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Inside Politics

McCain-Feingold Bill Headed for Victory in the Senate; Yugoslav Authorities Arrest Slobodan Milosevic

Aired March 30, 2001 - 5:00 p.m. ET


FRANK SESNO, CNN ANCHOR: Thank you for joining us. I'm Frank Sesno, sitting in for Judy Woodruff today.

As you know, if you've been with us for the past half-hour or so, we are following dramatic developments in Belgrade, where former Yugoslav President Slobodan Milosevic has been arrested. We will have more details on this story and speak with more people as more information warrants, so don't go away.

But we're going to turn to some U.S. politics right now, because it's been a very busy day in Washington as well, for the Senate hammered out its final details today of its campaign finance reform legislation, but without the fanfare and high drama of recent days. After the last big roadblock to the bill was cleared yesterday, even Monday's expected passage may seem a bit anticlimactic.

But the fight is not over yet. As Jonathan Karl reports, at least two senators still have their dukes up.


JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): The battle over big money in politics is all but over in the Senate, but for the two leading protagonists, the war continues.

SEN. MITCH MCCONNELL (R), KENTUCKY: It's not over yet. It's over in the Senate, but this is a bill that's fraught with all kinds of constitutional problems, and if it becomes law, I'm taking it to court.

KARL: John McCain vows to fight that battle when it comes, but first things first: he's focused on the upcoming battle in the House of Representatives.

SEN. JOHN MCCAIN (R), ARIZONA: It's been through the House twice by overwhelming majority, so I think we can do it. I do not underestimate the fact that the closer we get to passage, the greater the opposition will be, but there's no doubt that a win here was important. But it's still a long way from us having a bill to the president's desk.

KARL: McCain. McConnell. For the two men, the battle continues because it is more a personal crusade than a Senate debate. For McConnell, a crusade to protect the First Amendment; for McCain, to restore public trust in politics.

The last time they faced off in the Senate, it got personal.


MCCAIN: Let me offer my colleagues a definition of corruption from Webster's dictionary. "Corruption: the impairment of integrity, virtue, or moral principle.



MCCONNELL: I think that it is important to note for there to be corruption, somebody must be corrupt. Someone must be corrupt for there to be corruption, and so I would just ask my friend from Arizona what he has in mind here.


KARL: That was nearly two years ago. The offended McConnell used the Senate rules to keep McCain's bill from coming up for a vote.

When McCain took his crusade to the campaign trail, he portrayed himself as "Star Wars" hero Luke Skywalker, battling the forces of evil. When the debate hit the Senate floor this time, McConnell jokingly called himself Darth Vader, the "Star Wars" villain.

SEN. PHIL GRAMM (R), TEXAS: I want to say to my dear colleague from Kentucky that I admire him. Very few pundits are applauding, I just want to say I am one person who's applauding, and I will never, ever forget what you've done. It may not be in an editorial, but it's sure as hell enshrined in my heart.

KARL: But McConnell ally Phil Gramm emerged from the debate with newfound respect for McCain as well.

GRAMM: He has reminded me in this debate of an ancient god Aenius, whose mother was the Earth, and every time he was thrown to the ground, he got up stronger than he had been when he was cast to the ground.

KARL: This time it didn't get personal. In fact, Mitch McConnell, whose chilly relationship with John McCain has never been a secret, now says he's never gotten along so well with his adversary.

(on camera): So, how would you describe the state of the McCain/McConnell relationship right now?

MCCONNELL: A hell of a lot better.


KARL: Earlier today, I interviewed Senator McCain and asked him about McConnell, also about his relationship with President Bush and the prospects that there would once again be a "McCain for president" campaign. Here is that interview.


KARL (on camera): Senator, thanks for joining us. Phil Gramm last night said, talking about you, that, quote: "Seldom has a more noble effort been made on behalf of a poorer cause in the history of the United States Senate."

MCCAIN: Well, it is well known, Phil and I have been friends for many years. We just have a fundamental difference of opinion on this particular issue, and the one thing I've tried to do throughout this debate is respect the views of those people who disagree with me. I respect his views and that of Senator McConnell and all others who disagree.

KARL: Senator McConnell has been quite eloquent talking about what he believes will be some of the unintended consequences. Are you worried that now that we take so much money, if this becomes law, we take so much money out of the political parties that there will be such consequences?

MCCAIN: Well, actually, I'm exuberant over the prospect that we may return politics to the way that it was when I first ran for Congress in 1982, much cleaner, much better system, much more voter participation, much more grassroots activities. And yes, I fully understand that there will be loopholes that will be found and exploited, and 20 or 30 years from now we'll have to come back and clean it up again, just as we have to do, act continuously as a legislative body for that very reason.

KARL: I'd like to see what you think of how the president has handled this. Now he seems to be suggesting that he will sign a bill, perhaps this bill. Are you confident that he will sign this when it gets to his desk, and how do you think he has handled this whole process?

MCCAIN: I think he's handled it very well, from back in the South Carolina primary when he said he would ban both corporate and union soft money. I'm very pleased to hear that he said he would sign a bill if it got to his desk. Now we've got to get it through the House of Representatives, which won't be easy.

