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Are Media Handling the Enron Situation Responsibly?

Aired January 20, 2002 - 09:30   ET


HOWARD KURTZ, HOST: Welcome to RELIABLE SOURCES, where we turn a critical lens on the media. I'm Howard Kurtz.

Day after day reporters are doing combat in the White House briefing room over Enron, the first scandal or alleged scandal of the Bush administration. Journalists are digging into the relationship between CEO Kenneth Lay and President Bush, Vice President Cheney, and White House Economic Adviser Lawrence Lindsey, who was paid $100,000 for Enron consulting work.

Enron donated huge sums to the Republicans and lesser amounts to such Democrats as Joe Lieberman. And the press keeps demanding that White House spokesman Ari Fleischer release information on all Enron contacts with the administration.

Let's take a look at how he handled questions from Ron Fournier of the AP, and NBC's Campbell Brown.


RON FOURNIER, ASSOCIATED PRESS: Is the White House determining whether or not administration officials or White House aides have received any calls from Enron since the summer of 2001?

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: On any topic, on anything?

FOURNIER: I'm asking whether or not you guys are determining whether these calls were made. I'm not asking you...

FLEISCHER: These calls meaning which calls?

FOURNIER: I'm asking you whether or not, yes or no ...

FLEISCHER: You said "these calls." What -- describe the calls.

FOURNIER: Yes or not: Is the administration determining who in this administration got calls from Enron in the last six or 10 months?

FLEISCHER: About any -- six or 10 months.

FOURNIER: Only 2001.

FLEISCHER: About any topic or anything? The public wants to know that people here in this town are focused on the wrongdoing, where the wrongdoing occurs, and not engaging in wasteful fishing expeditions.

Campbell, go ahead.

CAMPBELL BROWN, NBC CORRESPONDENT: I mean, why not then just say OK, there's no there there. Let's just put it out here and end this so that we're not ...


FLEISCHER: You said why not put it out. Would you define "it"?


KURTZ: And joining us now Karen Tumulty, national global correspondent for "TIME" magazine and Dana Milbank, White House correspondent for "The Washington Post".

Dana Milbank, Ari Fleischer was taking a pounding there from the media mob. He even raised the question of what was the definition of it. Were the reporters just a little bit out of line?

DANA MILBANK, "THE WASHINGTON POST": No, I don't think they were out of line. They're demanding answers. Now the White House has no obligation to give answers to us. Now if their congressional committee is demanding the answers, and there are some in Congress beginning to demand all those very records that you saw Ron Fournier asking for there -- they're going to have to answer to that, but all he has to do is stand there in the podium as we abuse him, but he doesn't have to do anything.

KURTZ: Karen Tumulty, there was one briefing where Fleischer was asked 58 questions about Enron. And I wonder -- I mean is the press asking him and those in the administration to prove a negative? To say that no one at Enron called anyone, anywhere, at any time on any subject?

KAREN TUMULTY, "TIME" MAGAZINE: Yes and I think they are asking him to do that, and I think it's a totally fair question. I mean, the fact of the matter is -- the fact -- the basic fact of life in Washington and dealing with the Washington media is that the benefit of the doubt no longer exists.

It really hasn't existed since Watergate, and this administration is not only trying to prove a negative, but they're also trying to define what the question is. You know, is it whether they did anything to, you know, to save Enron. The broader question is well then, what did Enron get for all the money that it contributed, and that question is going to continue to be asked.

KURTZ: I can just hear people out there saying you arrogant, cynical reporters, what do you mean they don't get the benefit of the doubt? Why do you assume you Watergate-inspired, junkyard dogs that the administration did something wrong here. TUMULTY: Well I guess it's the -- it's the victory of experience. At some point, we develop a learning curve, and the fact is that usually in the past there has been something worth at least exploring and particularly in a case like this, where so many people got hurt.

KURTZ: When you write a story, as you did a couple of days ago, about all the administration officials, about 35 by your count, who either worked for Enron, got consulting money from Enron, owned Enron's stock or had some other connection, do you take heat from the White House?

