Will Iraq Let Inspectors Back In?; Did Jack Welch Pay A High Price for Good PR?
Aired September 16, 2002 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From the George Washington University, Paul Begala and Robert Novak.
BOB NOVAK, CO-HOST: Welcome to CROSSFIRE. Tonight, Iraq says the inspectors can come back. For real? Or is it just another delaying tactic? And GE's former chairman pays a very high price for political correctness. But first, the part of our show that is almost never politically correct. Here comes our CROSSFIRE political alert.
The Feds are breaking up that old gang of al Qaeda murderers. Ramzi Binalshibh, the terrorist operative who allegedly played a key role in the September 11 attacks, was captured last week in Pakistan. Today we learn he is in U.S. custody outside of Pakistan. And co- conspirator C. Mukhtar al-Bakri was in Bahrain for his own arranged marriage when the Feds pinched him. He's being arraigned in Buffalo. That's good news for all Americans and a deserved cheer for the FBI.
PAUL BEGALA, CO-HOST: I could not agree more. I sit here most nights and bang on the FBI, but FBI director Robert Mueller deserves a tip of the hat. Good job, Mr. Director and your FBI agents.
Ever since September 11 though, the right-wingers from Dick Cheney on down have been desperate to blame Saddam Hussein in order to justify a war against Iraq. The latest attempt is an interview given to ABC News by a woman who claims to have been Saddam Hussein's mistress. She told the gullible folks at ABC News that Saddam Hussein had met and given money to Osama bin Laden twice. But "Newsweek" magazine quotes a CIA official this week saying, "he CIA has no information to confirm Saddam ever met bin Laden in Baghdad." Said one CIA official, "We do not shy away from evidence, but we also don't make it up." Too bad that rule doesn't apply to everyone in this debate.
NOVAK: You may not believe this, Paul, but Dick Cheney had nothing whatever to do with this con woman. Believe me.
BEGALA: No, I believe that, but he's looking for a rationale here.
NOVAK: The Reverend Jesse Jackson was in East Lansing, Michigan yesterday downgrading the American tradition for Michigan State University students. American democracy, he told them, is only 37 years old, not 200 plus. Said the rev, "democracy as we know it did not begin in Philadelphia where a bunch of white men wrote the laws." "Democracy began," he said, "only with the passage of the 1965 Voting Rights Act. So much for Washington, Jefferson, Lincoln and two Roosevelts. That's the bad news. The good news, the 15,000-seat arena at Michigan State was nearly empty for Jesse's speech.
BEGALA: You know, those old white dead guys on Philadelphia gave us a mission, to form a more perfect union. Jesse Jackson has done a lot to help form a more perfect union...
NOVAK: Oh really?
BEGALA: As did Martin Luther King and the other people he worked with.
Well, "The Wall Street Journal" editorial page is, of course, the epicenter of the vast right wing conspiracy. But even I didn't realize how thoroughly right wing the page can be. Contributing editor Mark Halperin, a novelist who once wrote speeches for Bob Dole, attacks George W. Bush on that page today in a tone that is vicious, even by my standards. He writes "the president failed the test of September 11." He also writes "he has done little to change the dynamic that brought us that day.
"His indecision and irresolution and delay have exposed the nation he dearly loves to unprecedented danger." Halperin concludes that "a year after September 11, Bush is a president more of word than deed." Ouch!
NOVAK: How could it ever be that Paul Begala approves of a right-winger like Mark Halperin? I'll tell you when, when Mark attacks George Bush.
BEGALA: Yes, I said it was sadly.
NOVAK: A chill swept over America yesterday when Senator Hillary Rodham Clinton appeared on NBC's "Meet the Press." Tim Russert asked whether she might run for president in 2008. She said she had, "no plans" and "no intention of running." Isn't that a relief? Not if you understand Clinton speak. She had just used the words absolutely not about running in 2004 and added she was 110 percent sure about that. So she was cleverly opening the door for 2008. And only the optimists, only the real optimists deny that, yes, Hillary could be our first female president. That is truly scary.
BEGALA: Scary? It's wonderful. Run, Hillary, run. God bless Hillary. You're my hero.
Well, the California libertarian party has voted to drop its candidate for governor because of "repugnant conduct." The candidate, Gary Copeland, allegedly spat on a radio talk show host during an interview about immigration. Copeland claimed that the host had turned his microphone off, which made him well, spitting mad.