KARL: Is there anything that can happen between now and the vote on Monday?

MCCAIN: I think we'll be OK on Monday, but the new battle begins, and that's in the House of Representatives. And that won't be easy. It's going to be very tough. And the time that I'll be celebrating will be after the president signs a bill, not after we pass this bill through the Senate on Monday night.

KARL: As you look at this bill, the way it's been amended, do you think that there is anything unconstitutional in this bill?

MCCAIN: No, I don't. I know it will be challenged, but I don't think that there's unconstitutional aspects of the bill. But I am absolutely convinced that two major elements, soft money banning and Snowe-Jeffords, which are really fundamental parts of this legislation, are clearly constitutional.

KARL: And the -- of course, we had the Wellstone amendment that passed earlier in the week that limits the right of outside groups to run their ads 60 days before a campaign.

MCCAIN: I was very concerned about that amendment, and I still am, but it was the will of the majority. But if it is declared unconstitutional, then the heart and soul of the bill is still preserved.

KARL: How about Mitch McConnell? I mean, this seemed to be not as bitter and acrimonious as previous...

MCCAIN: I respect Senator McConnell. I admire his forthright opposition. There's no subterfuge with Senator McConnell. He is a valiant warrior for what he believes in and has earned over time my great respect.

KARL: Was this -- was this a hard process? I mean, was this as hard as you thought it would be?

MCCAIN: It was very difficult, but I always believed that we could do it.

KARL: What were the -- what were the -- did you have a moment where you thought that...

MCCAIN: There was about 200 moments when I thought it was all going to come apart.

KARL: With this crusade, there are still fights to go, but this crusade, you seem to be on your way to victory. What is the next big crusade for John McCain?

MCCAIN: Well, I think reforming the military is very important. I'm deeply concerned about the state of our defense, the men and the women in the military, and I'm worried about the lack of priority that's getting. I do believe we need an HMO patients' bill of rights, which is an issue which has been out there for years. And I think also we need to pay down the debt and reform Social Security and Medicare.

Those are all major challenges I think we face as a nation.

KARL: Do you see yourself aligned with the president on these issues, talking to him, communicating with him?

There hasn't been much communication, has there, between you and the president?

MCCAIN: Well, I've met with the president, as you know. I've met with Dick Cheney. I've met with other members of the administration. I'll continue to do that.

We have a warm relationship. We'll continue that.

We may not always agree, but I hope that we can come together on issues on which we do disagree.

I discussed during the campaign with the president our mutual dislike of pork barrel and wasteful spending, and the need to reform the military and other issues. So I look forward to doing everything I can to assist.

KARL: He needs to keep this in his budget, for instance, keep spending down to 4 percent a year. That's not going to be easy in the Senate, is it?

MCCAIN: Well, I do believe you can keep spending down, and the first way you do that is do away with the billions of dollars of pork barrel spending. I mean, it's just become obscene, and I really want to work with the president.

He -- my suggestion then and I think he's agreeable to start saying, look, I've got a veto, we can't spend these billions and billions on wasteful and unnecessary pork-barrel projects. And I think he's agreeable to -- to doing whatever's necessary to stop that.

KARL: Can he count on your support for his budget, including his tax cut, $1.6 trillion?

MCCAIN: I haven't seen what his tax cut is. Every time I pick up the newspaper we see a different proposal coming out of the White House. I'd like to examine it once it gets through the Finance Committee, but I obviously have concerns that I hope will be addressed as we go through the process.

KARL: Teddy Roosevelt, of course, your great political hero, he reformed the campaign finance reform or fought to do so in 1907, later went on to run, you know, of course, as a Bull Moose candidate for president.

What's your latest thinking on that? Is there any chance that John McCain will find himself in another presidential campaign? Any chance at all?

MCCAIN: No. No scenario that I can envision. No.

KARL: No scenario that you can envision, so then...

MCCAIN: No. Yeah -- no.

KARL: ... absolutely no, it will not happen?




KARL: No, no, no, John McCain says about a presidential run. But that's a question that is likely to persist, because some of McCain's most fervent supporters and closest allies still hold out the hope that he will change his mind and run. They think in the most likely scenario, if it were to happen, as an independent. But McCain, as you heard there, saying absolutely not, never again a run for president -- Frank.

SESNO: John McCain gets a lot of attention and from many a lot credit for what's gone on, on Capitol Hill. But Jonathan, we know he's also a polarizing figure there as well, hardly popular among many of his peers. How has this debate affected that?

KARL: Well, as you know, he's especially been a polarizing figure among the Republicans, who have had a very tough time dealing with John McCain. In this battle, he was dealing primarily with Democrats, because, of course, campaign finance reform, when it passes on Monday, will pass with the overwhelming support of the Democratic caucus and only a few Republicans.

Now, what was interesting throughout this process is there were many tense times between McCain and Tom Daschle, the top Democrat in the Senate. McCain's people, some of the people right next to McCain in this whole battle were saying privately but to many people that they thought that Tom Daschle was silently and privately colluding with the Republicans to kill campaign finance reform, because Daschle was worried about its impact on the Democratic Party.

