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The Lead with Jake Tapper
Corporate Scandals Add Up; Israeli Industrialist Has Vision For Middle East; How Well Does the Government Fight Fires?
Aired June 29, 2002 - 19:00 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.
ANNOUNCER: Live from Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to CAPITAL GANG. I'm Mark Shields, with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and in New York, Margaret Carlson.
In the latest accounting scandal, WorldCom revealed that it overstated profits by $3.9 billion.
(BEGIN VIDEO CLIP)
HARVEY PITT, CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION: We're filing today an action against WorldCom charging it with fraud, and we're seeking orders that will prevent any dissipation of assets or payouts to senior corporate officers past or present.
(END VIDEO CLIP)
MARK SHIELDS: Following the latest corporate scandal, President Bush spoke out daily.
(BEGIN VIDEO CLIPS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today the revelations that WorldCom has misaccounted $3.4 billion is outrageous.
I'm concerned about the economic impact of the fact that there are some corporate leaders who have not upheld their responsibility.
Corporate America has got to understand there's a higher calling than trying to fudge the numbers.
(END VIDEO CLIPS)
SHIELDS: Does corporate corruption require tougher government regulation?
(BEGIN VIDEO CLIPS)
SEN. TOM DASCHLE (D), MAJORITY LEADER: The Republicans came to Congress saying there's too much government regulation, and piece by piece, they dismantled the regulatory environment that we had... REP. MICHAEL OXLEY (R), FINANCIAL SERVICES CHAIRMAN: You have to have a regulated market, but a market that basically relies on the private sector to discipline. And I think, frankly, the private sector and the private markets really discipline better...
(END VIDEO CLIPS)
SHIELDS: Bob Novak, are corporate America, the Republican Party, and George W. Bush all in big political trouble?
ROBERT NOVAK, CAPITAL GANG: Well, the Democrats want to put them in trouble, as Senator Daschle, not surprisingly is making this a partisan issue, attacking the Republicans for this. Whether that works or not, I'm doubtful. I think the president has been worried about it for some time, as I think I've reported here and elsewhere. He wanted some time ago to speak out about it, and he probably should have. He's -- he was told not to.
But there's no question that the antibusiness elements in this society want to use this not only as an excuse to hurt the Republicans but as to overregulate the economy instead of letting the private sector sort out these problems.
When you have a vibrant economy, as we had in the last few years, you're going to have some excesses. You just -- you have to take that with the capitalist system.
SHIELDS: Margaret Carlson up in New York, Bob's defense of business excesses sounds a little bit, that the critics are antibusiness, sounds a little bit like those who criticize those who criticized the sexual abuse by priests being anti-Catholic.
MARGARET CARLSON, CAPITAL GANG: Right, Mark, you're so right. I mean, Bob has one point in which you wouldn't think it would take more regulation, in that there are laws on the books already against what businesses have been doing. You know, they're -- it's stealing, for instance, so there are laws against that. There's the Seventh Commandment, that one works.
But it doesn't work with these people.
Now, the reason it may hurt Bush is, his language is -- he used the word "misaccounting," "They're not upholding their responsibility," and "They're fudging." No. They might as well put on ski masks and hold guns and go into a convenience store.
You don't just lose $3.9 billion by misaccounting. It's a plot to steal money, it's not a victimless crime, shareholders and the public are hurting. And the Republicans are going to have to change their way of thinking about it if they're not going to suffer more damage than Democrats.
SHIELDS: Kate O'Beirne, there does seem to be an acute absence of shame (UNINTELLIGIBLE).
KATE O'BEIRNE, CAPITAL GANG: Yes, absolutely, Mark, I think that's asking a bit too much. I do think it's going to be hard to place political accountability on George Bush, although the Democrats are certainly trying. I don't think the American public's going to think that there's something he could have done in the past 18 months to encourage these kinds of frauds and illegal activity.
I thought it rang hollow when Al Gore immediately pounced by trying to accuse George Bush, given that high ethical standards in high places was not exactly a feature of the '90s, and that Bill Clinton, which is what the Republicans will be saying, of course, showed his own lack of respect for, for honesty.
So I don't think the political accountability's going to be a problem. The economy will be, though. This is taking a toll on the markets. It's bad for the economy. And George Bush will be held responsible for the state of the economy.
SHIELDS: Al Hunt.
AL HUNT, CAPITAL GANG: Mark, I think that George Bush is about as committed to taking on corporate wrongdoing as Bill Clinton was to the government abstinence program. I mean, this is not something he really feels. He may -- political advisers may say, You ought to do it.
There's nothing in his background or his record to indicate that he really believes it. For the last year and a half they have given corporate interests almost anything they wanted. They've tried to deregulate, they've put all kinds of their -- so many foxes in so many hen houses, starting with Harvey Pitt, you can't count them all.
And I -- and I'm not -- I don't think this will be a huge political issue, but I think it does take its toll. There have been a series of polls that last week, both national and state, which have clearly tilted slightly to the Democrats. The Democrats, at least, think this anti-corporate revulsion is at least in part responsible for that.
NOVAK: At least they hope so...
(CROSSTALK)
NOVAK: ... can I take, can I take issue...
HUNT: The polls are -- Bob, the polls are clear, both national and...
(CROSSTALK)
HUNT: ... why...