MILBANK: Sometimes from the White House and certainly often from conservatives because we're writing about a Republican administration, and they want to say well why haven't I written about the same for the Democrats and Congress. Now, of course, I don't cover Congress, so I was just writing about the White House there. But...

KURTZ: The others have certainly pointed out that the Democrats have connections here.


MILBANK: And they do have an excellent point. This is a political scandal, make no mistake about that. I don't believe it's a Bush administration scandal. This entire town is just swimming in Enron money, and everybody's been tripping over themselves for years to do favors for this company. That's a hell of a scandal.

KURTZ: Well you talk about conservative criticism, but it also seems that some of the conservative commentators who were all exercised about the Clinton fund-raising scandals, which I happen to think was the most serious of all the Clinton scandals, kind of rushing to Bush's defense here and saying well, money doesn't really buy any access, and they really didn't do anything for Enron.

MILBANK: It's a shame that that's happening, but the truth is you know with the, say the Marc Rich pardons, that was able to allow campaign finance people to get their measures through the Senate, and I think it's a pretty safe bet that the current Enron scandal is going to get that same measure through the House. So it does have some effect on these people.

KURTZ: Karen Tumulty, why wasn't Enron a bigger story for the media before the questions about calls to the Bush White House were revealed? And this is the seventh largest corporation in America, went bankrupt, top executives, at the very least involved in some pretty questionable financial behavior, selling their own stock while telling the employees the stock was going to go up. The stock went down. A lot of employees lost much or all of their retirement savings, and I'm not saying this wasn't reported, but it was largely treated as a business story. What was the matter?

TUMULTY: Well there were a number of things going on, and as you -- as you suggested, it isn't that it was that complicated. There were some pretty straightforward things going on here. But there was also a war going on, and the fact is that it is easier to put a front- page headline for an editor on something that has political intrigue on top of it. It isn't like the Enron story, by the way, didn't make the front pages. But it's always going to be easier to get political intrigue on a front page validly or not, than financial intrigue.

KURTZ: But that would seem to suggest to certain myopia on the part of the media.

MILBANK: Well it is true that ...

TUMULTY: What a suggestion.

KURTZ: I'm going out on a limb here.

MILBANK: We're here. We're part of the scandal industry here in Washington, but you know I think what happened, I was in the briefing room the day they talked about -- Ari Fleischer first mentioned on yes, there had been a couple of phone calls ...

KURTZ: Treasury secretary -- Commerce secretary.

MILBANK: And that suddenly exploded, and the reason why is you look back at, well it's not necessarily anything wrong with it, but it looked like they were hiding that for a long time, and suddenly that sent everybody's spidey sense tingling and they said wait a second, there must be another smoke, there's fire. It was the whole idea of secrecy surrounding this and just about everything else in the Bush administration, and suddenly this drips out, and it made everybody suspicious. So in a way, it -- the earlier...

KURTZ: Well, yesterday you wrote a story about Vice President Cheney having interceded with the Indian government on the behalf of an Enron project in that country. You could argue that that's routine, that the administration has always tried to help big corporations do business abroad, but why is this coming out one piece at a time, one dribble at a time. Isn't that creating a political problem?

MILBANK: It certainly is. The only reason that came out is because our newspaper and others put in a freedom on information request. They weren't volunteering that information, and you get this, and lo and behold, Enron was trying to sell off this Indian venture for $2.3 billion at exactly the time they needed all this cash because they were going down. That may be coincidence, but the problem is when you line up the events like that, it doesn't look good, and that's why the White House is facing so much pressure to put out more information.

TUMULTY: And what this administration has not learned in its dealings with the media is what the Clinton administration finally learned the hard way on the campaign finance scandal, which is that you have to get ahead of your own bad news, because you've got to get stuff out there and get your stamp on it, and people like you know Lanny Davis in the Clinton White House got very, very good at that. And you can then control the arc of the story a lot better. KURTZ: You've preempted my next question, which is going to be where is the White House world? Where are the people who are trying to A, deflect the negative questions, keep it away from Ari Fleischer so he can talk about what he wants to talk about. There is no Lanny Davis in this administration. They don't seem to feel they need one to deal with the press.