Here at CROSSFIRE, of course, we have rules for civil debate. There's absolutely no spitting allowed, although California Democratic Senator Barbara Boxer once had to be reprimanded when during a heated exchange with Bob Novak over the estate tax, the senator bit off part of Novak's ear. That was a terrible (UNINTELLIGIBLE).
NOVAK: As part of my self-appointed role to separate Begala fiction from facts, Senator Boxer never bit my ear or any other part of my anatomy.
BEGALA: True enough. That's fair.
Iraq has agreed to allow the return of U.N. weapons inspectors immediately and without condition. Those are the Iraqi words. The offer is contained in a letter given to the United Nations Secretary- General Kofi Annan. But a senior Bush administration official tells CNN, "we do not take what Saddam Hussein says at face value."
In the CROSSFIRE now is Scott Ritter. He was the United Nations weapons inspectors in Iraq from 1991 until 1998. And he was in Baghdad earlier this month. Now he steps into the CROSSFIRE. Scott, thanks a lot.
NOVAK: Mr. Ritter, when you were in Baghdad, did you get a sense, or did you learn, did you talk about the fact that the Iraqi government, which was saying never to unconditional inspectors, actually were going to agree to them?
SCOTT RITTER, FMR. CHIEF U.N. WEAPONS INSPECTOR: Actually, before I got to Baghdad, I went to Johannesburg, South Africa to meet with the deputy prime minister Tariq Aziz before going to Baghdad. And in my two meetings with the deputy prime minister, I impressed upon him the harsh reality that Iraq would be destroyed, eliminated in a war against America if they did not accede to the international community's requirements for unconditional return of inspectors and granting them unfettered access.
I told him that this is a message I need to deliver to the Iraqi government. And that's when I said I need to get to Iraq and speak before the Iraqi National Assembly and meet with as many ministerial level people as possible because if Iraq doesn't accede to the international community's will, war between Iraq and the United States is inevitable. And this is a war that I believe cannot be fought until which time we reconstruct the foundation of legitimacy for action against Iraq, something we haven't had until now. Now that Iraq is committed, if Saddam Hussein fumbles the football now, it's all over for Saddam.
NOVAK: But Mr. Ritter, CNN has reported that the administration is dismissive of this agreement by Iraq. In fact, as you're well aware, Secretary Rumsfeld, Vice President Cheney has said they will never agree to open inspection. Do you believe that this administration is determined to let the bombing begin, no matter what the Iraqis do?
RITTER: Well, this is the ultimate challenge here. What is the policy of the United States? Is it disarmament? I mean, we've been told that Iraq represents a grave and imminent threat to our national security, worthy of war, worthy of the sacrifice of American service members' lives, the ultimate sacrifice somebody can give to their country. We're told that Iraq is this threat. And this threat comes from weapons of mass destruction. And now we have a situation where Iraq says what the United States said they had to say all along, unconditional return of inspectors with unfettered access. Is the issue weapons of mass destruction or disarmament? Then get the inspectors back in, and let them do their job. And if Saddam fumbles, if he doesn't allow this to happen, now you have a case for war.
Or is this really about regime removal? Is the number one policy objective of the Bush administration regime removal and all this talk about weapons of mass destruction nothing but a facade to legitimatize a war?
BEGALA: And in fact, Scott, Mr. Ritter...
BEGALA: The White House story that John King broke on our network lists several other things. They say it's not just about weapons of mass destruction. They point out, this is quoting from a White House official, there are resolutions dealing with repression within Iraq, resolution with promises to make reparations to Kuwait, reparations dealing with unaccounted military personnel, including an American pilot. Now what about those three things? Iraq is clearly not going to comply of all that.
RITTER: And none of those are worthy of a single American life being lost with the exception of the American pilot. The concept of America going to war because Iraq owes Kuwait money is laughable. The concept of America going to war because Iraq is violent, any number one of international agreements is laughable. We can only go to war when there is a threat to the national existence of the United States of America. Our national security must be at risk.
And the only thing that Iraq has that could represent that kind of risk is weapons of mass destruction. And that's why we need to be focused on what the international community and international law has said all along. Iraq must disarm. There is absolutely no Security Council resolution on the book talking about the removal of Saddam Hussein from power. That is unilateral American policy.
BEGALA: Right, but the White House does point out that there are resolutions on the books requiring Saddam to do various other things, including stop repressing his own people. And he's clearly not going to do that. It seems to me at least as someone who once worked at the White House is they are looking for a much more broader change in Iraq and cessation of the weapons program.