Daschle always firmly denied that. But that whole process behind the scenes created some tension between McCain and his newfound Democratic allies. So McCain, even as he comes out of this success, still remains very much, among his colleagues in the Senate, a polarizing figure.

SESNO: Jonathan Karl on Capitol Hill, quite a week. Thanks.

INSIDE POLITICS will return right after this with our group of experts to look at campaign finance reform and whatever happened to George W. Bush on the subject of (UNINTELLIGIBLE).


SESNO: And joining us now for our regular Friday roundtable, Ron Brownstein of "The Los Angeles Times" -- he joins us from Florida -- Bob Novak of "The Chicago Sun-Times," and CNN senior political correspondent Candy Crowley.

Candy, let's start with you on the subject of what we've had here today, a dramatic development on Yugoslavia. President George W. Bush did not have to persecute the conflict in Kosovo -- his predecessor did -- but this is nonetheless an important development for him.

CANDY CROWLEY, CNN CORRESPONDENT: Well, absolutely insofar is if it gets something off the table, that's going to be helpful. This has been what we've seen sort of over the past 60 days or so, the Bush administration has, this is an administration that sort of wants to take a step back. So insofar as someone else is taking care of a problem that's out there, that has to be good for this administration. SESNO: Bob Novak.

ROBERT NOVAK, "CHICAGO SUN-TIMES": Well, obviously, the money talks, because the Serbian government, which -- a new Serbian government, which it said it wasn't going to send Milosevic to trial in The Hague, was threatened with the loss of funding that it needs badly from the United States, so it forgot about its principles.

I would say that the lesson or the moral lesson of this is if you lose a war, make sure you have a good enough police state that you don't have to have an election, because it's losing that election that is going to put Milosevic in prison.

SESNO: Ron Brownstein, I'll come to you in just a moment, but we're joined here by Andrea Koppel, State Department correspondent. Andrea with some official reaction from the United States government.

ANDREA KOPPEL, CNN CORRESPONDENT: Frank, they're in the process of working up a statement that would either be delivered by Secretary of State Powell or perhaps over at the White House. But in the meantime, a senior State Department official calls the arrest of Slobodan Milosevic an important step, said that this is the start of accountability for crimes, both domestic and international.

State Department saying that just a couple of weeks ago its ambassador to Yugoslavia, William Montgomery, met with Vojislav Kostunica, the president of Yugoslavia, and gave him a list of steps that the State Department wanted him to take. And on that list was the name of Slobodan Milosevic to arrest him.

As to whether or not, Frank, this is going to way the administration's decision whether or not to certify Yugoslavia tomorrow, I'm told that the decision hasn't been made. Obviously, this is an important factor in that decision. But according to the letter of the law, this congressional legislation, they have to comply, the Yugoslav government is supposed to comply and cooperate with The Hague more so than the U.S.

SESNO: All right, Andrea Koppel. And the certification you made reference to is the $100 million or so of U.S. aid to the new government in Belgrade if they fulfill those conditions. So we'll be watching that closely.

Ron Brownstein, back to you now and back to our discussion here in terms of the politics of all of this and any lessons about international policy. As Candy Crowley noted a bit, just a few moments ago, a very different approach to foreign policy and international policy by this administration than the predecessor, and yet here we see a democratic government in Belgrade and the former dictator being arrested.

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, I think, you know, the question of whether this is good politically or not for Bush may be too narrow a lens. It's a good day for the world when Milosevic is at least taking the first step toward being -- brought to account for what he did. And you know, in reference to what Bob said, I mean, what brought down his police state and in fact led to the elections in part was prosecuting a war that was disastrous for his country and brought not only terrible hardship on the people in Kosovo but on the people in Belgrade through the NATO -- through the NATO bombing.

But generally, Frank, the administration has been trying to sort of pull back from entanglements. They have more of a unilateralist view. They share the critique of the Clinton administration of many conservatives of the '90s that it was too deferential to allies, too quick to defer as well to multilateral, multinational institutions.

And I think that, you know, what you've got is on a variety of fronts, whether it's CO2 emissions or missile defense, Bush has signaled more a willingness to go it alone, and that is raising some tensions with allies in very different parts of the world, whether it's South Korea or Germany. So this has to be a welcome step -- welcome event for him, but I think it's more of a welcome event for the world.

SESNO: Well, to that point exactly that you make, Ron, president of the United States met with the German chancellor, Gerhard Schroeder, yesterday. The topic of those carbon dioxide emissions and the so-called "Kyoto accord" came up. The president defended the position that he takes based on very much along the lines of what you just said.

But here's what the president had to say yesterday. Take a listen.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The idea of placing caps on CO2 does not make economic sense for America. And while I worry about emissions and we'll work together to achieve efficiencies through new technologies -- and I'm confident we can do that -- I'm also worried about the fact that people may not be finding jobs in America.

And I am -- I'll consult with our friends. We will work together. But it's going to be what's in the interest of our country, first and foremost.


SESNO: Candy Crowley, what's in the interest of our country first and foremost, a theme we've heard before.

CROWLEY: Absolutely. It was all through his campaign, and so it should come as a surprise to no one that this was an administration that was going to take a sort of step-back approach.

