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How Will the Mideast Respond to Bush Speech?; How Can the Crime Rate be Lowered?; Is Martha Stewart an Example of CEO's Excesses?

Aired June 24, 2002 - 19:00   ET


ANNOUNCER: CROSSFIRE. On the left: James Carville and Paul Begala. On the right: Robert Novak and Tucker Carlson.

In the CROSSFIRE tonight: All he is saying is give peace a chance.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My vision is two states living side by side in peace.


ANNOUNCER: Tonight: Will anybody listen?

The crime rate is up. And with the FBI chasing terrorists, who's going to catch the rest of the crooks?

Her stock is like a fallen souffle.


UNIDENTIFIED FEMALE: The vast majority of people who know the brand are consumers, not investors.


ANNOUNCER: Why are do-gooders making Martha Stewart a poster girl for CEO excesses?


From the George Washington University, sitting in on the left, Dee Dee Myers. And on the right, Robert Novak.


Tonight, crime goes up and the fingers are pointing. Also, why are so many people picking on poor Martha Stewart?

But first, President Bush today came out in favor of a Palestinian state. But he conditioned it on several big ifs. The U.S. will back a Palestinian state if they renounce terrorism, if they adopt a constitution, a real parliament, a real course (ph), and perhaps the biggest if of all, if the Palestinians get rid of Yasser Arafat.

Is the Bush peace plan a realistic vision for the future, or mission impossible?

In the CROSSFIRE tonight, Democratic Congressman Robert Wexler of Florida, and Hassan Abdel Rahman, the chief PLO representative for the United States -- Dee Dee.

DEE DEE MYERS, CO-HOST: Well, I assume everybody saw the president's speech today. And let's take a look at one of the most important bites, I think the lead news bite from that speech right up there.


BUSH: Peace requires a new and different Palestinian leadership, so that a Palestinian state can be born. I call on the Palestinian people to elect new leaders.


MYERS: There it is Mr. Rahman, Yasser Arafat has to go. That's basically what the president said. It's the way it's being interpreted by the White House, by the Congress, by the media, by the Israelis.

How do Palestinian feel about that?

HASSAN ABDEL RAHMAN, CHIEF PLO REPRESENTATIVE TO U.S.: (UNINTELLIGIBLE) President Bush, he did not mention Yasser Arafat once.

MYERS: But that's what he meant.

RAHMAN: I don't know whether -- he could have said it...

MYERS: The White House is basically saying that's what he meant.

RAHMAN: What he is saying, that the Palestinians should have free democratic and open elections, and we are committed to that. We want a democratic election. I assume that President Bush will not also want to decide the outcome of those elections before they are conducted.

MYERS: But it sounds very much like if there were an election and Yasser Arafat, who's already been once elected by the Palestinian people, was to be elected again, that the United States would not do business with him.

RAHMAN: I don't know. I didn't hear President Bush saying that. We are committed to a democratic process. But President Bush was very clear about the situation of the Palestinian people and their occupation. He said it is untenable, it should end; and I believe that's what we need to focus on today. NOVAK: Congressman Wexler, you and many -- and your many colleagues on Capitol Hill who, like you, are unconditional supporters of Israel were very worried about this speech because you were afraid that the president was going to take a even-handed position.

Now I think you're absolutely delighted because he has set up so many hoops that Mr. Rahman's Palestinians have to jump through. They have to do this, they have to do that, they have to elect somebody other than Yasser Arafat. And I don't know if they'll do that; that it's very unlikely that even in your long congressional career, you're going to see a Palestinian state if those requirements hold. Isn't that correct?

REP. ROBERT WEXLER (D), FLORIDA: No, I hope not. I hope that what President Bush has done is he has presented a bold plan. He has laid out the case for why the Palestinian people deserve a state, but he's also laid out the case what they need to do in order to get it. And he has said unequivocally, you're not Palestinian people, going to get your state by the use of terrorism. You will get it by electing a leadership that is not tied to terrorism, a leadership that...

NOVAK: That means not Arafat.

WEXLER: That's right.

A leadership that is not -- that has a market economy so we can have a vibrant financial situation, a new constitution, a state the whole world can embrace. And I hope that what that means is a Palestinian state shorter rather than longer, but a demilitarized state, one that can be trusted.

NOVAK: Congressman, the Israeli position, which the president has embraced, is that you can't have a Palestinian state until terrorism ends. The people who are the terrorists are Hamas and other groups.