ROTTER: Then let's stop talking about weapons of mass destruction. Let's be honest to the American people that this is not about a threat to the United States of America, but rather about a larger design that the Bush administration has for the international community for how America will interrelate with the world. This is about regime removal. This is about the United States picking and choosing the leaders it wants in nations around the world. This is about the United States flouting the very foundation of international law that's held this world together since World War II, the United Nations charter.
NOVAK: When I interviewed Vice President Cheney, who plays a very important policy-making role, this past weekend, and he insisted that it is about weapons of mass destruction and about inspection. And let's listen to what he said to me.
(BEGIN VIDEO CLIP)
DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: He's operated for the last four years without inspectors. It would clearly indicate he's had the opportunity to build significant additional capability. We know he has from intelligence sources. And even before that, there was an awful lot the inspectors were never able to account for.
NOVAK: So he has a situation of no inspectors. And they couldn't account for them before that. You were one of those who couldn't account for them. Doesn't the vice president have a point?
RITTER: Hell no. The vice president just made the point for inspections. If the vice president has this intelligence information that he claims to have, give it to the inspectors, get them in and let them uncover the weaponry. It's as simple as that. Let the inspectors do their job.
Iraq just wove the rope that's going to be used to hang them. They've agreed to unconditional return of inspectors, giving them unfettered access. If Iraq screws up and says well, hold, you can't come here or no, we put we put on a condition here, it's all over. Now Bush has a case for war. And guess what? I'll be right there with him, volunteering my service to take on the most brutal dictator the world has ever seen in modern times.
NOVAK: We have to take a break. In a minute, we'll ask Scott Ritter why so many of his former colleagues disagree with him.
Later, what's wrong with being rewarded for doing a good job? And our quote of the day involves the long-range plans of a one-time presidential candidate.
BEGALA: ... dating to last summer. Today, Shirley, those facilities will be empty, their contents having been moved to secret locations elsewhere. And in fact, Saddam will have managed to have his cake and eat it, too. Yes, that suggests inspections won't work.
RITTER: No, you got to put that in the proper context. See, this is the problem with people selectively picking my words out of thin air. I was talking about the inspections that Richard Butler and the United States government were getting ready to send in December 1998, deliberately designed to provoke confrontation. These inspections were stopped in August of 1998, when I was to leave them, stopped because the United States didn't want to have a confrontation. They didn't like the idea of confronting Saddam.
And when they stopped, understand that the intelligence information that was used for the August inspection is perishable. Now we're talk about December, and the intelligence is no longer valid. Saddam has a chance to move. So we're going to send inspectors back into the same sites in December? Hence what I said. It's a sham.
Do real inspections, real inspections, that's what I've always been about, real inspections, real disarmament. Not fake, not cutting the corners, not violating the law, doing it the way the Security Council says it's got to be done. And now that Iraq's agreed to the unconditional return of inspectors, granting them unfettered access, it's time to unleash the inspectors again. But don't screw around with them like the Clinton administration did. Make them do their job the right way.
NOVAK: But you laid out to the Associated Press on December 7, 1998 what the inspectors might find. We'll take a look at that.
You said, "Iraq has had plenty of time to shuffle the deck, to hide its weapons, to stay one or two steps ahead of the weapons inspectors. When inspectors start carrying out no notice inspections, they will find nothing. And in so finding nothing, they will only reinforce Iraq's argument that there is in fact nothing in Iraq." Isn't that just as true today as it was in '98?
RITTER: Well, first of all, let's go back to 1998 because the same thing applies. My discussion in December 1998 dealt with the inspections going in using intelligence information from August to do an inspection in December. The intelligence is no longer viable, it's no longer valid. So you go in. Saddam shuffled the deck. You go punching into an empty bag. It's a useless exercise.
Dick Cheney just said he's got good intelligence. By God America, give it to the inspectors, let them go in, let them find the stuff, let them get rid of it. Quit playing games. The inspections should be taken at face value. Saddam says he's going to -- he's willing to do it. Let's believe Saddam. Let Saddam make the mistake, not let's let America make the mistake.
