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Feinstein Discusses Bush Address; Morial Talks About Super Bowl Security; Bloomfield, Luntz Debate Impact of Enron Scandal
Aired February 02, 2002 - 10:00 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.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: History has called us to action, and action we will take.
(END VIDEO CLIP)
JONATHAN KARL, HOST: On the road and on the Hill, a presidential pitch for the war, homeland defense and the economy. Senator Dianne Feinstein, Democrat of California, looks at the speech and at the political fallout.
And a nation on guard, from the economic forum in New York to the Super Bowl to the Olympics. Is the U.S. prepared? We'll head down to the Big Easy to talk to the mayor of New Orleans.
All just ahead in this special edition of TARGET: TERRORISM.
Good morning to the West Coast, and welcome to our viewers across North America. I'm Jonathan Karl in Washington.
Coming up in a few moments from now, the president's weekly radio address. You'll hear it here first. Senator Feinstein will be here to listen and react. We'll talk about homeland security on the eve of the Super Bowl, and two pollsters will debate whether Enron can help the Democrats in campaign 2002.
And, of course, we want your telephone and e-mail questions. Our address is security@cnn.com.
But first, the headlines.
(NEWSBREAK)
KARL: Joining me now as we wait for the president's weekly radio address, Senator Dianne Feinstein of California.
Senator Feinstein, welcome on a Saturday, by the way. We appreciate you for coming in.
SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Thanks, Jonathan.
KARL: In the president's State of the Union address, he talked about an "axis of evil": Iran, Iraq and North Korea. Should this country be prepared for war against those countries?
FEINSTEIN: Well, I think I know what he meant, but "axis" in the traditional sense means conspiring as the Germans, the Italians and the Japanese did during World War II. I think everybody knows that Iraq and Iran have been bitter enemies and North Korea doesn't quite fit in to the sense of a traditional axis.
I think what he was trying to do was put forward three countries that have had records of terrorism, use of biological chemical weapons, nuclear aspirations and perhaps illegalities and, in a sense, target them.
KARL: Well, he was clearly invoking the language of World War II.
FEINSTEIN: That's correct.
KARL: Which raises the specter of a much broader war than what we've seen so far.
FEINSTEIN: Well, that's right. I think the down side of it is what it said to some of our allies in Europe, that this kind of language was being used when perhaps they didn't agree with it or hadn't been consulted or didn't want to be part of this kind of effort. I don't know.
But I think, again, he was sending message to those three countries in the strongest possible terms. I wouldn't go any further than that. I don't think anybody wants to telescope whatever it is that the United States is going to do next. I think the element of surprise -- I also thing that military action is not the only action that can be taken. I think the freezing of funds, really expediting and pushing forward a major diplomatic effort is also very appropriate right now, very fast.
KARL: And you're on the Intelligence Committee, so you've got the briefings that none of us see on these subjects.
But Iran is a strange case because you have reformist elected government and then you have the un-elected religious leadership that controls much of the country.
I mean, shouldn't we be trying to reach out to that reformist element?
FEINSTEIN: Well, just remember, Iran still fuels and energizes Hezbollah, a major terrorist entity. I think the jury is out with respect to Iran.
I think Khatami is really trying to make some changes. He has certainly extended an olive branch to certain elements of Western society. He has indicated that he wants to try to see if a reproachement is possible.
However, the seeds of terrorism are still present.
KARL: Senator, we're going to break right now to, as promised, listen to the president's radio address. Here it is.
(BEGIN AUDIO CLIP)
BUSH: Good morning.
In my State of the Union address, I committed our nation to three great goals: to win the war, to secure our homeland and to defeat the recession.
In recent days, we have heard some encouraging reports on our progress and our work to defeat the recession. But many workers have lost their jobs and their retirement savings when their companies went bankrupt. Employees who have worked hard and saved all their lives should not have to risk losing everything if their company fails.
So my administration is proposing important safeguards to our pension laws to protect the retirement savings of workers.
First, we want to give workers greater freedom to diversify their retirement portfolios. Many companies require their workers to hold companies shares long after the workers wish to sell, even when the company's shares are dramatically dropping in value. I propose that workers be permitted to sell company-contributed shares in their retirement account and diversify after they have participated in a 401(k) for three years.
Next, we need to make sure that companies have a single standard for their executives and their employees. It is unfair for workers to be denied the ability to sell stock when executives are free to sell their stock.
Right now, though, companies can create what are called blackouts, when they switch the management of their retirement accounts from one investment firm to another. During the switch, employees don't have access to their 401(k)s and can't buy or sell.
These blackouts usually happen because the company is looking for better service for its employees. But when employees can't sell, executives shouldn't be able to sell either. So I'm proposing that company executives be prohibited from selling any and all of their stock during these blackout periods.
Third, workers should be informed in advance that a blackout period is coming. Under my administration's reforms, workers must be given 30 days' notice before employers make any changes that would stop them from selling their stock.
Fourth, companies will be put on notice when employees are blacked out. Company executives with power over 401(k)s will be held accountable for treating their workers' assets as carefully as they treat their own.
