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CNN Newsnight Aaron Brown
Corporate Scandal Takes Another Twist; How Prepared is FBI to Stop Another Terrorist Attack?
Aired July 11, 2002 - 22:00 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.
AARON BROWN, CNN ANCHOR: Good evening again everyone.
We were a little off stride there. The president and the corporate scandal story took another twist today, and while we thought last night that maybe we were done with the story for a day or two, it turns out not to be the case.
One of the things the president said on Tuesday in his speech was that the officers and directors of corporations should no longer be loaned money by the companies they're running. Well, it turns out Mr. Bush received one of those very loans while he was a director at Harken, an oil company.
The White House, as we'll report in a moment, says back then those loans were not being abused and that's the fundamental difference. They're being abused now, and it may well be true. We would point out another difference. We think it's important, the amount, more than $180,000, while hardly chump change was not a multimillion dollar loan that some CEOs are receiving, and you'll hear an extraordinary story about that tonight as well.
So, in the scheme of things, this isn't the biggest story on the planet. Harken's bottom line wasn't distorted by the loan. The loan was paid back and, while none of us could likely get such a deal on a loan, it was hardly the kind of money that brings a company down.
But what the president said on Tuesday is not healthy for corporations and not good for investor confidence. He did once, and that makes it news, not because it might have been illegal, it clearly was not, but because this is not just an economic story. It's a political one, and the news that the president took out the kind of loan he now says is wrong makes the political fight much harder for him and his party.
"The Whip" begins with the loan story. Our Senior White House Correspondent John King with the details tonight. John, a quick headline from you please.
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Aaron, another day for the White House, saying that what the president did before he got into politics not only was completely appropriate, but has nothing to do with the corporate corruption scandal now. The president hopes to change the subject tomorrow. He'll sit down for the first time with that new corporate fraud task force here at the White House.
BROWN: John, back to you at the top of the program tonight.
We turn next to homeland security and how prepared the FBI is or is not to stop another attack. Kelli Arena has been working that. Kelli, the headline from you.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Aaron, the short answer, it's got a long way to go and the terrorism threat is as potent as ever, back to you.
BROWN: Kelli, thank you very much.
And on to Charles Feldman out in Los Angeles next, where the Inglewood police case took quite an odd turn in our own back yard literally, out at CNN in L.A. Charles, the headline from you please.
CHARLES FELDMAN, CNN CORRESPONDENT: Yes, that's one way to put it, Aaron. It turns out that the guy who videotaped the Inglewood police beating has now been arrested. He's a wanted man. Aaron.
BROWN: Charles, thank you, back with all of you shortly.
Also coming up on the program tonight, Scott Adams, better known as Dilbert. He'll help channel all that rage that may be filling up in your cubicle these days about CEOs and the money they make and the corporations that are failing.
Chris Burns with an unsettling story tonight from Belgium, men of Arabic descent training at flight schools at the same time as September 11 hijackers were learning and no one seems to know where these men are now.
And, Jeff Greenfield has a behind-the-scenes look at the president, literally. That should keep you guessing until "Segment Seven." We like this one tonight. In fact, we like the whole program, and so we'll get to it.
We begin at the White House where the headline again tonight is not the president's message on corporate ethics and his efforts to rally the stock market. There must have been a sign of relief at the White House today when the Dow, which had dropped 200 points early in the day, started coming back. Whatever publicly they say, clearly they did not want to see a third straight drubbing of the markets since the president's big Wall Street speech on Tuesday.
But even as the markets bounced back, the loan story guaranteed that for yet another day, the White House would not control the message, and would play more defense than offense; again, our Senior White House Correspondent John King.
(BEGIN VIDEOTAPE)
KING (voice over): President Bush once benefited from a practice he now says should be illegal because of concerns about corporate corruption. Back in 1986 and 1988, Mr. Bush received two low-interest loans from Harken Energy. Mr. Bush was a company director at the time and used loans totaling more than $180,000 to buy 105,000 shares of Harken stock. Such loans are legal and not uncommon, were reported to federal regulators and repaid by Mr. Bush back in 1993.
But the president now says such insider loans should be illegal, because he believes the scandals at Enron and WorldCom show the practice is being abused.
ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: More than 10 years ago, this was a common practice, and in this case, the president did everything you were supposed to do with your loans, reinvest it in the company so your company can grow, disclose it publicly, a far cry from what's happened today.
KING: Democrats see a whiff of hypocrisy.
REP. RICAHRD GEPHARDT (D), MINORITY LEADER: It is hard to lead when you haven't done the things that you're asking others to do.
KING: Democrats see political gain in a corporate corruption debate that reminds voters both the president and vice president are former CEOs, and suggests the president's party is too cozy with big business.
