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Jesse Jackson Talks to Middle East Leaders; Senator Toricelli Faces Questions on Illegal Gifts; Will Hillary Run for President?

Aired July 30, 2002 - 16:00   ET


JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington. Is Jesse Jackson promoting peace in the Middle East or making matters worse by meddling? I will talk to him from Jerusalem.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: I'm Suzanne Malveaux at the White House. I will talk about the political influences behind Mr. Bush's decision to sign legislation cracking down on corporate criminals.

JONATHAL KARL, CNN CORRESPONDENT: I'm Jonathan Karl on Capitol Hill, where the Senate Ethics Committee is weighing allegations against Senator Robert Torricelli and possible punishment.

BILL DELANEY, CNN CORRESPONDENT: I'm Bill Delaney in Boston. In Massachusetts politics is never out of season, and this summer the hot governor's race is steaming ahead. I'll have a report.

WOODRUFF: Thank you for joining us. The Bush administration tried to make sure that today's signing ceremony for legislation cracking down on corporate crime was high profile. It also was crowded with Democrats and Republicans eager to take credit for the measure, chief among them, the president. Our Suzanne Malveaux is at the White House -- Suzanne.

MALVEAUX: Hi, Judy. A senior administration official tells us about kind of a breakthrough moment. It happened on July 10. It was a meeting between the president in the cabinet room with GOP leadership. He was talking about the Democrat-sponsored corporate responsibility bill and he described it this way, saying it's a pretty good piece of legislation, we're not that far apart. It goes on to say, all of us feel the same outrage. Business should be about honesty, integrity, and then he says, I'm plenty hot about this.


MALVEAUX (voice-over): At a ceremony in the East Room of the White House, President Bush signed into law a sweeping corporate reform bill in hopes that it will restore America's confidence in the markets.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: No more easy money for corporate criminals, just hard time. MALVEAUX: The Sarbanes-Oxley Act of 2002 establishes new grounds for prosecuting corporate corruption, sharply increases penalties for fraud, and imposes tough oversight on accountants.

Provisions include the creation of an independent board to monitor the accounting industry, up to 25 years prison sentence for those guilty of security fraud, and a requirement for corporate heads to certify their financial statements.

The bill pushed through by Democratic Senator Paul Sarbanes was much tougher than Republicans or the White House had envisioned. The administration was pushing for Securities and Exchange Commission much stronger than the independent accounting oversight board and more flexibility for accountants to provide consulting services for their clients.

But pressure for Congress and the administration to act quickly forced Republicans to let go of those provisions. The stock market is not yet clear from corporate fraud. The administration has required CEOs of the top 1,000 U.S. companies to verify that their books are accurate by mid August. Aides say that may mean the discovery of more bad apples.

SEN. PAUL SARBANES (D), MARYLAND: Once you have a bad apple to punish, much of the damage has been done, by definition, because you have a bad apple, bad things have happened. We want to tighten up the system and improve the system so the bad things don't happen to begin with.


MALVEAUX: And that's exactly what the administration is hoping for. They hope to regain confidence in the American people to turn this stock market around -- Judy.

WOODRUFF: All right, Suzanne, thanks.

Our senior political analyst Bill Schneider joins me now. Bill, you have a new poll. So does the president signing this corporate responsibility piece of legislation, does this help his party?


We asked people over the weekend, do you think President Bush is more interested in protecting ordinary Americans or large corporations? Forty-eight percent say large corporations, 41 percent ordinary Americans, a close split.

Now that's a very different image from his party. No question which side Republicans in Congress are on. Sixty-five percent say large corporations, 25 percent say ordinary Americans. The ancient stereotype of the GOP, the party of big business and big money persists. President Bush modifies that image. He's seen as a businessman with the moral values of ordinary Americans. This President Bush is seen as less partial to the rich than his father was.

WOODRUFF: So meanwhile, should the Democrats be out there rejoicing because the Republicans passed their corporate corruption bill?

SCHNEIDER: Well, this poll that we did suggests the Democrats shouldn't be too eager to celebrate. The bill seems to have blurred the differences between the two parties. We asked, do you approve or disapprove of the way the Republicans in Congress have handled the issue of corporate corruption? Forty-one percent approve, 44 percent disapprove. And now, how about the Democrats in Congress? Forty-two percent approve, 40 percent disapprove.

Again, Americans are skeptical about both parties on the issue of corporate corruption. Both parties get money from big business and neither party wants to bite the hand that feeds it. You know how Democrats blurred the differences with Republicans, over the war with Afghanistan? Well, Republicans are doing exactly the same thing on the issue of corporate corruption. Sometimes the smartest thing you can do in politics is to say, me too.

WOODRUFF: So maybe neither party should break out the champagne.

SCHNEIDER: Not quite yet.