TUMULTY: And they're congratulating themselves, in fact, on the fact that we don't have a war room. We're not like Clinton. I think that they have yet to understand, you know, the life that this kind of story can take on, and the fact that the questions don't stop.

MILBANK: I think that's right, and they've said to us, they don't need to chronicle the information. We are a straight arrow in this administration. We have not done anything wrong. We're not going to go and find out all these phone calls that were made. Now this may be entirely true. Nobody has any reason to believe they're not a bunch of straight arrows, but the fact that they're not going to chronicle that information means they're going to keep getting hammered, not just by the press, but more importantly by lawmakers and Congress.

KURTZ: But Karen Tumulty says that the press doesn't give the administration the benefit of the doubt, and I wonder whether or not, you know, a lot of people -- President Bush right now is a lot more popular than journalists, not just because of the war, although I'm sure that's played a role. And so a lot of people are going to be listening to this Dana Milbank and saying you people are just scandal obsessed.

MILBANK: Presidents at their lowest popularity are lot more popular than those of us in the press, and we get beaten up by all sides. We got beaten up during the Clinton scandals. We got beaten up for -- during the Gore fund-raising issues. We're going to get beaten up now. But this is the very heart of what our job is. It's not to be popular. It's to ask these questions, to be a watchdog of our government.

KURTZ: Well when we come back we'll beat you up some more since you seem to enjoy it. And we'll ask the question how much does the public care about Enron. We'll show you some surprising figures, and what about that other story that dominated the news for four months.


KURTZ: Welcome back to RELIABLE SOURCES. Not everyone is utterly fascinated by the Enron story. A research center poll found that 51 percent of Americans are very closely following the war in Afghanistan, 30 percent the health of the economy, 20 percent the trial of the hockey father, and just 10 percent very closely following the Enron story.

And the verdict was mixed in our e-mail bag. Writes Dan from Santa Barbara -- quote -- "the media can't over cover this story. There may not be any sex, but it's got everything else. Let's just encourage the media to forge ahead". Debbie (ph) from Pittsburgh, Texas disagrees. "The press coverage on the connection of President Bush and the Enron collapse has been -- has bordered on slander. Contrary to your irresponsible reporting, there is no there there".

But Lou (ph) writes, "are you kidding? It's about time you went overboard with it".

Well Karen Tumulty, those figures seem to suggest that Enron has become a media-obsession, but not exactly what people are talking about around the water cooler.

TUMULTY: Well, but that is not necessarily to suggest that a month from now it's not going to be, and it's -- it goes beyond even what's going on in Washington. I think every American who has a 401(k), at some point, is going to realize that they need to figure out what's going on with their own financial future, and there's going -- this is going to be followed by not only a congressional investigation, but hopefully an effort in Washington to make it possible that people won't be this exposed in the future. It's as substantive as a story could possibly get.

KURTZ: But it is also complicated in the sense that, you know, when you pick up the paper everyday, you see these revelations about well, an attorney for Enron contacted another attorney who said that the off-the-books partnerships might not have been legal if it was known at the time. Some of this almost reminds me of Whitewater in that for the average person is not spending a lot of time pouring over details could be kind of impenetrable.

MILBANK: It's hopelessly complicated, but it has issues that are very easy to understand. Big corporation was abusive, seemed to have ties to the government, the government fell down on the job of monitoring this company. It has the big executive versus the little guy losing his pension. Now that something people on Main Street can relate to. Obviously the average American can not understand exactly how the derivative's market work, and I think the average journalist probably can't either.

KURTZ: Well I think that was part of the problem, which was that the way that Enron operated and made money, or as it turned out, didn't make so much money was so complicated that even many business reporters had a hard time and certainly even Wall Street stock analysts had a hard time with it. But the -- you know what's really turned this is into a front-burner story has been that notion that the Bush administration did something wrong, did something questionable, took a lot of money from these people, and somehow helping them out, but there really isn't clear evidence of that, is there?