Fifth, workers should have the benefit of solid independent investment advice. Right now, the law deters companies from providing employees with sound advice, such as information about the benefits of diversification, and that doesn't make sense. We need to encourage companies to provide workers good advice, not punish them for doing so.
And finally, employers should be required to provide regular information to their workers about the current value of their accounts and their right to sell and diversify. Right now, employers need to give an accounting to workers only once a year. We're going to tell them they must do so every three months.
These measures will be a major benefit for American workers and for America's employers. Our countries employers welcome the highest standards of conduct because high standards are good for business and good for America.
I thank you for listening.
(END AUDIO CLIP)
KARL: Well, Senator, clearly the subtext here is the Enron collapse.
FEINSTEIN: That's right.
KARL: Would anything in those proposals you just heard soften the blow for Enron employees?
FEINSTEIN: You know, it's a rapid-fire presentation, and so it's hard to understand all of the details behind each of the points he mentioned, but I'm not sure it would.
I think the major point in much of this is, should all an employee's eggs be in one basket, or should the employee, as a matter of public policy, be required to diversify? And this...
KARL: Because, in fact, Enron allowed its employees to diversify. I mean, they could have sold 89 percent of their Enron stock in their 401(k)s.
FEINSTEIN: Well, of course that's true.
KARL: But they wanted to have stock in that company because they believed in it.
FEINSTEIN: Well, that's true too.
At the time, my understanding is that Mr. Lay was sending e-mails saying how healthy the company was, and I think that's a problem.
Now, we've got 42 million employees in 401(k)s. I'm one that believes that there should, as a matter of public policy, there should be a cap.
Where that cap should be, though, how long the employee should be required to hold before that employee sells, to encourage an employer contribution -- if the period of hold is too short, what's the incentive for the employer to match the employee dollars? I think it diminishes. So my own view, that this is a start, that we ought to take a very good look at it. There ought to be hearings held. There shouldn't be a rush to judgment. But clearly, we need to have some public policy strictures on this to protect employees.
KARL: And, you know, there's the related issue of the Enron investigation, and we want to go right now quickly to Kelly Wallace at the White House.
Kelly, you have got some more information on what the Justice Department would like to get out of this White House regarding Enron.
KELLY WALLACE, CNN CORRESPONDENT: Well, right, Jonathan, as you and the senator know, certainly the Justice Department widening a bit its criminal probe of Enron, looking at any contacts between the federal government and Enron executives.
The Justice Department sending a letter yesterday to the White House and, we understand, other federal agencies, calling on federal officials to retain, to hold on to all documents, e-mails and notes that are related to Enron, going back to January 1999. And of course that covers the last two years of the Clinton administration and the first year of the Bush administration.
In this letter from the deputy attorney general to the White House, it says, quote, "We believe that documents in the possession of the White House, its staff and employees may contain information relevant to our investigation into the financial conditions of Enron and statements made by Enron employees and agents relating to its financial condition and business interests."
Now, the word from the White House is there is no political significance here. Administration officials say they are absolutely complying with the Justice Department order.
Further, officials say, continue to say, no one in this White House did anything wrong; the documents, the notes, the records for the Bush White House will show that no one did anything wrong.
Jonathan, as you know, the Bush White House has said that Enron executives contacted the commerce secretary, the treasury secretary, also a top Treasury Department official in the fall, in some cases asking the government to potentially step in to avoid the company's collapse. At all times, White House officials say, no official decided to step in, that the government acted appropriately.
But, Jonathan, as you and the senator know, congressional investigators are under way. More hearings next week. Lots of Democrats have questions about whether Enron had undue influence in this White House.
So more questions. The White House says, though, it is complying and that no one did anything wrong.
Jonathan?
KARL: Kelly, thanks for that update.
Senator, very quick before we have to take a break. Is there a political significance, a political context here?
This is the very documents or some of the very documents that Congress and the GAO is trying to get out of the White House and they're refusing to turn over.
FEINSTEIN: Well, that's right. I mean, I think this is a significant step in the investigation. I think for the committees to have these documents is very important.
It's not to say the White House did anything wrong. We don't know. But, you know, we also don't know whether Enron did anything wrong, and there are a lot of suspicions. So we need to remedy those, and the only way we can remedy them is by taking a look at everything.
KARL: We need to take a quick break. A lot more to talk about, including I want to ask you about reports that some people opening mail in your office have come down with an illness...
FEINSTEIN: Right.
KARL: ... have become sick.
Thank you very much.
We'll take a quick break.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
FEINSTEIN: I would much rather be here in an eight-by-eight with a breeze than locked down in Folsom Prison in California.
(END VIDEO CLIP)
KARL: There is Senator Feinstein reacting to her tour of Camp X- Ray at Guantanamo Bay, Cuba, and taking a few swipes there at some of the people that have been, you know, raising concerns about the conditions down there for these prisoners.
Do you think that's been way overblown?
FEINSTEIN: I think it's been way overblown, yes. And, you know, I just say a picture of somebody in a facility in Afghanistan eating grass for a meal. Well, here the prisoners have three squares meals. They have got good medical care, the same as any soldier in the military gets.
