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Political Backlash From Enron Collapse Could Affect 2002 Elections

Aired January 19, 2002 - 07:11   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.
CATHERINE CALLAWAY, CNN ANCHOR: The Enron mess could be a key issue in the battle of control of Congress in the November elections. Its political influence is already being felt at the GOP winter meeting in Austin.

Here is CNN's Candy Crowley.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN CORRESPONDENT (voice-over): Less than an hour after he took over the Republican National Committee, chairman Marc Racicot had a debut press conference. All but one question involved Enron.

MARC RACICOT, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Where I come from, people aren't quite as suspicious of one another. You tend to believe that regardless of what it is that you'll do, you'll act with ethical behavior.

CROWLEY: A close friend and key supporter of President Bush, Racicot is former governor of Montana. He left office a year ago, joined a law firm, and, among other things, began lobbying for Enron. He says he won't lobby for anyone while he runs the Republican National Committee, but he will still work for and get paid by the law firm.

RACICOT: There are some continuing, I believe, moral and ethical and contractual obligations that have to be fulfilled without causing any possibility of undivided loyalties.

CROWLEY: At the RNC winter meeting in Austin, some Republicans privately stew that it would be better if Racicot made a clean break of it with the law firm and accepted a hefty salary from the RNC -- not, they say, because they worry about Racicot's integrity or intent, but because they worry about this sort of thing.

TERRY MCAULIFFE, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: Here's Enron, major corporation, lied about their numbers, cooked the books, used wrong economic forecasters. The wealthiest people took the money, ripped off the corporation, and the people at the lowest side of the salary scale in their 401s lost all their money.

It sounds a little bit like the Bush administration economic policies.

CROWLEY: It's only a metaphor, but this is a critical election year, and Democrats, holding their own winter meeting, are pleased with any link they can make between the Bush administration and the Enron debacle.

But the president's chief political adviser, a former Enron stockholder, coolly predicts the oncoming story will leave no tread marks on the GOP.

(on camera): Are you worried about the appearance, the PR part of it?

KARL ROVE, BUSH SENIOR ADVISER: No. Look, people are who fair and people who are not quick to sort of make snap partisan judgments, and everything -- this will be just fine.

CROWLEY: The truth is, the impact of Enron on election year 2002 is not major, as Democrats claim, nor is it minimal, as Republicans insist. Until the story plays out, it is, in fact, unknowable.

Candy Crowley, CNN, Austin, Texas.

(END VIDEOTAPE)

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