NOVAK: The fact that, the fact that say, I always say hope, so -- You know, Al, I think you're very unfair to President Bush on that. You said he does, he isn't sincere. You don't know that. But I do know that people have told me for a long time, and I do believe them, and I think I know George W. Bush well enough to know that this is the kind of thing that would upset him, this kind of stealing, this kind of dishonesty.
I think, I think you have to give him his due that he is honest about it, and as far as this regulation goes, Al, you and I earlier in the day, we had an interview with Michael Huxley, the...
HUNT: Oxley.
NOVAK: Oxley, I'm sorry, the chairman of the Financial Services Committee, and he said, which I think is very correct, that the, that the, that the private sector is taking care of these problems. These, these countries are -- these companies are in big trouble. They acted very badly...
(CROSSTALK)
HUNT: Go ahead, I'm sorry, Mark.
(CROSSTALK)
SHIELDS: Let me say one thing, Bob. You know, for two weeks in a row, you've talked about George Bush wants to make this tough speech but he's being held back by all these nameless, faceless...
NOVAK: It's not any more, not any more.
SHIELDS: ... little staff people. Well, I think, but the point is, speech -- we're beyond speeches. I mean, I think Kate's right, it's tough to say what happened over the past 18 months or whatever. What does he do now? What is his action statement?
O'BEIRNE: Right, right.
SHIELDS: Is he going to back the tough Sarbanes bill on accounting firms?
NOVAK: I hope not, I hope not.
(CROSSTALK)
SHIELDS: Is he going to get -- You hope not, of course you hope not...
CARLSON: Mark...
SHIELDS: ... because 17,000 people got laid off here today.
Margaret?
CARLSON: Mark, I was going to say, it's -- I think Bush does have a sense of right and wrong, but he hasn't expressed it here. He hasn't found the language for it, because...
NOVAK: What do you think he's saying?
CARLSON: ... it's not a misaccounting problem.
O'BEIRNE: No, I agree with the point...
CARLSON: They're stealing, and the market didn't correct because now the CEOs got off with the loot, and the shareholders and the public are left holding the bag. So the market didn't work at all.
O'BEIRNE: I think Margaret...
SHIELDS: Kate.
O'BEIRNE: ... makes an excellent point. I think the public does give George Bush credit for being straitlaced and straight-talking. But Harvey Pitt, the chairman of the SEC, refers to WorldCom's behavior as "shenanigans." So I think they clearly have to properly...
(CROSSTALK)
O'BEIRNE: ... label it. And I think the record shows, Al, that Enron, for one, got a lot more out of the Clinton administration than it got out of the Bush administration.
HUNT: Well, of course, the first couple...
O'BEIRNE: And I think the public appreciates that.
HUNT: ... the first couple of Enron was Phil and Wendy Gramm, who, you know, really took care of them on everything that there was to be taken care of. And I have no doubt when Karl Rove tells the president there's a political problem, that he responds to that.
But I do think there is a test, as Mark just said, the Sarbanes bill, which Paul Volcker said is absolutely essential, hardly a left- winger, if you will, we'll see if...
NOVAK: Hardly a conservative.
HUNT: ... we will see if his record will match his rhetoric.
NOVAK: I, I, I do have to, I do have to say one thing, that if you're going to live in a capitalist system and have the kind of economy that has made you and your wife so rich, Al, you're going to have to take some of the excesses of capitalism. That's one of the things we had in the 19th century. Mark, we had it...
HUNT: (UNINTELLIGIBLE)...
(CROSSTALK)
NOVAK: ... (UNINTELLIGIBLE) this country.
HUNT: ... just as Franklin Roosevelt saved capitalism by regulation...
NOVAK: Ohhh!
HUNT: ... you sometimes -- Franklin -- it's because of Franklin Roosevelt that you are as...
NOVAK: Spare me, spare me.
HUNT: ... as incredibly wealthy as you are today.
NOVAK: Spare me your nonsense, spare me your nonsense.
SHIELDS: Good point. And I'll just say, there are seven words you will not hear this year, "Now is the time to privatize Social Security."
HUNT: Right.
SHIELDS: The GANG of five will be back with President Bush laying down the law to the Palestinians.
(COMMERCIAL BREAK)
SHIELDS: Welcome back.
President Bush laid out his requirements for a Palestinian state.
(BEGIN VIDEO CLIP)
BUSH: Peace requires a new and different Palestinian leadership so that a Palestinian state can be born.
(END VIDEO CLIP)
SHIELDS: Does that mean that Yasser Arafat has to go?
(BEGIN VIDEO CLIP)
BUSH: (UNINTELLIGIBLE) what I said that there needs to be change. I've got confidence in the Palestinians, when they understand fully what we're saying, that they'll make right decisions.
(END VIDEO CLIP)
SHIELDS: Arafat called a Palestinian election for next January.
(BEGIN VIDEO CLIPS)
YASSER ARAFAT, PRESIDENT, PALESTINIAN AUTHORITY: This has to be decided by my movement, not by any person else.
SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: The Palestinian people have chosen President Arafat to be this -- their leader, and the world and President Bush must respect the democratic choice of the Palestinian people.
DORE GOLD, SENIOR SHARON ADVISER: If we have a new and different Palestinian Authority, then we can move forward, and Israel can reach a peace settlement with the Palestinians.