WOODRUFF: Thanks, Bill.


WOODRUFF: House Democratic leader Dick Gephardt says Republicans came around to supporting the corporate crackdown only when they felt pressure from the public. Speaking today at the Democratic Leadership Council meeting in New York, Gephardt took aim at President Bush's handling of the economy.


REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: George W. seems to know that things aren't right with the economy. And so he talks about it. And he talks about it. And he talks about it. And he talks about it. We can read this president's lips, but we don't hear any new ideas and we don't see any real action.


WOODRUFF: Other potential Democratic presidential candidates made similar attacks on Bush economic policy at the DLC convention where we were yesterday. On Wall Street today, the AFL-CIO held a rally to press for additional action to make corporate chiefs more accountable and to protect workers' rights.


JOHN SWEENEY, AFL-CIO PRESIDENT: We insist that the Securities and Exchange Commission and all three stock exchanges agree to a single higher standard for publicly traded corporations. That standard must require companies to expense and index stock options they give CEOs, or better yet, ban them outright.


WOODRUFF: AFL President John Sweeney was joined at the rally by former employees of the scandal-plagued firms Enron, WorldCom and Arthur Andersen.

Expelled Congressman James Traficant was sentenced today to eight years in prison for accepting bribes and kickbacks.


QUESTION: Tell that to the judge?

QUESTION: So what are you going to tell the judge today?

FMR. CONGRESSMAN JAMES TRAFICANT: Everybody in Ohio and America knows I've been railroaded.

QUESTION: Do you think she's going to be fair?


WOODRUFF: The Ohio Democrat remained defiant as he headed into the hearing in Cleveland. A federal judge rejected his argument that being booted from the House last week was punishment enough. And she refused to release Traficant on bond pending his appeal, citing his earlier comments he planned to break out of jail and quote, "tear the throats out of law enforcement officers."

Traficant was taken directly to jail. He was convicted in April of 10 counts of bribery, tax evasion, and racketeering.

Less than an hour from now, the Senate Ethics Committee is expected to meet again to consider action against New Jersey Democrat Robert Torricelli. Here now our Congressional correspondent, Jonathan Karl -- Jon.

KARL: Well, Judy, as Congress lectures corporate America about ethics and responsibility in the private sector, the six member Senate Ethics Committee is under intense pressure to deal fairly and forcefully with Senator Torricelli. You mentioned they're meeting again in an hour but like the previous meetings, that meeting will be closed to the public.

This committee has been holding hearings with a level of secrecy that sometimes even surpasses that of top secret national security briefings of the intelligence committee.


KARL (voice-over): Senator Torricelli has spent seven hours testifying under oath before the Senate Ethics Committee about his relationship with David Chang, a New Jersey businessman now serving an 18-month jail term for giving illegal donations to Torricelli's '96 Senate campaign. The ethics case comes down to the gifts Chang says he gave Torricelli.

BRAD SIMON, DAVID CHANG'S LAWYER: Two watches, a Rolex watch, diamond earrings for his girlfriend, television set, oriental rug, grandfather clock, other antique items, suits, as well as approximately 14 deliveries of envelopes of cash to Torricelli's house, at Senator Torricelli's request, over a two year period.

KARL: After appearing before the ethics committee last week, Torricelli told CNN, quote, "There were no gifts. Everything is properly accounted for."

But a source familiar with his testimony says Torricelli acknowledged receiving some items from Chang but also paid him back for those items. Chang's lawyer says he was not paid back. Whatever the ethics committee decides to do, its actions will have an immediate political impact because Torricelli is up for reelection. In a hint of what's to come, the Republican party has already launched a radio ad questioning Torricelli's ethics.

ADVERTISEMENT: He may be ducking questions, but New Jersey and national newspapers are saying a lot. They've reported that Torricelli may have received 14 envelopes stuffed with cash, a Rolex watch and even fancy Italian suits from a shadowy supporter.


KARL: Torricelli's spokeswoman dismisses those attacks and says the senator will answer all the questions regarding this investigation after the Senate Ethics Committee concludes their own investigation.

Now Judy, those hearings again starting right now. One possibility, though, is that the ethics committee may not do anything until after the election. The chairman of that committee, Senator Inouye of Hawaii, said that if they don't decide what to do this week, they may have to wait until after the election.

There is some precedent for that. Back in 1992 when the ethics committee was investigating Bob Packwood, they held off. They didn't actually do anything. Packwood was reelected in 1992 and the committee didn't vote to expel Packwood until 1995. So there is the potential that this thing could go on for some time. We may not hear anything until after the election -- Judy.

WOODRUFF: All right, thanks, Jon, and I'm going to ask Tucker Carlson and James Carville about that in just a few moments.

