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CNN Live Event/Special
New SEC Chairman Sworn Into Office
Aired February 18, 2003 - 10:21 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: We want to get to Washington, D.C., where President Bush is now beginning that swearing-in we mentioned moments ago. Swearing in his new director of the Security and Exchange Commission, William Donaldson.
(JOINED IN PROGRESS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Bill, welcome.
And Jane (ph), thanks for coming.
It's my honor to welcome your family here to the Roosevelt Room. And I'm proud to welcome Bill Donaldson as the chairman of the Securities and Exchange Commission.
Bill will be a strong leader of the SEC and a forceful advocate for the interests of investors. He's the right man at the right time.
I'm so honored you've agreed to accept this challenge. I really appreciate it.
Bill Donaldson spent a career preparing for this challenge. He has served as the founder of the leading investment banking firm, the chairman of the New York Stock Exchange, the founding dean of the Yale School of Management. He has set high standards throughout his entire career.
He will lead an active and energetic agency. This agency's been working hard. They, last year, filed a record number of actions for financial reporting and disclosure violations, sought the removal of more than 100 corporate officers and directors on the grounds of misconduct, and ordered corporations and executives to return to investors hundreds of millions dollars in improper gains.
This administration's committed to the enforcement of the security laws. We're committed to creating a climate of confidence in our markets. There's no better to help achieve that commitment than Bill Donaldson.
In the 2004 budget, I'm asking Congress to increase SEC funding by 73 percent over the year 2002. I want to make sure the SEC has the tools necessary to pursue its important mission.
This nation is increasingly a nation of stockholders who invest for their families and for their futures. Americans should be confident in the information they use in order to make investment decisions. All investors deserve to be treated fairly in the tax code, as well. Investors should not be punished for saving and investing in America's future. Investors should not be -- should be rewarded for taking risks in the marketplace.
The tax code ought to treat these people fairly, and so that's why I propose that Congress end the unfair and unwise double-taxation of dividends. This measure could improve corporate governance in America, as well.
Companies across America attract investors in a number of ways. One such way is to promise rapid growth, is to save (ph), even though we may not have cash flow. The future of our company (ph) is magnificent, therefore invest with us. Another way, of course, is to promise a steady source of income in the form of dividends. Eliminating double-taxation dividends would give more companies a reason to distribute their profits to direct cash to investors in the form of dividends; dividends serving as a stronger foundation for long-term value. Companies that pay them will have less motive to artificially inflate profits just to cause temporary increases in stocks.
Our laws should not discriminate against those companies that focus on stable, long-term growth. Eliminating the double-taxation dividends is good for American investors. It's good for American seniors. It's good for corporate reform.
I'm glad Bill Donaldson has agreed to take charge of an agency with the vital purpose of showing the American investors that they can rely upon the data which they use to evaluate investments, to really say to the markets loud and clear that we expect there to be corporate integrity throughout out system. He's a man who has not only set high standards, but has achieved them. He's got a lot of talent and a lot of drive, a lot of wisdom and a lot of integrity. Mr. Chairman?
WILLIAM HENRY DONALDSON, SEC CHAIRMAN: Mr. President, thanks for this honor and the opportunity to serve our country as chairman of the Securities and Exchange Commission.
Over the last decade, we've seen unprecedented growth in the number of Americans who invest. Ownership of stocks, bonds and other investment vehicles is no longer limited to the wealthy or to financial professionals. It is now an accessible option for all hardworking Americans as they seek to grow their retirement funds and save for their children's education. We have learned, though, that with such growth comes some severe challenges.
In recent years, as we all know, serious violations of our security laws and regulations have severely shaken public confidence in the corporate and financial world. The mission of the SEC and my duty as chairman is very clear: We will hold accountable all those who will have violated the public trust. We will demand responsible corporate governance through the business and financial world. We will strengthen our market structure, making the markets more efficient, more transparent and friendlier to all investors, particularly small investors.