(END VIDEO CLIPS) SHIELDS: Kate O'Beirne, will President Bush's insistence on getting rid of Yasser Arafat actually block a Palestinian state?
O'BEIRNE: Mark, it will block a new terrorist state in the Middle East, which is the only kind of state a terrorist like Yasser Arafat could be expected to run. It seems to me that thanks to President Bush, there's finally honesty and clarity in U.S. policy towards the Middle East.
The United States will no longer be engaging in the pretense that there can be a peace process with a partner like Yasser Arafat with his history of breaking every promise he's ever made and his history, of course, of sponsoring terrorism.
So by siding with a Palestinian democracy process rather than a phony peace process, I think George Bush has sided with the Palestinian people who actually do want to live in a peaceful, legitimate, noncorrupt state with Israel.
SHIELDS: Margaret Carlson, is Kate right that the elimination of Yasser Arafat is the only way to peace?
CARLSON: Kate and the president have a good point, and it does clear up any ambiguity that Yasser Arafat is a terrorist, and it's not the leadership the United States would like or is one with which people who want peace can negotiate with optimism.
Yet, you know, what if there are elections and Yasser Arafat wins? What do we do? You know, we've held out the prospect of freeing up the money that's frozen, which seems to me a great incentive for moderate Palestinians, but, you know, the elections, are we going to send Jimmy Carter to monitor the elections so that they're secret and open?
There are a lot of problems when you get involved in the democracy of another state. It would -- in a perfect world, it would be wonderful if we could get rid of Yasser Arafat. But I haven't seen other countries coming forward and saying, Listen, this is a great idea, we're behind you. We're told that all the other Arab countries are with us on this, but they just can't afford to say it.
Well, I think we're going to have to -- some people are going to have to stand up and see that the election which is held is one in which there's a chance of removing Arafat.
SHIELDS: Al Hunt, the president did -- wasn't specific on a lot of details. For example, he didn't lay out whether Yasser Arafat had to get a higher percentage to retain office of the popular vote than the president did.
NOVAK: Oh, come on, Mark, come on...
(CROSSTALK)
SHIELDS: ... no, I'm asking, I'm asking a question.
NOVAK: That's ridiculous.
SHIELDS: I want to hear.
HUNT: Listen, listen, I, I, I, I, I...
NOVAK: (UNINTELLIGIBLE).
HUNT: ... also want to say to Margaret's point that I don't quite get how you're going to have the Saudis and the Egyptians going and make sure...
SHIELDS: (UNINTELLIGIBLE)
HUNT: ... there's an honest democratic...
SHIELDS: (UNINTELLIGIBLE)
HUNT: ... election of the Palestinians.
O'BEIRNE: Good point.
HUNT: You know, I mean, that -- they have no credibility on that issue to begin with.
SHIELDS: Right.
HUNT: Kate, I don't think clarity has been a hallmark of this administration's Middle East policy. Maybe it's changing now, but it certainly has not been. If this really is a new policy, one of engagement, and they can figure out not just where they want to go but how they're going to get there, and Colin Powell's going to become actively engaged, then it may become a seminal moment.
If in fact this was a speech that was given in order to say something before the president went to the G-8 meeting, and in order to be a prelude before to -- before they invade Iraq a year or so from now, then I think it's going to be a dismal failure.
And I don't know what you do if the Palestinians, as I suspect they will, either reelect Arafat or someone who, in our view, is worse.
SHIELDS: Yes, but seriously, bob, isn't it -- doesn't it this -- if you're Yasser Arafat, you want to call for an immediate election. You want to say that...
NOVAK: Well, you call for (UNINTELLIGIBLE)...
SHIELDS: ... my candidate, my candidate, our side's candidate...
NOVAK: ... (UNINTELLIGIBLE).
SHIELDS: ... is the man that Ariel Sharon wants out of office. Isn't that a natural?
NOVAK: You know, there's so much demands for -- there's so much attention on the demand for a new Palestinian leadership that people haven't read that speech very carefully. That's a remarkable speech.
And the Israeli extremists, like Sharon and their defenders in this country shouldn't like it, because he very clearly talks about the pre-'67 borders, going back to that. He's against settlements. He talk -- and the president talks for the first time about the anguish and the misery of the Palestinians, how they've been brutally treated by Israel.
This is a speech that thrilled Arabs all around the country. So why do the Israelis like it? Because they believe that the demand for a new government is going to make it impossible to get rid of Arafat. Arafat was sinking in popularity until this picked up both in the, in the, in the Arab street and in, and in Palestine.
Now, the question is, who gets elected in this election? Is it, is it Arafat? Is it somebody worse? It's probably not the kind of guys the United States wants in there. But the point of the matter is, read that speech carefully, and there was tremendous progress toward a Palestinian state.
And Al, it isn't -- it wasn't a device to get, to get to Canada. That, that was a serious proposal.
HUNT: Bob, Bob, I think the speech was. I'm saying what was the rationale for George Bush? And I think, you know, your point is very well taken. However, his April 4 speech was pretty good too. And he, and he, and he laid down some markers, and then he backed down starting in April 5 or April 6.
O'BEIRNE: The speech, the speech...
HUNT: My question is, is there a serious comprehensive commitment here?