BEGALA: That's -- let's actually take a look and see what a new proposal, though, on inspections, put some teeth behind it. The phrase around town this week is coerced inspections. The Carnegie Endowment for International Peace Force came up with this. Secretary of State James Baker from the first Bush administration endorsed it in "The New York Times," writing, "to the extent that the resolution" -- U.N. resolution -- "calls as it should for Iraq to admit weapons inspectors with a warrant to go anywhere, anytime without exceptions, they could and should be backed up with the United Nations Security force on Iraqi soil, preferably under U.S. command. Failure to provide for this type of coercive inspection is one reason prior inspection regimes have failed."
Why not send Scott Ritter's successors or you yourself back in to inspect with 50,000 armed guys behind you?
RITTER: First of all, it won't be 50,000. We tried this once in 1991. We had a situation where the Iraqis were goofing around with us in Western Iraq. And we needed to get into some missile sites. And there was talk about the Marines coming in and following our inspections. It was rejected by everybody because it's a suicide mission. It's a one-way mission.
RITTER: Inspectors cannot have weapons. Inspectors go in armed with international law. We go in and say unconditional, unfettered access. And if the Iraqis mess around, you pull the inspectors out and now you bring the hammer down. But don't put potential hostages there, which is what inspectors become when you start talking about coerced inspections.
NOVAK: Mr. Ritter, we're just about out of time. I'm struck by the critical comments made about you by your former colleagues in the inspection. I'll just use one of them by Richard Spertzel, former chief biological weapons inspector says to you, "how does he know what 100 percent is -- 100 percent of no weapons? I don't. And how many biological sites did he visit? The answer is none. He has no knowledge of those sites."
Why do your colleagues have this low opinion of your capabilities in assessing the situation?
RITTER: First of all, you quote one person, Richard Spertzel. You could quote David Kay, who never worked with me. You could quote Charles Dalford who...
NOVAK: How about Butler -- ambassador...
RITTER: Richard Butler. There's four. I'll give you Ralph Acais (ph), I'll give you Tim Traband (ph), Roger Hill. I'll go down the list. The bottom line is everyone knows that I was a great inspector, that I carried out the will of the Security Council, I'm a good American who loves my country, I'm a good patriot who wants to do right by my country. And with dear respect to Dick's Spertzel, he's not working to get inspectors in. He's working to screw the pooch. I'm working to get the inspectors in, which is a military term.
BEGALA: Military term, Marine base meaning we're going to...?
RITTER: We're going to mess this whole thing up.
RITTER: We're going to mess this thing up. It's a pilot term. But...
BEGALA: Scott Ritter, thank you very much...
RITTER: Thanks a lot.
BEGALA: ... for an education on many topics with colorful Marine language.
Still ahead, a multi-millionaire says maybe I shouldn't be taking all that free stuff GE's giving me. And then later, the Bushes are screaming for a congressional war vote before the election even as they're squealing that the election has nothing to do with it. Does anybody believe them?
And our quote of the day is the winning shot in a game of my source is better than your source. Stay with us.
BEGALA: Welcome back. The Internet web site, the Drudge Report, is often a site for creative writing. Today's no exception. The headline today reads, "Rematch: Gore Tells Top Aides He'll Seek Nomination." According to the story, Gore "has confided in very top aides that he's determined to give it another try." No surprise of course that Drudge doesn't name who those sources might be. But we've go a source we can identify.
In our quote of the day, Gore spokesman Jano Cabrera tells CNN, "With all due respect to Mr. Drudge, I have a better placed and more definitive source, Al Gore. And I can tell you that he has not made up his mind."
NOVAK: You know, there are certain people well placed in the Democratic party who don't think Al Gore will run after all. So I don't think it's a sure thing.
BEGALA: I don't either. I think -- we'll wait and see.
NOVAK: It took days, but a California jury has finally decided what should happen to a convicted child killer. Connie Chung has the details next in a CNN news alert. Later, the Democrats wouldn't stoop to using Saddam Hussein to score political points, or would they? Also, GE stockholders reap the rewards of Jack Welch's labors. So why shouldn't he?
NOVAK: Welcome back to CROSSFIRE. We're coming to you from the George Washington University in Foggy Bottom, D.C.
In the 1997 movie "Wag The Dog," a White House adviser and a Hollywood producer invent an imaginary war to detract attention from a presidential sex scandal. The movie got lots of free publicity when President Clinton bombed Iraq just before he was impeached in 1998.
Now suspicious, conspiracy-addicted Democrats, like our own Paul Begala, think they're seeing a "Wag The Dog" connection between Iraq and the upcoming election. Have they been watching too many late, late shows, or just remembering how Bill Clinton did it?