Jesse Jackson is putting pressure on President Bush and on Yasser Arafat. Up next, I will ask Jackson about his latest mission to the Middle East and what he thinks he can accomplish.

Also ahead, a return to a Clinton White House? We'll look at the buzz over whether Hillary Clinton has her eye on her husband's old job. But...

JEFF GREENFIELD, CNN SENIOR ANALYST: I'm Jeff Greenfield in Atlanta. The southern states have become a mine field for Democratic presidential nominees, but the picture is very different when it comes to other races.

WOODRUFF: Is Bruce Springsteen born to run for office? I'll tell you what the rock star says about the speculation.


WOODRUFF: With me now from Jerusalem is the Reverend Jesse Jackson. Reverend Jackson, you've been in the Middle East since Saturday. You've been meeting with leaders there. The first question is, what can you accomplish that the Bush administration and others who have been trying for so long to get something done, have not been able to do?

REV. JESSE JACKSON, RAINBOW PUSH COALITION: Well, I don't really want the comparison. I think that the Bush administration lost some time for the first year when they didn't tackle this issue. But I think they are back in the ballgame now significantly.

We're here with a group of religious leaders, rabbis and Protestant and Catholic, trying to forge a kind of force urging the Palestinian forces and the Israeli forces to break the cycle of violence. What Secretary Powell has said, and what Foreign Minister Peres said, if we can get a halt on these suicide bombers we can get back to the table. To get back to the table then you can begin to talk about (UNINTELLIGIBLE) solution, ending the occupation and moving on with a solution.

WOODRUFF: But you know that the Bush administration, the president, Secretary Powell, have indicated they want Yasser Arafat out as the leader of the Palestinian people. They want to see new leadership there. They said that Arafat is a man who tolerates violence and terrorism. By seeing him, are you not undermining their argument?

JACKSON: No, actually that trying to choose their leadership is really a non-democratic idea. When you went through the G8 meeting in Canada and said we should have a two-state solution which would end occupation, which would end the settlements, which would stop the violence and economic reconstruction, everybody said yes. But the idea of choosing their leadership, Tony Blair, Chirac said no.

You really cannot democratically choose another people's leadership. And so let's focus on the reconciliation of Israelis and Palestinians, focus on reconstruction and not spend all the time saying Arafat is not relevant and then say he is most relevant. Let's focus on the real issue.

WOODRUFF: What concrete do you believe that you, Jesse Jackson, can bring back from there, and what is to stop some people from saying, well, there goes Reverend Jackson again, off to some hot spot. What can he accomplish?

JACKSON: And every time he brought Americans back home, from Cuba or Syria or Iraq or Yugoslavia, because there is the role for moral leadership in these political stalemates. And what we have done so far, we have been able to get the defense minister to agree, for example, to let the Palestinian trucks come in from Jericho and Jordan to bring in food, medicine and water.

There is high malnutrition in the area there because of the impact of the curfew and the inability of the Palestinians to access jobs, and so that movement is important -- the food, medicine and water.

The students in Bethlehem and Nablus couldn't take their final exams because of the curfew. They agreed to let that take place now. So the humanitarian relief could be the first part of the breakthrough. We go back again and meet with Arafat tomorrow and his entire cabinet because he did on yesterday do what Mr. Powell said should happen and what Mr. Perez said should happen. He read a statement in both Arabic and English calling for an end to violence and terrorism and reaching out to Hamas to join him. These are steps in the right direction.

WOODRUFF: Letting the trucks through is one thing. But having a real cease-fire is something else all together, isn't it?

JACKSON: Well, they are two different issues. The first issue is humanitarian relief. A people hear about water and electricity, are dying in their houses because they can't get their dialysis machines. Eight in 10 people in their house 22 hours a day and can't get out even on their balcony.

That's extreme punishment, creating extreme reaction and hostility and volatility, so to bring some easing up of access to food and medicine, granting more work permits so Palestinians can come here and feed their families, those are significant steps towards some relief. Now if Arafat can affirm with his entire cabinet a commitment to work as hard as he can, plus a march to begin to break some of these terror tactics, that's a good thing, because Israel likewise must make the same commitment to end the occupation and the settlements which Mr. Bush says are impediments to the process as well.

WOODRUFF: Reverend Jesse Jackson, thank you very much for talking to us from Jerusalem.

JACKSON: Thank you very much.

WOODRUFF: And just ahead, James Carville and Tucker Carlson weigh in on some of the day's top issues. And, there is new speculation about Osama bin Laden and whether the Al Qaeda leader is dead or alive.


WOODRUFF: Checking our INSIDE POLITICS "Newscycle," there is more speculation today about Osama bin Laden and whether he is dead or alive.

