The Web      Powered by
powered by Yahoo!


Return to Transcripts main page


Kerry's Choice Of Edwards Gives Him 5 Point Bounce; Senate Intelligence Committee Condemns CIA Intelligence Leading To Iraq War; Ken Lay Indicted, Pleads Not Guilty To Charges

Aired July 10, 2004 - 19:00   ET


ANNOUNCER: Live from Washington, THE CAPITAL GANG.
MARK SHIELDS, HOST: Welcome to THE CAPITAL GANG. I'm Mark Shields, with Al Hunt, Robert Novak and Margaret Carlson. Our guest is Republican National Committee chairman Ed Gillespie. This year, the only time in history, both party chairmen both graduates of Catholic University of America.

ED GILLESPIE, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: I think it may be the first time that both are graduates of the same school, period.

SHIELDS: I think that's true. It's the first time we've had...

GILLESPIE: Great school.

SHIELDS: ...national chairmen have been college graduates.


SHIELDS: No! It's good to have you with us, Ed.


SHIELDS: Senator John Kerry of Massachusetts announced Senator John Edwards of North Carolina as his running mate.


SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I could not be more proud of the pick I have made. This man is ready for this job.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: I saw him head to head during the presidential campaign. I saw the kind of strength and courage and determination that he showed.


SHIELDS: The Democratic ticket kicked off their campaign by going to Florida to target President Bush.


KERRY: He's not just dividing America, he's got a problem with math because he not only divides America, but the budget numbers don't add up.

EDWARDS: The American people are going to reject this tired, old, hateful, negative politics of the past.


SHIELDS: The senators stressed that talking about values is no longer a Republican monopoly. A Democratic TV ad introduced the new team.


UNIDENTIFIED MALE: They're a new team for America, with a plan to make us stronger at home and respected in the world.


SHIELDS: A "Time" magazine poll showed Senator Kerry moving from a 1-point deficit against Senator -- President Bush a month earlier to now a 4-point lead, a 5-point bounce.

Bob Novak, from your long, extensive coverage of American politics, how much does Senator Edwards on the ticket change in 2004 the political dynamics?

BOB NOVAK, CAPITAL GANG: I think he does threaten saccharine poisoning with all that sweetness and hugging and everybody...

SHIELDS: You're not a huggy and touchy guy, no.

NOVAK: ...saying, Oh, this is so nice. I don't think it makes that much difference. A 5-point bounce was the same as Joe Lieberman got four years ago. It usually doesn't last very long.

The thing that some people are talking about is he puts the South in play. In talking -- my reporting to the South doesn't indicate that -- that John Edwards is going to do very well in the South. It's doubtful he can carry his own state of North Carolina, and probably the Democrats are going to waste a lot of money down there.

There's a -- I think he is a popular choice in the Democratic Party. In hindsight, I don't think anybody else would have been nearly as popular. But if it energizes Democrats, I don't know how much more you can energize them because they -- they hate Bush so much that I see very little significance in it.

SHIELDS: Well, it energizes Democrats, Margaret Carlson, but doesn't make any difference.

MARGARET CARLSON, CAPITAL GANG: Right. Yes. Well, you know, Kerry had to satisfy no special interest groups. The -- the Democrats are united enough to stand behind whoever he did. But I think this is the popular choice for Democrats. This is what they wanted. The party feared that Kerry might think he would be overshadowed by this cheerful, pessimistic guy -- optimistic guy who hugs...

GILLESPIE: Pessimistic.

CARLSON: ...who hugs. And Bush doesn't like it, but people kind of like that. It's been shown that they choose the optimistic guy. And it will make Republicans spend money in the South, Bob, because the South will become more competitive.

SHIELDS: Republicans spend money on the South?

GILLESPIE: Well, we'll put some money into North Carolina. We're obviously not going to take North Carolina for granted. We weren't going to take it for granted to begin with, but with Edwards on the ticket, we certainly won't.

But I got to tell you, Mark, you know, I ran Elizabeth Dole's Senate campaign, or I was a consultant for it, the strategist for it, in 2002. I know the...

SHIELDS: Successful campaign.

GILLESPIE: ...state pretty well. It was -- thank you for pointing that out. And the fact is that Edwards would have had a hard time getting reelected in that state because of his voting record. The fact is, this is a voting record that's very consistent with Senator Kerry's. You know, the "National Journal," very well respected, non-partisan publication read by journalists and policy makers here in town, did an analysis...


GILLESPIE: ...of all the votes -- did an analysis of all the votes in the last session of Congress. The found that John Kerry was most out of the mainstream. He was the most liberal senator in his voting record out of all 100. But John Edwards was not far behind. He was No. 4.

