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CNN Sunday Morning

Congress Considers Corporate Accountability Reform

Aired July 14, 2002 - 11:01   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.
FREDRICKA WHITFIELD, CNN ANCHOR: Now to our top story, policing big business. Senators may vote as early as tomorrow on a reform bill and CNN White House correspondent Kelly Wallace joins us with more on the political backdrop of Washington's war against corporate corruption.

Hi, Kelly.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Hello, Fredricka. While President Bush tries to highlight what he is doing to stop corporate abuse, he continues to be dogged by questions about his own past as a corporate leader. And one of the people vigorously defending the president today, Securities and Exchange Commission chair, Harvey Pitt. Pitt was asked about the president's sale of stock in Harken Energy when Mr. Bush served on the company's board and just two months before Harken announced a major loss. Pitt said the SEC thoroughly investigated the matter. He said it was case closed as far as the SEC is concerned. And he accused anyone of raising questions about it of playing politics.

(BEGIN VIDEO CLIP, "MEET THE PRESS")

HARVEY PITT, SEC CHAIRMAN: The issues that you raise were investigated thoroughly by the Democratic head of our enforcement division, Bill McLucas, a man of unquestioned integrity. They were vetted with then Chairman John Dingell, who reviewed the results of that investigation and the conclusion was absolutely nothing was wrong.

Now, why can't we focus on WorldCom, on Enron, on Qwest, all these other companies where the American public is being injured? Why are we diverted for mere political gain?

(END VIDEO CLIP)

WALLACE: But some lawmakers believe Pitt is too close to President Bush and Vice President Cheney, too close to big business and someone who is really not the right man to lead the independent regulatory agency at this point in time. So Democrats have called for Pitt to step down and so, too, is a member of the president's own party, Republican Senator John McCain.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R), ARIZONA: I think that the important thing about the situation we're in today is the restoration of trust and confidence. Mr. Pitt's background, both as an apologist for and a defender of the accounting firms and his tepid activities in enforcing until recently, in my view, think that this good man should serve the country in another capacity.

(END VIDEO CLIP)

WALLACE: But Pitt says he has no plans to step down. He says he is the right person for the job and the White House says President Bush continues to have confidence in Pitt, believes he is doing a good job and believes lawmakers should give him time to perform -- Fredricka.

WHITFIELD: And Kelly, does the White House continue to commit its confidence in the man that has been appointed by the White House, Larry Thompson, to be the head of this corporate cleanup crew?

WALLACE: Yes, the administration saying President Bush -- excuse me -- believes that Larry Thompson will do an excellent job. Some questions being raised though, after it was learned that Thompson served on the board of this credit card company called Providian that was forced pay more than $400 million to settle allegations of consumer and securities fraud. Some Democrats after hearing that raising questions, whether he is the right person to lead this new so- called financial SWAT team, but the message from the White House is he is the right person and he will do a terrific job -- Fredricka.

WHITFIELD: All right, Kelly Wallace from the White House, thank you very much.

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