Hamas put out a statement today saying they're going to accelerate the suicide bombings. So that's a catch-22 that President Bush has bought into. He is saying that we can't have a state until they end terrorism, but the terrorists, the Hamas, they don't want a Palestinian state. They want the destruction of Israel, so they'll continue the terrorism. Isn't that correct?

WEXLER: Oh, Hamas definitely does want the destruction...

NOVAK: So how do you...

WEXLER: ... of Israel.

NOVAK: ... how do you stop...

WEXLER: The problem is that in the last 18 months it hasn't been just Hamas that has committed terrorist acts...

NOVAK: But what do you do about Hamas? WEXLER: ... but it's also been al Aqsa Brigade. It's been the security forces of Arafat himself. Mr. Arafat has been indicted in the conspiracy of terrorism.

NOVAK: How do you stop Hamas?


WEXLER: The issue -- the issue is not just Hamas. The issue is the Palestinian Authority.


WEXLER: I'll tell you how you stop Hamas, Bob. You have a Palestinian Authority who's willing to take control of its own people and its own land. And until they do, that's what the Israelis have to do, and that's what President Bush recognized today, that Chairman Arafat can't be complicit with Hamas.

MYERS: Well, it's not ending terrorism, although I see that as a huge precondition. All of it is precondition on steps by the Palestinian people. This is not a parallel process the president outlined today.

It's a first-things-first process, which is that the Palestinians confront terror, stop terror, confront corruption, build new institutions, new security arrangements, then we'll move forward with the provisional -- interim state.

RAHMAN: You know, with all due respect to President Bush and what he said, the problem is the Israeli occupation of the Palestinian territories. You have...

MYERS: But that's not going to end until after...


RAHMAN: But this has been going on for 36 years, before even President Bush became governor of Texas. He cannot come today to tell the Palestinian people what to do only without having to deal with a situation that has kept the Palestinian people for 36 years and the occupation and the Israeli official terrorism conducted by the Israeli army.


RAHMAN: I am listening to the congressman speaking about what the Palestinians need to do. But he's not talking about the hundreds of thousands of Jewish settlers who moved illegally into the Palestinian territories, where they were paid for by taxpayers' money that the congressman voted for in the Congress.

He needs to do things regardless of what President Bush say or he does not say. There is a situation on the ground there that is grinding the Palestinian people, that is destroying the Palestinian people. If they... (CROSSTALK)

RAHMAN: ... were concerned about the Palestinian situation, why Israel would destroy the roads, the telephone system, the electricity, the schools?


WEXLER: The president was very clear in saying that there had to be stopped...


RAHMAN: Regardless of what the president...


WEXLER: ... there had to be...

RAHMAN: ... said I want your opinion, not the president's opinion.

WEXLER: Yes, the president was very clear in saying that Israeli settlements had to stop. I agree with the president.



RAHMAN: Are you going to vote in Congress against Jewish settlements in the Palestinian territories?

WEXLER: And what needs...

RAHMAN: Are you going to vote for that?

WEXLER: ... what...


WEXLER: That is American law that I support.


WEXLER: That is American law and I support it.

RAHMAN: I'm asking you, are you going to...


WEXLER: The issue is...


WEXLER: Mr. Rahman...


RAHMAN: Are you going to vote...


WEXLER: You asked -- you talked about the so-called occupation. The Israelis would like nothing more...


WEXLER: ... they would like...


WEXLER: ... they would like nothing more -- it's not an occupation when you removed yourself from it and you had to go back.





WEXLER: Because there was...


WEXLER: ... there was intense suicide...


WEXLER: ... attacks.


NOVAK: All right, all right, all right, let's calm down for a minute.


NOVAK: Let's put up on the screen exactly what President Bush said as his condition on the Israelis. Let's listen.


BUSH: As we make progress toward security, Israel forces need to withdraw fully to positions they held prior to September 28, 2000 and, consistent with the recommendations of the Mitchell Committee, Israeli settlement activities in the occupied territories must stop.


NOVAK: Now Congressman Wexler, to have peace, wouldn't it be advisable -- I assume since you're supporting the president's position, you support what he said.


NOVAK: Wouldn't it be a good idea that the Israeli forces withdraw now to those positions and that they stop the settlements now so that you have a certain balance, the demands being put on both sides are equal.

They get rid of Arafat. They demand a new system, and here you have Sharon moving back. Why not do both? Why not have it simultaneous?

WEXLER: Bob, have you forgotten what happened last week? Have you forgotten all the children driving to school to only have their bus blown up? The Israelis reoccupied certain towns because the terrorism, the suicide bombings did not stop.

