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American Morning

In This Election Year, What Has Changed?

Aired January 30, 2002 - 08:06   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.
PAULA ZAHN, CNN ANCHOR: So back to politics. So in this election year, what has changed? Will the Democrats have to advance to their own agenda in the face of the president's overwhelming popularity?

Well, Democrats, including Senator Ted Kennedy, are calling for postponement of some of the president's tax cuts, but the president made it clear that he thought those cuts are just right.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Last year, some in this hall thought my tax relief plan was too small. Some thought it was too big. But when the checks arrived in the mail, most Americans thought tax relief was just about right.

(END VIDEO CLIP)

ZAHN: Joining us now from Washington, Terry McAuliffe, chairman of the Democratic National Committee -- welcome back.

TERRY MCAULIFFE, DNC CHAIRMAN: Paula, it's great to be with you.

ZAHN: Actually I think this is your first visit to A.M. -- glad to have you with us this morning.

MCAULIFFE: I love it.

ZAHN: OK. Before we get to the substance of the speech last night, I want you to clear up some confusion about some of your own business matters. It came to light yesterday that you had made a $100,000 investment in a defense company called Global Crossings that yielded you $18 million several years later, which probably wouldn't have garnered much attention, except this company later went bankrupt. Can you explain to us when you sold your stock, and why you sold your stock.

MCAULIFFE: Paula, I was an initial investor in this company, which I knew that was my business. This one happened to work. I invest in many high-tech companies. I sold several years ago. I wasn't the only one who thought it was a pretty good investment. The president's own father, President Bush 41, was also an investor. He actually didn't put up any money. I actually had to put up risk money. It was a risky investment. And it worked. The company... ZAHN: Well, the president -- wait, wait, wait. Terry, before you go any further, the fact is the president took that stock in exchange for a speech he made.

(CROSSTALK)

MCAULIFFE: Yes. Well, he gave a six-minute speech in Tokyo for $100,000. I think it was great. I invested my own capital. I invested in many different companies. The company went from zero to $50 billion in market cap. It's a great success story. Paula, let me tell you what you're supposed to do when you invest in the stock market. You try to make money. I made money on some, I lost on others. This was a very good company, a great investment, and I am very happy with it. And I sold when I thought it was right. In fact, I probably sold it a little early. I could have made some more money.

ZAHN: So for the record, though, for all those people that think a red flag has gone up here, you are saying this morning you got no indication at all of any problems that this company was going to have down the road?

MCAULIFFE: Paula, I sold...

ZAHN: You were not tipped off in any way?

MCAULIFFE: I was sold three years ago. The company continued to go way up after I sold my stock, so I'm sorry, nice try. Listen, you invest, you sell when you think it is appropriate. I sold. I probably sold too early. I could have made a lot more money, but that's how the stock market works. I was a shareholder. That's it. I had no involvement with the company. I wasn't on the board, wasn't an employee, wasn't a consultant. I invested. I bought stock. I sold it. I called my stockbroker. That's what you do. That's capitalism. I am very proud of it.

ZAHN: And I know you came out yesterday, at least the DNC, saying that Republicans trying to use this as a political issue are using it as a pathetic attempt to district the American public from what's going on in Enron. But can you explain something to us this morning?

MCAULIFFE: Sure.

ZAHN: It was reported in "The Wall Street Journal" that a memo was being distributed by Democrats last night, James Carvel apparently wrote it, along with Bob Shrum, trying to encourage Democrats to take on the issue of Enron to try to take away from the president's popularity. Here is what Senator Daschle had to say earlier this morning on this show about that memo -- let's listen.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D), MAJORITY LEADER: I haven't seen it, but I wouldn't support that. The last thing we should do is politicize this scandal. There is a tremendous amount of work to be done to get the facts and find out what we have to do to ensure that it doesn't happen again. We don't need to politicize it, and I am disappointed that a memo like that would be circulated.

(END VIDEO CLIP)

ZAHN: The senator says he is disappointed. Do you agree? Were you aware of this memo? Do you think it was a bad idea?

MCAULIFFE: I have not seen the memo. This is the first I have heard about it. There are some legitimate concerns about Enron. Listen, it's not what the contributions that everybody took, Paula. It's what did Enron get? And it seems clear now what they got from the Bush White House is they got 17 specific proposals in their energy bill. They got on the tax bill, a $254 million tax break that they tried to put in. They have Karl Rove getting Ralph Reed a consulting contract with Enron to help on the presidential campaign. And then Ken Lay was actually involved in picking the members, the commissioners to the Federal Energy Regulatory Commission. So he was picking the people whom he was going to regulate.

These are all very serious questions. Vice President Cheney needs to answer to us and show us what went on in these secret meetings. When Bill Clinton had health task force meetings, he was forced to disclose them. Dick Cheney should be held to the same standard of what went on. It's demand disclosure that's getting everybody to ask questions. If you invest or you are involved in a company, put it all out there and let people make their decision.

ZAHN: Well, I know you say these are serious questions that are being raised, but why is this memo not politicizing this issue? That's exactly what Senator Daschle said the Democratic Party should not be doing.

MCAULIFFE: I am chairman of the Democratic Party. I knew nothing about it. Tom Daschle is the Democratic leader in the Senate. I guarantee you Dick Gephardt -- James Carvel is one of the most partisan Democrats. I am very proud of James Carvel out there fighting for the -- I can't control if James is going to put a memo together just as the Republican Party can't control the right wing who go out and send out these calling Tom Daschle and comparing him with Saddam Hussein in South Dakota.

You have seen the things they have put on the street about Tom Daschle, after he tried to work in a bipartisan way. The conservatives went out, attacked him, they ran ads in South Dakota comparing him to Saddam Hussein. We can't control the people. James is going to do what he is going to do. I can't control him, but as chairman of the party, I feel for the thousands upon thousands of people who lost their 401Ks and lost their jobs.

I thought the president did a magnificent job last night. I want to see more specifics however on the economy. What is he going to do to help people get back on their feet, get back working again? Eight million people, Paula, are now out of work in this country. We have been in a recession for a year. We are in deficit spending. We don't have a prescription drug benefit he promised us. So let's get going. Let us use...

(CROSSTALK)

ZAHN: But the president addressed that last night. But, Terry...

MCAULIFFE: Yes.

ZAHN: ... we are going to have to leave it here, but the bottom line is in an overnight poll by USA-Today and CNN, 73 percent of the Americans polled thought that the president's economic plan was going to lead us out of recession. You have poll after poll showing you that you are fighting a very popular president. On most issues he leads the Democrats 2 to 1. How are you going to pierce those numbers? And you've got just about 15 seconds...

MCAULIFFE: This is the same thing they said to me last year...

ZAHN: ... because they will give me a lot of trouble if I don't move along.

MCAULIFFE: All right. I thought we were on for now, but anyways, in 2001 we swept the country. We won 39 of 42 mayors' races. We won both governorships. We won the suburban vote, the rural vote. We won, when we talked about kitchen-table issues. Last year it was 90 percent, we won all over the country, and we're going to do it again this year. I am very bullish on the Democratic prospects. American families know we are fighting for them, Paula.

ZAHN: And American families out there just wishing they could get their hands on $100,000 to make $18 million. Wouldn't that be great if everybody could do that?

MCAULIFFE: Well, if they are smart investors, they should do it. I mean, that's capitalism. That's the stock market, Paula.

ZAHN: All right. Terry McAuliffe, chairman of the DNC.

MCAULIFFE: Thank you.

ZAHN: Thank you for coming in this morning -- appreciate it.

MCAULIFFE: You bet.

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