There is at least a breeze going through. It is true they are in cyclone-fence-type enclosures. There is a roof.
You know, these are the worst of the worst. And it's very important that the interviews with them be able to sort some things out and get some information.
The picture that was taken was actually taken not from Guantanamo Bay, it was taken from a hillside in Cuba. And it was taken of a sallyport (ph), where they were being held for transitioning into their various enclosures. So I think, in a way, it was not a true bill of what's actually happening.
KARL: I don't think there's going to be a lot of sympathy out there in terms of...
FEINSTEIN: No, I don't think so, either.
KARL: ... public opinion.
I want to come back to Enron for a second, a very important point. You wrote in the L.A. Times that, as Ken Lay getting meetings with the White House, and Enron executives were getting meetings with senior executives, senior people in the White House, you couldn't get a meeting.
FEINSTEIN: Well, that's right.
See, I wanted to talk to the top person. I wanted to tell him what was happening in California and give him some of my views of what the broken market was doing, what it was doing just deregulating the wholesale end -- which, incidentally, Enron made a really push for, to encourage him to do those wholesale price caps -- why there were necessary, cost base rates.
KARL: And you wrote three letters to try to get meetings three different times, and you were told no. Now, you know what the White House says. They say they actually met with the California delegation.
FEINSTEIN: Well, that's not quite true. Cheney met with the California delegation. I found it a very unsatisfactory meeting. He also met with the Energy Committee. I also found that an unsatisfactory meeting.
KARL: You wanted a one-on-one meeting...
FEINSTEIN: You know, when something is unsatisfactory, and your state is at peril and at risk, the only place to go is to the top person.
KARL: There is a political context here. I would like you to take a quick look at an ad just released this week by the North Carolina Democratic Party, attacking Elizabeth Dole. Let's take a quick listen.
(BEGIN VIDEO CLIP)
NARRATOR: September 11, Elizabeth Dole promises she will put her campaign on hold, but then, on September 20, flies to a secret fund- raiser hosted by Kenneth Lay, the chairman of Enron.
(END VIDEO CLIP)
KARL: OK, now, is this the kind of thing that we're going to see? Is this politicization of this whole Enron issue, is this where we're headed with this? And are Democrats going to try to score points here?
FEINSTEIN: Well, I don't happen to like this.
Look, I have never taken or gotten any money from Enron. Now would I, two years ago, have accepted a check from Enron? A small -- probably, or a $1,000 contribution -- yes, probably. There was nothing to have prevented it at that time. I didn't know that much about Enron. I don't necessarily know that much about a lot of the individuals that contribute to me. I mean, I've had more than 100,000 individual contributions. So...
KARL: So is this kind of ad a mistake?
FEINSTEIN: ... I'm not a great fan of this kind of ad. I have just to tell you right up front.
KARL: Is it a mistake? Should they not have done it?
FEINSTEIN: I think it's a mistake in this sense, yes.
KARL: OK, we have a phone call now on another issue, another domestic issue, the budget, a phone call from, I believe, South Carolina.
Caller, your question?
CALLER: Hi, Senator Feinstein. I wanted to find out, do you think the economy will get an uprise soon?
FEINSTEIN: Yes, I think we're on the brink of a recovery. I think there are a number of good signs. Manufacturing is up, durable goods, consumer confidence, housing starts, all are beginning to turn around. The Fed didn't lower interest rates, which indicates to me that they think a turnaround may be happening.
The one negative that I see there is that unemployment has not increased -- that's just a good sign -- as much as it had earlier, but people have sort of taken themselves out of the labor market. So we need to watch that very carefully.
But I think we're on our way to a turnaround, yes.
KARL: OK, so if we're on our way to a turnaround, why is Congress talking about a $100 billion economic stimulus plan? I mean, we are in a series of -- we have budget deficits. Why spend money stimulating an economy that's already recovering?
FEINSTEIN: Well, I don't intend to vote for a stimulus plan. I don't think one is necessary or warranted.
I did vote for the president's tax package. Over a trillion dollars of that has not yet gone into play.
FEINSTEIN: There was an $80 billion to $90 billion stimulus in that plan. So I don't believe a stimulus is going to be that helpful.
Now, having said that, I do believe we should extend unemployment insurance for workers by another 13 weeks, and I do believe there are some Medicaid fixes that need to be made, which cost about $5 billion. I think we should do those two things, and I will submit an amendment to do those two things.
KARL: And meanwhile, the president and Secretary Rumsfeld are talking about nearly $50 billion in more military spending just this year, much more going out of the next several years -- the biggest military build-up in U.S. history.
Is there going to be enough money to do that and to still meet our domestic priorities?
FEINSTEIN: Well, the talk on the Hill is that the president will get what he wants.
I think we need to take a very good look at it, because the expenditures this year also determine expenditures for future years. So you get locked into a program that, at a certain point, may crowd everything else out.
Now, when the tax cuts do go into play, when the military budget escalates, it may well leave no room for anything else. And that's a serious concern.
KARL: Do you regret that vote for that tax cut?