PETER HART, DEMOCRATIC POLLSTER: This is one issue that seems to galvanize Democrats and also forces Republicans to be able to take on the special interests which they have been helping for the last several years.
KING: Republicans say the president's popularity now is more important than anything in his business past.
BILL MCINTURFF, REPUBLICAN POLLSTER: People in the country aren't saying, "oh my gosh the president filed a late SEC report and the president used to own a company and the president this." What they're saying is, "what's he going to do to fix it?" This is a country that is really tired of people in Washington fixing blame.
KING: Wall Street's reaction worries the White House much more than any criticism from the Democrats.
(END VIDEOTAPE)
KING (on camera): And that late rally on Wall Street today offered some solace to the Bush White House, but still the Dow Jones Industrial Average off more than six percent, since the president traveled to Wall Street to give that speech that was supposed to calm investor jitters. The biggest worry here at the White House, investor anxiety will turn into voter anxiety, and the president's party will get punished come November. Aaron.
BROWN: John, did they acknowledge publicly or privately in any way at all that the stock market's reaction since Tuesday has, in fact, in some part been a reaction to the speech?
KING: Well, certainly, they say there are other factors as well, but yes, they say, some aides privately say they have not at least gotten the psychological boost they had hoped for from the president's speech. They hope today is the beginning of the turnaround. They do note that there have been some other bad corporate news in the days since the president's speech that probably took away any positive you were going to get from the president's speech, but many on Wall Street didn't like the speech. Many in Congress said it wasn't tough enough. They didn't get what they were looking for.
BROWN: John, thank you, Senior White House Correspondent John King on duty tonight.
There was a discouraging report today about the government's efforts to ensure that all baggage checked into airlines is also checked for explosives. The congressionally mandated deadline for this is December 31.
The logistics are formidable. All 429 commercial airports in the country will either check bags with those wands that sniff for chemicals used in bombs, and that takes an enormous amount of manpower, or they must run them through giant CAT scanners, and those are very expensive. The Reason Foundation considered all that and came up with December 2004 as the more realistic deadline. As for the cost, the study puts the bottom line as high as $12 billion.
There are questions as well tonight about progress in reshaping the FBI to fight the war on terror at home. Today at a hearing on the new Department of Homeland Security, the Attorney General John Ashcroft once again warned of al Qaeda agents operating in the United States. Can the FBI handle it now, and if not, then when? Here's CNN's Kelli Arena.
(BEGIN VIDEOTAPE)
ARENA (voice over): In some of America's biggest cities, including Seattle, Chicago, Detroit, Atlanta, groups of suspected al Qaeda operatives are being closely watched by the FBI, government sources say, fewer than 100 in all, CNN has been told, that the most specific detail yet about the possible terrorist threat inside the U.S.
JOHN ASHCROFT, ATTORNEY GENERAL: There remains sleeper terrorists and their supporters in the United States who have not yet been identified in a way that will allow us to take preemptive action against them.
ARENA: Public statements, such as these, and word that investigators are convinced another attack is being planned, raise an obvious question. How equipped is the U.S. to prevent another domestic attack?
SEN. BOB GRAHAM (D), INTELLIGENCE CHAIRMAN: The reality is that as long as we are as free a society as America is, we are going to be vulnerable.
ARENA: The onus is mostly on the FBI because it is charged with collecting intelligence in this country. Changes are underway. Five hundred agents will be permanently shifted to counterterrorism. The FBI has new investigative flexibility, and agents in the field have more power to make decisions, but problems persist.
BRIAN JENKINS, RAND CORP.: We still have a long way to go on coordinating intelligence activities and cooperation among agencies in this country. This is a very complex government. There are many sources of collection. Bringing those all together is not a natural thing to do in the intelligence business.
ARENA: Analyzing the loads of information coming in every day is also a problem. One official says the FBI, "isn't even close when it comes to hiring the analysts needed to decipher important clues and it will take several years to get there," another crucial element, computers.
ROBERT MUELLER, FBI DIRECTOR: We are overhauling our technology as quickly as we can given how far we are in being behind the technology curve.
ARENA: Agents are still not able to perform sophisticated searches or functions necessary to connect intelligence dots, but an overhaul won't be complete for another two years. Perhaps the biggest challenge facing the FBI is developing contacts within terrorist organizations.
JENKINS: It takes years to penetrate these organizations, and even then, terrorist attacks continue to occur.
(END VIDEOTAPE)
ARENA (voice over): Officials again point out there is no specific or credible information about another attack against the United States, but there wasn't any before September 11 either. Aaron.
BROWN: It is that persistent notion that in the country today there are tens or dozens or we don't know how many al Qaeda operatives just waiting to do something, but we don't know what.
