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President Bush and Tony Blair in Canada for G-8 Summit

Aired June 26, 2002 - 11:55   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.
LEON HARRIS, CNN ANCHOR: Now, let's take it to these comments that we're just now getting fresh tape in now from President Bush in Calgary.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... a couple comments and then I'm going to make a comment and the prime minister will make one, and we'll call, in orderly fashion, and answer a couple questions if you don't mind.

First, it's great to be with my friend, the prime minister. This is our second bilateral of the day. The first was in the gym. I went down after a run, and there was the prime minister out, in an impressive regime I might add. So we had a good visit then, and we'll have a good visit here.

America's got no better friend than the government of Great Britain, and I really appreciate his advice and friendship. It's good to see him.

I am deeply concerned about some of the accounting practices that take place in America. Today, the report (ph) that WorldCom has misaccounted $3.4 billion dollars is outrageous.

We will fully investigate and hold people accountable for misleading not only shareholders, but employees as well.

There is a need for renewed corporate responsibility in America. Those entrusted with shareholders' money must -- must -- strive for the highest of high standards.

The good news is, most corporate leaders in America are good, honest, open people who care deeply about shareholders and employees, and our economy is strong.

But when we find egregious practices, such as the one revealed today, we'll go after them, and need to.

Mr. Prime Minister?

TONY BLAIR, BRITISH PRIME MINISTER: Well, Mr. President, first of all, thank you for your kind words. I thought you looked in pretty good shape yourself this morning. And, once again, let me pay tribute to your leadership at this time, particularly post-September 11, but actually for all the range of issues in the world today. Our relationship is strong partly because you and your colleagues are so easy and open and transparent to deal with, and I thank you for that, Mr. President.

Obviously, we have discussed and will discuss all the key issues that has to do with the summit; issues that deal with the Middle East and so forth, and I'm sure our discussions will be good and fruitful as they always are.

QUESTION: Mr. President, earlier this week you made it very clear that the current leadership in Palestine is not acceptable. If the outcome of the election in January were to result in the reelection of Yasser Arafat, what would be the policy of your government?

BUSH: I meant what I said that there needs to be change. If people are interested in peace, something else has got to happen.

We're mired in a situation now where there's terror on the one hand and hopelessness on the other, and that's unacceptable. And, therefore, I laid out a way forward for Palestinians, Israelis, the Arab world and all the rest of us have worried about.

And it said, basically, there needs to be new institutions, there needs to be a new constitution, there needs to be elections, there needs to be balance of power, there needs to be new security forces, and there needs to be transparency amongst financial institutions.

I also made it plenty clear that if there's leadership compromised by terror, we won't be along the path to peace. I've got confidence in the Palestinians when they understand fully what we're saying, that they'll make right decisions as to how we get down the road for peace.

The status quo is simply unacceptable and it should be unacceptable to them. You know, they've been pawns in the game of peace. They have no hope. Their economy is in shambles. They live in squaller. Their leadership has let them down.

QUESTION: Mr. President, who will be the judge, though, to (UNINTELLIGIBLE) of the reforms that you're calling for?

BUSH: The free world. The people who are going to be asked to put up money.

I can assure you, we won't be putting money into a society which is not transparent and corrupt, and I suspect other countries won't either.

QUESTION: Prime Minister, could I ask you, do you agree that there's got to be change, and that means an end to Yasser Arafat?

I would ask you also, Mr. President, whether you agree with the Europeans that you're not as serious as Mr. Blair about helping Africa?

BUSH: OK.

(CROSSTALK)

BLAIR: First of all, let me just make it clear. As I said to you yesterday, it's for the Palestinians to elect the people that they choose to elect.

But if we're going to make progress, we need people that we can negotiate with who are serious about negotiating around the issues of security and political reform necessary for the peace process to work.

So this is not a question of us going in and saying to the Palestinians, "Look, we're going to run your election."

But it is a question of our saying, if we want this peace process to work, there are certain clear preconditions. One, we've got to have leadership we can negotiate with that is serious about peace and resists and totally rejects terrorism.

Two, we've got to have a security infrastructure in Palestine that has integrity.

And three, we've got to have political institutions capable of giving rise to the viable Palestinian state that we believe should be the outcome of this process.

