIGIBLE). Strom Thurmond was a political opportunist. He was -- he denied blacks their human dignity until it didn't work any more, and then he switched. And, you know, he's proved that if you last long enough, all will be forgiven, which means there's hope for you, Bob.

NOVAK: How about you, Margaret?

CARLSON: I intend to last long enough...

SHIELDS: Children, children...

CARLSON: ... to be forgiven, even by you.

SHIELDS: Last word, Margaret.

Next on CAPITAL GANG, Beyond the Beltway looks at Saudi Arabia fighting back with Romesh Ratnesar of "TIME" magazine.

(COMMERCIAL BREAK)

SHIELDS: Welcome back.

Saudi Arabia has been accused by members of Congress and other American political leaders of being slackers in the war against terrorism. The White House defense of the royal government was qualified.

(BEGIN VIDEO CLIP)

FLEISCHER: The president believes that Saudi Arabia has been a good partner in the war against terrorism. But even a good partner like Saudi Arabia can do more.

(END VIDEO CLIP)

SHIELDS: It was revealed that Saudi Interior Minister Prince Nayef was -- has claimed Jews were behind the September 11 attacks on the United States. This week, the foreign policy adviser to the Saudi crown prince, Adel al-Jubeir, tried to take the offensive.

(BEGIN VIDEO CLIP)

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: We believe that our country has been unfairly maligned. We believe that we have been subjected to criticism that we do not deserve. We believe that people have been misinformed about Saudi Arabia and what Saudi Arabia has done, or frankly that people have lied about what we have done or what we allegedly have not done.

(END VIDEO CLIP)

SHIELDS: Joining us now from New York is "TIME" magazine staff writer Romesh Ratnesar, who has reported from Saudi Arabia.

Thanks for coming in, Romesh.

ROMESH RATNESAR, "TIME" MAGAZINE: Thanks for having me.

SHIELDS: Romesh, how can the Saudi government explain a key cabinet minister spreading this anti-Jewish slander?

RATNESAR: Well, it's not the first time that we've heard Prince Nayef make statements I think most Americans would find somewhat outrageous. I mean, you know, this sort of thing actually you hear quite a bit in Saudi Arabia. There's a great sort of conspiracist view of things. I think many Saudis are still really in a state of denial about what happened on September 11 and the level of Saudi involvement in the attack.

So, you know, I -- it's the kind of thing that you hear the Saudi government will surely try to back away (UNINTELLIGIBLE), to amend those remarks. But that attitude is not so uncommon, both within the government in Saudi Arabia and also among ordinary people there.

SHIELDS: OK. Bob Novak.

NOVAK: Romesh, although the Saudi regime is under attack from some neoconservatives and even some real conservatives in the United States, isn't it true that the Saudi regime is really under attack by al Qaeda and by the extremists themselves?

RATNESAR: I think that's true. I mean, certainly bin Laden from the start has said that, you know, one of his goals, in addition to destroying the United States, is removing the House of Saud from the ruling position in Saudi Arabia. So there is extremism there, it is directed in some cases against the royal family. And, you know, we've heard, and we've reported in our magazine that the CIA has been talking to Saudis that al Qaeda is operative in Saudi Arabia and may be planning attacks there.

So there is the threat there, and it's one they should be taking seriously.

CARLSON: Romesh, despite...

SHIELDS: Margaret Carlson. CARLSON: ... everything we know about the Saudis' involvement in 9/11, the 15 hijackers and their support for suicide bombers and the charities and on and on, the United States treats Saudi Arabia with kid gloves, and, you know, for instance, did -- could it matter that former president Bush and James Baker and others are -- do work for the Saudis here? Has that made a difference in how the United States responds?

RATNESAR: Well, Margaret, I mean, it's very complicated to try to sort out the extent to which our sort of soft approach toward the Saudis has to do with strategic concerns and the extent to which it has to do with the fact that the Saudis have very effectively bought influence in Washington on both sides of the political aisle.

I think those two are related. I think the Saudis have been pretty effective in getting Washington -- I mean, if you listen to the -- what the White House says, there's very -- a great deal of reluctance to directly confront the Saudis. I think a lot of that has to do with the ties that members of the administration, members of the Republican establishment, members of the Democratic Party have with the Saudis.