Strictly enforced and clearly understood laws, however, will not be enough, in my view. It is time that all those who manage and govern our corporate and financial institutions show true leadership.
As chairman of the SEC, I will call upon them individually and collectively to create a new environment of integrity and accountability that goes well-beyond adherence to laws. This must happen person-by-person, company-by-company. I believe that such a dedication by all involved will offer a renewed sense of confidence in the honest functioning and potential of our markets.
Mr. President, I pledge to you and to all American investors that I along with my new colleagues at the Securities and Exchange Commission will pursue this mission with vigor and absolutely unwavering commitment. I look forward to the task and I'm eager to get to work.
Thank you.
BUSH: Thank you, Mr. Chairman. Good job.
Ron (ph)? I'll answer a couple of questions here.
QUESTION: Thank you, Mr. President.
What do you make of the fact that millions of people across the world have taken to the streets to protest your approach to Iraq? And if you decide to go to war, how do you reach a campaign in the face of such (OFF-MIKE)
BUSH: I have two points. One is that, democracy's a beautiful thing and that people are allowed to express their opinion. And I welcome people's right to say what they believe.
Secondly, evidently some of the world don't view Saddam Hussein as a risk to peace. I respectfully disagree. Saddam Hussein has gassed his own people. Saddam Hussein has got weapons of mass destruction. Saddam Hussein has made -- has defied the United Nations. Saddam Hussein is providing links to terrorist. Saddam Hussein is a threat to America. And we will deal with him.
You know, I -- war is my last choice, but the risk of doing nothing is even a worst option, as far as I'm concerned. I owe it to the American people to secure this country. I will do so.
QUESTION: (OFF-MIKE)
BUSH: Pardon me?
QUESTION: Have you decided how you're going to deal with him yet?
BUSH: Hopefully, Saddam Hussein will disarm. If he chooses not to disarm, as I have been saying for a long time, Ron (ph), we will lead a coalition of the willing to disarm him.
Steve (ph)?
QUESTION: Should a second resolution on Iraq include a deadline? And how are you going to get around the opposition of France, Russia and China?
BUSH: Well, we're working with our friends. As I said, a second resolution would be useful. We don't need a second resolution. It's clear this guy could even care less about the first resolution. He's in total defiance of 1441.
BUSH: But we want to work with our friends and allies to see if we can get a second resolution. That's what we're doing right now.
QUESTION: (OFF-MIKE) deadline?
BUSH: We're working with our friends and allies right now to how best to get a resolution out of the United Nations. It would -- just say, it'd be helpful to get one out. It's not necessary as far as I'm concerned.
QUESTION: Mr. President, are you any closer to an aid package for Turkey, particularly given the continued problems with NATO regarding any defense of Turkey?
BUSH: Well, first of all, as you know, NATO did express their desire to help Turkey. And I appreciate the NATO allies. I also appreciate the EU statement yesterday that Saddam Hussein needs to fully disarm. I thought those were positive developments.
We're working closely with the Turks. And, you know, we got great respect for the Turkish government. They've got no better friend than the American government. And hopefully, we can come up with an agreement that's satisfactory to both parties. We're still working it.
Yes, Bill (ph)?
QUESTION: Mr. President, would it be easier to win the peace after the war in Iraq, if there is one, if you had the allies with you going in? And what about the idea of an ultimatum for Saddam, another last chance?
BUSH: Well, you mean another, another, another last chance? Well, he knows my feelings, and that is, he needs to disarm -- completely, totally disarm.
Listen, he's a fellow that likes to buy time; buy it through deception and delay. He believes time is on his side. After all, he was quoted in an Egyptian newspaper saying, all he's got to do is stall and defy the world and, you know, coalitions will fall apart.
I am determined to keep the peace. I'm determined to hold this man to account. And there's two reasons why. One, we have the obligation -- I have the obligation, this administration has the obligation to do everything we can to protect the American people. Second, I think it's very important for the United Nations to be useful as we go out into the future. And there's nothing less useful than issuing a resolution and then not upholding the resolution.
