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CNN Sunday Morning

Democrats Raise Questions About Deputy Attorney General's Past

Aired July 14, 2002 - 08:04   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.
MILES O'BRIEN, CNN ANCHOR: It was a scary week on Wall Street, and corporate responsibility remains a hot issue from Washington to Main Street. President Bush has named Deputy Attorney General Larry Thompson to lead a crackdown on corporate misdeeds, but there are some questions about his corporate past, and veiled whispers about the fox guarding the hen house.

White House correspondent Kelly Wallace, joining us for the latest on Washington's war against corporate corruption.

Good morning, Kelly.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Good morning, Miles. Well, the White House is standing solidly behind Larry Thompson, but some Democrats are questioning whether Thompson's activities as a corporate board member mean he's the wrong person to lead this new corporate fraud task force.

Now, at issue: A story that was disclosed on Saturday that Thompson served on the board of a company called Providian, a credit card company that was forced to pay more than $400 million to settle allegations of consumer and securities fraud. You see Larry Thompson there, this was after his meeting Friday at the White House, with President Bush and other members of this new financial services SWAT team.

Now, the Justice Department is defending Thompson, saying he only found out about the company's problems when regulators starting looking into the matter, and that he led the effort to implement new reforms at the company.

Also, a Justice Department spokesman is saying this information was fully provided to the Senate Judiciary Committee last year, which overwhelmingly, or rather unanimously, confirmed Larry Thompson to be deputy attorney general.

Still, this comes as questions continue to dog this administration about President Bush's own behavior when he served on the member -- as a member of the board of Harken Energy more than a decade ago, and as questions continue to dog Vice President Cheney, who served as CEO of Halliburton Financial Services, a company that is under investigation by the Securities and Exchange Commission due to possible questionable accounting practices. Democrats say this all means that this administration does not have the credibility to lead on the corporate responsibility issue, and Democrats are looking at some numbers, thinking they have the political advantage.

According to a new CNN-"TIME" poll, when people were asked, "Who do you trust more to deal with these accounting scandals?" Forty-four percent said they favor Democrats; 33 percent say they favor Republicans. Those numbers definitely to be a concern here at the White House, as the president tries to help Republicans in the November election.

So, Miles, we are told he will continue talking about the economy, talking -- talk about corporate responsibility, and he'll do that on the road tomorrow, when he travels to Birmingham, Alabama -- Miles.

O'BRIEN: Kelly, the Democrats, though, I think have to be kind of careful how they play their hand here, because during the Clinton years the Democratic Party tried to recharacterize itself, or recast itself as not necessarily being anti-business. How far will Democratic leaders go back down that old road?

WALLACE: Well, two points. One, Democrats certainly are well aware of what Republicans did during the Clinton administration, and so, they don't want to be looked at as continuing to attack the Bush White House. They also, of course, some of these members, Miles, received campaign contributions from big business, from major corporations.

So, they have to be careful as well, and they also have to be careful not to be viewed as too partisan. I can tell you that some White House aides believe the Democrats are overplaying their hand here, that they are looking very partisan, whereas the president and the vice president, and others, are quote, "Trying to fix the problem," according to aides here. So, Democrats have to be careful not to be viewed as too partisan, but they clearly will continue to raise questions about the White House -- Miles.

O'BRIEN: Beware the backdraft on all this.

Kelly Wallace, at the White House, thank you very much.

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