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CNN Saturday Morning News
Reporter's Notebook: The Enron Scandal
Aired February 23, 2002 - 08:28 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: Imminent "Reporter's Notebook" coming up. Major Garrett...
KYRA PHILLIPS, CNN ANCHOR: And we need phone calls.
O'BRIEN: ... Rick Dunham. Kyra's lonely. She's already bored...
PHILLIPS: Yes, Miles won't let me read the e-mails.
O'BRIEN: She's been back and...
PHILLIPS: He's hogging the computer.
O'BRIEN: I'm not hogging the computer. That's...
PHILLIPS: So call.
O'BRIEN: But in addition, in addition to our folks, Major Garrett, Mr. Dunham -- we have Rick Dunham.
PHILLIPS: Rick Dunham.
O'BRIEN: With "Business Week." We also have Bill Hogan with "Mother Jones" magazine, who impressed us enough earlier that we decided to let him stick around. We've perfectly, totally ruined his Saturday morning now. We appreciate you all being here.
Enron this week...
PHILLIPS: And plug the phone number. We didn't do that.
O'BRIEN: Let's do it.
PHILLIPS: I apologize.
O'BRIEN: Let's do it.
PHILLIPS: 404-221-1855. Once again, we've got plenty of e- mails, but we need some phone calls for our three distinguished guests, as we say. 404-221-1855. Give us a call so we can get your live voices on the air, also.
O'BRIEN: All right, this is a pair of e-mails I want to bring out kind of in tandem. The first one comes from Mackenzie in Ohio. "Why don't you talk about the extensive Clinton and Robert Rubin ties to Kenneth Lay? Also, please talk more about Global Crossing and its Democratic donations." And then sort of a similar one from Mark W. Morgan in East Point, Georgia. "Why aren't we hearing more about the Global Crossing bankruptcy and the suspicious windfall that came to Terry McAuliffe?"
Let's begin with Major Garrett on all of that. There is the impression out there among our e-mailers that this somehow is a vendetta by the liberal media to go after the Bush administration. And I, for the life of me I can't figure it out. But let's address it.
MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, first of all, there are now a couple or three companies that sort of fit into this category of A, prominent, well known company; B, active here in Washington spreading money around both sides of the aisle in hopes of possibly, at least getting access to some people who might help them out on regulatory matters; and C, one's being covered, Enron, extensively. The other two, Global Crossing, is not. And so the question arises well, why the disparity?
Well, in part the disparity is because there are active congressional investigations of Enron and not the others, at least so far. And we have a sitting president who has extensive ties within his administration, openly acknowledged by the White House, to Ken Lay and to Enron.
And so the question becomes did this White House in any way do anything to overtly or covertly benefit Enron? The White House says no, there's no evidence to suggest that it stepped in to help Enron in any particular way. And I thought it was interesting when Vice President Cheney was on Jay Leno's program earlier this week, Jay Leno himself said well, if Enron was doing, getting so much from the administration, why did it go bankrupt? The poker-faced Dick Cheney then said that's a pretty good line, Jay, you ought to use it more often.
O'BRIEN: Gentlemen, anybody else want to weigh in on that one?
RICK DUNHAM, "BUSINESS WEEK": Well, I think there has not been very extensive coverage of Global Crossing in the general media. But I think part of the reason is that both parties are a little wary of it because there's significance Global Crossing links to both parties. Terry McAuliffe, as the viewer said, had worked for Global Crossing and had helped set up some of the original deals raising money for it.
But on the other side, I mean "Business Week" just reported this week that former President Bush made at least $4.5 million in stock sales of Global Crossing stock that he received after speaking to Global Crossing groups. And he's spoken at least four times to Global Crossing audiences.
So the Republicans don't want to make a big deal of it because they're afraid that the former president will be hit by the Democrats and the Democrats don't want to make a big deal of it because Terry McAuliffe's in the middle of it and Ann Binghaman, who was Bill Clinton's anti-trust leader, earned $2.5 million as a lobbyist for Global Crossing.
So, again, it's sort of mutually assured destruction and I don't think either side wants to make a big political deal of it right now.
PHILLIPS: Speaking of political deal, we've got a question out of Virginia. Bob has a question with regard to Bush and Cheney and the GAO. Go ahead, what's your question, Bob?
BOB: Good morning, Kyra and Miles. Glad to see you both together again after so many months of departure. It's great. It's great to see you back together.
O'BRIEN: Thank you for noticing.
PHILLIPS: That's nice. Thanks, Bob.
BOB: Really, I really appreciate that.
Major Garrett...
O'BRIEN: Bob, we'll give you the special inside phone number from now on.
PHILLIPS: That's right.
BOB: No, that's OK, guys. I appreciate that.
O'BRIEN: You can call any time.
BOB: OK.
My question is for Major Garrett. With the GAO lawsuit looming and, of course, campaign finance reform and everybody's politicking about that load of mess, what will, why are Bush and Cheney so reluctant to disclose the information and with this election year coming, will this affect the Republican Parties who are so adamant against campaign finance reform and will it actually pass?
GARRETT: A couple of questions there.
First of all, will campaign finance reform pass? I'll go to the end of your question and get back to the front. Campaign finance reform passed the House. It is going to get to the Senate floor this week. There is every indication that a filibuster can and probably will be broken. I have reported and CNN has reported that if the campaign finance reform bill that passed the House also passes the Senate and arrives here, the president will, in fact, sign it.
Now, why is the White House so adamant about and not releasing the information the General Accounting Office has requested? It's adamant because it believes the General Accounting Office has over stepped its jurisdiction, asked not only for who did the vice president's energy task force meet, but what did they discuss, what were their deliberations, what were the topics. And they believe this is an area of presidential privilege that simply must be protected, not just for this White House, but for future White Houses. And they say they are prepared to defend that right in court. They believe they're on solid legal footing. And I will tell you privately here at the White House they have been spoiling for this fight for months. They're eager to go to court, even though many Republicans on Capitol Hill, seeing the larger public relations fallout from this, are not so eager to see that court fight. But it's a call the White House is making and they intend to go to court.
O'BRIEN: All right, let's go back to the e-mails. Kelly Allen, who is in Texas, has this. "Can you explain to me the logic of these retention bonuses, I.e., the money grab? Why is only a select few buddies getting these incredible retention rewards? Where is all this retention money coming from?"
Rick Dunham, you want to take a stab at that one?
DUNHAM: Well, I think right now that the retention money is to try to keep any top executives from fleeing Enron. But the question of where it's coming from is it's coming from what assets are left then. I think it's going to be challenged in court by some of the shareholders or some of the former employees, but I think Enron is worried about a complete brain drain of anybody of any quality leaving right now because of the image of the company and the financial future.
O'BRIEN: Bill Hogan?
BILL HOGAN, "MOTHER JONES" MAGAZINE: Well, I'd just say this has become kind of a common practice in corporate America in recent years. But I think just the larger issue now as we peel back all the layers of this onion is Enron is still operating in some degree of secrecy and there's a lot we don't know. And I hope that that changes soon. But, I think there will be more disclosures like this.
O'BRIEN: All right, I guess we're going to leave it on that note.
PHILLIPS: Rick Dunham, White House correspondent with "Business Week," Bill Hogan, D.C. bureau chief of "Mother Jones" magazine and our own White House correspondent Major Garrett. Gentlemen, thank you so much.
O'BRIEN: And thanks for your calls and e-mails.
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