MILBANK: Something wrong in the legal sense, no, there really is not, and I think there may be a good bit of evidence to the contrary. And again, I'd say it's not the Bush administration, it's our entire government has taken a great quantity of money from this company, and it looks awful. It doesn't mean that anybody broke any laws. It, perhaps, looks awful because all of this stuff is perfectly legal. KURTZ: In fact, among those who got Enron money is Paul Krugman, a financial columnist for "The New York Times" who disclosed that he had been on an Enron Advisory Board, essentially got $50,000. In his defense, he's written about -- he's written critically about Enron, but it does show you the tentacles of this corporation.

MILBANK: It's absolutely everywhere. The gentleman from the GAO and Congress had worked for Arthur Andersen, and you had, in the Justice Department, you had John Ashcroft disqualify himself -- now his deputy's in charge. Well you know he worked for a law firm that represented Enron, and you can just, you know, you're only a couple of steps removed from, I'm sure, you know, Howard Kurtz has got some Enron stock.

KURTZ: I don't even think any of my mutual funds own any Enron stock.

But is there a sense here, Karen Tumulty, that the press is now taking the sort of everyday practice -- the everyday intersection of money and politics, and now trying to use the Enron story as a way to pump up the John McCain story that had faded, which is, of course, campaign finance reform.

TUMULTY: Absolutely, but once again, I mean the -- probably the most Washington -- the overused Washington cliche is the scandal is always what's legal, and I think that as many times as we can put a light on that, the more times the better, the more ways the better. People need to understand how their government operates.

KURTZ: But some people will say the media have an agenda here. They want campaign finance reform and therefore, they're taking this, which may not even be a political scandal, it certainly is a financial scandal, and using it to push an agenda.

TUMULTY: But the people who don't want campaign finance reform, then argue that the bright light of exposure makes campaign finance reform unnecessary so it becomes a circular -- a circular argument.

KURTZ: OK. Do we have Jim Glassman? OK, so I'm getting some conflicting advice here. Let us take a look at something, someone else was in the news this week on a story that we used to be talking about quite a bit on this show. Let's take a look.


GEN. TOMMY FRANKS, HEAD OF U.S. CENTRAL COMMAND: When I think all of us say that we don't know where bin Laden is, I think that's -- I think that's a true statement. We really don't know where he is, whether he's in Afghanistan, or whether he may have left. But we know this, the world is not a large enough place for him to hide.


KURTZ: And joining us now from New Orleans is Jim Glassman, a "Washington Post" investment columnist, and author of "The Secret Code of the Superior Investment", also the host of Jim Glassman, is the press going a little overboard here in pumping up the Enron story at the expense of say the war in Afghanistan?

JIM GLASSMAN, "THE WASHINGTON POST": Well the short answer, I think, is yes, but the press is also falling down on explaining some very important aspects of the story, such as the nature of this 401(k) plan, and the fact that gosh, employees really were not locked in, as they said. Also I still don't know, as somebody who reads the press assiduously, exactly what happened to Enron. What did it do wrong? Why, in fact, did it start losing lots of money? I certainly understand that there were deceptive practices going on, but beyond that, I don't know very much.

KURTZ: Why has there been, Jim, this effort to portray the Enron employees as innocent victims...

GLASSMAN: Because it's a -- it is a wonderful story, Howard, the notion that the rich executives were making tons of money by selling their stock while the poor employees were locked in. That's -- that is absolutely, at this point, not proven at all, and in fact the employees were not locked in into any greater extent than the executives.

Let me add one other thing. There's a very important aspect to this story, which is what did the Bush administration do in response to this tremendous contribution? So far, all we know is that they rejected the request for a bailout, number one, and number two, in the single most important regulatory move that could be done, according to Enron officials themselves, which was to pass, to endorse the Kyoto agreement, the Bush people turned them down on that too. That was the story that was in "The Washington Post" that I saw nowhere else -- an amazing story about how Enron was pushing ratification of Kyoto and Bush saying no, we don't want that.

KURTZ: So in your view, this whole media template implastment (ph) that because these people gave a lot of money to George W. Bush, a lot of money to people who now are in the administration, therefore they got something special in return, some special access, perhaps some favors. You think that that is all just sort of hot air being pumped out by ...

GLASSMAN: No I don't.

KURTZ: ... scandal-hungry journalists.