Some of the Al Qaeda leader's bodyguards are among the detainees at Guantanamo Bay Cuba, and sources tell CNN that suggests bin Laden likely is dead. But, the sources also say, there is not enough hard evidence to draw a firm conclusion. On a related note, intelligence officials says one of bin Laden's sons is active in his father's terrorist group. But they say contrary to some reports, there is no direct evidence that he has taken on a more senior role in Al Qaeda.

Federal investigators are trying to determine the cause of yesterday's Amtrak derailment in Maryland. They say the position of the controls in the train's engine were normal. Among other things, they will check the maintenance records and reports on inspections of the track and the train before the crash. The derailment injured 100 passengers.

At the White House, President Bush signed a sweeping corporate reform bill into law. Prompted by a rash of corporate scandals, the measure will create a new oversight board to monitor the accounting industry. It also includes tough new penalties for corporate fraud, and more money for the Securities and Exchange Commission.

With us now from the CNN "CROSSFIRE" set at George Washington University, James Carville and Tucker Carlson.

Gentlemen, let me ask you about Senator Bob Torricelli. The Senate Ethics Committee is just about to meet this afternoon to try once again to reach agreement on what to do about these charges against the senator -- among other things, that he accepted gifts. He says he paid for them. Others say he didn't. Now we hear from the chairman of the Senate Ethics Committee, Senator Daniel Inouye, that if they can't get this resolved today, they may have to put it off until after the election this year -- Tucker.

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Well, I mean it's an embarrassing joke in every regard. First of all, Senator Torricelli apparently said before that he didn't receive any gifts. Now he admits that he received some. So he apparently lied.

Well, if he lied about that, did he, as Mr. Chang alleges, brag about having friends in the mafia? Did he try to obstruct the federal investigation? Did he take these cash payoffs again and again and again?

There are a lot of unanswered questions. But the Senate is not calling Mr. Chang, now in jail, or any other witnesses. And now Senator Inouye says we have to wrap this up soon before the election, otherwise it might hurt Mr. Torricelli's reputation, which is like saying, we got to stop the O.J. trial before the verdict because we wouldn't want to besmirch O.J.

I mean, it's ridiculous. And I think more people ought to start saying that.


JAMES CARVILLE, CO-HOST, "CROSSFIRE": Well, it's important to remember, first of all, there was a complete grand jury investigation. Senator Torricelli, did everything they could to get him, decided there was insufficient evidence to even proceed. The second thing is this has been going on since January. The third thing is, there's probably no greater patriot in the United States Senate or anywhere than Senator Inouye, and to impune his integrity is absolutely ridiculous. They had this stuff since January and I think what Senator Inouye was saying and if we've had it long enough we ought to issue a ruling and let it good forward.

I find it interesting that Senator Torricelli's opponent today said the longer this drags out, the better off it is for me. The better off it is for New Jersey is to get the facts out, let the voters decide the gravity of the facts and then come November we'll find out what they think about it.

CARLSON: Which is absolutely why they ought to call the chief accuser, the chief witness and Democrats -- hold on James -- Demorcats are saying we can't call him because he's a convicted felon. Well, in every criminal case, as you know, virtually every one, there is testimony from bad guys, even felons. If you want to get to the truth of what happened, you have to have the chief accuser there to explain his side.

CARVILEE: They have again, the man was convicted. They have all the grand jury testimony, which I might add, was against the law. Republican senators have been leaking to the "New York Times." They have gone to New Jersey. They have had investigators looking at it since January. They'll render their decision. The decision will come forward.

The people of New Jersey will decide. I think they will decide that Senator Torricelli has been an outstanding United States senator who made a mistake along the way and his opponent was trying to drag this out for his own political good and not the good of the people of New Jersey.

WOODRUFF: All right, James and Tucker. Today President Bush signed this corporate responsibility bill. We've heard a lot about it but just let me quote none other than a former Nixon administration official Chuck Colson who today said, wrote in the "Washington Post": "What fools we are when we think we can legislate away human morality." Does he have a point, Tucker?

CARLSON: Of course. I think James, everyone agrees. Of course he has a point. I mean look, the penalties for security fraud, now 25 years in prison, higher than for many violent crimes including many cases of rape and other heinous crimes. So the penalties are there. They're stiff and everybody is in favor of enforcing them. Well, does that mean that everyone who deals in securities is going to be honest? No, of course not.

CARVILLE: I think it's an asinine point. We shouldn't have rape laws because they're not going to stop people from raping each other. We shouldn't have anti-murder laws because people are going to murder each other. The point is that as a nation, we have to make -- will there still be securities fraud after this passed? Of course there will, but will there be less of it? Perhaps so. WOODRUFF: But are you saying, James, the new law's not going to make any difference, James? Are you saying the new law's not going to make any difference.