As soon as they stop -- as soon as the Palestinians reform their leadership, the Israelis will withdraw as the president stated today to those guidelines, and the president is being entirely reasonable. But to ask the Israelis to unilaterally put up their hands, which they have done many times and expect the nonexistent Yasser Arafat to stop terrorism, how many more Israelis have to die?


NOVAK: You have always struck me as a liberal humanitarian person. I'd like to get your reaction -- I know what your reaction is to the murder of Israeli children by these killers. What was your reaction to the murder of Palestinian children by the Israeli defense force a few hours after a Palestinian gunman killed an equal number of Israeli children?

WEXLER: It is horrifying when any civilians lose their life, any innocent civilians, whether they be Israelis, Palestinians or anyone else.

But there's a huge difference. The Palestinian suicide bomber purposely attacks civilians, purposely attacks children. The Israeli army does not purposely attack civilians.


WEXLER: A mistake was made...


WEXLER: Did the Israeli army say they made a mistake...

RAHMAN: Let me respond to that.

WEXLER: ... yes or no?

RAHMAN: Let me respond...

NOVAK: Go ahead. RAHMAN: You have 450 Palestinian children school-age were killed by the Israeli army. Is this an accident? You have 3,000 Palestinian men and women killed. Is this an accident? You use Apache helicopter...


RAHMAN: Is this an accident? Come on congressman.


WEXLER: Are we, the United States...


RAHMAN: Let's be serious...

WEXLER: That's right...

RAHMAN: ... and let's have equality between the Palestinian life and the Israeli life.

WEXLER: And there -- and there is.

RAHMAN: Don't make Israeli life...


RAHMAN: ... worth more than Palestinian life...

WEXLER: And I would never...

RAHMAN: ... because then you lose...

MYERS: Mr. Rahman...


RAHMAN: ... the moral ground in which you are standing.


WEXLER: Agreed...


MYERS: But that's a good question...


MYERS: ... the moral ground, what is the Palestinian Authority doing, and what have they done to end terrorism? As the congressman pointed out...

RAHMAN: We are trying...

MYERS: ... the bombing has not stopped.

RAHMAN: ... our best, but we can...

MYERS: It's not good enough.

RAHMAN: ... not -- we cannot do much when our country is occupied, when the Israeli army is in control.

You know there are 50,000 Israeli soldiers today in the West Bank and Gaza. There are hundreds of tanks...

MYERS: But what...

RAHMAN: ... and Israel -- and with all this army cannot protect Jerusalem. You want Yasser Arafat, who is in prison in Ramallah, to protect Jerusalem for Israel.

Come on, let's be serious.


WEXLER: And just days ago...


RAHMAN: Let's be serious.

MYERS: We want him to take some action.

RAHMAN: He puts people in prison. He -- but when his people are all in prison, when Yasser Arafat cannot leave his compound, he cannot...

MYERS: He didn't...

RAHMAN: ... save Tel Aviv.


RAHMAN: Tel Aviv can be saved when the Israelis move their troops and their settlers out of Palestinian territories.


WEXLER: And just -- and just days ago the Israelis found yet more suicide belts with explosives not out in the street, but in...

RAHMAN: And I assure you...

WEXLER: ... Yasser Arafat's offices.

RAHMAN: ... there will be more. I assure you...

WEXLER: In his offices...

RAHMAN: ... there will be more. If is continues its brutality against the Palestinians, you will have more.

WEXLER: So you're justifying...

RAHMAN: Because Israel...

WEXLER: ... suicide bombing.

RAHMAN: ... not justifying. Israel, through its brutality, is creating anger and hostility from the Palestinians.

NOVAK: One more -- I have one...

RAHMAN: Come on.

NOVAK: ... more question.

WEXLER: Bob, you talk about people that are unfortunately killed in a military conquest. We, the United States...


WEXLER: ... have every -- have every right to be in Afghanistan. Does that mean that every person who died in Afghanistan is a result of...


RAHMAN: There's a difference between Afghanistan and the West Bank.

NOVAK: I think you...

RAHMAN: America is not building American settlements in Afghanistan and is not stealing Afghani land, and it is not occupying Afghanistan. Taliban was conducting an act of aggression against the United States. Israel is occupying Palestinian territory.

WEXLER: And why did they occupy...


WEXLER: ... in '67?


WEXLER: Was Israel attacked in '67?


RAHMAN: By whom, by the Palestinians?


RAHMAN: Come on, let's not...

WEXLER: By actually several Arab countries. (CROSSTALK)

RAHMAN: The country that attacked you made peace with, Egypt and Jordan. What are you talking about?