And I might sort of point out, too, that we're only 60 days into this. We have no idea where this policy on any of this, you know, whether it's CO2 or North Korea, is actually going to go over the course of the next four years. I would suggest that this is not unlike that first State of the Union address, if we could call it that, that the president gave to Congress.

Each of these issues are the first dealings that he's having with these countries, and I think what this administration wants to project is a certain amount of strength and that willingness to go it alone.

It's an opening negotiating position in many of these cases and signals at least a new toughness, but doesn't tell us where they're going to end up in the end.

SESNO: And Bob Novak, especially on the subject of the environment, Democrats are hoping to use this very much to their political advantage. Will it work?

NOVAK: No, I don't think it will. I think the position on the Kyoto accord that what's more important is American jobs and American prosperity is a good political position. It was a position he really took during the campaign. Somebody slipped in this CO2 emissions control in his Saginaw, Michigan speech in the 49th paragraph of a 60- paragraph speech. Nobody covered it, including CNN. Nobody mentioned it. And now it's a holy grail.

It wasn't really part of his agenda, and I think this is more clearly his agenda. And there is a political difference between the parties on the environment, and he is a Republican and a conservative, and he's carrying it out.

SESNO: All right, let me throw the next issue to all of you and all at once -- Ron, maybe you want to start us off -- and that is we just heard from Jonathan Karl and John McCain on the subject of campaign finance reform and what this means in terms of a political challenge to the president and to the Congress. It's going to end up in the House.

BROWNSTEIN: Well, sometimes even a president, Frank, has to say, look, I gave it my best shot and I was beat, and that's pretty much what happened to George W. Bush on campaign finance in the Senate in the last few weeks. He offered alternatives. The vote came up last week on his paycheck protection idea. That lost more than 2-1. The administration was sort of tacitly supporting Senator Hagel's effort to have a less restrictive move on soft money. That lost by 20 votes.

And the odds are that the bill will clear the House. As Senator McCain noted, it passed the House twice before, the last time with 252 votes.

At that point, Bush has a difficult decision. Does he sign the crowning achievement of his archrival from 2000 or does he go out and veto campaign finance reform? I think it becomes even harder because of what we were talking about a moment ago, which is that all of these environmental decisions that he's made, as well as some workplace safety, consumer protection decisions, in which he has, in following his general ideology, moved the federal government away from sort of an activist position, closer to business -- if he then goes out and vetoes a soft-money bill, I think some people even around him fear that he runs the risk of being tagged as, you know, a president too sympathetic of powerful special interests. So he may be boxed in a corner here.

CROWLEY: Look, if you're a betting person here, you're going to bet that it will go through the House, although we're now hearing some rumblings from there that maybe the Democrats might want to stop it. If you're a betting person, you're going to bet that George Bush is going to sign it for two reasons. No. 1, he wants to get onto something that actually is important to him. Campaign finance reform was never a big part. It was only something that came out of his New Hampshire defeat in order to counter John McCain, and also just to get John McCain off the stage on John McCain's signature issue. It is worth it to sign this bill.

NOVAK: That's exactly -- that's exactly right, Candy. And the Republicans I talked to and the Democrats I talked to privately on the Hill think this is a terrible bill. It isn't going to accomplish anything. It's going to make some things more difficult. It isn't going to create this utopian world that John McCain talks about. But it is going to pass the House. I'll bet you he's going to sign it.

And it just shows with a senator who's got a bad temper, who has some public support and is a tough customer, what he can do to bulldog the rest of the government to passing a bill that they have grave misgivings about.

SESNO: Bob Novak, Candy Crowley, Ron Brownstein, thanks to all of you very much and have a great weekend.

BROWNSTEIN: Thank you.

SESNO: And we want to come back to the very dramatic story that we're tracking from Belgrade at this hour: That is the arrest of former Yugoslav President Slobodan Milosevic by security forces there. We were told by the Serbian deputy prime minister just a short time ago that Milosevic was in court, facing a judge on charges of tax evasion, other charges during his tenure as president.

He is most significantly wanted in The Hague by the United Nations War Crimes Tribunal for alleged war crimes and crimes against humanity.

Now, we are joined on the phone by former U.S. Secretary of State Madeleine Albright, who was of course in office during the campaign in Kosovo and had a large hand in the policy toward Yugoslavia.

Secretary Albright, first and foremost, your reaction to this arrest.

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: Well, Frank, I think that the people of Serbia should be congratulated for this, because they are the ones who started this when they got Milosevic out of office and elected President Kostunica now. Their system, their rule of law is working, and I think they are the ones that should be congratulated for this. And I believe that's a very important step.

SESNO: And as to whether and when Milosevic ends up in The Hague to face these war crimes?

ALBRIGHT: Well, I think that he is now being faced with the crimes that he committed in Serbia itself. We have believed and said all along that it's also very important for international justice to be served. He committed crimes against humanity, war crimes, he was indicted for those, and international justice needs to be served.

SESNO: What precedent, if he ends up at The Hague facing these crimes against humanity, does that serve in terms of world leaders, national leaders, and the conduct of war?