FEINSTEIN: No.
KARL: Daschle said it made the recession worse.
FEINSTEIN: No, I don't agree. I don't agree with Tom Daschle on that. I don't believe it did, and I think events show that it hasn't, because a trillion dollars of it hasn't even gone into play yet. So I don't really think you can say that.
At the time we took the vote, yes. I don't think the vote would have been the same after 9/11, for example, when we then knew we had to escalate military spending tremendously and homeland security became a big-ticket item, things changed.
You could only do what you can do at the time. At the time, the economy was booming, surplus was big. It was time to give back to people, and I think good public policy is letting people keep more of their own money.
KARL: We only have about 30 seconds left, but I want to find out what's been happening with the mail. Obviously, we had an -- the anthrax situation on Capitol Hill. They have been irradiating all your mail to protect people from anthrax, but you've seen some negative side effects. FEINSTEIN: Yes. Well, we have a very big mail load, over 20,000 pieces of mail. This is the largest irradiation that I every know of. I mean, it's much more than even sterilizing medical instruments. And nobody knows what the impact of this kind of radiation may be on cellophane or chlorine-treated paper or any residual chlorine dioxide.
KARL: Have people in your office gotten sick?
FEINSTEIN: Well, people in my office, yes. Some have had a metallic taste, nausea, tingling in the hands and a number of other symptoms.
To make a long story short, the University of California has offered to come in, sort of independently, and give me a little independent analysis of what's going on, and I'm very grateful for that.
KARL: Great. Senator Feinstein, we really appreciate you joining us today. Thank you very much.
FEINSTEIN: Thank you very much. Right.
KARL: Up next, it's straight ahead to the Super Bowl.
(BEGIN VIDEO CLIP)
MARC MORIAL, MAYOR OF NEW ORLEANS: In the post-9/11 environment, it's very important that we recognize that evil people could attack any site, especially if they think they could garner great publicity for it.
(END VIDEO CLIP)
KARL: In the countdown to the Super Bowl, we'll talk to New Orleans Mayor Marc Morial and terrorism expert Brian Jenkins. Back in a moment.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BUSH: We have found diagrams of American nuclear power plants and public water facilities, detailed instructions for making chemical weapons, surveillance maps of American cities, and thorough descriptions of landmarks in America and throughout the world.
(END VIDEO CLIP)
KARL: President Bush talking to the world Tuesday night, saying that what U.S. troops found in Afghanistan, quote, "confirmed our worst fears."
The focus of special precautions this weekend, of course, is the Super Bowl in New Orleans. We'll be talking to New Orleans Mayor Marc Morial and, in Los Angeles, terrorism expert Brian Jenkins, a senior adviser at the Rand Corporation. Mayor Morial, I want to start with you. You've got 48 different agencies down there trying to take part in the security efforts, thousands of law enforcement officials. Who is paying for all this?
MORIAL: Well, it's being paid for by a combination of sources -- certainly local funds, some help from the league, and some help from the federal government, and some help from the state government.
Together, we have got the best security plan a special event has ever seen, and I'm very confident that Sunday the game is going to be safe.
KARL: Well, the Super Bowl, of course, is one of the most wildly profitable events that we have in the United States. Shouldn't the bulk of these security measures, shouldn't they be paid for by the NFL? After all, they're the ones making the money on this.
MORIAL: I think the way to do it is to share, because this game has a strong economic impact for the city, also a strong economic impact for the state. And it generates a lot of money for local businesses, so -- and also, the idea of a terrorism threat is something that is in the national interest.
So I think sharing the expense, as we've done, is the correct way to do it. And by doing it this way, I think we have stake holders who are working very, very hard to make sure that Sunday's game is going to be safe.
KARL: Brian Jenkins, this has officially been classified, the Super Bowl, as a national security event, the first time the Super Bowl has gotten that kind of designation. What does that mean, practically?
BRIAN JENKINS, TERRORISM EXPERT, RAND CORPORATION: Well, this is actually a new category of event that was created in 1998 in order to improve the coordination of security at these major events. It has only been used at about 12 events. It applies to the Super Bowl this year. It also applies to Olympics.
What it means is that the Secret Service will take the lead role in the planning and ensuring the coordination of all of the elements of security that will be involved -- that is, at the federal level, at the state level and at the local level.
KARL: All right. Well, both of you, we do need to take a very quick break. We'll have much more to talk about when we come back, take a break, and also get a news update.
(COMMERCIAL BREAK)
KARL: Back with our guests in a moment. Now let's get a quick look at the hour's top stories. Joining us from Atlanta, Miles O'Brien.
(NEWSBREAK)
KARL: We're back with Mayor Morial and terrorism expert Brian Jenkins.
We have some pictures of some of the security measures that have been taken around the Super Bowl. I think we can show those right now. It makes it look almost like an armed encampment, perimeter after perimeter of security. There you see people in fatigues. I mean, law enforcement officers from any number of agencies.
Brian Jenkins, is this the view of the future? I mean, are future Super Bowls and events like the Super Bowl going to always look like, you know, basically an armed encampment?