NOVAK: We're out of time.

RAHMAN: Let's not turn history upside down. Be honest to history.


MYERS: All right...


WEXLER: You have an opportunity Mr. Rahman...


MYERS: ... we're -- that this debate is going on long beyond the segment, but we are out of time. Thank you both for being with us.

Next in the CROSSFIRE, why are the bad guys winning? We'll look at why the crime rate is up for the first time in a decade.

Later, Martha Stewart's recipe for trouble, or at least a lot about bad publicity.

And you don't have to wait until 8:00 for Connie Chung. We'll welcome her to CROSSFIRE, and she'll tell us about her first guest in just a little bit.


MYERS: Welcome back to CROSSFIRE. CNN's Connie Chung will be joining us before the half hour.

But first, crime takes a bite out of us. The FBI reports the nation's overall crime rate is up for the first time in a decade, led by jumps in murder, robbery, burglary and car theft. More bad news: It isn't just in the big cities; crime is up in the suburbs too.

To help us finger the culprit, please welcome Philadelphia Police Commissioner John Timoney to the CROSSFIRE. He's now CEO of Beau Dietl & Associates. He joins us from New York -- welcome.


MYERS: Good.

NOVAK: First, Mr. Timoney is the former police commissioner of Philadelphia. TIMONEY: That's right.

NOVAK: Glad to have you with us, commissioner. Commissioner, it is not -- it doesn't take a great investigator or a detective to find out why the crime rate is up. Crime rates always go up in recession, don't they?

TIMONEY: That's true. But the question is: Did it necessarily have to go up last year? If you look, if that was the case, it would go up evenly across the board, and it didn't.

For example, it went over -- in the three regions, the South, the West and the Midwest -- it went up. But the northeast driven largely by New York, Philadelphia and Baltimore, the crime went down, including the violent crime.

NOVAK: Why is that?

TIMONEY: Well I think, you know, there's a thing called the comp-stop (ph) process, where commanders are brought in on a weekly basis. It was something we instituted in 1994 in New York. It's since been instituted by me in Philadelphia and by Eddie Norris in Baltimore, where these weekly meetings are held and they go on for three or four or five hours where commanders are grilled. They're held accountable for the crime in the area, and it's a day-to-day focus, hour-to-hour focus on crime.

And in those cities -- now look at New York, this is nine years in a row it's going down, while other cities saw it go down. For example, Los Angeles in the last three years has been up for a whole variety of reasons.

MYERS: Now when -- to get political, what you always do here on CROSSFIRE, when Bill Clinton was president, he instituted...


MYERS: ... a program to put 100,000 new police officers...


MYERS: ... on the street and surprise, surprise, crime went down. Now the Bush administration wants to cut funding for that program by some 80 percent. Won't that just make things worse?

TIMONEY: Well, there's a few things that'll make it worse. That will, I think, in the long run. But there's also the issue of terrorism.

The FBI is now getting out of the game of bank robberies, the drug interdictions, gunplay. All that where the feds step out, the locals have got to pick up that in addition to picking up their responsibilities with terrorism.

And so, for example, I know in New York and Philadelphia, the big cities particularly on the East Coast, quite literally hundreds of police officers are being diverted away from regular patrol to deal with the issue of terrorism at central locations, signature buildings, a whole host of things.

MYERS: So what do you need? I mean, what is it going to take to bring the crime rate back down, at least start it moving back in the...


MYERS: ... right direction?

TIMONEY: Well I think you need more...

MYERS: ... from the federal government?

TIMONEY: ... police officers. You do need help from the federal government. You know, I've said from day one, I testified before Congress about six or seven months ago that if you view local police as the first line of the homeland defense, that they need additional resources. They need more money to hire more police officers, more training, more equipment and things of that nature.

And so myself and the 52 other major city chiefs argued before Congress for additional money, and now we have a situation where some of it may be actually cut back. And I think right now that's short- sighted.

NOVAK: I was disappointed that, commissioner, that Dee Dee brought up something from her old boss Bill Clinton, of course...

MYERS: ... shocked.

NOVAK: ... of course, 100,000 cops were not put on the streets.


NOVAK: But this was supposed to be a temporary program to tide over a certain period. You can't...


NOVAK: ... say that the increase in crime is due to discontinuing a program into the future that...


NOVAK: Go ahead.

TIMONEY: Right. You're absolutely right.

No, I was talking about is under horizon. There were some dark clouds on the horizon. So, for example, if you look at New York City, two years ago, a year-and-a-half ago, it had over 40,000 police officers.