In the CROSSFIRE, Democratic consultant Steve McMahon and Republican consultant Ed Rogers.
BEGALA: Ed, Steve, thank you all for coming.
BEGALA: We've got a lot to cover. It is hot, Ed.
So, let me begin with the point Novak made. In 1998, President Clinton struck Iraq. It's because facts have changed on the ground. The weapons inspectors had been kicked out. The president responded to changed facts on the ground. Back in 1990, facts changed on the ground. Iraq invaded Kuwait. President Bush responded to that which changed on the ground. Nothing has changed now except the election is coming.
Here's what our president said:
ED ROGERS, REPUBLICAN CONSULTANT: A lot has changed.
BEGALA: But let me show you what our President says.
ROGERS: I hate it when he does this.
BEGALA: The president of the United States of America.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATE OF AMERICA: If I were running for office, I'm not sure how I would explain to the American people, that said, "You know, vote for me and, oh, by the way, on the matter of national security, I think I'm going to wait for somebody else to act."
(END VIDEO CLIP)
BEGALA: He's clearly saying this he's doing this because of the election, right?
ROGERS: Well, no. That's not what he said at all.
BEGALA: But what has changed?
ROGERS: What you say is fundamentally wrong. A lot has changed. September 11 changed the world. We're in a new era where...
ROGERS: The United States can no longer wait until peril draws closer. Here we have a threatening, menacing regime that has weapons of mass destruction where we are the potential victims. That regime needs to be changed. The president is going about his business to do it, and that is a very big change.
BEGALA: First off, we are one year and five days after September 11, we're only 60 days from an election. Let me go to my second witness, Karl Rove, the president's chief political adviser. I'm only going to cite by the way, the president and his men, proving my point.
ROGERS: Yes, your MO. I understand.
BEGALA: Karl Rove wrote a memo where he outlined the Republicans' political strategy. And, the first three words: "focus on war." Now it's said, "focus on war and economy."
ROGERS: Not talking about the economy anymore...
BEGALA: They've since tanked the economy, "focus on war." The first three words. Karl gave a speech back in January at the Republican National Committee where he said, "we're going to take the issue of war to the voters." Over and over again Republican strategists say they're doing this for the war. Why can't I believe them?
ROGERS: Once again, your obsession with that, Paul, doesn't hold water. The war he was talking about was the war on terrorism, and the whole notion that it's a legitimate topic to be discussed whether or not people are satisfied with the performance of their elected leaders when we are in a war. To the degree to which that was the point he was making, it's a legitimate point to be made.
Now there's a very different point to be made. The split in the politics isn't being played on the Republican's side, it's being played on the Democrats' side, and how it is they seek to avoid taking a position before the election.
NOVAK: Steve McMahon, if Paul can cite Republicans, I can cite Democrats. And I will cite one of the leading Democrats in America, the Majority Leader of the Senate.
Let's listen to him what he said just Sunday.
(BEGIN VIDEO CLIP)
SEN. TOM DASCHLE, SENATE MAJORITY LEADER: I think that if the president makes a formal request and we work out this resolution over a period of time, it's entirely possible we could have it before the election. Absolutely. We're not going to shy away from that responsibility if we see that the time has come to pass it.
(END VIDEO CLIP)
NOVAK: See, I didn't just fall off the turnip truck, Steve. Paul and wild men like him have this "Wag the Dog" thing. He takes the good cop position. Where are you?
STEVE MCMAHON, DEMOCRATIC CONSULTANT: Well, I think the president has a little bit of attention deficit disorder. He's lost the fact that this war against terrorism -- there's a terrorist network, Bob, operating all over the world we haven't yet conquered. He now wants to open a new front.
I understand that Tom Daschle also said on that show, "I'll go down to the White House and write a resolution that will get unanimous consent from the Senate, but the president hasn't called him down. When Bill Clinton used to have matters of great national importance, the budget for instance, he called the Republican leaders down.
Now, one thing that's changed in this whole thing is the president has come back from vacation. And I'm glad he's come back from vacation after being gone for five or six weeks.
MCMAHON: But there's a serious point here, Bob. And that is, if this is so critical and so important, and there was so much evidence mounting, why did the president spend the last month in Texas and running around the country doing fund-raisers while his chief of staff said, "We don't want to roll this out in August because it's not a good time to sell it."