So if, in the end, you want, as we want, an Israeli state that is confident about its own security and a viable Palestinian state, those are the preconditions. For Israel to be confident, it's got to have a negotiating partner that is serious about tackling terrorism. Now, that is, I think, the essence of it.

So, you know, it's not a question of saying, you know, we're going to tell people who they elect or not elect. That's for them. But it's for us to say the consequences of electing people who aren't serious negotiating partners is that we can't move this forward.

QUESTION: And that's Arafat you're talking about...

BLAIR: Well, you know, as I said to you yesterday, we've had a situation over the past few years -- and I've tried as hard as anyone; I think I've had 30 different meetings with Chairman Arafat over the past few years. But as I said to you yesterday, you've got a situation where we have not been able to make progress, and there has been an attitude towards terrorism that is inconsistent with the notion of Israel's security.

BUSH: As to Africa, all of us are doing as much as we possibly can. I don't think this is a competition. I'm proud of the Blair government's efforts for Africa, and I'm proud of my efforts for Africa. After all, I laid out what I call a Millennium Challenge Account in Monterrey, Mexico, that says if countries adopt the habits of democracy and freedom and private property and reform there'll be $5 billion a year available. Laid out a new AIDS initiative that is the first of its kind, that says we're going to provide a lot of money, about half a billion dollars, to affect mother-to-child transmission of HIV-AIDS.

We're also significantly involved in the AIDS fund. Laid out another initiative on a $200 million education fund.

So I'm plenty pleased with the progress we're making.

QUESTION: Mr. President, if Yasser Arafat is compromised by terror, and if the Palestinian Authority has trafficked with terrorists, under your doctrine, are you prepared for the U.S. to step up its military role in eliminating him and those terror organizations which the administration believes that he props up?

And totally unrelated to that, do you believe that there is a crisis in confidence among the American people vis-a-vis the economy, and particularly the stock market, in view of yet another failure of an American corporation?

BUSH: Yes, let me answer the second question first.

The market isn't as strong as it should be, for three reasons. One, corporate profits. There's no question some sectors of our economy are recovering from the slowdown, but they'll recover.

Secondly, there are still some concerns as to whether or not the United States and our friends and allies will be able to prevent further terrorist attack. In other words, there's some concerns about the capacity of the enemy to hit us again. And I want to assure American investors and our friends that we're doing everything we possible can, the government's on full alert, attempting to run down every hint and every lead.

And thirdly, there are some concerned about the validity of the balance sheets of corporate America. And I can understand why. We've had too many cases of people abusing their responsibilities.

And people just need to know that the SEC is on it. Our government is on it. After all, Arthur Andersen has been prosecuted. We will pursue, within the full -- within our laws -- those who are irresponsible.

Having said that, I do believe the economy is strong, and I know that most people that run businesses in America are above board, honest, care deeply about their employees and their shareholders.

First question.

QUESTION: On the Bush doctrine (ph), any...

BUSH: On the Bush doctrine (ph), I said we'd use all resources, all available resources to fight off terror. And that includes working with our friends and allies to cut off money, to use diplomatic pressure, to convince those that think they can traffic in terror, that they're going to face a mighty coalition. And sometimes, we'll use military force, and sometimes we won't.

And in the case of the Middle East, obviously, the road map I've laid out is one that calls upon all our friends and allies to join and bind together against terror. It calls upon the Arab nations to step up and firmly reject terror. Of you remember, in my speech I said they need to get on their public airwaves and denounce terror, they need to work on Syria and Lebanon to prevent Hezbollah from creating chaos in the Middle East.

We all have responsibilities, and in this case the tool I'm using is diplomatic pressure and to work with our friends and allies to convince all parties they have a responsibility to bear.

QUESTION: Are you ruling out military action?

BUSH: I'm never ruling out military. All options are available. But in this case, the path I've laid out is the path that ought to be clear to you by now, it's the one that I spoke to clearly.

STAFF: Final question. British reporter.

QUESTION: I'm the only British reporter here.

(LAUGHTER)

(CROSSTALK)

BUSH: I may not understand you.

(LAUGHTER)

QUESTION: Could we just ask about the war on terror? Because, you know, anyone who's come up here knows what a fortress you've got here. What more have you got to agree with your G-8 partners here on...

BUSH: On the war on terror?

QUESTION: ... on the war on terror?