ARENA: This is true. The number is, we are told, fewer than 100 but that doesn't include so-called sympathizers with the cause and people who are supportive as well, and let's not forget, Aaron, there are also domestic terrorist organizations that still exist in the U.S.
Al Qaeda is not the only terrorist threat within U.S. borders. Again, as you said, no specific intelligence as to exactly what al Qaeda or any other terrorist group is up to at this point, and that is something the FBI is working hard on finding out.
BROWN: Kelli, thank you very much, Kelli Arena in Washington tonight.
A story related to this, the Justice Department says now that most of the people detained immediately after the 11th of September have been released. Of the 1,100 or so people detained many, most have been deported. Seventy-four remain in custody, and about half of them also are awaiting deportation. Advocates for the detainees point out that ten months later, not a single one of those people taken into custody was charged with a single crime related to 9/11.
On now to what may be the perfect cable news story of our time. You probably know the preliminaries already. A Los Angeles area teenager is roughed up by police, which may or may not have been appropriate. That's for a jury, apparently, to decide. The incident was caught on home videotape. There are racial overtones and the media frenzy begins. The story runs day after day, so does the tape. New developments happen. They're reported. There's reaction. Then there's reaction to the reaction, and pretty soon the story, which we ought not forget, is an important story, is trapped in a kind of media hall of mirrors, which brings us to today.
On his way to an interview at CNN in Los Angeles, the man who caught the arrest and the incident that followed on videotape was himself arrested, which was also caught on videotape. Some days, folks, you can not make this stuff up. Here again, CNN's Charles Feldman.
(BEGIN VIDEOTAPE)
FELDMAN (voice over): When Mitchell Crooks videotaped the beating of Donovan Jackson by a city of Inglewood policeman last weekend, he couldn't have known what he was actually buying into at the time. The tape has led to multiple investigations, the forced leave of the police officer, and today in a bizarre twist, the arrest of Mitchell Crooks who shot the video.
Crooks' arrest by the L.A. District Attorney's Office was captured by this CNN security camera, and by a CNN cameraman who also recorded Crooks' screams for help as he was being driven off.
DAVID LAKE, CNN PHOTOGRAPHER: It was a blood-curdling scream that you heard that brought me downstairs, and then when I saw him - well, I saw someone being arrested. Then I thought, well, I should get my camera.
FELDMAN: The L.A. DA's office says Crooks was arrested on outstanding arrest warrants from Placer County in Northern California, where he is charged with driving under the influence, hit and run, and petty theft. Crooks had been hiding out in the CNN building with an executive from another TV network that also has its offices there.
TOM MARTINEZ, TAM BROADCASTING: He didn't want to be alone. He didn't want to stay in a hotel room.
FELDMAN: The DA's office claims Crooks' arrest had nothing to do with the fact that he thumbed his nose at a subpoena to appear before a Grand Jury today to testify about his videotape.
(END VIDEOTAPE)
FELDMAN (on camera): Aaron, minutes ago, a friend of Crooks played for me a voicemail he says he just received from his jailed friend. On that tape, a man identified to us as Mitchell Crooks claims he has been roughed up again and expressed fear of being sent back to Placer County in Northern California.
And, a little while ago also, CNN producer Stan Wilson called in to say that according to Crooks' attorney; he has now been transported to an area hospital to be treated for whatever injuries he says he has sustained. Aaron.
BROWN: Wow, it probably does get weirder than this, but it's hard to imagine. I read today the transcript of a radio talk show interview out there in L.A. that the guy was involved in, and at the risk of going farther than I actually want to here, he does not necessarily sound totally in control. He sounds a little paranoid.
FELDMAN: No, I mean - well, he was. In fact, during that radio show that you're talking about here, he said that you know he really didn't want to go in to testify to the grand jury because he was afraid of whatever interaction he might end up having with the police. He did apparently talk a little bit about his past, but it was unknown until today exactly how extensive his background with law enforcement turned out to be.
BROWN: And, all of this, or none of this has anything to do with the images on the tape itself. The tape is the tape of the incident in Inglewood. It speaks for itself. It probably does not speak completely, but it speaks for itself, and what's new on that front, anything?
FELDMAN: Well, nothing but I'll tell you the danger here though, Aaron, and how this kind of relates, and you're right, this incident on the one hand would appear to have absolutely nothing to do with the other, except for this one point, and that is that there may be a number of African-Americans in the city of Inglewood tonight who will raise the issue that, isn't it odd that the police officer who's caught on videotape beating up a Black youth is put on paid leave, and the guy who makes the videotape ends up being arrested?
BROWN: Well, the guy who made the videotape had outstanding warrants is the answer to that, but we'll let people say what they say.
FELDMAN: Yes.
BROWN: And we'll watch the reaction as it plays out, Charles thank you, a strange day in the back of CNN in L.A. today, thank you. Ahead on NEWSNIGHT, the political fallout from the trouble in America's boardrooms; more on that as we continue for Thursday night.