ALBRIGHT: Well, I think that what is important, we -- what was a great precedent is when the War Crimes Tribunal was established. And it set out a whole new set of categories and the issue of war crimes. It is essential, it was created by the international community as a sign of trying to carry out justice, international justice.

And I think that it will show, if this all goes forward -- and it has not just not with Milosevic, but with some of the other people already, that you cannot ethnically cleanse other people and commit war crimes with impunity, and that the international community, as it is constituted in the 21st century, believes that that is unacceptable behavior, and it assigns individual guilt for these crimes and allows the country, most of the people, all the people that are not involved in this, to be able to hold their heads up and become a part of the international community, and specifically of the new Europe.

SESNO: Do you believe -- are you saying then that you believe that seeing Slobodan Milosevic in front of those justices at The Hague will actually affect other leaders and their behavior in their countries?

ALBRIGHT: Well, it's very hard to say always what one leader learns from another, but there are few people like Slobodan Milosevic who had a plan for ethnically cleansing a group of people that happened to be of a different ethnic background or religion. And so, I would hope that lessons would be drawn from that.

But I think that the important point here is that after years of watching a dictator convolute the wishes of his people and through demagogic means get them all into nationalist hatred of another ethnic group, that this is the right approach, that the international community has set down certain standards, and the War Crime Tribunal is as hugely important precedent, as was for instance, when they decided that rape was designated as a tool of war, which was something new.

So, we are in a new era of international justice, and I think there's important lessons here.

SESNO: You dealt with Slobodan Milosevic, both in the search of peace and in the conduct of war. Did you think it would end like this?

ALBRIGHT: Well, I had said for some time that his day would come, and I think that he had many opportunity along the way not to engage in this kind of behavior. And he kept pursuing his policies, and kept believing, obviously wrongly, that the Serb people would tolerate this kind of behavior. They have shown that they would not. And as I said, they are the ones that have made clear that it should end like this.

SESNO: Madam secretary, the world is now seeing a return to some very ominous violence in neighboring Macedonia, also driven, it would seem, by ethnic tensions, though certainly not to the degree that the world saw in Kosovo. Is there any connection to today's developments there? And if not, what could -- should the world be doing in Macedonia?

ALBRIGHT: Well, I think obviously what is going on in Macedonia is troubling and needs to be ended as quickly as possible. I believe that it is essential for those extremists to be isolated and marginalized, that the majority of the Kosovar population by election, again, supported a moderate leadership, and that it is important for the Macedonian government to understand that there are rights that the Albanian minority should be assured, and that doesn't have to be done through military means.

And there -- unfortunate, the connection is that the Balkans have been uprooted so many times by these kinds of nationalist, or then revenge motives, and I hope very much that this can be stopped very quickly, and that the moderates in both the Kosovo government and the Macedonian government will prevail. But the minority -- one of the -- the connection everywhere here, Frank, are that minority rights need to be respected within multiethnic societies.

SESNO: There's a lot of talk that this new administration is pulling back somewhat, taking a less vigorous approach in some of these peace efforts to let the protagonists themselves come to terms before the United States gets deeply involved. Should it be more involved in Macedonia, in the Balkans?

ALBRIGHT: Well, I have believed this. And this has been the unfortunate history of what has happened in the Balkans -- is we have learned lessons too late. That was -- it was true in Bosnia, it was true in Kosovo, and I think that we should not repeat mistakes.

And that it is as important for the United States to make clear that we have an interest in this because it was President Bush, number one, who said that there should be a Europe that is undivided, and President Clinton and I pursued that. The Balkans were the last piece of it, and I think it's important that the United States -- it is in our national interest that there be a Europe that is whole, undivided and free.

And so, I believe that the United States has a role in trying to deal with the issues in the Balkans, and we cannot walk away from this. I know...

SESNO: Are you suggesting -- are you suggesting that your successors are walking away?

ALBRIGHT: No, I'm simply saying that it's very important for them to continue the leadership role that the United States had in last years and to work with the Europeans on this issue, that this is not just a European problem. That is the point I would like to make...

SESNO: Are they doing that, in your view?

ALBRIGHT: Well, I think there's a danger of that, but I think that they have made many statements recently which would indicate that they are interested in the Balkans and that they are not going to be pulling out.

But I hope very much that they will see the continuity in foreign policy, and that they understand that it's very important for the U.S. to be involved.

SESNO: Former Secretary of State Madeleine Albright, thanks very much. Appreciate your time.

ALBRIGHT: Thanks, Frank.

SESNO: Thank you.

And we're going to go back over to the White House and the State Department, ever so briefly. There has been some response. Andrea Koppel at the State Department, would you recap for us please what the United States is saying with respect to this arrest, this sudden arrest, of Slobodan Milosevic, on deadline, if you will.

KOPPEL: Certainly, Frank. People here -- I should just say as an aside, no one here believes that this is a coincidence that this is happening, that the apparent arrest of Slobodan Milosevic is happening on the eve of the Bush administration's deadline to decide whether or not to certify that Yugoslavia has complied with congressional requirements.