I just looked at the numbers today. It's under 37,000 and dropping. Not only have they not hired, but they're having a difficult time getting people to come into the police service, not just New York, Philadelphia, Los Angeles, major cities across America because they don't pay police officers enough salaries, are having a real difficult time recruiting.

NOVAK: Isn't that really a local problem, though? I mean, police has always been local in the whole 200-year history of this -- of this program, this little tiny...


NOVAK: ... amount that we're talking about by the federal government is a drop in the bucket. This is something that the local citizens are going to have to say...


NOVAK: ... do we want to have policing or do we not?

TIMONEY: Right. And you're right, it is a local program. But even a guy you may have admired, I'm not sure, Richard Nixon, was probably the best president for law enforcement.

He created the LEAP (ph) program that sent people like myself through college where the federal government paid the college expenses. It was like the GI bill.

NOVAK: I have to -- I have to disillusion you, I'm not a Nixon...


MYERS: Not now anyway. But you know -- but commissioner, I find it interesting that in the -- in the wake of 9/11, where a lot of police officers lost their lives, who were injured, and certainly the ones that were working -- worked many, many hours, but focused around the southern end of Manhattan -- and yet crime went down. There had to be less patrolling, longer response times to crimes in other parts of the city.

What happened? How did New York's crime rate go down under those horrible circumstances?

TIMONEY: I think a variety of reasons. I also think the city, if you'd been here at the time, was really in shock, from coming out, and so there was -- there was a bit of a lull, if you will, in a crime decline the first two or three weeks, but it quickly picked up the latter part of 2001.

As a result, they wound up redeploying additional officers back out to the neighborhoods. And by the way, there was an awful lot of overtime spent augmenting those patrols.

NOVAK: Commissioner...

TIMONEY: Yes. NOVAK: ... there has been a lot of complaints by local police authorities for a long time that the FBI did not share information. They were the imperialists in Washington, and not dealing with the peasants.

Since 9/11, has that changed?

TIMONEY: Yes, I think you and I had this discussion shortly after 9/11. And I think -- I think it really has changed. They're trying their best. I know Bob Mueller -- I've met with him on numerous occasions. He's a serious man trying to do the right thing.

But you know, it's a cultural thing. Not just the feds, but even local law enforcement. There's always a resistance to share information. You get these turf battles. But you know, after 9/11, all those -- all those things should have gone out the window and put the egos aside, leave them at the door, and share information.

But it really is -- it's still an extraordinary hurdle even though they've made progress.

MYERS: What can local law enforcement officials do to cooperate better with the FBI? As you point out, the breach exists on both sides. Everyone is pointing their fingers at the FBI in this climate, but local law enforcement can do more too, right?

TIMONEY: They probably can, but you know, Ray Kelly (ph) has beefed up a whole intelligence division within the NYPD, bringing in former high-ranking officials from the CIA, General LaBooty (ph) from the Marine Corps. And so he's kind of committed in New York to getting that intelligence and sharing it with the FBI, the CIA and people like that.

However, there's still -- there's still a long way to go. I can guarantee you the system isn't fixed yet, and you know, everybody needs a good kick in the rump to get their act together.

NOVAK: We don't have much time, and I want to ask you something about one...


NOVAK: ... federal program that I do like, and that is the Police Corps. It's a very...


NOVAK: ... small program. They just have a horrible time getting a little money to establish scholarships for people in college.

Do you favor the Police Corps?

TIMONEY: Oh absolutely. It's been a successful program. People like Ray Kelly (ph) came out of the Police Corps. I came out of a variation of that. But it's a great program, particularly in helping to recruit young minorities...

NOVAK: We're out -- we're out of time.

Commissioner, thank you very much.

TIMONEY: Bob, good seeing you. Dee Dee, thank you.

MYERS: Thank you...

NOVAK: Next, CNN's Connie Chung joins us with an update of the headlines. She will tell us about the new name that has surfaced in the search for the missing Utah girl.

And in our political news alert, the real reason why Gary Condit's congressional staffers are so loyal to him.


CONNIE CHUNG, CNN ANCHOR: Dee Dee and Bob, it's good to be joining you.

NOVAK: We're happy to have you with CNN, Connie. We have known each other -- I won't say how many years.

CHUNG: You know what? I think we should reveal this. It's something like, I'm guessing, 35 years. What do you think?

NOVAK: It was 1969. So it's 33.

CHUNG: Thirty-three?

NOVAK: Thirty-three years.

CHUNG: All right.

NOVAK: Connie, I understand you have the most beloved losers in America, the U.S. soccer team you're going to talk to. Is that right?