(COMMERCIAL BREAK)
BROWN: A bit more now on corporate ethics, the battle over that and the president's predicament in particular. Moments like this must be pure gravy for a political reporter and nothing less than China White for a political junkie. Our good friend, Craig Crawford, is both. Well, he's not an addict exactly. He is the executive publisher of "The Hotline." "The Hotline" is decidedly nonpartisan, pretty much the Bible of politics in Washington. Welcome back to New York. CRAIG CRAWFORD, EXECUTIVE PUBLISHER, "THE HOTLINE": Thank you.
BROWN: We've talked a lot about the president. I was just saying that it seems to me the danger for the president, or one danger for the president is that this goes to his - this attacks in some ways his strongest suit, which is his character, that he is a good, decent and honest man, an ethical man, and that's where this attack, I think, is dangerous for him.
CRAWFORD: I think Clinton overcame a lot of scandals, Whitewater, Monica, we know them well. I always thought one reason he got away with it is he was elected as a rogue. We knew that when he was elected. He didn't campaign on character. Bush did and that was his central issue in campaigning, and as president.
So, anything personal that goes to his credibility is a problem. I mean they carefully constructed this kind of Jimmy Stewart, genial honesty image and anything that contradicts that can be dangerous.
BROWN: Right. I want to talk about the vice president a fair amount in this because now he's in Larry Klayman's sights, and we know from the Clinton years that that can be a dangerous place to be, that there is discovery, there's depositions. What's the buzz on the vice president?
CRAWFORD: Well, one thing to remember is, and it wasn't Larry Klayman's case, although he benefited from it. It was the Paula Jones case that the Supreme Court used to force Clinton to testify. They said the president had to testify because it was about matters before he took office in the Paula Jones case.
And, if you remember, when he testified, that's what led to the charges of lying and so on. So, there's a train here that's leaving the station that could be very dangerous for Cheney and that Larry Klayman, with that Supreme Court opinion, could force him to testify, which could be very demeaning, and if he slips up, all kinds of things could happen.
BROWN: And there's this accusation of cooking the books of some sort at Halliburton, and Arthur Andersen was the auditor there and we all know about Andersen now. And, what's going on now is that there's this videotape, a promotional tape that the vice president appears on touting Andersen, and this thing is everywhere, including on the Internet. We pulled it down from the Internet to play a little of it right now.
(BEGIN VIDEO CLIP)
DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The company obviously has a long, historic relationship with Arthur Andersen, and a very important part of the business. They've got the good traditional role to fill as our auditors. They do that extraordinarily well. I've worked with them in some other settings as well too.
They also have - one of the things I like that they do for us is, in effect, I get good advice, if you will, from their people based upon how we're doing business and how we're operating over and above just sort of the normal by-the-books auditing arrangement.
(END VIDEO CLIP)
CRAWFORD: This is about the only way we find Cheney these days, by the way, on grainy video on the Internet.
BROWN: In and of itself, it doesn't mean a whole lot, but when you hear him say "they give me good advice above and beyond," and the defense here is that I didn't know about these irregularities, if that's the right term, in the Halliburton case, that's got to be a little ushy (ph) in the White House.
CRAWFORD: There are many clips in there, and I've already heard this tape in the shop at TV ad companies for Democrats in this coming campaign for November in the midterms.
BROWN: Is there any talk that the vice president could become such a liability that he might have to go?
CRAWFORD: There really is. There has been some talk for some time that he would not be the running mate in the second campaign for reelection. I've never been sure how true that was in terms of what he wanted, but there are plenty in the wings, Ridge, Powell, lots of folks in the administration. And, if he does the bleeding for the president, that's how it usually goes.
BROWN: I want to quickly change the subject, that's John McCain. What's he up to these days? What is he up to?
CRAWFORD: He is out to aggravate this president. I think they had a real parting of the ways. There were so many but the most recent and serious one was when the president signed the campaign finance reform bill.
BROWN: Yes, in the dark.
CRAWFORD: Early one morning, he signed it, got on a helicopter, flew to North Carolina and raised the money it just outlawed, and then called, had an aide call McCain in Arizona at his home and say, "OK we signed that bill of yours."
(CROSSTALK)
BROWN: Do you think that he'll jump parties?
CRAWFORD: There is real talk about it. He doesn't make it go away.
BROWN: Yes.
CRAWFORD: And, the other scenario is to run as an independent and he did something today in the Senate that suggested that direction, because he outed (ph) something in this reform debate that both parties don't want to do and that's on stock options, the notion of making companies declare those stock options on their balance sheet.
BROWN: As an expense?
CRAWFORD: As a real expense which they are.
BROWN: Right, yes.