CARVILLE: I think it will make -- I think the legislature passed a law against rape. Does it stop people from raping? No. But less people will. And those that do will get punished. I think it is an asinine argument to assert that if you pass a law against something that the prohibited conduct will continue. Of course it will continue. What one is hopeful of and I think will happen here, there will be less of it and if it does happen, they'll get caught and they'll pay a price for it.

CARLSON: Well, obviously you and Chuck Colson agree he wasn't arguing of course that we shouldn't have the laws against certain crimes. Of course we ought to, but that's just not in the end enough but I think you probably agree with me, James.

CARVILLE: I agree it won't stop securities fraud but I agree that we should have the laws anyway.

WOODRUFF: We are going to leave it there. Next time, we are going to get you guys to come out of your shells.

James and Tucker, thanks.

CARLSON: Thanks, Judy.

WOODRUFF: Would Hillary Clinton consider a spot at the bottom of the presidential ticket? Up next: the "Inside Buzz" on the senator's political aspirations in 2004 and '08.

And who's rocking and who is slipping in the nation's hottest governor races?


WOODRUFF: Reading the tea leaves about Hillary Clinton's future is the sport of choice for Democrats this week. The speculation has been fueled by the senator's speech to moderate Democrats yesterday. It was a stinging and well-received rebuke of the Bush administration on a number of fronts, including the economy and corporate reform.


SEN. HILLARY CLINTON (D), NEW YORK: The 1990s economic boom was not a fluke or a bubble.

WOODRUFF (voice-over): Good speech, great reception, but is she running? The junior senator from New York says no. But both friend and foe insist the most famous woman in American politics could end up on the Democrats' national ticket in two years.

CLINTON: Remember the national debt clock? Well, it came down in September of 2000. And when did it go back up? Just a few weeks ago. Walk over to Times Square. Take a look at our nation's newly mounting debt.

WOODRUFF: Democrats say such criticism of Bush would help Clinton build a case to break her vow to serve her full Senate term. Supporters are encouraged by polls showing she leads all Democratic prospects except Al Gore and that her numbers have steadily increased since January.

One Senate Democratic aide said Clinton has polished her national profile, distancing herself from the Clinton White House scandals while staying loyal to her husband's popular economic policies. Quote: "If she does it right," the aide said, "Hillary could run with all of Bill Clinton's pluses with none of the minuses."

Republicans say they would also be happy if Hillary ran. One GOP aide said: "In some groups, she is Ted Kennedy, Tom Daschle and Jesse Jackson wrapped into one." Both sides may get their wish soon enough. Clinton won't rule out a run in 2008.


WOODRUFF: Well, with the stock market reeling in recent weeks, Democrats have been suddenly energized, dreaming of a big victory in the fall.

But when it comes to the governor's races, CNN political analyst Stu Rothenberg says Democratic dreams may in fact be slipping away.


STUART ROTHENBERG, CNN POLITICAL ANALYST: While Democratic prospects for the House and the Senate seem to be improving because of the corporate scandals, when we look at governorships, we see a very different story.

It looks, actually, as if Republicans are making some gains. One thing that has happened is that recent primary outcomes have produced strong Republican candidates. In Alabama, for example, Congressman Bob Riley blew away his opponent in the primary. He looks like a strong opponent for Don Siegelman.

In South Carolina, Mark Sanford won overwhelmingly in a primary. He's a strong candidate. And then you turn to a state like Maryland, where Republican Bob Erlich, a congressman, entered the race late, has picked a very appealing running mate for lieutenant governor, African- American. It looks like a strong challenge to Kathleen Kennedy Townsend, whose poll numbers are increasingly weak.

Another problem for some of these Democratic governors: the state economies. Awful poll numbers for Governor Gray Davis in California, both when he's matched up against Bill Simon, the Republican challenger. And simply internally he is not regarded very favorably. You can also look at a state like Iowa, where Tom Vilsack had a huge lead, was regarded very favorably. And suddenly the voters are satisfied with the state of the economy and the governor's performance. On the upside for the Democrats: three big Rust Belt states: Michigan, Illinois and Pennsylvania. The Democrats are going to have good candidates in all three. They already have strong candidates in two of the three. The Republicans are on the defensive. Again, it is the bad economy, but it is also sitting Republican governors. It is time for a change.

On the downside, however, for the Democrats, their prospects are not as good in the three big states that they have been salivating over. In Texas, Democrat Tony Sanchez has spent $30 million so far and still trails Rick Perry badly. In New York, George Pataki has $23 million sitting in the bank. The Democrats still have a primary before they can pick their nominee. And, in Florida, Janet Reno leads in the Democratic primary. She's probably the weaker general election candidate against Jeb Bush. He could be vulnerable, but right now it does not show it.

The bottom line is, the Democrats still ought to pick up governorships. But the situation is a lot less certain now than it was just a few weeks ago.