BUSH: I think it's just enough (ph) time that we ought to give an update. We've got to do everything we can to cut off their money; do everything we can to keep the pressure on countries which might not realize that we're still serious.

We've had some great successes. One of the most recent successes, of course, is Gloria Arroyo in the Philippines. She's a part of our vast coalition. She, early on, said we need to get after Abu -- you know, the Abu Zubaydah group, and she did. And to her credit, it looks like the leader met his demise. And the Philippines are better off for that, and so is the world.

And so this is a chance for us to continually remind each other that our countries are still under threat, but we're making good progress. This is a different kind of war.

BLAIR: Yes.

BUSH: I readily concede that.

BLAIR: Yes.

BUSH: Sometimes people are going to see success, and sometimes they're not. But we're making success.

BLAIR: And I think the important thing, too, is to emphasize to people that it's a continuing threat. I mean, this threat is not over yet. I mean, we have to make sure that at every single level we carry this fight on and it will take, you know, a long time.

But I think if you -- if we could look at Afghanistan today and think back, you know, seven, eight months, I think we've come a very, very long way indeed. And I'm optimistic about it, because I think the coalition against terror is as strong today as it was all those months ago. BUSH: Let me just make sure you understand what I understand. I can tell by the tone of your question that there was a little doubt in your mind -- some doubt.

No leader ever takes options off a table. But the path to peace that I believe is appropriate is the one I talked about in the Rose Garden the other day, just to make sure you understand.

QUESTION: Diplomacy?

BUSH: Absolutely.

UNIDENTIFIED MALE: Thank you all very much.

(END VIDEOTAPE)

KYRA PHILLIPS, CNN ANCHOR: News conference there coming out of the G-8 Summit in Calgary, British Prime Minister Tony Blair meeting with President George W. Bush, focusing on two subjects, the Middle East and of course the WorldCom scandal that has broken today.

The president saying he is deeply concerned about the accounting practices in corporate America, and he plans to fully investigate hold people accountable in this scandal. In addition, wants to work on renewing investor faith in the stock market.

Also Middle East, both Blair and Bush agreeing that there needs to be a massive change in the government in the realm of the Palestinian government. Fair elections and change of leadership when it comes to creation of a Palestinian state the only way that they are going to find a path to peace.

Our John King is live about the president there in Calgary. John, what did you make of the speech.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Kyra, Dramatic statements there by President Bush and Prime Minister Blair, from the president, on two fronts. It is very rare for a president of the United States to be discussing, especially in detail and at length, the fate of one company. Presidents are reluctant to talk about single companies or about the stock market, because every time a president speaks, it could affect the stock market.

But you see President Bush saying, what we are hearing at WorldCom today, a roughly $4 billion accounting disaster. Mr. Bush calling it outrageous. He says the government will fully investigate. And he says there is now, in his view, a broader impact on the confidence people have in the U.S. stock market because of Enron, because of the Arthur Andersen case, now the WorldCom case and others. Mr. Bush saying that Americans and others are rightly concerned that corporate America is not being honest about the balance sheets.

This is rising to a serious economic issue for this administration, and we should be honest, it is also a serious political issue in the view of many Republicans heading into the 2002 midterm elections, so President Bush taking a very strong line there, calling this conduct outrageous and promising to investigate.

And on the subject of the Middle East, Mr. Bush holding firm, some European allies here in Canada for the G-8 summit thought Mr. Bush went a little bit too far saying he would support Palestinian statehood only if Yasser Arafat were moved out of the picture. President Bush clearly defending that line today, saying that the Palestinian Authority under Yasser Arafat is compromised by terrorism, is trafficking in terrorism.

Mr. Bush and Mr. Blair saying they were not telling the Palestinian people who they should elect, but they are drawing this line, essentially telling the Palestinian people, if you keep Yasser Arafat as your leader, you will not isolated in the world community, Mr. Bush will urge the European Union and others not to provide financial aid to the Palestinian Authority, and he will not support a Palestinian state.

So Mr. Bush drawing a very strong line there. We are told there is new evidence in the hands of the of the United States government that even as of recently, Yasser Arafat has been supporting terrorism against Israel, Mr. Bush drawing that line, saying only if Mr. Arafat goes is he ready to support Palestinian statehood, the position he will have to sell at the G8 summit.

PHILLIPS: John King live from Calgary. Thanks, John,

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