(CROSSTALK)
CRAWFORD: The Democrats don't want to do that either.
BROWN: Yes.
CRAWFORD: And he tried to bring it up for a vote today, and went into a tirade when Democrats are actually the ones who thwarted it, and said the fix is in and attacked both parties. That's where he may end up going is the independent route.
BROWN: I suspect you're going to have work on this for a while?
CRAWFORD: Oh, yes, I think this...
BROWN: Always nice to see you.
CRAWFORD: I mean the president's getting kicked around quite a bit, but you know when you're getting kicked in the rear, at least you're in the front you know.
BROWN: There you go. Thank you, Craig, very much. We'll continue. We have more of this tonight. We'll look at this from the business side. We'll talk with a CEO of a company and about loans and options in the right way and perhaps the wrong way to do it. We'll get his views on the situation as this is playing out. This is NEWSNIGHT on CNN.
(COMMERCIAL BREAK)
BROWN: We spent quite a bit of time through the course of the program already looking at the loans the president received from Harken Energy more than a decade ago. It is a fascinating political story, but we do not want to overshadow the actual problem, and it is a considerable one, companies loaning in some cases enormous amounts of money to their own executives.
There is, perhaps no more egregious example or outrageous, no loan more titanic than the one given to the former executive who loved to call himself the telcom cowboy, Bernie Ebbers of WorldCom. Allan Chernoff has been crunching the numbers, and here's what he found.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): Perhaps the biggest loan outstanding to a corporate executive is WorldCom's extension of credit to ousted Chief Executive Bernie Ebbers. He owes the company $408 million. Ebbers used much of the initial loan to buy WorldCom stock on margin, putting up only a fraction of the price.
When the stock price sank, Bank of America, Ebber's broker demanded more money. WorldCom backed Ebbers up, lending him $165 million over the past two and half years at the same rate the corporation paid, only 2.3 percent as of April. The best rate local banks offer in WorldCom's hometown of Jackson, Mississippi is 9.75 percent according to bankrate.com. Backing up the total loans of $408 million is Ebbers WorldCom stock, now worth just $2.3 million, and MCI stock worth $127,000.
(END VIDEOTAPE)
CHERNOFF (on camera): WorldCom today said it would not pay a second quarter dividend on the stock of its MCI Division. That means Mr. Ebbers will miss out on a payment of $345,000. WorldCom says the loans to Mr. Ebbers were made after it was determined, "they were in the best interest of WorldCom and our shareholders in order to avoid additional forced sales of Mr. Ebbers stock." That decision was made by the board's compensation committee, and ratified by the board of directors. Aaron.
BROWN: Well, thank you, nice piece of reporting there.
The Ebbers story is just one dramatic example of the broader outrage in the story of corporate wrongdoing, that executives for years have been getting sweetheart deals and perks that are out of reach to Joe Cubicle and the rest of us too.
Often these deals actually do damage to the financial health of an entire company.
We want to get some perspective on executives behaving badly with someone who has to deal with the issues of the boardroom every day. We have wanted for some time, in fact, to talk with a CEO, and we do tonight.
John Snow is the chief executive officer of the freight carrier CSX. He joins us tonight from Richmond, Virginia.
Mr. Snow, it's nice to see you, thank you.
JOHN SNOW, CHAIRMAN AND CEO, CSX CORPORATION: Thank you, good to be here.
BROWN: Yes, you getting any $400 million loans? I thought I'd ask.
SNOW: No, that's a pretty staggering number, isn't it?
BROWN: Yes. Let's talk about this sum. Do you think the president's proposal to outlaw these loans is gone too far?
SNOW: Well, I can see some valid uses for some loans under some circumstances. I don't know that the president's proposal is to ban all loans to all executives no matter what they position they have in the company. BROWN: Yes.
SNOW: But certainly there's been abuse of this, and I can see why the president would react the way he did.
BROWN: You want your executives, the people who work for the company, to own stock in the company. And in fact, at your store, you want them to own a lot of it, don't you?
SNOW: We encourage it, very much so. We encourage it. We set ownership guidelines. We require people to take the proceeds of the exercise of their options in company stock and to hold that stock.
BROWN: And that's the difference, it seems to me, is that what you're saying to your executives is, Exercise your options, the options are valuable, but you can't essentially cash them in. You have to keep them within the company. Right?
SNOW: Absolutely, Aaron. I think the mistake that gets made is to treat them as cash, because the whole theory of options is they're designed to align the interests of management with the interests of shareholders. And that doesn't happen when they become instant cash.
BROWN: One of the arguments against that, as I understand it, is that in a sense it's unfair to the executive, because they end up at the end of the day owning too much of one company, and maybe the company that employs them pays their salary, but their overall financial situation is out of whack.