JENKINS: Well, in fact, heavy security at major sporting events has been a feature of the landscape for the last 30 years, certainly ever since 1972 when Palestinian terrorists seized hostages at the Olympics in Munich.
We're operating in an environment, a post-9/11 environment, where we have to anticipate this type of threat. It is going to be part of the permanent landscape, part of the circumstances we're going to have to deal with, which is not an argument against the security. It simply underscores the imperative of destroying the terrorist organizations that are capable of creating this type of situation.
KARL: Well, Mayor Morial, you've had nine Super Bowls in New Orleans -- that's a story in and of itself -- but nine Super Bowls in New Orleans. How does the security at this one compare to the previous?
MORIAL: Well, security at all of our big events in New Orleans, and that's not just the Super Bowl, but also Mardi Gras, jazz festivals, Essence festivals and other events we do, has always been strong and always been tight an always been pervasive.
The security for this Super Bowl is enhanced, it's ramped up. We're doing some different things, like the perimeter around the Superdome.
But, Jonathan, in reality -- maybe the picture suggests because of the Army fatigues, an armed camp. But the reality is that there is a strong presence. And the perimeter around the Louisiana Superdome reminds much of the kind of perimeter you see around an arena that's hosting a national political convention.
So security is a lot tighter this year, but I think, as our expert, Mr. Jenkins, indicated, strong security at sporting events has been pretty much the norm for 30 years. I know it's been the case here. We simply have more agencies and perhaps more planning and some new techniques that we're utilizing this time.
KARL: And if you look at some of the things that have been banned, people are encouraged to come to the Super Bowl basically carrying just their tickets. But look at some of the banned items -- backpacks, camera cases, camcorders, banners, noisemakers, even those big foam number one fingers. And I think I saw on the list also that diaper bags are banned unless you can prove you have got the baby with you. Brian Jenkins, is some of this going overboard?
JENKINS: No, I don't think so. I think these are reasonable precautions, especially given the most recent reports that in some of these training manuals that we have discovered in Afghanistan, it specifically mentions the attractiveness of carrying out terrorists attacks at large public events.
That doesn't mean that there is a specific threat to the Super Bowl. I mean, since September 11, we have some through the World Series, the New Year's celebration, the Bowl games, without incident. And certainly with this kind of security that we see in New Orleans, perhaps the most protected place on the planet is going to be in the Superdome tomorrow.
KARL: OK. Well, we've got an e-mail, a question. I believe I know the answer to this. I'll have both of you take a crack at this.
Even with the FBI, the Secret Service and other law enforcement agencies in New Orleans, what's to prevent a hijacked airliner from crashing into the Superdome? Will the Air Force be patrolling the skies over the area?
Mayor Morial?
MORIAL: Let me say this, there are a number of things that we're doing that it's not appropriate to discuss on the air. Suffice it to say that all of the potential risks that might be out there, we have strategies and a plan to be able to take care of it.
So, the caller's question is good. But we have made plans to deal with every possible risk, and it's going to be safe. We are not going to have an incident at the Super Bowl. We're going to have a great game, and everybody in New Orleans is having a wonderful time.
KARL: There's going to be a no-fly zone, isn't there, around the Super Bowl at the time of the game?
MORIAL: Well, I don't want to confirm the -- all of the strategies that we have. The Secret Service and the federal agencies have placed a number of restrictions in place. But I'm not comfortable here talking about all of those restrictions, because, again, you know, much of what we do is designed not to tip off people who may have bad intentions.
KARL: Well, Brian Jenkins, we know that we have not only the Super Bowl, but we've got the Olympics coming up, the World Economic Forum in New York. Are the nation's security resources -- obviously, these are federal efforts, every single one of these -- are they tapped out by three major events aligning essentially at the same time?
JENKINS: No, I don't think so. You know, with the federal agencies involved, with the National Guard, with 18,000 police forces in this country, with 2 million people employed in private security, we're not stretching the human resources required to provide adequate security at these events.
There is a broader question regarding the diversion of resources. Certainly it costs a great deal of money to provide this protection. We're spending a lot more money since September 11, both in the public and private sectors, on security. That's a worrisome diversion of resources at a time when other needs, whether it's our nation's schools or health care, could certainly use the money.
But, again, that's not an argument against security. That simply underlines the necessity of altering the world environment which permits this kind of terrorism.
KARL: Mayor Morial, I want to switch gears. We only have about a minute left.
There's also another event going on, if I'm correct, today in New Orleans. You have an election. Is that right?
MORIAL: We have an election for my successor. I'm term-limited and can't run again. And today is the primary. The top two vote- getters will move to a March 3 runoff.
KARL: And I saw one candidate on the ballot was promising that he would not give away any favors to his friends because he doesn't have any friends. I just love Louisiana politics.
MORIAL: Yes, there's always someone who wants to entertain, and this campaign's been pretty entertaining.
KARL: What are your plans? You can't run for re-election. Are we going to see you run for another office?
MORIAL: I can't run again. There's a good chance that that will happen in the future, but probably I'll take a break for a while. My wife and I are having a baby, and I'm going to be doing a lot of daddy duties come May.
