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American Morning

Bush Will Unveil New Get-Tough Policy on Corporate Corruption

Aired July 09, 2002 - 07:18   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: As we told you a little bit earlier, President Bush will unveil a new get-tough policy on corporate corruption in just a few hours on Wall Street, yet there are some who say the president himself is carrying some baggage on this issue from his days as an oil company executive.

A short time ago, I spoke with Commerce Secretary Donald Evans about the White House response to the recent scandals.

(BEGIN VIDEOTAPE)

ZAHN (on camera): And Secretary Evans joins us this morning from the lawn of the White House -- good to see you again -- welcome.

DONALD EVANS, COMMERCE SECRETARY: Thank you, Paula -- good to be with you.

ZAHN: So the president comes to Wall Street today at a time when some Democrats are really beating him up. Democratic critics have come close to calling the president a hypocrite on the issue of corporate responsibility. And I wanted to quickly play a part of an ad that's running, attacking the president, to get your reaction -- let's listen.

(BEGIN VIDEO CLIP)

ANNOUNCER: Remember the saying about foxes guarding the hen house? Well, guess what's happening in Washington? President Bush says he is getting tough on corporate fraud, but look at the record.

Bush played a key role at Harken Energy. They used Enron-style accounting to hide losses. Bush sold out early. The Bush team: Dick Cheney was CEO of Halliburton, more Enron-style accounting, and Harvey Pitt, the accounting industry's top lawyer. Bush thinks tough talk can hide the record. That's sly, like a fox.

(END VIDEO CLIP)

ZAHN: So, Mr. Secretary, how much do you think this assault compromises what the president is trying to accomplish here?

EVANS: Not at all, Paula. That's just political garbage is all that is. I mean, the American people see that this president has been focused on this most important issue for a long, long time. I mean, I'll go back to the campaign when he was talking about ushering in the responsibility era. And then after entering office in late -- in 2001, he had to deal with the Enron issue, and he got on that immediately. And then he addressed the American people in his State of the Union back in January and talked about tougher, stricter accounting measures, talked about tougher full disclosure, issued a 10-point plan in March of 2002.

So you know, that's just political garbage, and this president is very focused on this important issue of restoring investor confidence in the marketplace. He understands it's a serious issue. He understands how important it is to go after these people who have violated their trust with their shareholders and with their owners, and he's going to do it.

ZAHN: The president had to confront the issue of his Harken Energy stock trades a number of times yesterday in a pretty blistering news conference. Do you expect this issue to go away anytime soon? It seems quite clear that the Democratic strategy is to continue to shed some light on these very old trades.

EVANS: Well, I think -- listen, I think the American people want to focus on the issue that -- of the moment, the principal issue, which is restoring investor confidence in these public markets. And that's what this president is focused on, and that's what the American people want this president to be focused on and want this town to be focused on. They don't want this town focused on a bunch of political garbage.

Look, we have been through this Harken episode time and time and time again. I mean, it was brought up in the '94 campaign, brought up in the '98 campaign, brought up in the 2000, and the people that are releasing these -- the ad that you just ran just don't know the facts.

And so, it's just political garbage that -- again, this president is going to stay very focused on restoring investor confidence in America. And he will do that, and he will do that because of the strong leadership that he continues to deliver this nation.

ZAHN: Senator Corzine will be a guest a little bit later on CNN. And in an interview that I just prerecorded, he basically said that he is not too crazy about the way the Democrats are attacking the president on Harken Energy, because he said it misses the point. And where he is critical of the president is the fact that he says the president is not going far enough on how accounting reports are showing up to investors.

EVANS: Well, the president has gone -- he has issued a 10-point plan. He has talked about strengthening the audit system. He has talked about making accounting standards clearer and tougher, and Harvey Pitt has already responded to the 10-point plan, has already taken action.

So the president and the administration are moving. The Senate has still not acted on the pension reform bill that was passed in the House last year as a result of the Enron episode. The Senate has still not approved the $20 million that the president has requested for the SEC this year to strengthen it and toughen it up this year.

And so, you know -- but the principal problem here, Paula, is a betrayal of trust. I mean, when people don't tell the truth, then institutions fail, and that what's happened here. You know, the president feels strongly that, yes, we do need to take some tough measures, we do need to strengthen our audit system and our accounting system. But the president is also talking about restoring trust and making sure that the management of companies understand who the owners are and understand their fiduciary responsibility, as well as their moral responsibility.

(END VIDEOTAPE)

ZAHN: And that was Donald Evans, the Commerce secretary, talking about what the president is expected later -- to say later today when he addresses Wall Street investors at 11:30.

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