NOVAK: Steve, I've been watching the Democratic Party for a half century. And I'm very fascinated how it works, the intricacies, because it's so much more subtle than the Republicans. Do you sit around in somebody's basement and say that, "Hey Tom Daschle and Joe Biden are going to be reasonable, and guys like Begala and McMahon are going out with these outrageous accusations?" Is that how it works?
MCMAHON: Here's one of the problems that the president...
NOVAK: No, I'm asking you a question.
MCMAHON: No. That's not how it works. Do we -- we do that in a bar. We don't do that where anybody can listen. We're a lot more fun than that.
MCMAHON: But seriously, one of the things that's going on here is the president doesn't have support. He's now got his administration in line, which is wonderful, because he didn't have Colin Powell, I think, until just about last week. He now seems to have some movement at the United Nations Security Council, and that's great.
But until he has a coalition, until the world supports this...
ROGERS: Can I address that point? Just all of a sudden we need a coalition; please give us a coalition. Well, the whole notion that the United States Congress, that the Senate would defer action, would defer having an opinion on this matter until the president has gone out and built an international coalition.
Well, wouldn't it be easier for the president to build a coalition to protect our interests if we had the Congress supporting him and America speaking with one voice?
BEGALA: How about if he simply made -- that's a valid point, Ed.
ROGERS: Thank you.
BEGALA: How about if he simply made up his mind first, though. Here's Dr. Condoleezza Rice, the president's national security adviser...
ROGERS: ... been pretty made up for a while.
BEGALA: That's not what Dr. Rice says. I think you're right, but Dr. Rice went on the ABC "This Week" show with my friend George Stephanopoulos, and she was asked directly about what Bush was going to do.
Here's what Dr. Rice said.
(BEGIN VIDEO CLIP)
DR. CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: The United States is open to the idea of weapons inspections, although we've not decided that that is the way to go. First of all, the president hasn't determined that military action is the right course.
(END VIDEO CLIP)
BEGALA: We haven't decided inspections are right. We haven't -- he hasn't decided if military action is right. If Bush can't make up his mind, how the hell can Congress?
ROGERS: There's nothing wrong with keeping Saddam guessing. There's nothing wrong with saying we're right now critiquing our options and are going to take the very best course. There's nothing wrong with that at all.
NOVAK: Steve, I don't think Stephanopoulos likes to be called Paul Begala's friend anymore. But that's another thing.
You're a consultant. You tell these creatures in Congress how to vote. Would you tell them to vote no on a resolution?
ROGERS: I don't think so.
MCMAHON: No, I think everybody has to vote their conscience, and I think everybody will. I think the Democrats actually would be smart to take the president up on this say, "Come on down next week. Let's pass a resolution. Let's get on with the debate about...
ROGERS: That's what's going to happen. They're going to pass a resolution overwhelmingly.
MCMAHON: Beginning with the economy which, by the way, is now off that memo, right?
BEGALA: Apparently... (CROSSTALK)
BEGALA: Democratic strategist Steve McMahon, thank you very much. Ed Rogers, republican strategist, thank you very much.
Still ahead, your chance to join in this Iraq debate.
And one of our viewers is as suspicious as I am of W's timing.
But next, a story that proves that while executive excess may be legal, it's still excessive.
Stay with us.
NOVAK: Former GE Chairman Jack Welch is paying a high price for everyone else's political correctness. The SEC is now investigating Welch's original retirement package, which became public as a result of a messy divorce. In today's "Wall Street Journal" Welch reveals he has asked GE to eliminate nearly all of his lavish, but perfectly legal and well-deserved, perks. Welch will now pay GE at least $2 million a year for his Manhattan apartment and other services.
Are perks to successful CEOs really a national problem?
In the CROSSFIRE from Boston is Common Cause President and CEO Scott Harshbarger. And in New York is "Forbes" magazine Managing Editor Dennis Neil.
BEGALA: Gentlemen, thank you both for joining us. Mr. Neil...
DENNIS NEIL, "FORBES" MANAGING EDITOR: Yes, go ahead, I'm ready for my beating Mr. Begala.
BEGALA: Yes. The last time you were on this program, you will recall, I suggested that perhaps this needed to be looked into, Welch maybe needed to be subpoenaed. You had a conniption fit. Today CNN reports the SEC is looking into Welch's employment and retirement agreement.
It takes a big man to admit he's wrong, Dennis. Show me.