O'BEIRNE: Well, there's always -- they're always fighting a rear-guard action against the State Department. But this speech this week was perfectly consistent with what the president's been saying about terrorism, which is that there's a two-pronged agenda, fighting terrorism and promoting democratic values.
And what he's saying is, people in the Middle East, specifically now the Palestinians, are no exception, they too are capable of and deserve to live in a free, democratic state.
NOVAK: But, but, but, but Kate, in that speech, he talks about the -- in very plain language the terrible treatment of the Palestinians by Israel.
O'BEIRNE: Also by the PLO, though, Bob.
NOVAK: He, he talks, he talks...
O'BEIRNE: Also by the PLO.
NOVAK: ... he's been talking about that for a long time. There's no -- and he comes out stronger than any American president for a Palestinian state. That never would have been bought by Sharon except for this thing on saying Arafat must go, which is the, is the catch-22 that may wreck the whole program.
SHIELDS: Last word, Robert Novak.
Next on CAPITAL GANG, OK to school vouchers. And later, no to God.
(COMMERCIAL BREAK)
SHIELDS: Welcome back.
The U.S. Supreme Court, by a five to four vote, ruled that Cleveland's voucher plan using public funding for religious school tuition is constitutional. The majority opinion by Chief Justice William Rehnquist said, quote, "We believe the program challenged here is a program of true private choice and thus constitutional."
A dissent by Justice Steven Breyer said, quote, "In a society composed of many different religious creeds, I fear this present departure from the court's earlier understanding risks creating a form of religiously based conflict, potentially harmful to the nation's social fabric," end quote.
Al Hunt, does this open the door to school choice programs nationwide?
HUNT: It does, Mark, but the voters won't allow it to stay very -- to stay open very wide. I happen to favor school vouchers, at least on an experimental basis, not because I'm convinced that they're going to be a panacea, I don't think they will be. But I think they might bring pressure on inner city schools.
We don't have an education crisis in America, we have a crisis of inner city schools. And other than places like Chicago and now with Mayor Bloomberg in New York, there's been no accountability. And I think this could force some competition.
But voters, every time you take it to a ballot, they lose, they lost in Michigan and California last time, and American voters just don't want to have their tax dollars go for schools that are run by Louis Farrakhan or some disciple of Bob Jones.
SHIELDS: Bob Novak, but that Michigan (UNINTELLIGIBLE) perfect example. It was suburban conservative voters who paid lip service to this position...
NOVAK: Absolutely.
SHIELDS: ... who voted against it, right?
NOVAK: Absolutely, and that's true everywhere. The suburban selfish voters in suburbia are afraid their nice little schools...
SHIELDS: Going to have inner city kids.
NOVAK: ... are going to suffer because of inner city kids.
O'BEIRNE: Well, they're soccer moms, everybody is going for.
NOVAK: There's no, there's no question about that. And that's why the dissenting opinion by Steven Breyer, who was Clinton's justice, who was supposed to be a -- he and Ginsberg were supposed to be moderates, but they always vote the left-wing line, that's why his dissent is so silly.
He talks about religious turmoil, there's no religious turmoil in this thing. This is, this is not a religious warfare, this is a warfare of the teachers' union supported by the, by the suburban soccer moms against the inner city people.
SHIELDS: But Margaret Carlson, look at it politically. There has been a certain insulation for the White House and for President Bush by saying there's been a constitutional impediment. Now doesn't this put a little pressure on the president to really become a champion for school vouchers, which he wasn't, he dropped like a cold -- a quick -- quickly in his education plan?
O'BEIRNE: Well, because of Democratic opposition.
SHIELDS: Go ahead.
CARLSON: Right. Let a thousand vouchers bloom now, because you're right, it's -- the impediment has been removed. But the voters are -- that impediment is still there, and the taxpayers.
You know, the -- I feel ambivalent about vouchers. I know that's a mortal sin on television. But you want to help out those Cleveland parents who have no place to send their kids except for the little bit of money they get for vouchers. And the only thing they can afford is not the tony private school but the parochial school.
It's de facto supporting parochial schools, but it's not really intended for that. It's just a way to help these kids in the meantime while you hope that the public schools get fixed.
But, you know, Breyer, Justice Breyer has a point. You don't want taxpayer money going to any number of religious schools, some of which you might agree with, some of which you don't. But it's -- the parochial schools look good. I went to one, I couldn't have gotten a better education. But do we want Louis Farrakhan getting the money? I don't think so.
O'BEIRNE: You know, Mark...
SHIELDS: Louis is taking a beating. Go ahead.
O'BEIRNE: ... federal money, of course, does go to religious schools in the form of both Pell grants and the GI bill. It's only been grammar schools because the teachers' union sort of blocked it.
You seem to want to put George Bush on the spot, but on this one, Mark, liberal hypocrisy has never been more apparent. They are perfectly willing to trap low-income kids in miserable schools they'd never send their own kids to. George Bush's Rod Paige at the Education Department has been vehemently in favor of vouchers. It was only dropped from the education bill because Democrats would not have passed anything else if it remained there.
And now they're all going to be on the spot, because George Bush and Republicans are going to back a choice plan for D.C., some of the most miserable schools in the country will have George Bush's enthusiastic backing. Let's see what the Democrats do.
SHIELDS: Kate, I will say to you that my hypocrisy is totally bipartisan on this one.