Now having said that the State Department is calling this an important step, a senior State Department official says that it's the beginning of accountability for crimes, both domestic and international. And it believes -- the State Department believes that Secretary of State Powell's meetings in recent weeks with the Serbian Foreign Minister Dindic, he met here just last week, and the U.S. ambassador to Yugoslavia is meeting with the president of Yugoslavia, Vojislav Kostunica, just in the last couple weeks, played a real role in swaying the government, in persuading the government to arrest Slobodan Milosevic.

And again, doesn't believe that this is any kind of an accident or coincidence that this is happening today, Frank.

SESNO: Major Garrett at the White House.

GARRETT: Quickly, Frank. No official White House confirmation of the arrest. That may be because the White House hasn't been able to confirm it through diplomatic channels; it may, in fact, be waiting for the Serbian government as a matter of diplomatic courtesy. But still, from the White House, no absolute confirmation of this arrest. One interesting note to strike based on your interview with former Secretary of State Madeleine Albright, the president, when asked about this today in a photo opportunity with Brazilian President Cardoso said: "We have always said that Mr. Milosevic ought be brought to justice." The distinction there, Frank: justice where? Justice only in Serbia or international justice?

That's a key question that's yet to be resolved and the next thing this Bush administration will have to deal with, as Mr. Kostunica and the Federal Republic of Yugoslavia pursue charges within the Federal Republic of Yugoslavia against Mr. Milosevic.

SESNO: Major, another point I would like to follow up with you, based on what we were hearing -- and Andrea, I would be interested in your thoughts as well -- from former Secretary of State Albright, and that is this sort of veiled admonition not to walk away from commitments and from an active role in the Balkans and elsewhere. Major, does that resonate at the White House?

GARRETT: Well, I can tell you, Frank, in my conversations with senior administration officials over the last two weeks, for example, about Macedonia: I can tell you about two weeks ago the attitude was of sort of, I don't want to say lukewarm interest, but a sense that the Macedonians could deal with the Albanian extremists on their own; did not need a lot of U.S. involvement even though at that time there was already criticism about the United States failing to step up to the plate.

This week, a tremendous increase in U.S. administration activity. last week, the announcement that unmanned aerial drones would be sent to the mountainous terrain near Tetovo to help the Macedonian government obtain intelligence about the movement of the Albanian extremists. Today an announcement of $5 million in aid to the Macedonian government, dealing with this military incursion; stepped up efforts with NATO forces to stop the movement of Albanian extremist across the Kosovo border.

Clearly, this administration getting more involved. They won't concede here they were slow on the uptake, even though that was some of the criticism received from the Macedonian government and other European capitals. Clearly, engagement has increased. I won't -- it's not clear to me whether they were indifferent or slow on the uptake at first, but I can tell you, clearly there's been a change in attitude, a change in conversation and clearly, a change in facts on the ground.

SESNO: Andrea?

KOPPEL: Well, Frank, I would just make a couple of points, and the first being that you have to remember the Clinton administration didn't jump right in either in Bosnia or in Kosovo. It took months and months and months and a lot of pressure from governments around the world before it did anything.

And secondly, the Bush administration, while it's made a very strong case for not getting further involved in the Balkans, has done quite a bit so far. It has -- it's accelerating the dispersal of about $13 1/2 million in military equipment. It has rediverted some U.S. K-4 soldiers onto the border. And so it believes that it's doing what is required at this point.

SESNO: Andrea Koppel at the State Department, Major Garrett at the White House; thanks to you both very much.

And at this time we're going to join our sister network CNN International and Jim Clancy for another important voice in this discussion.

JIM CLANCY, CNN INTERNATIONAL ANCHOR: ... International Criminal Tribunal?

RICHARD HOLBROOKE, FORMER U.S. AMBASSADOR TO U.N.: I agree with you it's an important day, but only half of what you said is going to happen, as Christiane just told some of your viewers. Milosevic has been arrested, but he's been arrested by the Yugoslav authorities on what I assume, as Christiane does, will be domestic charges -- embezzlement or financial irregularities. It's a long way from a Belgrade jail to The Hague and President Kostunica of Yugoslavia still opposes that.

Still, let's start with the good news: The man who started four of the wars in the Balkans in the last nine years is finally in jail, and that is a big step forward, but a lot more remains to be done.

CLANCY: When you say "a lot more remains to be done," you are speaking about holding him accountable to the war crimes with which he is charged?

HOLBROOKE: Milosevic should end up in The Hague. Yugoslav authorities should cooperate with the Tribunal. The prime minister of Serbia -- Prime Minister Djindjic was in Washington two weeks ago talking about this very issue. And I would underscore for your viewers around the world that what happened tonight is undoubtedly in part -- at a minimum in part -- a result of pressure put on Belgrade by the American Congress and resolutions sponsored by Senator Pat Leahy and other members of the Senate, which conditioned future American aid towards cooperation. This is not -- this is an example of the reach and influence of American leadership. It's a positive example, and we've taken a step forward.

On the other side, Jim, there are several other problems. No. 1, two of the worst of the war criminals, Mladic and Karadzic are still at large. One a hands-on murderer, the other the separatist who's still trying to undermine Dayton.