NEIL: Well, first of all, SEC and whatever it's going to do to investigate stuff it reads about in the headlines has nothing to do with what Jack Welch is doing. What Jack Welch did, and let's first start from a premise. This guy was worth every penny GE paid him, and he should not have had to give back anything. Second, what he did today, however, is a brilliant PR move, public relations move. If Martha Stewart had done something like this a month ago, she'd be out of trouble right now.
What I worry about, though, is that this is a bad move for corporate America. We are now inviting open season on CEOs, and we're going to have a whole bunch of bleeding heart liberals asking, "Hey, what are you going to give back?" Jack Welch shouldn't have given back a penny, although it's a smart move that he did.
NOVAK: Mr. Harshbarger, I hope you read Jack Welch's piece in "The Wall Street Journal" today. And he explained just what happened. I'm just going to read one paragraph from it.
"There was not a single day in the past six years that I thought it was improper, and I don't believe it is improper today. I was given extra compensation for remaining at GE until I was 65 -- compensation which would be delivered in-kind post-retirement rather than a much greater payment in cash pre-retirement."
They made a deal. What in the world is wrong with that?
SCOTT HARSHBARGER, COMMON CAUSE, PRESIDENT AND CEO: I think right here we have two things. One is Jack Welch was paid well for doing an exceptional job. He also did exactly the right thing to give back that money to provide real leadership in corporate America today. Average investors, including GE employees and retirees are losing millions, billions of dollars, and CEOs are retaining millions.
Now, the deal isn't whether this is legal, it's what's good leadership here, what's fair to the average investor when you're trying to restore trust and confidence. And I think the other piece of this that was really a problem was that we didn't learn about this until it was a divorce settlement, as opposed to being part of a regular disclosure.
This isn't just getting time at the gym and a phone line and an office. This was millions of dollars in perks that may well have been legal. But was it the right thing for a retired chairman of GE to do? I think not, and I think he did the right thing in giving it back.
It wasn't just politically correct, it was a real example, I hope, of leadership that we'll see from the rest of corporate America in dealing with this.
BEGALA: Well, in fact this -- Neil let me ask you about the morality of this now that it's got Harshbarger head-raising (ph). He's not the only one who's pointing out the morality of what appears to be a maybe legal but immoral.
William McDonough, who I no doubt trust you know as the editor of "Forbes." He's the president of the Federal Reserve Bank there in New York. Here's what he had to say. He spoke about this powerfully. It was written up in the "L.A. Times" this morning.
He said, and I quote: "I find nothing an economic theory that justifies this development. I am old enough to have known both the CEOs of 20 years ago and those of today. I can assure you that we CEOs of today are not 10 times better than those of 20 years ago. This is terribly bad social policy, and perhaps even bad morals."
Isn't he right?
NEIL: No, I think he's entirely wrong. I think that this is not something that government officials should be ruling on and holding forth. This is something shareholders should decide. Shareholders of GE...
BEGALA: But it wasn't disclosed to shareholders.
NEIL: Shareholders of GE watched that stock go up 1,000 percent. That's twice the rise in the whole bull market because of Jack Welch, and shareholders of GE should be the ones to decide how much that man should be paid. I don't think it was too much. When we start to question how much a CEO is worth, we get into a problem. And I have an example for you.
Mr. Harshbarger of Common Cause, he's the president, he's run that organization for three years, he's done a terrific job. They played a major role in campaign finance reform. Mr. Harshbarger earns $200,000 a year. That's more than 98 percent of the U.S. households earn, that's more than the $86,000 paid to the CEO of the Salvation Army. It's more than the $86,000 paid to the guy who runs Habitat for Humanity. But you know what...
BEGALA: What do you make? Mr. Neil, what do you make?
NEIL: Mr. Harshbarger is worth it. Mr. Harshbarger's worth every penny of that.
HARSHBARGER: I don't get to use the Common Cause plane, though. I don't get to use the Common Cause New York apartment.
NEIL: But you just quit Common Cause to join a consulting firm that I bet you is paying you and will let you use the plane any time you want.
HARSHBARGER: Wait a second. My point here is this is about government...
NOVAK: Mr. Harshbarger, with your very, very successful career in politics, in non-government organizations, you have never been in the private sector to make the kind of progress for ordinary Americans that Jack Welch did of building up jobs and growth. I mean, if it's a little -- what right do you have to criticize a man like that, is what I ask.
HARSHBARGER: I'm just -- let me be real clear here. I think this is a context of the times, Bob. I mean, let's be very clear. Average Americans have lost trillions of dollars in value. It has been simply -- it's unfortunate, but it's wrong that we have Jack Welch now sitting here with Dennis Kozlowski and Ken Lay and being equated with them.