KARL: And you've got two teams from out of town coming in for the Super Bowl. Who does the mayor of New Orleans root for?
MORIAL: I'm going to tell you something, I get myself in trouble but I'm a big football fan. Marshall Faulk is one of my favorite players. He's from New Orleans. Anias (ph) Williams is from New Orleans. And you know who they play for, the St. Louis Rams.
KARL: All right. Well, we'll put you down for the Rams.
MORIAL: Thanks, Jonathan.
KARL: Brian Jenkins, Mayor Morial, we thank you much for joining us on a Saturday.
JENKINS: Thank you.
KARL: Take care.
Up next, the Enronization of campaign 2002. Have Democrats found the issue they think they can win on?
(COMMERCIAL BREAK)
KARL: And here's a quick look at some of the week's best political cartoons.
Mike Peters (ph) of the Dayton Daily News shows a mother talking to her son. "You're grounded young man. Go to you room." The news savvy kid asks, "Am I a prisoner or a detainee?"
Mike Keith (ph) of the Denver Post served up a different spin. He shows congressmen grilling Vice President Cheney in the Enron probe. He gives up only his name, rank and serial number. His questioner says, "I didn't realize he was covered by the Geneva Convention."
And Jack Oman (ph) of The Oregonian offers reaction shots from the State of the Union: There is applause from Ted Kennedy and smiles from Dick Gephardt, Trent Lott and Tom Daschle, but open-mouthed shock among listeners from the axis of evil -- North Korea, Iraq and Iran.
Joining us with some insight into how Enron and the war on terrorism will play this election year, Democratic pollster Michael Bloomfield and Republican pollster Frank Luntz.
I want to get right to the memo that everybody was talking about this week, the James Carville, Stan Greenberg, Bob Shrum memo; read a quote from "On Enron in Politics" (ph). It said, in part, "Enron is not a Beltway issue but a national issue. The concerns people have are powerful and likely to be increasingly corrosive for the Bush administration."
Frank, isn't he right?
FRANK LUNTZ, REPUBLICAN POLLSTER: Well, I'm looking and there is another quote there about tarnishing the Bush policy initiatives.
If they were focused on doing this in terms of the people who were hurt, the employees and the shareholders, that would be great. And I think we could have some consensus there.
What bothers me is that this whole memo here -- and you should show your viewers, they should want to get a copy of this -- this entire memo is about how to score political points, partisan points, off of people's suffering. And I can tell you right now since September 11, it's not what the public is looking for.
Take care of these people. Don't try to score electoral and political and partisan points off of these people.
MICHAEL BLOOMFIELD, DEMOCRATIC POLLSTER: There are two things here with the Enron issue that are happening. One is the issue of special interests and influence and what happened in Washington, as well as what happened on Wall Street. The other is the people who are suffering, who are out of work, had their -- not only their retirement savings bankrupted, but bankrupted at the same time that executives were making millions. So you have those two issues. To the extent that Republicans are identified with special interests, which we have seen all year, even as Bush's numbers have gone up, people seem to identify Republicans with special interests...
LUNTZ: But that's the whole point...
BLOOMFIELD: And to the extent that happens, that is something that will hurt the Republican Party.
LUNTZ: But this is not about hurting the Republican...
BLOOMFIELD: There are two issues...
LUNTZ: Let me respond.
BLOOMFIELD: OK.
LUNTZ: This is not about helping or hurting Republicans or Democrats. This is about finding solutions so this thing doesn't happen again.
BLOOMFIELD: That's why you have Democrats like Charlie Rangel, Ken Bentsen, George Miller on the floor of the House introducing proposals for 401(k) revisions, to look at corporate accountability. And you have actual legislative language trying to change things.
The other issue, though -- and we should say, "Oh, this is just politics." The influence of special interests in Washington...
LUNTZ: It is just politics.
BLOOMFIELD: No, no...
LUNTZ: Read this memo. This is politics.
BLOOMFIELD: Campaign finance reform is an important issue. The influence of businessmen, whether they're making money or going bankrupt...
LUNTZ: Do you endorse the politicization of this? Do you endorse what Stan Greenberg, Bill Clinton's pollster; James Carville, Bill Clinton's consultant; Bob Shrum, Al Gore, do you endorse this?
BLOOMFIELD: I think, I think the influence of special interests in Washington in policymaking is an important issue.
And the one thing that I'm not doing -- wait -- the one thing I'm doing is I'm not saying, I am sure there is a connection between what Dick Cheney does or did or wants to do or Trent Lott or Dennis Hastert did and the Enron executives or the Enron money.
What I do think, though, is that we should all agree this is an important issue to look at.
LUNTZ: And we all are doing that... BLOOMFIELD: And if can't hold...
LUNTZ: Hold on, hold on...
BLOOMFIELD: But the question...
LUNTZ: ... but we all agree on that. We all agree on that this must be looked at. But we want to look out it without this partisanship. We want to look at it without memos that turn this into politics at its worst way.
There are people who are watching this show right now -- and I'm one of them, by the way. I lost money in Enron stock.