It also has to do with Iraq. I think the U.S. is still worried that the Saudis are not going to allow us to use Prince Sultan Air Force Base.

So there are lots of things that are -- seem to be in a related, but they can't be distinguished from each other. They all contribute to the fact that we don't probably take the kind of hard line you might expect.

SHIELDS: Kate O'Beirne.

O'BEIRNE: Romesh, given the negative opinion the majority of the American public has about Saudi Arabia, is there a chance the Bush administration gets caught on the wrong side of defending Saudi Arabia? Might the Democrats exploit their friendship?

RATNESAR: I think the Democrats are starting to talk about this. I think you've heard some members of the Republican Party, John McCain and others, who are trying to push the administration to take a harder line. I mean, I don't think it's going to happen any time soon. I mean, the administration needs the Saudis for -- to take on Iraq. We need the Saudis to maintain oil production, keep oil supplies flowing, especially if war disrupts those markets.

So I think the administration is probably not going to take a much harder line against the Saudis than they are. But you're right, I mean, the -- there's no love lost between the American public and the Saudis, and the same goes for the Saudi public and the United States. There's not a great deal of sympathy in Saudi Arabia for what happened on September 11, and very little support, if it -- any at al about our policies toward Iraq and the Palestinians as well.

SHIELDS: Romesh Ratnesar, thank you so very much for being with us. THE CAPITAL GANG will be back with the Outrages of the Week.

(COMMERCIAL BREAK)

SHIELDS: And now for the Outrage of the Week.

This week Mississippi Senator Trent Lott said, quote, "When Strom Thurmond ran for president, we voted for him. We're proud of it. And if the rest of the country had followed our lead, we wouldn't have had all these problems over all these years either," end quote.

In his 1948 campaign defending racial segregation, Thurmond said, quote, "All the bayonets of the Army cannot force the Negro into our homes, our schools, our churches," end quote.

To his credit, Strom Thurmond changed dramatically. Why, then, does Trent Lott romanticize an era of hate when black Americans were truly oppressed?

Bob Novak.

NOVAK: I think Trent Lott was kidding, Mark.

Two (UNINTELLIGIBLE) uncompromising conservative Republicans from Texas, congressman Dick Armey and Senator Phil Gramm, are leaving Congress defiantly opposed to big government and worried about a collateral threat to individual freedom.

In departing from Capitol Hill, they both asked whether fighting for our safety against terrorists is threatening our freedom. The most ominous sound heard in Washington today comes from administration officials saying, We have to give up a little liberty to defeat terrorism.

That may be the slippery slide toward a police state.

SHIELDS: Margaret Carlson.

CARLSON: Mark, "The New York Times" editors were wrong to kill two columns because they disagreed with "The Times"' official position that Tiger Woods should boycott the Masters Golf Tournament at Augusta for its ban on women. It's not Woods' fight, and more importantly, "The Times" shouldn't be suppressing dissenting views.

But about the men-only policy, "The Times" is right. Unfortunately, women can't boycott a club they can't join, but they can boycott CBS for broadcasting the golf tournament there.

SHIELDS: Kate -- I'm sorry.

CARLSON: You'll miss, if you boycott CBS, "Everybody Loves Raymond." But you can catch the reruns after CBS caves.

SHIELDS: I love "Everybody Loves Raymond" almost as much as I love Margaret.

Kate.

O'BEIRNE: This Christmas season, Planned Parenthood is sharing its goodwill wishes in a greeting card that proclaims, "Choice on Earth." The publicly funded abortion rights outfit no doubt delights in mangling sacred scripture to offend their devout critics and win some cheap publicity for themselves.

Some of us enjoy the bizarre spectacle of these marketing geniuses using the celebration of an unplanned pregnancy to a young mother to promote their antichild agenda.

SHIELDS: Al Hunt.

HUNT: Mark, in bad times, all institutions cut back on perks like year-end bonuses. Except, that is, the Bush White House, which believes sacrifice is only for economic or political have-nots. Despite a dismal economic record and spiraling budget deficits, the president is going to give up to $25,000 bonuses to his political appointees.

This perk was abused by his father too, and it's even more offensive today.

SHIELDS: This is Mark Shields saying good night for THE CAPITAL GANG.

Coming up next, "CNN PRESENTS: Showdown Iraq -- War Games."

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