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CNN Sunday Morning

Corporate Responsibility Becomes Hot Issue in Washington

Aired July 14, 2002 - 10:01   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: Now to our top story. After a scary week on Wall Street, corporate responsibility is a hot issue from Pennsylvania Avenue to Main Street. The Bush administration is fighting to challenge the perception of its relationship with big business.

White House Correspondent Kelly Wallace joining us with the latest on this.

Kelly, the administration a bit on the defensive here maybe?

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: A bit on the defensive, but officials, including Commerce Secretary Don Evans, taking to the Sunday shows, defending President Bush.

Also, someone else vigorously defending Mr. Bush, Securities and Exchange Commission Chair Harvey Pitt. Pitt was asked about President Bush's controversial sale of stock in Harken Energy when he served on that company's board. The SEC chair said he would release the entire file on that stock sale if the president asked him to.

But Pitt said, as far as he's concerned, this is a matter that was thoroughly investigated, that the case should be closed. He said anyone raising questions about it is simply playing politics.

(BEGIN VIDEO CLIP)

HARVEY PITT, SEC CHAIRMAN: The people who want to raise a decade-old issue that was thoroughly investigated are doing this for political advantage, and what that does is it trivializes the losses and the harm that's been done to American investors and working people. That's what's important. That's what we're about fixing.

(END VIDEO CLIP)

WALLACE: And Pitt was also asked why the SEC has not yet interviewed Vice President Cheney. The agency is investigating the Halliburton company, looking into the company's possible questionable accounting practices. That is the company that Vice President Cheney once headed. Pitt said that he won't comment on an ongoing investigation, but he said no one will be immune from the SEC.

Still, some Democrats are using this as an example to question whether Pitt, someone who was selected by President Bush, can really carry out an impartial investigation of one of the president's top advisers.

Now the controversy really doesn't stop there. Another person in the president's administration questions being raised about. That is Larry Thompson, the deputy attorney general and the man the president has chosen to lead the new corporate fraud task force.

We have learned that Mr. Thompson served on the board of a credit-card company known as Providian that was forced to pay more than $400 million to settle consumer and securities fraud allegations.

Now the White House is voicing confidence in him, saying THAT he will do an excellent job leading this task force. But, Miles, Democrats are looking at this, looking at the past practices of the president, and the vice president to say that they believe this administration does not have credibility on the issue that Mr. Bush, Mr. Cheney, and now Mr. Thompson, when they served in corporate America, did not practice what they are now preaching -- Miles.

O'BRIEN: Kelly, of course, the Democrats need to be kind of careful here because this link to the corporate world certainly goes to both sides of the aisle. That is the money which keeps Washington running. Are they tempering their criticism, or are they going full (UNINTELLIGIBLE)?

WALLACE: What they are doing is they're trying to go after this administration when it comes to economic security. So they are looking at something that came out on Friday, in fact. The administration saying that the federal budget deficit will be much larger than previously anticipated.

Also, again, raising questions about the administration's own background when it comes to corporate America. They are trying to not raise as many questions directly about some of these past practices by the president and the vice president because, again, they don't want to be viewed as being too partisan, and they do -- of course, have received contributions from corporate America as well.

So they're trying to walk a fine line but, again, saying they believe this administration doesn't have the moral authority that they believe Democrats have on this one -- Miles.

O'BRIEN: CNN's Kelly Wallace at the White House.

Thank you very much.

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