And after all, I want to remind the people that this man has been in defiance of resolution, after resolution, after resolution, after resolution, for 12 long years. And I think it's -- unless the United Nations shows some backbone and courage, it'll render the -- it could render the Security Council irrelevant.
And that's a danger in dealing with the new threats that the civilized world faces. We face terrorism. We face the idea of people having nuclear arms. We face people who've got weapons of mass destruction. We face these deadly terrorist networks teaming up with countries with weapons of mass destruction, who could attack, you know, any time. Those are the threats of the 21st century.
The best way to deal with those threats is to have, you know, international organizations which are effective. And if the United Nations can't enforce its own resolutions -- a resolution which, by the way, has been around for 12 years, it says something about its utility as we head into the future. I want the United Nations to be effective body. I think it's in our country's interest that it be effective. And we'll see whether or not it's got the capacity to be effective.
Yes, Ann (ph)?
QUESTION: Give the size of the protests in England over the weekend, do you have any concerns that Tony Blair might pay a serious political price for supporting you on Iraq?
BUSH: I think anytime somebody shows courage when it comes to peace, that the people will eventually understand that.
First of all, you know, size of protests it's like deciding, "Well, I'm going to decide policy based upon a focus group." The role of a leader is to decide policy based upon the security, in this case, the security of the people.
Tony Blair understands that Saddam Hussein is a risk. Tony Blair sees that, you know, a weakened United Nations is not good for world peace. And he is a courageous leader. And I'm proud to call him friend.
Another courageous leader is coming to the ranch this weekend, Jose Maria Aznar. I'm looking forward to having a good meeting with him.
These are men of vision. They see the task at hand. And I'm proud to call them allies. And we'll work together for the sake of peace.
Listen, thank you all very much.
HARRIS: And President Bush there has now made it official by introducing his new SEC chairman, and he also had lots of comments to make about Iraq, as we expected him to do this morning in the question-and-answer session.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Aired February 18, 2003 - 10:21 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: We want to get to Washington, D.C., where President Bush is now beginning that swearing-in we mentioned moments ago. Swearing in his new director of the Security and Exchange Commission, William Donaldson.
(JOINED IN PROGRESS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Bill, welcome.
And Jane (ph), thanks for coming.
It's my honor to welcome your family here to the Roosevelt Room. And I'm proud to welcome Bill Donaldson as the chairman of the Securities and Exchange Commission.
Bill will be a strong leader of the SEC and a forceful advocate for the interests of investors. He's the right man at the right time.
I'm so honored you've agreed to accept this challenge. I really appreciate it.
Bill Donaldson spent a career preparing for this challenge. He has served as the founder of the leading investment banking firm, the chairman of the New York Stock Exchange, the founding dean of the Yale School of Management. He has set high standards throughout his entire career.
He will lead an active and energetic agency. This agency's been working hard. They, last year, filed a record number of actions for financial reporting and disclosure violations, sought the removal of more than 100 corporate officers and directors on the grounds of misconduct, and ordered corporations and executives to return to investors hundreds of millions dollars in improper gains.
This administration's committed to the enforcement of the security laws. We're committed to creating a climate of confidence in our markets. There's no better to help achieve that commitment than Bill Donaldson.
In the 2004 budget, I'm asking Congress to increase SEC funding by 73 percent over the year 2002. I want to make sure the SEC has the tools necessary to pursue its important mission.
This nation is increasingly a nation of stockholders who invest for their families and for their futures. Americans should be confident in the information they use in order to make investment decisions. All investors deserve to be treated fairly in the tax code, as well. Investors should not be punished for saving and investing in America's future. Investors should not be -- should be rewarded for taking risks in the marketplace.
The tax code ought to treat these people fairly, and so that's why I propose that Congress end the unfair and unwise double-taxation of dividends. This measure could improve corporate governance in America, as well.