CHUNG: Exactly. Yes, yes. We're going to have a couple of them on and, of course, the coach.

Go ahead?

MYERS: I was just going to say congratulations, Connie. I thought you were done, I didn't mean to interrupt.

But you also have comedian Jon Stewart, who is going to do his take on the anchor wars. Don't you feel like you're kind of going to be in the middle of the routine? That's a dangerous place to start your new show.

CHUNG: I couldn't agree with you more. I have no idea of what he's going to say, you know, because he doesn't want us to pre- interview him. He just comes on, and it's a free for all.

Just like your program, Bob.

NOVAK: Congratulations, Connie, and we look forward to a long association with CNN. Thank you.

MYERS: Break a leg, Connie.

CHUNG: Thank you, Dee Dee.

NOVAK: OK, Next in the "CROSSFIRE Political Alert." An update on the University of Arkansas' Bill Clinton class. Guess what? You don't even have to be in Arkansas to take it.

And later, Martha Stewart and sour grapes.


NOVAK: Now, it's time for those unusual and interesting political stories that you might not find anywhere but in our "CROSSFIRE Political Alert."

Ever wonder why Congressman Gary Condit's aides have been so loyal to him, despite their boss' sleazy behavior? The "Roll Call" newspaper went to the congressional payroll records and found out.

Condit's highest paid staffer, chief of staff Michael Lynch, earned $102,000 in 1999. This year he's on track for $138,000, just $7,000 less than Condit makes. Administrative assistant Mike Dayton's annual pay went from $82,000 in 1999 to $137,000 this year. Remember, Dayton was with Condit when he dumped in a North Virginia trash can a watch case containing a gift for the congressman's former female friend.

And then there's Jackie Mullen, who went to bat for Condit on "LARRY KING LIVE." Went from $43,000 to $105,000 in four years, making her one of the highest-paid secretaries on Capitol Hill.

If you want loyalty, the Condit aides will be available in a few months. But you may have to pay dearly for it.

MYERS: And they say you can't buy me love.

It looks like Senator Hillary Rodham Clinton will easily beat her husband to the book store. The "New York Times" reports the senator is making good progress on her $8 million memoir, such good progress that it's tentatively scheduled for publication in the late spring or early summer -- or early fall of next year.

Mrs. Clinton assembled a staff that includes a coordinator, a professional writer and a researcher.

Meanwhile, the former president is writing his $12 million memoir, longhand. And according to the paper, he's barely started. His book, which the publisher was hoping to bring out next year, may slip until 2004, or even 2005. Gosh, that sounds familiar.

However, the "Times" says the former president denies he's foot- dragging so that he can read what Hillary says about him and then get the last word.


NOVAK: A few weeks ago I reported that the University of Arkansas at Little Rock will offer a new course on the Clinton presidency. Now I have more wonderful news. The course will be available to everybody over the Internet. No, there will not be instruction on how to hit on interns or how to lie to a grand jury and lose your law license and still retain the presidency.

It was announced there will be Clinton-related courses in journalism, speech communications, rhetoric, writing and -- get this -- health services administration. Not how to pass on a health bill, I bet you.

Even Internet students can pose questions to Clinton aides. Dee Dee, maybe I'll sign up for that.

MYERS: You can learn a thing or two, Bob.

All right, coming up, Martha's bad things: from a fallen stock price to questions about insider trading, should she have stuck with pastry and paint tips?

And later in the "Fireback," the hunt for Osama bin Laden and what President Bush does or doesn't have to say about it.


MYERS: Martha Stewart investors got burned today even if they were nowhere near a stove. Her company stock closed down 21 percent, at $12.55 a share. Martha watchers, the kind who buy stocks rather than towels, are worried about how much she knew when she dumped her stock in the biotech firm ImClone last year.

It happened shortly after she chatted would ImClone CEO and just before ImClone's stock tanked. Martha denies trading on insider information.

But should her fans be feeling a sickly pale green, or perhaps a fiery, wrongly accused red?

Joining us from New York is Christopher Byron. He's the author of a book called "Martha Inc."

Also in New York is Dennis Kneale, the managing editor of "Forbes" magazine.

Thank you for joining us.

NOVAK: Mr. Byron, the reason I believe the tremendous drop in the Martha stock has been the incredible publicity that this accusation has had. Most insider trading accusations get in a very small type.

But isn't it a fact that she is being singled out because she's a millionaire, she's a celebrity, and she's a woman -- in fact a good- looking woman. Isn't that why she's been singled out?