Secondly, as we speak, a fifth war has broken out in the Balkans and Milosevic had nothing to do with this one. The very people we protected and helped in Albania, in Kosovo two years ago -- the Albanians of Kosovo are now -- some of their cousins are leading a rebellion in western Macedonia which could split that country. It's a very dangerous situation, and one in which the United States must take a stronger leadership role in. And finally, unnoticed by the world press, the Bosnian Croats are now challenging the Dayton peace agreements for the very first time in the five years since they took place. They're obviously testing to see whether their new administration will look the other way if they try to split the country up. So even as we celebrate Milosevic's movement in the direction he so justly deserves, we need to face the fact that there are challenges all over the Balkans that the new administration must deal with.

CLANCY: Mr. Ambassador, I don't think anybody is challenging or getting confused about the notion that this arrest does not constitute the end of the story. As you pronounced, there, the litany of problems remain in the Balkans. But one has to ask, would you be in favor of him facing a trial in -- for these financial charges, corruption charges in Belgrade if it was a means to diffuse or pave the way towards his ultimate appearance in The Hague?

HOLBROOKE: Yes, I have no problem with that. But I think some of my friends in Washington may feel that doesn't go far enough. I would agree it doesn't go far enough, but let him be exposed in his own courts at first for what he did, let him be fully discredited among his own people; and that's a good enough start for me.

I want to stress something: This is a historic moment today and CNN is quite right to devote so much attention to it. But Milosevic is already entering history. He's a has-been. The future problems of the area, in Macedonia; the new Croat challenge to Dayton and the unresolved situation in Kosovo must be dealt with. And the other war, and particularly Karadzic must be brought to justice.

CLANCY: As you note there, no one can believe that it is over; and, in fact, as you said very clearly, Mr. Milosevic cannot be blamed for the conflict that's unfolding now in Macedonia between ethnic Albanians and the Macedonian government; but they are, in the worlds of one of the people that I interviewed once in the Krajina region of Croatia, they are all sons of Tito. Milosevic was one of them. It is the style governing that remains the same. We are seeing it in Mostar with the Croats that you mentioned.

HOLBROOKE: That's right, and I need to make a fundamental point to all your viewers about why this is an untenable situation. If any of the ethnic groups of southeastern Europe -- the Croats, the Serbs or the Albanians, or anyone else, tries to create ethnic boundaries for international states, it won't work because all the ethnicities of this region are mixed up.

Let's start with Albania: Albanians live in Albania itself, in Kosovo, in Montenegro, in Macedonia and last, but definitely not least, in northern Greece. Greeks live in southern Albania. If the Albanians continue to do what they seem to be doing, which is to try to create an organic, greater Albanian state, they will simply create more wars. And then the Hungarians will say, what about us. And the Slovenes will say, what about our brothers in northern Italy? And you will unravel these boundaries.

Now these boundaries, most of which were set at the end of World War I, 80 years ago, are indefensible in historical terms in many senses. Woodrow Wilson and his colleagues made some bad mistakes at Versailles in the name of self-determination. But any attempts to change the boundaries 80 years later by force, which the Serbs tried and failed at three or four times, and now appears to be happening in western Macedonia, will unravel the politics of the region.

They Albanians have a legitimate grievance in the Tetovo area, which you have reported on very well, but that grievance does not justify the use of force to settle it.

CLANCY: Ambassador Holbrooke, I want to go back to the main topic: the arrest of Slobodan Milosevic. And it may only be on economic charges, but I think you made the point yourself: By doing so, the government of President Kostunica there in Belgrade may well be paving the way for the takedown of Slobodan Milosevic, the discreditation of Slobodan Milosevic...

HOLBROOKE: Well, they've done that already, Jim. They took him down; in political terms, he is now finished politically, in my view. But the job is not finished in terms of justice. He needs to go to The Hague. And again, I think we should congratulate the Congress of the United States for laying out a situation which undoubtedly is the reason this happened tonight -- because President Bush has to make very important decisions in the next few days on whether to certify or not to continue aid to Yugoslavia.

So I think Milosevic is now fully discredited, or will be shortly, whether he's in The Hague or in a Belgrade cell. And what happens next remains to be seen; but politically, I really think he's over.

CLANCY: He's over, but the dispute with the U.S. Congress may not be over. How should the U.S. react to this? Should the funds be freed up? Is this going far enough?

HOLBROOKE: Well, I think you ought to interview people like Senator McConnell and Senator Leahy on that. They authored this very artful piece of legislation last year, and I congratulate them. My own view, for what it's worth, and I haven't talked to any of my friends in the Senate yet about this, is that in light of what's happened tonight, President Bush should certify, under the law, that enough progress has been made.

Because the law didn't say he had to end up in the Hague. In fact, it does not even mention Milosevic by name. But I think the president ought to certify, in the next two days, that Yugoslavia has made enough progress for him to extend assistance and vote for more through the World Bank.

This is pretty good stuff by any measure and it's a huge event in the history of the Balkans. It ends Milosevic as a public figure in my view, and I think the trial will show the Yugoslav people, if they try him on embezzlement, before he goes to the Hague, he will be discredited for having robbed his country blind, which is, I think, what happened -- he and his family and his cronies robbed Yugoslavia blind -- and then, fully discredited, he will, I hope, end up in the Hague.