SNOW: Well, that's a frequent complaint, and in some ways it's justified. The financial advisers, the outside financial advisers to CSX executives, repeatedly tell me and tell other executives, You're way too committed to CSX. But that's just part of the price we pay for being executive officers at this particular company. I think it's a good practice.
BROWN: Yes, if you want the salary, that's part of the price.
More broadly, is there, sir, in your mind a systemic problem in American business that needs to be corrected and regulated? Or is it a few bad apples out there who have caused a heck of a lot of trouble, but the danger may be in overregulation?
SNOW: Well, I think there is a danger of overreaction here. On the other hand, these are serious problems. They're problems that are glaring. They're problems that need to be rectified. And I think the vast majority of leaders of American corporations, at American corporations, maintain the books honestly and are ethical.
In fact, it's inconceivable we could have had the prosperity the country has enjoyed for the last decade, rising productivity, rising GDP, the envy of the world, if our financial statements weren't accurate.
But there's been some alarming cases of abuse, of fraud, of deceit, and that needs to be rooted out. BROWN: As opposed to regulated to death?
SNOW: As opposed to regulated -- I think that's a good way to put it.
BROWN: Yes.
SNOW: There's a danger of killing the goose that lays the golden egg here. If the vast majority of the companies are performing appropriately, with honest statements, without deceitful conduct, and doing what they should be doing, and they're regulated as if they're all crooks, then that's going to have an adverse effect.
BROWN: Twenty seconds or so. Do you think options, because it's one of the issues out there, ought to be treated by your company and others as expenses, legitimate expenses?
SNOW: That's a legitimate issue. I saw Senator McCain's comments today. There's a good argument on both sides of that. And I'm participating in a commission, the Commission on Public Accountability, with Pete Peterson. That's one of the principal issues that our commission will look into. And I don't want to prejudge it. I think there are good arguments on both sides.
BROWN: Sir, it's nice to talk to you. Thank you of your time, appreciate it very much.
SNOW: Thank you.
BROWN: Chairman of CSX Corporation on CNN tonight.
Quickly, the national roundup, we begin with the case of Elizabeth Smart. Authorities filed charges today against the handyman you've heard about, Richard Ricci, involving theft and burglary. These charges are not related to the 14-year-old's disappearance.
Salt Lake City police chiefs said Ricci, quote, "remains a central figure in the kidnapping," but he has not been charged, he's not the sole focus of the investigation into young Elizabeth's disappearance, now more than a month ago.
And trouble today for NBA all-star Allen Iverson, trouble not new to Allen. An attorney for Iverson has arranged for him to turn himself in to authorities next Tuesday. He'll face four felony counts.
Allen Iverson allegedly forced his way into his cousin's apartment last week with a gun. He'd been in a domestic dispute with his wife. He went there looking for her, it is said. And now he's got serious trouble in Philadelphia.
Still to come on NEWSNIGHT tonight, the Dilbert view of the trouble in America's boardrooms.
This is NEWSNIGHT on CNN.
(COMMERCIAL BREAK)
BROWN: Well, we had a little satellite problem, sort of shifting things around here. We'll have Scott in a bit, we hope.
On to other matters. A mystery for you tonight about a group of men with Arab roots who attended flight schools more than a year ago, men who seemed eager to fly, though not necessarily eager to learn the particulars of flying.
We wish we could say we were talking about the September 11 hijackers. At least we know what happened to them. Instead, we are talking about a group of men in Europe, and no one has any idea, not a clue, where they are now.
Our story was filed by CNN's Chris Burns in Belgium.
(BEGIN VIDEOTAPE)
CHRIS BURNS, CNN CORRESPONDENT (voice-over): It's one of a dozen flight schools across Belgium, nestled among the cornfields south of Brussels. Life is slower, the people here friendly, unsuspecting.
Several men of Arab origin, who remain at large, applied for or took classes here between fall 2000 and spring 2001. It was around the same time the September 11 hijackers were training in similar small-town flight schools in the United States.
(on camera): A coincidence, or a chilling pattern? It's enough to interest Belgian investigators, and though personnel at this flight school declined to speak on camera, one instructor tells CNN of his last telephone conversation with one of the students, whose voice, he said, appeared to be under stress.
The student said he couldn't take any more classes, even though he'd paid for them in advance.
(voice-over): A source close to the investigation says at least five ethnic North Africans, four with Belgian passports, went to PubliAir (ph) Flight School. Some seemed to know each other. Those who took classes didn't seem to care much about takeoff and landing. They just wanted to know how to fly.
Sound familiar?
CLAUDE MONIQUET, TERRORISM EXPERT: At that time, of course, it didn't match anything, because it was before the September 11 attacks. But after the attacks, it took a very different color.