CHRISTOPHER BYRON, AUTHOR, "MARTHA, INC.": No, I don't think so. I don't think she has been singled out at all, but I think she's getting a lot of negative publicity, really bad publicity right now because she's the CEO, and there's allegations loose in the press -- which I really should say, haven't been proved. There's no real support for them on a factual basis, just a lot of coincidences -- that she might have been involved in a felony crime. And that will get you in the papers any day of the week.

MYERS: And Mr. Kneale, isn't that a fair place to go? Investigators were investigating ImClone. Their investigation led them to Martha Stewart. She shouldn't be exempt because she's a billionaire. She should be treated like everybody else.

DENNIS KNEALE, MANAGING EDITOR, "FORBES" MAGAZINE: Ms. Myers, let me just -- I think it is simply silly that Congress is investigating this whole incident at all. If you look back to the late '80s and the last real insider trader scandal we had, we had teams of financiers that were making raids on companies. They were parking stock illegally under hidden ownership. They were planting rumors. They were buying stock or selling stock with the intent of profiting.

Here, Martha Stewart hears from a pal, hey, the stock could be in trouble. She tries to avoid a loss; she sells. Who could resist that? The market, to be efficient, requires a person to act on information. She did, and now I think everyone is really overreacting. There might be $30,000 involved here. This is a tempest in a teapot.

BYRON: I'm not so sure it is. I think that there might be a lot more here in which Martha Stewart is just a bid player. First of all, this committee of Congress didn't begin, didn't start out investigating Martha Stewart at all. Her name just turned up on some documents when they were investigating some aspects of this ImClone company. Now the only reason they got involved in it was because the FDA might have leaked some information to somebody in ImClone that they were going to send the letter to them not letting them sell their big cancer drug.

Congress got involved in it on that basis. The name Martha Stewart just sort of turned up, and then they started looking at her. And maybe now, they will wind up looking at this fellow who was the broker at Merrill Lynch and start looking in his little black book and look at everybody else he might have put ImClone stock into to, and then gave him a heads up to get out. That is probably very news worthy and very important if it leads to a large ring of insider traders.

KNEALE: There is no ring. And the idea that Martha Stewart is some kind of insider, when she has no executive post at this company, she's not on the board of directors. Somebody told her something, and then she decided I want to avoid a loss. She wasn't even trying to get rich. Now, go after the guy who told her the secrets he shouldn't have told her. MYERS: They are going after the guy who told her the secrets, as well. But this is party a reaction to a culture where people who are wealthy and powerful share information with each other, protect each other from bad deals, makes huge profits, even when their company stockholders lose billions of dollars in value. And the party is over. Isn't this just a signal that the party is over? That the rich and powerful have to play by the same rules as the rest of us now?

KNEALE: I think this is a signal that the regulators and the politicians and those of us in the media are burned that we didn't catch Enron, we didn't catch any of this.

MYERS: The public is so interested in it.

KNEALE: And so now we're going to crucify Martha because it makes us all feel better about ourselves.

MYERS: No, enforce the rules. We're going to enforce the rules.

NOVAK: I think there's something else here. The other people, the people from Enron didn't get the kind of publicity in the New York tabloids and the magazines. I thought one of the most astute comments appeared in "The Wall Street Journal" by Jennifer Grossman. She wrote this. She said, "What stands on trial is Martha Stewart-ism, the striving, quintessentially middle-class American impulse to make life a little nicer, to take its lemons and, quite literally, turn them into lemonade." I don't want to criticize you, but you wrote a very critical book about Martha Stewart. You're a little turned off by niceness, aren't you?

BYRON: Let me say this, Bob. I don't agree with that quote at all. Martha Stewart-ism, whatever that is, is not on trial here. In fact, nobody is on trial yet. The question is whether this woman is a felon. That's appropriate inquiry by the media and anybody else. We're talking about her here tonight because everybody wants to know this. This is the main topic in the news, and it's appropriate material. And it's got nothing to do with whether this woman is the McGuyver of home decorating and can make a centerpiece out of garden hose.

MYERS: It might not be about that, but, Mr. Kneale, isn't it a sign that sometimes having a company that is so dependent on the image of one is person can be a slightly dangerous business practice, irrespective of whether this is brouhaha is fair?

KNEALE: Sure. I think that, yes, that is exactly what we're seeing in the market. It's just that the investors are wrong. If you look at Steve Madden, the she designer, the guy gets indicted for fraud regarding his initial public stock offering. He gets a 41-month prison term recently. The stock has gone up since then because investors decided it was undervalued. Versace, he was murdered; the company lives on. Martha Stewart will live on. And the stock's a buy right now.