O'BEIRNE: Not (UNINTELLIGIBLE) you.
SHIELDS: There's no question about it, there's no question about it. People who talk about caring, about the, the, the inner city schools and so forth...
O'BEIRNE: Republicans have passed the plan.
SHIELDS: Yes, I know. Hey, let's be very frank...
O'BEIRNE: For D.C.
SHIELDS: ... about it, let's be very frank about it. I'm still waiting for John Engel, the governor of Michigan, when they had a referendum in his state...
O'BEIRNE: A single, a single governor.
SHIELDS: ... where was the leadership? No, no, I mean, seriously, where was George Bush? George Bush never spoke.
(CROSSTALK)
HUNT: Let me tell you what this president could do, and there's a guy named Matt Miller, old policy wonk, who's proposed this idea, experimental basis, go to five school districts and say, What I'm going to do, we're going to have a voucher system in every one of those places, and alternatively, we're going to increase public spending, federal spending for those public school districts by 20 percent.
NOVAK: Well, I wouldn't want to do that.
(CROSSTALK)
O'BEIRNE: ... no.
(CROSSTALK)
SHIELDS: ... that's hypocrisy.
(CROSSTALK)
HUNT: ... because you don't want to spend your money...
(CROSSTALK)
HUNT: ... you want your money to go for your estate tax...
(CROSSTALK)
NOVAK: ... can I tell you what I want?
HUNT: Kate, if you're really serious, you'd try something like that and see if it works.
NOVAK: I'll tell you what, I'll tell you what it is, it's because he's -- this is turning money after bad with those schools.
O'BEIRNE: Exactly.
NOVAK: And let me just say one other thing on Justice Breyer with this religious warfare. He doesn't know that the parochial schools, there's enough of religious education in the parochial schools today. The idea that this is some kind of religious indoctrination is nonsense.
HUNT: How about Louis Farrakhan and Bob Jones?
NOVAK: They're not -- that's ridiculous, you know they, you know they...
HUNT: It is?
NOVAK: ... are just a...
SHIELDS: I've been to Bob Jones.
THE GANG will be back with a court decision that won the nation's attention.
(COMMERCIAL BREAK)
SHIELDS: Welcome back.
In San Francisco, a three-judge federal appeals court panel ruled "one nation, under God," added in 1954 to the Pledge of Allegiance, is unconstitutional.
(BEGIN VIDEO CLIPS)
BUSH: We need commonsense judges who understand that our rights were derived from God. And those are the kind of judges I intend to put on the bench.
DASCHLE: I think we need to send a clear message that the Congress disagrees, the Congress is going to intervene, the Congress is going to do all that it can to live up to the expectations of the American people.
(END VIDEO CLIP)
SHIELDS: The Senate voted opposition to the decision 99 to 0, the House 416 to 3.
Margaret Carlson, was this just an aberration by two federal judges?
CARLSON: Well, it's going to be overturned in a New York minute, Mark. It's caused a lot of aberrant behavior on the part of politicians. They just love coming out on this, and the congressmen singing "God Bless America," reciting the pledge. And President Bush has announced a new litmus test for judges, which is, he's going to ask, you know, Do you believe in "under God" in the Pledge of Allegiance?
(UNINTELLIGIBLE) it's ceremonial deism (UNINTELLIGIBLE). We don't pay any attention to it. But let's not forget that it was originally put in there because we were a godless society back in 1950, according to President Dwight Eisenhower, and that's why it's there.
But it doesn't hurt anybody, it's a rote kind of thing, it doesn't really go over into school prayer even though kids have to recite it. It doesn't amount to a whole hill of beans, so it will be overturned, and the...
SHIELDS: OK.
CARLSON: ... dem -- you know, the country will be safe.
SHIELDS: Hill of beans, Bob Novak?
NOVAK: No, it -- I loved one of the judges who -- there was Steve Reinhardt (ph), who -- he's an old left-wing Democratic politician. He was put on ages ago by Jimmy Carter. The important thing is, as President Bush says, put these guys on, they last forever. But boy, did you see those Democrats get on the right side of that thing but quick. I mean, they didn't leave a millimeter's time pass.
SHIELDS: Al Hunt, the only good news for the White House this week came from a Republican judge appointed by Richard Nixon...
(CROSSTALK)
HUNT: The California decision was written by a Republican judge. Look, there's no, there's no doubt that this basically endorses religion. Suppose it said, "one nation, under Allah"? But Mark, there's such a thing as experiencing and common sense. This hasn't hurt us at all. It'll be overturned by the Ninth Circuit. It is a totally frivolous, silly issue.
O'BEIRNE: Democrats...
SHIELDS: Kate? O'BEIRNE: ... must see this decision by a Nixon judge as one last Nixon dirty trick, because it really put them on the spot. And ironically, it seems to me, it proves there is a God, and He answers Republican prayers, because Tom Daschle was wrong, this decision is not nuts. This decision is in the mainstream of liberal jurisprudence on church-state issues.
HUNT: Kate...
O'BEIRNE: Brock (ph), it's been going on for 30 years, no prayer in schools, no creches on public lands, no graduation prayers. The kind of judges Democrats favor are responsible for these kinds of decisions.
SHIELDS: I'm sorry the Democrats let you down by opposing it, Kate. You know, it would have been a great direct mail issue.