WOODRUFF: Well, the ad war in that Texas governor's race that Stu mentioned tops today's "Campaign News Daily": Democrat Tony Sanchez says that a new spot by GOP incumbent Rick Perry is untruthful. The ad focuses on alleged money laundering by a now- defunct Savings & Loan company when Sanchez was chairman of the board.


ANNOUNCER: Newspapers reported Tony Sanchez's bank laundered $25 million in drug money, stuffed into suitcases, flown to Texas, and deposited in his bank. Can Texans really trust Tony Sanchez?



ANNOUNCER: Rick Perry is misleading you about something that happened almost 20 years ago. Tony Sanchez was never accused of any wrongdoing. And the bank was totally exonerated by the Department of Justice, two federal judges and the IRS.


WOODRUFF: So, who is telling the truth? Our ad zapper, Brooks Jackson, will check the facts tomorrow on INSIDE POLITICS.

In the New York governor's race, Andrew Cuomo gets a helping hand in a new ad from his uncle-in-law, Senator Ted Kennedy. The spot appears designed to emphasize Cuomo's liberal leanings by linking him to Kennedy, Martin Luther King III, and Geraldine Ferraro. Cuomo is married to Ted Kennedy's niece Kerry.

And in Georgia: more controversial claims by Representative Cynthia McKinney. In a new ad, McKinney likens her Democratic primary opponent to an -- quote -- "out-of-control cop."


ANNOUNCER: Abuse of power: Sometimes, it's an angry, out-of- control cop beating up a teenager in California. And sometimes it's an angry, out-of-control judge right here in Georgia, a judge like Denise Majette.


WOODRUFF: Majette denies McKinney's allegation that she hid trial records to cover up mistakes that she made as a state court judge that deprived innocent people of their rights.

Here in Washington, our mayor, Tony Williams, says, one way or another, he is running for reelection as a Democrat. Williams announced today that he will appeal a decision by the elections board that bumped him off the September 10 Democratic primary ballot. But even if the appeal fails, he says he is prepared to run in the primary as a write-in candidate.

Williams says he is a lifelong Democrat and he will not abandon his party. The elections board found that, although Williams had more than enough signatures to get on the ballot, many were tainted by questions about whether Williams' supporters violated the law in gathering them.

When we return, Kate Snow checks in with the latest in the battle in the Senate over a Medicare prescription drug bill. And what is the key to Democratic victories in a Republican stronghold, the South? We'll find out from Jeff Greenfield in his "Bite of the Apple."



SEN. ROBERT BYRD (D), WEST VIRGINIA: With the level of endorsement that the Congress has given to this idea, one would think that the proposal for a new Homeland Security Department had been engraved in the stone tablets that were handed down to Moses at Mount Sinai. But, in reality, the idea was developed by four presidential staffers, four, in the basement of the White House. For all we know, it could have been drafted on the back of a cocktail napkin.


WOODRUFF: Democrat Robert Byrd on the Senate floor today, pressing his concerns about the creation of a new Homeland Security Department. His efforts to delay action on the measure are paying off. Majority Leader Tom Daschle's office says the Senate will delay a vote on the new department until after the summer recess.

Well, the Senate has been struggling to move ahead on a measure to help some senior citizens pay for prescription drugs. But today, some members of both parties seemed to dig in their heels about a last-ditch compromise. (BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: We have said with an exclamation point we believe in a Medicare benefit for prescription drugs. Republicans denied us that opportunity, so we're coming back with a compromise version. If they oppose us on the compromise, we'll know then who supports drugs and -- drug coverage, I should say, for prescriptions and who doesn't.

SEN. DON NICKLES (R), OKLAHOMA: Now I think the Democrats are in a frantic panic, trying to say, "Well, let's just pass something." They're throwing money around. They're throwing figures around. And they're coming up with proposals that are hundreds of billions of dollars that really haven't been scrutinized.


WOODRUFF: Kate Snow is with us now from the Hill.

Kate, they're debating this on the floor right now. Now, last week, the Democrats were, as Senator Daschle said, for a more generous bill. Why the change?

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Well, yes, they are going for a much less -- you could look at it as a much less generous bill this time around, mainly helping the lower-income seniors and helping people with catastrophic, really bad situations with high drug costs.

The reason: because, Judy, they're just about to leave for an August recess here. And the Democrats in the Senate are looking at the fact that the House passed a bill. Democrats, of course, lead the Senate. They are going to be stuck with the blame if they don't pass something. I'm told that, at many meetings recently, many members of the Democratic Caucus have stood up and said, "I have got to have something to bring home to my people," particularly senators who are running against House members, like Tim Johnson out in South Dakota.

He has got an opponent who is a member of the House, who can say, "We passed something, but the Senate didn't pass something." So, they're going back a ways from what they originally wanted. As one aide said to me, "We're giving up on a lot of things we have been fighting for for five years" so that they can have a compromise and say, "At least we tried to compromise" -- Judy.