But discrediting him is politically important and justifies President Bush extending aid to Yugoslavia on a continuing basis.

CLANCY: Ambassador Richard Holbrooke, our thanks to you for being with us, as always, on world views.

HOLBROOKE: My pleasure.

SESNO: I'm Frank Sesno in Washington. We're now joined by our senior international correspondent Christiane Amanpour. Christiane, joins us from London. Christiane, you have covered this -- these many wars -- and you have covered Slobodan Milosevic for quite some time. How is this likely to play in Belgrade and beyond?

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, it is likely to play in a very interesting fashion. Basically, back in September when the Yugoslavs, when the Serbians, went to elections, they rejected Slobodan Milosevic in an overwhelming fashion. And that was the first big signal that this regime pretty much had run it's course. And then, after that, they again put the Democratic parties into an overwhelming victory in the parliamentary elections.

And slowly, Slobodan Milosevic has essentially faded into an irrelevance on the international and on the domestic scene. And I think it's important to note that there has not been, yet, mass demonstrations in Serbia. There are a few handfuls die-hard supporters of his that gathered outside his house, but over the last few months, the people of Serbia have come to the realization that this leader was the one that was leading them backward and not forwards, leading them into their misery and not out of their misery.

And there was a very interesting poll in a Serbian newspaper, a magazine, a couple weeks or so ago, which basically said that, amongst those people polled, the majority thought that it was time that Slobodan Milosevic went to trial and accounted for his crimes, whether domestic or otherwise.

Now, having said that, there is no doubt that there is still lingering resentment about the way Serbia has been treated, lingering resentment about the International War Crimes Tribunal. But, in general, the mood has changed dramatically, according to many, many Serbian colleagues and friends that I've talked to over the last few months. The mood has changed dramatically since the election of Kostunica and the move toward democracy in Serbia.

And people simply want to get out of, what they call, the nightmare that they have lived through over the last 10 years. And To that extent, this what appears to be a logical follow-through of the political situation that has been playing itself out since Milosevic was voted out of office back in September, Frank.

SESNO: Christiane Amanpour in London. Thanks very much for joining us. Appreciate it.

We 're going to take a quick break, be right back. (COMMERCIAL BREAK)

SESNO: And we are tracking the story of the reported the arrest of Slobodan Milosevic, the former Yugoslav president, in Belgrade. We're going to go over to the White House now, to our correspondent Major Garrett.

Major, I'm told that you are hearing that Belgrade and Washington are now having some direct discussion on this topic and these rolling developments.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: That's right, Frank. CNN has confirmed through a senior administration official, there are conversations going back, and, administration official telling CNN, the White House is 98 percent sure that Mr. Milosevic has, in fact, been arrested.

The White House is waiting for absolute concrete confirmation of that and acknowledgement from Belgrade as to what judicial proceedings have taken place before issuing any official comment. Also,o the White House wants to wait for an official announcement from Serbia and from Belgrade about exactly what happened. That's partially a bit of diplomatic courtesy. the United States does not want to step to toes of the Federal Republic of Yugoslavia with this very important development. It wants to wait and make sure that they announce it officially, themselves, before responding.

Generally speaking, this administration official said, that if, in fact, Milosevic -- Mr. Milosevic -- is arrested, the administration would consider it a significant step forward, not only for the rule of law, but for the people of Serbia, and would also consider it crucial in its evaluation of whether or not it will certify the Yugoslav republic as cooperating with all of the various strictures laid down by the U.S. Congress, among them, arresting Mr. Milosevic, but also, moving toward Democratic reforms.

This administration official stressed, however, that merely the arrest of Mr. Milosevic would not be the only thing that would bring certification from this administration. Of course, that certification tied to an extra $50 million in U.S. aid to the Yugoslav republic, also their access to financial loans through the International Monetary Fund and the World Bank.

SESNO: Major, two points, very quickly. First of all, we were told by the Serbian deputy prime minister, unofficially, that Milosevic had been arrested, but he said the official word had to come from the Yugoslav government, itself. That has not happened. There has not been official word on that. And secondly, the certification you talk about, the ultimate aim of, at least a part of that process, is to see Mr. Milosevic at the Hague facing the United Nations War Crimes Tribunal for crimes against humanity, correct?

GARRETT: Correct. The White House is waiting for that official word from the Federal Republic of Yugoslavia and also it will debate, as will other European nations, the fate of Mr. Milosevic. There's clearly an international predilection to have him tried at the Hague. Kostunica made it clear in his campaign for the presidency of Yugoslavia, that he would like to see him tried only in Serbia.

SESNO: All right. Major Garrett at the White House. Our thanks, as well, to Andrea Koppel over at the State Department for her reporting throughout this afternoon as we've been tracking this story.

Christiane Amanpour and others, here at CNN, contributing to the story unfolding in Belgrade.

I'm Frank Sesno in Washington. We'll stay with this story throughout the night, but up next, "MONEYLINE."



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