Companies across America attract investors in a number of ways. One such way is to promise rapid growth, is to save (ph), even though we may not have cash flow. The future of our company (ph) is magnificent, therefore invest with us. Another way, of course, is to promise a steady source of income in the form of dividends. Eliminating double-taxation dividends would give more companies a reason to distribute their profits to direct cash to investors in the form of dividends; dividends serving as a stronger foundation for long-term value. Companies that pay them will have less motive to artificially inflate profits just to cause temporary increases in stocks.
Our laws should not discriminate against those companies that focus on stable, long-term growth. Eliminating the double-taxation dividends is good for American investors. It's good for American seniors. It's good for corporate reform.
I'm glad Bill Donaldson has agreed to take charge of an agency with the vital purpose of showing the American investors that they can rely upon the data which they use to evaluate investments, to really say to the markets loud and clear that we expect there to be corporate integrity throughout out system. He's a man who has not only set high standards, but has achieved them. He's got a lot of talent and a lot of drive, a lot of wisdom and a lot of integrity. Mr. Chairman?
WILLIAM HENRY DONALDSON, SEC CHAIRMAN: Mr. President, thanks for this honor and the opportunity to serve our country as chairman of the Securities and Exchange Commission.
Over the last decade, we've seen unprecedented growth in the number of Americans who invest. Ownership of stocks, bonds and other investment vehicles is no longer limited to the wealthy or to financial professionals. It is now an accessible option for all hardworking Americans as they seek to grow their retirement funds and save for their children's education. We have learned, though, that with such growth comes some severe challenges.
In recent years, as we all know, serious violations of our security laws and regulations have severely shaken public confidence in the corporate and financial world. The mission of the SEC and my duty as chairman is very clear: We will hold accountable all those who will have violated the public trust. We will demand responsible corporate governance through the business and financial world. We will strengthen our market structure, making the markets more efficient, more transparent and friendlier to all investors, particularly small investors.
Strictly enforced and clearly understood laws, however, will not be enough, in my view. It is time that all those who manage and govern our corporate and financial institutions show true leadership.
As chairman of the SEC, I will call upon them individually and collectively to create a new environment of integrity and accountability that goes well-beyond adherence to laws. This must happen person-by-person, company-by-company. I believe that such a dedication by all involved will offer a renewed sense of confidence in the honest functioning and potential of our markets.
Mr. President, I pledge to you and to all American investors that I along with my new colleagues at the Securities and Exchange Commission will pursue this mission with vigor and absolutely unwavering commitment. I look forward to the task and I'm eager to get to work.
Thank you.
BUSH: Thank you, Mr. Chairman. Good job.
Ron (ph)? I'll answer a couple of questions here.
QUESTION: Thank you, Mr. President.
What do you make of the fact that millions of people across the world have taken to the streets to protest your approach to Iraq? And if you decide to go to war, how do you reach a campaign in the face of such (OFF-MIKE)
BUSH: I have two points. One is that, democracy's a beautiful thing and that people are allowed to express their opinion. And I welcome people's right to say what they believe.
Secondly, evidently some of the world don't view Saddam Hussein as a risk to peace. I respectfully disagree. Saddam Hussein has gassed his own people. Saddam Hussein has got weapons of mass destruction. Saddam Hussein has made -- has defied the United Nations. Saddam Hussein is providing links to terrorist. Saddam Hussein is a threat to America. And we will deal with him.
You know, I -- war is my last choice, but the risk of doing nothing is even a worst option, as far as I'm concerned. I owe it to the American people to secure this country. I will do so.
QUESTION: (OFF-MIKE)
BUSH: Pardon me?
QUESTION: Have you decided how you're going to deal with him yet?
BUSH: Hopefully, Saddam Hussein will disarm. If he chooses not to disarm, as I have been saying for a long time, Ron (ph), we will lead a coalition of the willing to disarm him.
Steve (ph)?