WOODRUFF: Now, what about the Republicans, though, Kate? They've been saying the Democrats just wanted an issue. Now the Democrats have come up with a real -- or what they say is a real compromise. Are Republicans now under some pressure to go along with this?

SNOW: Yes, Republicans still say, though, that Democrats are just doing this as an issue. It's one last-ditch attempt, they will tell you, to try to force their hand. As Senator Nickles said to, "Yes, they're trying to box us into a corner, but it is not going to work." He said: "People are going to see through that. They are going to blame Tom Daschle, because Tom Daschle is the leader here. That's the bottom line."

They also say that they think this is a flawed bill, because it really philosophically differs with everything Republicans believe in, Judy. It is an expansion of Medicare. Republicans say they just can't go for that -- Judy.

WOODRUFF: All right, Kate, thanks very much.

Our Jeff Greenfield traveled from the Big Apple to the South today, where he's been looking at a big question facing Democrats: Why do Southern voters respond so differently to presidential campaigns compared to state elections?


JEFF GREENFIELD, CNN SR. ANALYST: When Democrats gather to discuss their prospects, one subject is always close at hand: how to win in the red zone, those culturally conservative states where George W. Bush won his narrow presidential victory?

Well, here is a curious fact you'll find in the Southern states, those reddest states of all, like Georgia. While Democrats have had a terrible time winning presidential elections South of the Mason-Dixon Line, when it comes to other races, they do surprisingly well.

(voice-over): First, the grim news for Democrats: In presidential years, the once-solid Democratic South has become a GOP stronghold: 1980, Carter wins only his native Georgia; 1984, Walter Mondale shut out; 1988, Michael Dukakis shut out.

Clinton do well in Southern and border states in his two campaigns. But in 2000, Al Gore, native of Tennessee, came up empty. Of course, Florida was in some dispute.

UNIDENTIFIED MALE: That's a pregnant chad.

GREENFIELD: But look at the governorships. Democrats hold statehouses in Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Missouri. And how about the U.S. Senate? Democrats have seats in North Carolina, South Carolina. They have both seats in Georgia, both seats in Florida, both seats in Louisiana and Missouri.

What's the key? On matters both cultural and economic, they have serious differences with the outlook of national Democrats.

SEN. ZELL MILLER (D), GEORGIA: Well, I don't know.

GREENFIELD: For instance, Georgia Senator Zell Miller has been outspokenly critical of Democrats on everything from Bush's judicial nominations to tax policy.

SEN. JOHN BREAUX (D), LOUISIANA: Calm voice of reason.

GREENFIELD: Louisiana's John Breaux has often looked for the middle ground on issues like health care. Many Southern Democrats are Second Amendment Democrats, outspoken about the rights of gun owners. They are frequently muted or middle-of-the-roaders on contentious social issues like abortion.

(on camera): In earlier times, Southern Democrats were defined principally on the explosive issue of race, blocking civil rights legislation for decades.

But with that issue resolved and with Southern blacks long since enfranchised, Southern Democrats have hit on a different winning formula: avoid the hot-button issues that plague them in the South and combine a respectable share of the white vote with an overwhelming share of the black vote. That's turned out to be a winning formula for Democrats in many of the reddest states of all.

Jeff Greenfield, CNN, Atlanta.


WOODRUFF: Just ahead: It is not business as usual for some of the candidates in the Massachusetts governor's race. Bill Delaney will fill us in on some of the different tactics being used in the Bay State.


WOODRUFF: Our Bill Delaney now on the sometimes surprising stops along the campaign trail in Massachusetts.


BILL DELANEY, CNN CORRESPONDENT (voice-over): Amid the brew at Dunkin' Donuts, billionaire...


DELANEY: ... and Salt Lake Olympics knight in shining armor, Mitt Romney.

ROMNEY: Yes, a surprising sometimes when they see me across the counter.

DELANEY: Republican Romney is running, though, for governor in a state where, doldrums of summer or not, politics never even tries to sneak a three-day weekend.

ROMNEY: My work days, where I've gone out, worked on farms, flipped hamburgers, those are really designed to allow me to hear what people of different backgrounds and different work experiences are thinking about.

DELANEY: The four Democrats running think a lot, like state Treasurer Shannon O'Brien, on each other, sure, in advance of their September primary, but also on their minds, way out ahead in the polls, Romney. SHANNON O'BRIEN (D), MASSACHUSETTS GUBERNATORIAL CANDIDATE: I don't need to spend campaign days serving franks at Fenway Park or working out on a farm to understand what people are feeling. Certainly, I think people are very cynical about people like Mitt Romney, the people who come from the corporate world.