We'll be back with the second half of THE CAPITAL GANG. Our Newsmaker of the Week is Israeli industrialist Stef Wertheimer. Beyond the Beltway goes West for wildfires with Arizona State University Professor Stephen Pyne. And our Outrages of the Week.
That's all after the latest news following these messages.
(COMMERCIAL AND NEWS BREAK)
SHIELDS: Welcome back to the second half of THE CAPITAL GANG. I'm Mark Shields with the full GANG, Al Hunt, Robert Novak, Kate O'Beirne, and in New York, Margaret Carlson.
Our Newsmaker of the Week is Israeli industrialist Stef Wertheimer, who is proposing a mini-Marshall Plan for the Middle East.
Stef Wertheimer, age 75, residence Nahariyah, Israel, religion, Jewish. Came to Israel as a 10-year-old refugee from Nazi Germany, founded Iscar Limited, manufacturer of carbide cutting tools. Builder of industrial parks in Israel. Was planning Palestinian industrial park until the project was halted by violence.
Earlier this week, Al Hunt sat down with Stef Wertheimer.
(BEGIN VIDEOTAPE)
HUNT: Mr. Wertheimer, explain your ambitious notion for a mini- Marshall Plan of industrial development in the eastern Mediterranean.
STEF WERTHEIMER, CHAIRMAN, ISCAR LIMITED: Our region will only quiet down if the income level of the countries without oil in the Mediterranean area will be comparable to the peoples with oil in the Persian Gulf.
Therefore, my tool is educate people to build industrial parks, make them successful, and make a kind of a Marshall Plan which was done 55 years ago.
The main issue is there are three countries in our area which have no oil, which is, Turkey is the biggest country, Israel is probably the most industrialized area, and Jordan is a Western- oriented country who wants to be getting on its feet.
Probably it should be started in a modest way only in Jordan, which is 4 million people. You probably would need a billion dollars to get it going for the first four years (UNINTELLIGIBLE)...
HUNT: Where would the initial capital come from?
WERTHEIMER: I guess the governments must pay it...
HUNT: (UNINTELLIGIBLE)...
WERTHEIMER: ... the Americans, Europeans, the World Bank.
HUNT: You envision this spreading to an emerging Palestinian state. Is that possible if Arafat is still the leader?
WERTHEIMER: I think what Mr. Bush said is -- I agree with him 100 percent, that Palestinians must organize and clean up their state. I'm planning to work parallel on Jordan, like Ireland works parallel on making peace arrangement...
HUNT: One of the issues that you can't get away from is the issue of corruption with the Palestinian Authority. Billions have been poured in there, much of it squandered...
WERTHEIMER: Very simple, because the Marshall Plan stipulated a very good thing, that the money doesn't go to government, it goes to institution who take a very clean responsibility for two things, education, infrastructure, and equipment.
HUNT: The rebuilding of Europe, the Marshall Plan, the rebuilding of Korea a decade later, occurred after the bloodshed had ended. How can you possibly have any successful economic development in the region as long as violence rages?
WERTHEIMER: Because, you know, as I say before, Ireland has not waited till everything is ended, they still fight to some extent
HUNT: No, but as bad as it was in Ireland, it was not nearly as bad...
WERTHEIMER: OK, but Korea has not finished with the North, it's still the conflict exists...
HUNT: But not open violence.
WERTHEIMER: Not open, I agree with you. But parallel, you have to work what you want to do. And the problem is not only Israeli, our problem.
HUNT: What is the response of the Sharon government to your idea...
WERTHEIMER: Rabin was for it. I have a letter from Mr. Netanyahu, he likes it. I have a letter from Mr. Barak, he likes it. Sharon knows about it and think it makes sense.
HUNT: Have you gotten a letter from Sharon yet?
WERTHEIMER: No, I have no letter. But I have his verbal agreement. The refugee problem with leaving settlements should be tied in. In other words, Israel should give up the land and go back to '67, I agree with that.
On the second side, it can only be done if the refugee camps would be closed down and be helped to be industrial good sons (ph). And this is probably the job a Marshall Plan should do to generate industries in the refugee camps, thereby getting them out of the (UNINTELLIGIBLE) refugee camp...
HUNT: What's been the reaction of Americans and American government officials?
WERTHEIMER: Extremely positive. Whoever I met now, and it was quite a number of people, very influential people, they are searching for a way how to translate the word, how do we help this area to get on its feet...
(END VIDEOTAPE)
SHIELDS: Al Hunt, is Stef Wertheimer's visionary vision really practical in the absence of a political resolution?
HUNT: Well, Mark, as you say, this is a very visionary guy, and, I think, a very courageous guy, and it's certainly worth continuing to search to try to do something like this.
The model really is not so much the Marshall Plan, which saved Western Europe, but more than anyplace else, it's probably Northern Ireland, where industrial development did take place when there was still some violence. But that wasn't nearly as bad as what we have now.
And I think until some kind of at least semipeace is there in the Middle East, I think it's going to be hard to do this. But it's worth trying.
SHIELDS: We haven't seen that compassionate side of Israel and the Jewish population in the last -- during all the troubles.
NOVAK: And the question is, do you want to get them out of -- they really want to get them out of those refugee camps, so they want the Palestinians pull -- penned up there. They're not going to have economic development where they're stuck in the refugee camps.