QUESTION: Should a second resolution on Iraq include a deadline? And how are you going to get around the opposition of France, Russia and China?
BUSH: Well, we're working with our friends. As I said, a second resolution would be useful. We don't need a second resolution. It's clear this guy could even care less about the first resolution. He's in total defiance of 1441.
BUSH: But we want to work with our friends and allies to see if we can get a second resolution. That's what we're doing right now.
QUESTION: (OFF-MIKE) deadline?
BUSH: We're working with our friends and allies right now to how best to get a resolution out of the United Nations. It would -- just say, it'd be helpful to get one out. It's not necessary as far as I'm concerned.
QUESTION: Mr. President, are you any closer to an aid package for Turkey, particularly given the continued problems with NATO regarding any defense of Turkey?
BUSH: Well, first of all, as you know, NATO did express their desire to help Turkey. And I appreciate the NATO allies. I also appreciate the EU statement yesterday that Saddam Hussein needs to fully disarm. I thought those were positive developments.
We're working closely with the Turks. And, you know, we got great respect for the Turkish government. They've got no better friend than the American government. And hopefully, we can come up with an agreement that's satisfactory to both parties. We're still working it.
Yes, Bill (ph)?
QUESTION: Mr. President, would it be easier to win the peace after the war in Iraq, if there is one, if you had the allies with you going in? And what about the idea of an ultimatum for Saddam, another last chance?
BUSH: Well, you mean another, another, another last chance? Well, he knows my feelings, and that is, he needs to disarm -- completely, totally disarm.
Listen, he's a fellow that likes to buy time; buy it through deception and delay. He believes time is on his side. After all, he was quoted in an Egyptian newspaper saying, all he's got to do is stall and defy the world and, you know, coalitions will fall apart.
I am determined to keep the peace. I'm determined to hold this man to account. And there's two reasons why. One, we have the obligation -- I have the obligation, this administration has the obligation to do everything we can to protect the American people. Second, I think it's very important for the United Nations to be useful as we go out into the future. And there's nothing less useful than issuing a resolution and then not upholding the resolution.
And after all, I want to remind the people that this man has been in defiance of resolution, after resolution, after resolution, after resolution, for 12 long years. And I think it's -- unless the United Nations shows some backbone and courage, it'll render the -- it could render the Security Council irrelevant.
And that's a danger in dealing with the new threats that the civilized world faces. We face terrorism. We face the idea of people having nuclear arms. We face people who've got weapons of mass destruction. We face these deadly terrorist networks teaming up with countries with weapons of mass destruction, who could attack, you know, any time. Those are the threats of the 21st century.
The best way to deal with those threats is to have, you know, international organizations which are effective. And if the United Nations can't enforce its own resolutions -- a resolution which, by the way, has been around for 12 years, it says something about its utility as we head into the future. I want the United Nations to be effective body. I think it's in our country's interest that it be effective. And we'll see whether or not it's got the capacity to be effective.
Yes, Ann (ph)?
QUESTION: Give the size of the protests in England over the weekend, do you have any concerns that Tony Blair might pay a serious political price for supporting you on Iraq?
BUSH: I think anytime somebody shows courage when it comes to peace, that the people will eventually understand that.
First of all, you know, size of protests it's like deciding, "Well, I'm going to decide policy based upon a focus group." The role of a leader is to decide policy based upon the security, in this case, the security of the people.
Tony Blair understands that Saddam Hussein is a risk. Tony Blair sees that, you know, a weakened United Nations is not good for world peace. And he is a courageous leader. And I'm proud to call him friend.
Another courageous leader is coming to the ranch this weekend, Jose Maria Aznar. I'm looking forward to having a good meeting with him.
These are men of vision. They see the task at hand. And I'm proud to call them allies. And we'll work together for the sake of peace.
Listen, thank you all very much.
HARRIS: And President Bush there has now made it official by introducing his new SEC chairman, and he also had lots of comments to make about Iraq, as we expected him to do this morning in the question-and-answer session.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