DELANEY: You don't need a weatherman to predict Democrats this fall will try blowing Romney away with ill winds from his years in the corporate world. Ted Kennedy did it in 1994, in a political firestorm of a campaign observers say hardened nice guy Romney.

ROMNEY: My opponent or opponents at this stage will do everything they can to divert the attention of the voter from the issues. They're going to instead want to use a fear-and-smear campaign. I think the people on the street are tired of the insiders on Beacon Hill. That's the real anger that people have.

DELANEY: And voters have, for 12 years now, balanced the overwhelmingly Democratic Massachusetts legislator by electing Republican governors.

(on camera): Weariness of politics as usual would seem to be good news for the one candidate in this arguably pure as the driven snow. But to some, apparently, that candidate just seems to be getting a free ride.

(voice-over): The other knight in shining armor in this race: clean-elections candidate Warren Tolman, no special interest money, but lowest in all polls and now just handed more than $3 million in clean-elections money raised from taxes and even selling off state property.

WARREN TOLMAN (D), MASSACHUSETTS GUBERNATORIAL CANDIDATE: I am the best candidate to beat Mitt Romney because I don't offer him the business-as-usual cronyism that he is going to attack as part of the Beacon Hill culture.

DELANEY: While meanwhile, down the road a piece: Democratic candidate and former Labor Secretary Robert Reich traversing the state this summer in a 1978 vintage RV. The temperature was around 97 degrees. The air-conditioning didn't work.

(on camera): People are looking for somebody who can make things work. You can't even get the air-conditioning working on this thing.

ROBERT REICH (D), MASSACHUSETTS GUBERNATORIAL CANDIDATE: I can't even get the air-conditioning to work. But, nevertheless, we are moving.

DELANEY: Toward the cooler days this fall when, if Mitt Romney stays hot, Republicans, in the corner office for 12 years, could yet make 13 a lucky number.

Bill Delaney, CNN, Boston.

(END VIDEOTAPE) WOODRUFF: Those lucky voters in Massachusetts.

A question we posed yesterday: Does "Wheel of Fortune" host Pat Sajak have a future in politics? We will have the story in a moment.

But now let's take a look at what is coming up on "WOLF BLITZER REPORTS" -- hi, Wolf.


Our justice correspondent Kelli Arena has new information about Osama bin Laden's bodyguards. You might be surprised to hear where they are right now. Also: the cost of going to war against Iraq. Will the U.S. have to foot the bill? And what will that mean for your bottom line? And more whales are coming ashore in Cape Cod and dying. It is a sad and amazing story. We'll have details.

All that and much more coming up at the top of the hour, right after INSIDE POLITICS.


WOODRUFF: Checking a story we tried to bring you yesterday: Could popular game show host Pat Sajak have his eyes on a political prize? The "New York Post" noted the "Wheel of Fortune" star recently gave a politically charged speech at a Michigan college. Among other things, he condemned the media for lauding Rosie O'Donnell as brave for publicly revealing she's a lesbian. We have calls out to Sajak to find out if he is considering a run for any office or if he'd consider Vanna White as a possible running mate.

An even bigger celebrity said today that he will take a pass on public office. While out plugging his new album, "The Rising," New Jersey's own Bruce Springsteen was asked today about his political aspirations.


MATT LAUER, HOST: There is talk in this state, in your state of New Jersey...


BRUCE SPRINGSTEEN, MUSICIAN: I know where you're coming from.

LAUER: And I used to think it was a joke. I thought they did it tongue and cheek. They said Bruce Springsteen should run for Senate.

SPRINGSTEEN: Yes. That would be...

LAUER: Well, wait. Stop and think about it for a second. Don't just brush it off. You are one of the most popular people in this state. You obviously...

SPRINGSTEEN: That's it. I'm in. I'm in.


LAUER: You obviously have strong opinions about things. Why not give it some consideration, to run for the U.S. Senate?

SPRINGSTEEN: Well, first, that's a real job. And I've spent -- the musician's life is to avoid real work for as long as you can. And I've been successful in doing so. That's why -- like I say, that's why they call it playing.

But it came out of sort of a -- I don't know, somebody grabbed the day's headlines with it. And the guy who did it got Jesse Ventura. So, actually, I'm not thinking about politics, but I am thinking about professional wrestling. I may go there next.


LAUER: Well, that's right. Then you go to politics after that.

SPRINGSTEEN: That's right. So I got to get to that place in the middle.


WOODRUFF: Well, we asked New Jersey Senator Robert Torricelli if he's relieved that The Boss is not interested in his office. Torricelli's response: "I wouldn't be able to attack Bruce even if he was my opponent."

That's it for INSIDE POLITICS. "WOLF BLITZER REPORTS" is next. Thanks for joining us. I'm Judy Woodruff.


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