Just as an historical footnote, though, I'm interested in all -- in a Marshall Plan in this connection because General Marshall as secretary of state wrongly and wrongheadedly tried to strangle Israel at its birth. So that was an interesting footnote.
O'BEIRNE: I think what Mr. Wertheimer's talking about is of fundamental importance. And we should note that before the Oslo accords, there was virtually no unemployment on the part of Palestinians. But that's not what Yasser Arafat wants. He doesn't want industrial parks, he wants an angry, unemployed population blaming Israel for all their problems.
So I think this shows enormous promise. He just has to keep the U.N., who have, of course, poured money into the corrupt PLO regime and running these schools that teach hatred, far away from this money.
SHIELDS: And you didn't blame Bill Clinton on that one, Kate, that's the only place you missed.
Margaret Carlson in New York.
CARLSON: One of the things Bush said in his speech was that Israel should unfreeze the money that's gone to help the Palestinians if there's a free election in Palestine. And I know Bob thinks I'm a Marxist, but I do believe that money, capitalism, is one of the keys to democracy, the spread of democracy, and to making the Palestinians see that something other than terrorism pays off.
SHIELDS: Last word, Margaret Carlson.
Next on CAPITAL GANG, Beyond the Beltway looks at who should be blamed for Western wildfires with Arizona State University Professor Stephen Pyne.
(COMMERCIAL BREAK)
SHIELDS: Welcome back.
Over 900,000 acres are on fire in the West, and Republican members of Congress blame the environmentalists.
(BEGIN VIDEO CLIPS)
UNIDENTIFIED MAN: We're trying to thin these forests. We're going to have more of these fires if we can't cut through some of these regulations and get some of these groups to work with us...
UNIDENTIFIED MAN: What's wrong with these forests is they've been managed exclusively for timber industry profits for 100 years. The old fire-resistant trees have been cut down and shipped to timber mills, and fires have been suppressed because they were viewed to be dangerous to the timber industry...
(END VIDEO CLIP)
SHIELDS: Joining us now from Phoenix, Phoenix, Arizona, is Stephen J. Pyne, professor in the Biology and Society Program at Arizona State University, and the author of "Fire: A Brief History," published last year.
Thanks for coming in, Steve.
PROF. STEPHEN J. PYNE, ARIZONA STATE UNIVERSITY: My pleasure.
SHIELDS: Professor, who's to blame for the fires, the environmentalists, the loggers, both, the active guard, what?
PYNE: Well, there's plenty of blame to go around. If we could throw into the mix ranchers, we could throw in urbanites who don't like smoke, we can add the agencies up to a point, we can add homeowners whose irrational exuberance has now created a bull market for burning.
What we're -- what's happening is that these fires are knotting together all kinds of threads, everything we've done and not done over the last century.
I will say specifically, though, that the problem in the Southwest did not begin with logging, and it's not going to be cured by logging as those terms are commonly understood. In fact, the real culprit here that -- where it all began, well before the National Forests were even established, was with grazing. Overgrazing cropped off the grasses and began shifting the fire regime. And we're still living with the consequences of that.
SHIELDS: Bob Novak.
NOVAK: Steve, the -- John McCain, senator from your state of Arizona, who is a favorite of some of the liberals on this panel, and is a good environmentalist, says that the radical environmentalists, by not letting the small, scrubby trees be removed, have caused this. And John McCain very seldom fuzzes over his language. He's very tough on it. Is he completely wrong on that, do you think?
PYNE: Well, I think he's partially right. In some way, the more radical environmentalists are now in the position of the more radical civil libertarians after September 11. There's got to be a renegotiation of the social contract between what we do with the lands and how we can protect lives and property.
I don't know that there's been so much direct stalling or problems from environmentalists. They've created a situation over the last few decades to prevent the Forest Service in particular from logging, doing major logging. But it has created a sort of demoralized agency, an agency that's somewhat unable to do anything.
But where I would fault them in this instance is that this problem has been growing for decades. The agencies, to their credit, have identified it and tried to do all kinds of things for well over a decade now. And many of these groups have not become part of the solution.
And how there is no way to sort of force them to participate, and until they become actively part of the solution, trying to make good decisions on a site by site basis, and everybody quit talking metaphysics and theology and principles and all this other stuff. Until that happens, the problem will continue.
SHIELDS: Margaret Carlson...
PYNE: (UNINTELLIGIBLE)...
SHIELDS: OK. Margaret Carlson in New York.
CARLSON: Professor Pyne, controlled fires are one way to, supposedly, to keep the big fires from happening. But there's a lot of controversy over that, and laypeople like me are kind of scared to death of controlled fires. And when one was set in Los Alamos, New Mexico, two years ago, that controlled fire became uncontrolled fire.
Can you settle for us, is that a good policy? Is it a way to avoid this? Who's right on that issue?
PYNE: Well, like everything else in this, there's a whole cocktail of treatments and issues and problems. We might remind you too that when the Los Alamos fire occurred, the park service had also lost another fire at the same time, which forced the evacuation of the north rim of the Grand Canyon.
And I'm reminded of a line from "The Importance of Being Earnest," that to lose one parent may be regarded as a misfortune, to lose two looks like carelessness. Clearly there were systematic problems in prescribed fire. We know that part of the problem was the removal of fire from the landscape, but we've learned that it is not a reversible process. You can't put fire back in as easily as we took it out.