BURNS: While the probe is only at a preliminary stage, other investigations indicate this country is a center of Islamic militant activity.
Accused shoe bomber Richard Reid spent the night at this hotel in a Muslim neighborhood near Brussels' main train station. Down the street, the restaurant where police seized large amounts of bomb- making ingredients believed intended for an attack on the U.S. embassy in Paris.
While officials won't comment publicly on the mystery pilots, they admit it's frustrating trying to prevent terror attacks.
"It's obviously terribly difficult to establish the proof that some actions, apparently insignificant, are aimed at preparing a terrorist activity," he says.
But officials are trying to connect the dots to determine whether sinister intentions were behind simple flying lessons.
Chris Burns, CNN, Temploux, Belgium.
(END VIDEOTAPE)
BROWN: Two other items that made news around the world today, starting in Bosnia, the city of Srebrenica, the place where seven years ago -- seven years ago -- Bosnian Serbs carried out the worst civilian massacre in Europe since the days of World War II, about 8,000 Muslims died then.
Today a memorial was dedicated, mourners coming from all over Bosnia, a brutally hot day there, and heartbreaking. "I have lost everything a man can lose," one man said today. "The biggest tragedy is I am still alive."
In Pretoria, South Africa, a not-guilty plea from Winnie Mandela. She's charged in connection with an alleged scheme to obtain bank loans for fictitious employees of a political organization that she runs.
And from China tonight, there is this. It's a bit like Double Dutch. Well, in the same way that a firecracker is a bit like an H- bomb. Seventy-five ropes, 150 kids swinging the ropes, and one kid in the middle. He jumped them not once, which would have been something. He jumped them 160 times, which is the record.
OK, it's not a Lithuanian guy with a beard pulling a Jeep. It's the best we could come up with.
NEWSNIGHT continues in a moment.
(COMMERCIAL BREAK)
BROWN: The truth is, there was bad karma in the office today, and we lit the good-luck candle, and the good-luck candle went out. We're still working on the satellite problem.
Here we go on a highly sophisticated analysis of the president's message. This is fun.
We want to spend some time trying to understand every nuance, every obscure historic allusion that the White House is using to present its policy.
For that, you need a respected scholar of the presidency and political history. And thank goodness we have one in Jeff Greenfield. Or at least someone who can read the writing on the wall.
(BEGIN VIDEOTAPE)
JEFF GREENFIELD, CNN POLITICAL ANALYST: Tonight we go behind President Bush's words -- literally.
(voice-over): Apparently the Bush folks believe that the best way to get their message across is to make certain that we know exactly what that message is, in black and white.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Those who sit on corporate boards have responsibilities.
GREENFIELD: When the president spoke to Wall Street Tuesday about corporate responsibility, the backdrop spelled it out -- "Cor- por-ate Re-spon-si-bil-ity."
BUSH: It was necessary to protect America.
GREENFIELD: When the president spoke about protecting the homeland on Wednesday, you couldn't really mistake the remarks for a call for, say, campaign finance reform, because the theme was spelled out -- "Pro-tect-ing the Home-land."
And how did we know that the president last week was calling for "A Better America"? Call it a hunch.
(BEGIN VIDEO CLIP)
SINGERS (singing): Stand by your man.
(END VIDEO CLIP)
GREENFIELD: Now, what makes this so intriguing is that for years and years, political operatives have thought that images were much more powerful than mere words in making a political point. So in 1992, when Bill Clinton wanted to show that he wasn't one of those soft-on-crime liberals, he spoke in front of a blue wall of uniformed cops.
When past presidents wanted to celebrate the environment, they'd take to the mountains or the woods.
(BEGIN VIDEO CLIP)
GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES: ... to die and live under that flag...
(END VIDEO CLIP)
GREENFIELD: When President Bush's father was attacking Michael Dukakis for insufficient patriotic fervor in 1988, he campaigned at flag factories. And in fact, during the 2000 election overtime, nobody was allowed to say anything without a whole bunch of flags behind them.
Of course, not every symbol works quite the way a candidate hopes. Here's Michael Dukakis as Snoopy.
But starting back during the 2000 campaigns, the Bush approach has been to put the words into the pictures so that every TV image, every front-page photo, will carry the theme of the day unsullied by political opponents or by the media.
(on camera, before backdrop reading "World's Greatest Analyst"): Now, to be blunt, there is something chilling about this. It is, in fact, an Orwellian attempt to implant in the credulous viewer's mind a subliminal message. This is unworthy of our national leaders, dangerous to open, honest discourse. And we, the free and untrammeled press, tribunes of the people, should demand that it be stopped, now.
Jeff Greenfield, CNN, New York.
(END VIDEOTAPE)
BROWN: Well, let's see if the Scott Adams deal works. We'll take a break and say this is NEWSNIGHT.