NEIL: It's wrong to mention those in the same breath. It's terribly wrong for you to mention that in the same breath. Do not liken him to an accused alleged criminal. That is simply wrong.
HARSHBARGER: Dennis, relax, just relax a minute, relax a bit. All I'm saying is that this is not a question for perhaps for the SEC, this is a question for the boards of directors and for shareholders.
And the reality was shareholders did not know and could not have known and, certainly more importantly, Jack Welch added great value. Nobody questions that. But so did the average employee at GE. So did the average employee add a lot of value.
BEGALA: That will have to be the last word. Scott Harshbarger of Common Cause, thank you very much for joining us. Dennis Neil from "Forbes," thank you both very much for joining us.
NEIL: Thank you.
BEGALA: Coming up in "Fireback," one of our viewers has an idea for a Florida ballot that even Jeb Bush might understand. Stay with us.
(BEGIN VIDEO CLIP)
BEGALA: Welcome back to "CROSSFIRE." Time now for "Fireback," where you the viewer get to fire away at us. Let's look at the e- mails first.
Isaac Smith of Cincinnati, Ohio writes, "At this time I feel that Iraq is being used as a scapegoat and a distraction from more urgent problems facing Mr. Bush such as corporate fraud and the economy. I find it very suspicious that practically overnight Mr. Bush wanted to go to war with Iraq."
I think you're not the only one.
NOVAK: I think he's your cousin, cousin Isaac.
BEGALA: He's a great guy.
NOVAK: The next e-mail is from Johnathan Appleby of Toronto. We've been having a lot of sparring with our Canadian viewers.
He said, "Mr. Novak, I am so fed up of the depths of Canadian liberalism, aka socialism. In the spirit of NAFTA, how about we negotiate a free trade deal? You give us Dennis Hastert and Trent Lott, we'll give you Prime Minister Chretien and any other miserable leftists."
I got a better deal, Jonathan. You give us your western provinces and they'll become American states and we'll have a continual republican majority.
BEGALA: I'd take that deal. I'd like to have Chretien. He's terrific. Of course President Bush calls him Creighton. I'm just kidding. He doesn't. Give me a break.
Rick Esmonde in Nashville, Tennessee writes, "Now I realize why Paul always displays that smirk. Nothing he says can be said with a straight face."
Actually, no Rick, the smirk is a tribute to our president, who -- there we go... (LAUGHTER)
BEGALA: See, I so love and admire him that I'm trying to smirk just like him.
NOVAK: Yes. But, you did it when Clinton was in too.
Tom Reno of Biloxi, Mississippi who is Janet's brother -- no, he isn't. "The election commissioners in Florida didn't get it right again. If they want a ballot that Dade Count Democrats can understand, make it look like a bingo card."
BEGALA: Good idea!
BEGALA: Yes, sir?
NOVAK: Question please.
UNIDENTIFIED MALE: What's wrong with requiring all publicly traded companies to disclose just how large those golden parachutes are?
BEGALA: Amen, that's all I would ask. Disclose it.
NOVAK: I don't think it's necessary. I think it's a -- if you don't like the way the company is being run, sell your damn stock.
BEGALA: But you don't have the information on which to buy or sell.
NOVAK: Next question.
BEGALA: They should disclose it all. It's the shareholders' money, not Jack Welch's.
UNIDENTIFIED MALE: I'm a student at GW. Is the invasion of Iraq really a campaign issue if military regrouping, training, and deployment will likely take at least three months, well past November?
BEGALA: That's a good point.
NOVAK: Go ahead.
BEGALA: Yes, sir?
UNIDENTIFIED MALE: With tonight's breaking news that the Iraqi government offers to allow free and unfettered access to the inspectors and assuming they do that and they come back with a positive report i.e., there are no weapons of mass destruction, the U.N. it seems would have to accept their decision, or their observations but the White House probably won't.
NOVAK: The ball is in...
UNIDENTIFIED MALE: So aren't we on the road to unilateral action?
NOVAK: Your time is up. The ball is in the Iraqis' court. And, they got to be clean. If they're not clean, the bombs will fall.
BEGALA: From the left, I am Paul Begala. Good night from "CROSSFIRE."
NOVAK: From the right, I am Robert Novak. Join us again next time for another edition of "CROSSFIRE."
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