And the way to think about it, I think, is to imagine the reintroduction of fire as like reintroducing a lost species. And the critical thing is to get a right habitat. If we want to reintroduce wolves, we don't dump a pack into a shopping center. You dump them into a place where they can behave as they should.
We have to create a context for fire to act as the ecological catalyst that it should be so that we can control the bad fires and promote the good ones. It's a very complicated process. It's not cheap. It brings lots of hazards. And I'm not personally convinced that it is the preferred treatment, even for fuel reduction.
When you've got a land in the right case, then you can use fire to maintain it. I don't see fire as some kind of ecological pixie dust that we can sprinkle over the landscape and suddenly bad, degraded lands become good and beautiful.
SHIELDS: Professor, finally, we have a little less, a little over a minute, so Kate O'Beirne.
PYNE: OK.
O'BEIRNE: Professor, is the failure to come up with an effective federal policy due in part to the divided responsibility between the Forest Service at Department of Agriculture and the Park Service at Interior Department, who don't seem to cooperate any better than the FBI and the CIA do?
PYNE: Well, I think on fire they do cooperate, and they have many years of cooperation. And that is not a problem. In fact, I'm an aggressive policy skeptic. We've had policies for 35, 25 years for the federal agencies to try to correct this imbalance, and it doesn't seem to be resulting in real effects on the ground.
We've had policy up the bazoo. I'm not convinced that more policy is the solution. I think what we're missing is practice and poetry, and by practice I mean a whole array of techniques of all sorts to make it happen on the ground.
And I think by poetry what I mean is a compelling social reason that this is worth national attention, considerable expense, a lot of political capital to expand it. And so far we don't have that kind of poetry or story to tell, we just have these weekly, almost yearly disaster stories.
HUNT: Professor Pyne, we only have about 10 seconds left. All politics is local. We were planning to take our kids to vacation in Arizona this August. Can we do it?
PYNE: Yes. I would avoid...
HUNT: OK.
PYNE: ... the Mugion (ph) Rim, but that's -- other than that...
HUNT: Thanks.
SHIELDS: Terrific. Professor Stephen Pyne, thank you so much for being with us.
THE GANG will be back with our Outrages of the Week.
(COMMERCIAL BREAK)
SHIELDS: Now for the Outrage of the Week.
The Supreme Court's majority opinion outlawing execution of mentally retarded defendants cited the brief of the U.S. Catholic Conference. Justice Antonin Scalia, a prominent Catholic layman, called religious opposition to capital punishment irrelevant and added this about the Catholic Conference.
Quote, "The attitudes of that body regarding crime and punishment are so far from being representative, even of the Catholics, the views of Catholics, that they're currently the object of intense national criticism," end quote.
Those attitudes against execution of people with IQs below 70 are identical to those of Pope John Paul II. Justice Scalia fired truly the cheapest shot of the week.
Bob Novak.
NOVAK: As the Soviet Union crumbled, one hero fearlessly exposing its criminal conspiracy was former KGB general Oleg Kalugin. Another hero, Boris Yeltsin, once asked him to be his national security adviser.
This week, a Russian court convicted General Kalugin, who now lives in America, of treason. It looked like the bad old days in Moscow, the defendant tried in absentia, no witnesses. It also looks like the KGB's making a comeback with one of its boys, Vladimir Putin, as Yeltsin's successor.
SHIELDS: Margaret Carlson.
CARLSON: Mark, I got a lot of mail this week, you might want to know, from the sisterhood, critical that I would pile on poor Martha Stewart. Men, they say, use insider trading charges as a pretext to vent resentment of successful women.
In fact, I wrote a laudatory profile of Stewart.
But women shouldn't give women a pass. Like men, women are supposed to play by the rules. If Stewart lied, thinking she could get away with it, that's shameful. Yes, Martha's become a face of CEO corruption. But so would Ralph Lauren if he'd pulled a fast one.
SHIELDS: Kate O'Beirne.
O'BEIRNE: Country music legend Charlie Daniels won't be performing at our national celebration at the U.S. Capitol on the Fourth of July because he objected to being censored by the liberals of public television, who didn't want to broadcast his "Last Fallen Hero" song paying tribute to the rescue workers of September 11.
PBS decided that mentioning the cowardly attackers and fallen heroes was inappropriate. What's inappropriate is that taxpayers fund its left-wing censorship, and the Capitol grounds continues to play host to the politically correct PBS.
SHIELDS: Al Hunt.
HUNT: Mark, Republican lawmakers demand an up-and-down vote on important issues -- that is, in the Senate. By contrast, House Republicans, while passing a weak prescription drug benefit for seniors, refused to even allow Democrats to offer a more comprehensive alternative.
Now, perhaps we cannot afford a real prescription drug benefit while giving huge tax cuts to the very wealthy. But why won't Tom DeLay even allow a vote on the Democratic alternative? Maybe he thinks it would lose, and this way he can fool the voters.
SHIELDS: This is Mark Shields saying good night for THE CAPITAL GANG.
If you missed any part of our show, do not despair. You can catch the replay at 11:00 p.m. Eastern and again at 4:00 a.m. Eastern.
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