(COMMERCIAL BREAK)
BROWN: (UNINTELLIGIBLE) fact I didn't think I would need to use tonight. Satellite television for us has been around for 40 years this week, it's the 40th anniversary. And yet every time we do one, it's an adventure.
Scott Adams, who draws Dilbert, has been waiting patiently for us to fix the problem out in San Francisco, and he joins us to talk a little bit about Dilbert and the like, and corporate ethics and the like.
Nice to see you. Hope this holds up.
SCOTT ADAMS, "DILBERT" CARTOONIST: It's nice to be seen. I wondered if the problem may be something went bankrupt in the satellites there, I'm not sure.
BROWN: Well, fortunately, we got you.
In times like this, when people are talking about corporate ethics and CEOs or weasels, or however you want to put it, is business good? Does business seriously, noticeably pick up?
ADAMS: Oh, absolutely. It's boom time for Dilbert. I mean, he's the -- he's kind of the poster child for the abused, you know, abused by the corporate CEO, so it's kind of a perfect time to be a Dilbert cartoonist, really.
BROWN: And what does the guy in the cubicle think of all this? Is he somewhat amused by this notion that CEOs are cooking the books and stealing?
ADAMS: Well, you know, it's kind of bizarre, because, you know, I spent a lot of time in cubicles, and the whole time I was there, everybody I worked with was stealing office supplies and making personal phone calls and surfing the Internet, and, you know, fudging their expense reports.
So the real question I wonder is, are the CEOs less ethical than the people that, you know, work for them? Or are they just more effective? You know, they -- are they just stealing better? Is it just a quality question? That's the thing I wonder.
BROWN: They -- on a grander scale, you wrote today, literally wrote today, or at least I read it today, that the whole world to you seems upside-down these days, that good guys are bad guys and bad guys are good guys.
ADAMS: Yes, yes, you think about it. A year ago, you were thinking Bill Gates was evil, you know, everybody was saying that. And now the stories are Bill Gates is vaccinating children in third world countries. A year ago you thought Catholic Church, they're good. Now the stories are, Catholic Church, you know, may be protecting people who are abusing children.
So everything's backwards. I mean, a year ago, weren't the CEOs kind of the good guys, you know, the captains of industries? And now it's all, you know, how much have they stolen today?
BROWN: Yes, and what are we going to learn tomorrow? Do you think any of them will go to jail, in your little cynical view of it all?
ADAMS: You know, I sure hope so. I -- and the thing I hope more than anything, having been an investor in, believe it or not, Tyco, Enron, and WorldCom -- yes, I had all three -- I hope that I'm on the jury. I mean, that's what I really hope. You know, partly to do my civic duty, and partly because I would like to see a CEO cry. And I'd just like to see it.
BROWN: Were you really an investor in all three of those companies? That's an amazing trifecta of losers.
ADAMS: Oh, I could go on. How about WebVan?
BROWN: Well, WebVan, you sort of deserve it, because that was a cockamamie idea.
ADAMS: OK, I deserved that one.
BROWN: What else is -- what else catches your mind these days when you see all of this and try and relate it to working stiffs?
ADAMS: Well, you know, the thing that the CEOs were always saying is that the reason they got paid so much, so much more than the rank and file, is because it was riskier, you know, their compensation was at risk. So therefore it could be higher.
But who knew the reason that it was riskier is because they were stealing, you know? It's always -- of course it's riskier, you're stealing! You know, stop stealing, maybe it'll be a little less risky.
BROWN: Do you think you'll ever work for somebody again? I mean, really have a boss again? Seriously.
ADAMS: No, that...
BROWN: No?
ADAMS: ... not after today, that's for sure.
BROWN: Well, that will pretty much do it.
ADAMS: Yes, pretty much ended my hopes of a corporate career.
BROWN: When was the last time you worked for someone?
ADAMS: I guess 1995 I walked out of Pacific Bell, and it was the happiest day of my life. And since then, I try to avoid all contact with humans, and I'm much happier, really.
BROWN: Gee, I -- is that -- I mean, do you draw alone pretty much? Your day is pretty much spent alone?
ADAMS: Yes, it's me and two cats and, you know, Pam's downstairs, and pretty much it's a solitary day. Every once in a while, I get to talk to a camera, and I believe there's someone on the other side, but I can't be sure.
BROWN: There is. You want to change days with me for just a day?
ADAMS: That would be fun. Can you draw?
BROWN: No. Can you?
ADAMS: Not very well. Doesn't seem to stop me.
BROWN: Nice to talk to you, thank you, Scott.
ADAMS: Thank you.
BROWN: Appreciate your patience.
And good to talk to you all too. I hope you'll come back tomorrow, we'll talk again. Good night for all of us at NEWSNIGHT.
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