BLOOMFIELD: I doubt you're watching the show right now, but OK.
LUNTZ: There are people who are -- I can see it down there -- there are people who are watching this show right now who lost a lot of money. And actually what they don't want to hear is you and I. What they don't want to hear is this going back and forth.
And if they saw this memo, if they saw...
BLOOMFIELD: That's why -- I don't want to have this discussion here, Jonathan.
LUNTZ: ... this...
KARL: Let me ask -- Michael, if I can get in for a second here, if you look at -- I mean, this memo came out and it is all of the top Democrats, right. These are household Democratic names. But McAuliffe immediately distanced himself from this, the chairman of the party. The Senate leader, Tom Daschle immediately said, "This is not the kind of politics."
I mean, if Democrats go down this road, aren't they going to risk doing...
BLOOMFIELD: Go down what road?
You don't hear me saying that this memo is some sort of Magna Carta for us. What you hear me saying is there are two important issues and we should look at them. One is the influence of special interests in Washington, and we should hold hearings, we should look at this, and...
LUNTZ: Jon, where do we disagree?
KARL: OK, let's...
BLOOMFIELD: OK, you know what, maybe we don't. So what I'm saying is that this is a big issue.
BLOOMFIELD: It's not a political issue. This is a major issue, both on real economic...
(CROSSTALK)
KARL: Well, let me throw something out there. Where do you disagree? The Democratic Party, the state party, with funds from the national party, ran an ad in North Carolina this week attacking Elizabeth Dole quite viciously. We played it earlier in the show. You've got the kind of grainy video of Dole, making her look really bad, evil, and talking about how she, right after September 11, went and got money from Ken Lay.
Is that the kind of politics that's going to work for Democrats?
BLOOMFIELD: I will say here -- I've seen that ad. I think one thing about it that is bigger than Enron, the first thing you think about that when you see it is, you have a candidate who lied, who said -- made a solemn promise, made a big deal after this tragedy...
KARL: Elizabeth Dole lied?
BLOOMFIELD: Elizabeth Dole said -- this is from the Winston- Salem paper that they quote in the ad -- said, I'm going to stop fund- raising because it would be unseemly, it would be inappropriate to raise money now, so I will not do that. She then went, days later, and went on a fund-raising trip.
The fact that she went to Ken Lay's house, who, at that time, had money, obviously is a bitter irony that makes it more notable and makes us talk about it on the show.
But the fact is, when a candidate for the House, the Senate, any political office, lies, especially around something like September 11, you know it's going to be thrown out.
KARL: Is this an effective ad, Frank?
LUNTZ: No. What the public wants less now than ever before is this kind of negativity, is this kind of viciousness, is this kind of personal attack.
BLOOMFIELD: But, Frank...
LUNTZ: Don't, don't -- hold on one second. And they also don't want people interrupting each other on television.
(LAUGHTER)
KARL: All right. Well, make it quick because we have to take a break.
LUNTZ: What the public is looking for are people who've got solutions. They want an economic stimulus package, they want an energy bill, they want a terrorism insurance bill. They want things to happen. They don't want this back-and-forth.
BLOOMFIELD: Well, then, let's make the Enronization, as you called it...
LUNTZ: As you all called it.
BLOOMFIELD: Let's get this Democratic bills passed.
KARL: Let's take a quick break. I have some other issues I want to...
BLOOMFIELD: Charlie Rangel's bill, George Miller's bill, Ken...
(CROSSTALK)
KARL: Let's take a quick break. I've got some other subjects I want to deal with. And I want to get, before you guys leave, a prediction from you as to where Bush's popularity will be by the time election time comes around in November. We'll take a quick break.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
REP. RICHARD GEPHARDT (D-MO), HOUSE MINORITY LEADER: I refuse to accept that while we stand shoulder to shoulder on the war, we should stand toe to toe on the economy. We need to find a way to respect each other and trust each other and work together to solve the long- term challenges America faces.
(END VIDEO CLIP)
KARL: House Democratic Leader Dick Gephardt giving his party's response to President Bush's State of the Union address Tuesday night.
We're talking about the war's impact on election-year politics with Democratic pollster Michael Bloomfield and Republican pollster Frank Luntz.
You almost had to feel for Gephardt. I mean, that's so hard to give that response. You're in this empty room. The president's just been before the leadership of the free world, cheering crowds, and you're alone.
But, you know, one point that both made, especially the president in his speech, is that the war's not over. And he wants people clearly to be on a high alert. Rumsfeld's talking about possibly attacks worse and more deadly than September 11.
What's the sense from both of you? Are people still on that war footing? Or have people kind of thought it's over, Afghanistan's done?
BLOOMFIELD: I don't think people think it's over. But look at what happened in the State of the Union and Gephardt's response. We did dial tests then, a group of swing voters, watching their responses. Their responses really to Gephardt ended up being more generally favorable. Doesn't mean they don't support President Bush...
KARL: Really? BLOOMFIELD: Yes. Not that they don't support President Bush.
KARL: Who did you have at your dials?
BLOOMFIELD: The difference is, they supported him coming in Tuesday morning, and Wednesday morning, the same thing. In other words, the beginning of the session, the end of the session, they supported him.