GLASSMAN: No Howie, I don't think it's hot air. There's no doubt that they got access, absolutely got access, and everybody in this town, in that, in your town -- I don't know about New Orleans. New Orleans is ...


GLASSMAN: Clean place when it comes to politics. But in Washington clearly contributions by access. The question is what else did they buy, and I think it's great for reporters to continue to press to find out what else it's bought. What's so interesting about the Enron story to date, now it may change, is that for all this money that was given, not just to Republicans, but $640,000 to Democrats, money to Paul Krugman, "The New York Times" columnist ...

KURTZ: Right.

GLASSMAN: ... all this money, what have they gotten out of it? What did Enron get out of it? As far as I can see, they sure didn't get very much.

TUMULTY: I think that's not true. They got a lot. They got who they wanted at the top of regulatory panels. They got a very favorable White House task force, and that too is coming out in the stories as the press, I think, is beginning to broaden the question from what did they get as they were failing to what did they get as they were succeeding. They got a lot.


GLASSMAN: Karen, they didn't -- they didn't get who they wanted in regulatory panels. This is a Bush administration. President Bush made it very clear before he was president during the election that things were going to change when it came to energy policy. I mean Enron didn't appoint the key people in the energy environment. Clearly, they were in tuned in some areas with the Bush administration. They were completely at odds in things like cap on trade on admissions, C02 emissions. Enron wanted to trade admissions. That's what -- they thought that was the single biggest thing they could make money on, and the Bush administration turned the debt.


GLASSMAN: All I'm saying is keep pushing, but at this point there really isn't anything. In fact, it's the opposite.

KURTZ: In about 10 seconds, what about the war? Is it fading as a story?

MILBANK: What war was that Howard? It'll be back when there's more developments in the war. We're in a lull here and that gives us ...


MILBANK: ... time to...

KURTZ: Well two people were killed today, so obviously Afghanistan is not over. Jim Glassman, New Orleans, thank you for joining us, Dana Milbank...

GLASSMAN: Thank you.

KURTZ: ... Karen Tumulty, thanks very much. When we come back Bernard Kalb's "Back Page" on how newspapers get the final word in your obituary.


KURTZ: Time now for "The Back Page." Here's Bernard Kalb. (BEGIN VIDEOTAPE)

BERNARD KALB, CNN CORRESPONDENT: It's a shame that someone has to die to make the point, but I suppose that's life. And the point that some of the media's best work can be found in telling the story of people who have been with us for years and have now moved on to other worlds.

(voice-over): In journalistic lingo, these stories are called obits, short for obituaries. And every day you meet people you have never met before, of 1,000 different backgrounds, different professions, of lives cut short one day in September, and of lives that ended more normally one at a time.

There was a first-rate reminder the other day of the way an obit can link past and present, give us a cram course in our own history. Cyrus Vance was President Carter's secretary of state in the late '70s. The obit deals with Vance's role in normalizing relations with China, arms control with the Soviets to search for peace in the Middle East, a new future for the Panama Canal. In real life all of this took years. Here it is all in one piece, how American foreign policy changed. And there's also this reminder of the rare ethical courage Vance displayed, resigning his job over a matter of principle.

No surprise, then, that those who get the biggest obit spreads include scandal-painted politicians and high-voltage celebrities. And on that basis alone, according to one survey, Nixon, Jackie, and Old Blue Eyes emerge as the top three most famous people of recent years.

A good obit can take lots of journalistic digging, sometimes including an advanced chat with a VIP on the way out. For example, in an interview for this article, it says here, it's the last chance for someone to go public with a long suppressed opinion, to give one's image a final polish.

The dot-com world has also caught up with obits and of course, there's one obit coming up Sunday that's going to stop the presses. It will reveal the identity of that mystery person known as "Deep Throat", the source of so many Watergate exclusives by "The Washington Post," the name expected to be revealed when "Deep Throat" takes one last breath.

(on camera): So in the end, it comes down to this: Thanks to media obits, death brings history back to life.


KURTZ: Bernard Kalb with "The Back Page."

Well, that's it for this edition of RELIABLE SOURCES. I'm Howard Kurtz. Join us again next Saturday evening at 6:30 Eastern for another critical look at the media.




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