BYRON: Hold it.

MYERS: That's probably true. I'm sorry, but we're out of time at this point. Thank you both for joining us.


NOVAK: This is "Round Six," where Dee Dee and I have it out with nobody else around.

The president of the United States has been telling Yasser Arafat for months, you have to get tough on terrorists. Yesterday, he arrested -- a very unpopular thing for him to do -- one of the leaders of Hamas. It did no good at all. The president says we won't have a peace process unless we get rid of Arafat. That's the Israeli line. Isn't the president just adopting the Israeli line hook, line and sinker?

MYERS: That's exactly what he's done. He has adopted the Israeli line and he set conditions for a Palestinian state. He has called for the creation of a Palestinian state, but set the conditions so high that it is going to be very difficult for the Palestinians to ...

NOVAK: You're supposed to disagree with me.

MYERS: Yes. Well, it is one of the rare times you and I agree. I will not disagree that President Bush has been inconsistent on this. He just simply has been.

NOVAK: I think he has been consistent. I think he's been consistently pro-Israeli. I think that is why the Israeli government has wanted to have the United States, the U.S. and Israel, against the entire world. I don't think it's a good position to be in.


NOVAK: Time now for "Fireback," when the viewers "Fireback" at us.

Our first e-mail is from Ken of Canada: "The president has asked way too much of the Palestinians and nothing of Israel. The Palestinians can't change the leadership in their government. The only way is to kill Arafat. I don't support this, nor do I support USA's pro-Israeli stance in this `Peace Process.' You are only putting yourself in harm's way."

I've been very tough on Canadians the last few weeks for some of the silly things they say, but Ken, you have it exactly right.

MYERS: Go, Ken.

Our next e-mail comes from John Geran from Atlanta, Georgia: "How come Bush hasn't mentioned bin Laden's name in over 100 days? Has he forgotten about his mass murderer? I feel like we are being spun down a political path that puts the focus of this `War on ISM's' on everything but the main objective." That's a very good point. "No bin Laden equals no victory. No votes for GOP in November."

That sounds about right. NOVAK: No way.

MYERS: No way.

NOVAK: Our first question from the audience.

UNIDENTIFIED MALE: My name is Pat McClane (ph) from California. My question is, even assuming there is a Palestinian Thomas Jefferson out there to replace Arafat, which is doubtful, what are the odds that a new Palestinian leader will have the power to stop terrorism?

NOVAK: President Mubarak had a meeting with President Bush a couple weeks ago. President Mubarak of Egypt, he says what may follow Arafat may be even worse.

MYERS: There's absolutely no question that there's no obvious succession chain of leadership. The situation is very difficult, but the president has made it very clear, the Palestinians go first. If they don't do what he's laid out, then the process doesn't go forward.

NOVAK: Question.

UNIDENTIFIED MALE: I'm Jonathan Shole (ph) from Detroit, Michigan. Considering the terrorist attack of 9/11 and the increasing crime rates in the U.S., why would President Bush cut back the funding for the police force?

NOVAK: Why would he cut back what?

UNIDENTIFIED MALE: The funding for the police force.

NOVAK: He didn't cut back the funding for the police force. He hasn't taken off a single policeman. He just said that the program is supposed to end in a couple of years, as it is scheduled. Did you ever hear of a government program ending on time?

MYERS: It's still reducing funding 80 percent. That funding funds cops. On the street, there will be fewer cops. Thank you, President Bush.

NOVAK: Question.

UNIDENTIFIED MALE: Hi. I'm Randall Jackson (ph) from Detroit, Michigan. Isn't demanding democracy, but saying that the people can't elect Yasser Arafat sort of like demanding good chocolate with no calories?

MYERS: Isn't that the American way?

NOVAK: All the years in the Cold War, I don't remember the toughest anti-Communist saying we're not going to negotiate with the Soviet Union unless they get rid of Stalin or Khruschev or whoever was there. Do you remember that? I don't remember that.

MYERS: I think that it is important. There isn't anybody in the leadership of our government, Democrat or Republican, who thinks that Yasser Arafat can lead the way to peace. Finally, it has been said that he has to go.

From the left, I'm Dee Dee Myers. Good night from CROSSFIRE.

NOVAK: From the right, I'm Robert Novak. Join us again next time for another edition of CROSSFIRE.

"CONNIE CHUNG TONIGHT" begins right after a CNN News Alert.


Crime Rate be Lowered?; Is Martha Stewart an Example of CEO's Excesses?>



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