They obviously support both parties on the war, because both parties are standing together.
The biggest question they have is on the economy, and that's something that Bush did not answer. He really raised more questions than he answered.
We found out this group of 50 people -- basically we had one person who said -- knew what Bush wanted to do on the economy and supported it.
KARL: And, in fact, Frank, I mean, he opened the speech up by saying America is in recession, which kind of surprised me. I mean, it's one thing we all know it's a recession, but for the president to come out in the State of the Union and say, hey, we're in a recession, sounded almost Carteresque, no?
LUNTZ: With all due respect, if you dial a group -- Gephardt family reunion, you're going to get favorable responses.
(LAUGHTER)
And even among them, several of them chose Bush over Gephardt.
Basically the president's got a new sense of commitment, and he's a different person than he was a year ago. And I think what you see from this administration is some straight talk. They say like it is, and they don't mince words. The public thinks that the economy is going to get better, but they are concerned right now. And President Bush is saying, hey, look, things aren't great, but they can be better.
KARL: Was it straight talk when the president came out and said Ann Richards was a bigger -- got more money from Ken Lay and Enron was a big supporter of Ann Richards in his 1994 race?
LUNTZ: My understanding, if you look at the FEC reports, and I can only quote from the "Washington Post," is that that is actually the case, that Ken Lay actually donated more money to Ann Richards.
BLOOMFIELD: For the record, I did not Enronize this conversation. It is just what people are thinking about, and Jonathan's evidence of that.
KARL: Speaking of Enron, let's go to the president, let's hear what he had to say this week.
Well, that is the president there on the right, and that is a former president on the left.
BLOOMFIELD: I was going to say, I recognized him.
(LAUGHTER)
KARL: Well, the president came out and he's got this plan on 401(k)s. Is this going to immunize him from the Enron fall-out?
LUNTZ: It's not an issue of immunization. The things that Americans, particularly those over age 50, are most concerned about are retirement security, not just Social Security and strengthening it, but the whole idea of retirement security.
And I find it interesting that the Democrats' approach to this is to tell people that you cannot invest more than X amount of dollars, I think it's 20 percent in Feinstein's bill...
KARL: Boxer.
LUNTZ: Boxer's bill -- in a certain stock investment.
Washington has not done the best job, Jon, in Social Security. I think you would agree with that. That the return that people get on their Social Security dollars is virtually nothing. Now Washington wants to make a decision, wants to tell the American people, you can and can't invest here and there.
KARL: And Republicans are going to have to argue against that at a time when Enron is...
BLOOMFIELD: Here's what the difference is.
LUNTZ: Explain to me the difference.
BLOOMFIELD: Here's where the difference is, is that people are, on the Democratic side, making proposals to address the problems.
And the second thing we're doing, which I said is an important part of this, it's not politics, it's the idea of looking at what happened in Enron and the connections on the issues and how that changed policy.
LUNTZ: OK, did you hear...
KARL: Make it very quick.
LUNTZ: ... George Bush's presentation?
(CROSSTALK)
LUNTZ: Would you stop for one second? Just stop for one second.
George Bush yesterday talked about pension reform, which will guarantee...
BLOOMFIELD: He didn't talk about it. He has no policies. He has no changes...
KARL: We're not going to have time to debate that now. I only have, like, 15 seconds.
(CROSSTALK)
BLOOMFIELD: ... raised these issues and didn't answer them.
KARL: OK, I want to get predictions from both of you. Bush's popularity still now over 80 percent in most polls. Where will it be in November of this year?
BLOOMFIELD: In November of this year, House Democrats, the generic vote, will be at like 53.
KARL: Where will the president's popularity be?
LUNTZ: Answer the question.
BLOOMFIELD: Irrelevant. It will be irrelevant to the election.
KARL: Frank, where will his popularity be?
LUNTZ: The Democrats can't answer the question.
KARL: Where will it be?
LUNTZ: 68 percent favorable.
KARL: 68 percent, we'll hold you to it, and we'll try to pin you down next time.
Thank you very much for joining us on a Saturday here. I appreciate it.
When we return, my turn: an investigation that just won't fade away.
(COMMERCIAL BREAK)
KARL: Remember those reports shortly after Inauguration Day that the outgoing Clinton administration trashed the White House? Clinton aides strongly denied the allegations of vandalism, and the issue seemed to fade away.
Well, it's coming back. In fact, the Government Accounting Office, the very agency now threatening to sue the White House, is wrapping up work on a year-long investigation into the issue.
Sources at the GAO tell me more than 100 Bush and Clinton White House staffers have been questioned, as recently as this past week, for a report that should set the record straight about whether those outgoing Clintonites were vandals or simply the victims of a smear campaign.
But here's the more interesting issue: The Bush White House, which says it has only limited time to cooperate with an investigation into its own activities, has had no problem finding the time to fully cooperate with this investigation of alleged wrongdoing by the Clinton White House.
Well, thanks for watching this edition of TARGET: TERRORISM. I'm Jonathan Karl in Washington.
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