They both voted against the child tax credit, both voted against a repeal of the marriage penalty in the tax code, both voted for the war in Iraq, but then voted against funding for the troops, for body armor and for healthcare for the reservists. And then neither one of them showed up for the second vote for funding for the troops. They both voted against the ban on partial-birth abortion, which two thirds of the senators voted for.

SHIELDS: I guess it's going to be a piece of cake, then, Al. I mean, Ed Gillespie says it's all over.

AL HUNT, CAPITAL GANG: Mark, look, this was, for the Democrats, a great roll-out. I mean, everything worked for five days, with one or two exceptions. The pictures were great. The families looked good. The messages meshed. I mean, Bob hates hugging, but you know, a lot of Americans, you know, like that stuff.

I do agree that it's easy to exaggerate the importance of a running mate. Remember 1988? And also, Bob, I agree that there's not going to -- it's not much of a bounce. I don't think you'll see many bounces this year. I think these are -- I think the electorate is so divided, two big aircraft carriers, and you're not going to see these wild swings.

But still, I think John Edwards is a decided plus. And the reason he's a decided plus is because he is going to at least enable Democrats to go into and be competitive in a number of important areas -- four or five Southern states, I think, rural areas, places like southern Ohio. May not carry any of those, but I think it's -- Republicans are going to have to spend more resources there.

Ed, I suspect if they hadn't picked John Edwards, you all wouldn't be talking about spending any money in North Carolina.

NOVAK: You know -- you know, Al, the...

GILLESPIE: That's probably right. Well, we'd spend some, obviously, but there's no doubt. If they'd picked Gephardt, we might put a little more into Missouri. That's -- that's the nature of the business.

NOVAK: Al -- Al, you know, the -- the Democratic spin is it's going to put a lot of Southern states in play. Except for North Carolina, I don't think that's true. The Republican spin is that just because he talks with a Southern accent doesn't mean he's going to appeal to Southern voters. I think that's true.

Lloyd Bentsen was a much more moderate Southerner. John Edwards, I think we ought to say, just votes -- is just as liberal on his voting record as Kerry. He's a full-scale liberal. And I -- I don't believe that just -- that the -- that the -- that the rural voters are saying, Boy, oh, boy. He sounds like us. We're going to vote for him. I don't think they're that suckers.

SHIELDS: Let me just -- let me just toss in my two cents' worth, which is, first of all, the two secret weapons in this campaign emerged this week. That's Emma and Jack. Bob might have missed them, but these two kids...

NOVAK: Oh, please!

SHIELDS: ...have absolutely energized John Kerry. John Kerry looked 10 years younger. He was more animated than any time I've seen him since the Swift boat comrades, the guys whose life he saved, showed up in Iowa.

NOVAK: What are you going to do...


NOVAK: What are you going to do about his billionaire wife, then?

SHIELDS: His billionaire wife?

NOVAK: Kerry's, yes.

HUNT: Who, Jack or Emma's?

SHIELDS: I mean, I didn't -- I didn't think she was on the ballot. But that's -- but that's OK.

NOVAK: Well, I didn't think the kids were on the ballot, either.

SHIELDS: I mean, I'm saying it made it -- it made it...


SHIELDS: It made a distinct difference...

NOVAK: They're in the picture...

SHIELDS: It made -- it made a distinct difference...

NOVAK: They're in the picture.


GILLESPIE: Are they going to travel with him from here through November?

SHIELDS: Well, the second...


SHIELDS: The second great thing about this is that my good friend, Mr. Novak, who's been railing against plaintiffs' attorneys, forgetting, of course, that Abraham Lincoln was a plaintiffs' attorney, the founder of the Republican Party -- ignored the fact that in the overnight poll, 29 percent of Americans said it would be a weaker candidate because he's a plantiffs' attorney, 67 percent in the Gallup poll said it'd be a stronger credential.

NOVAK: It's the way -- it was the way it was...


NOVAK: Now, wait just a minute! He mentioned my name. It was the way -- it was the way -- it was the way it was worded. And Abraham Lincoln, if you read your history -- he was a railroad attorney.


HUNT: Let's stay out of the 1860 election. I think -- again, I don't think the Democrats will carry very many Southern states, but I think you're going to have to work a little bit harder than you would have otherwise in Louisiana and Arkansas, maybe even Virginia.

SHIELDS: Last word, Al Hunt. Ed Gillespie and THE GANG will be back with the Republican side of the VP story.

ANNOUNCER: Here's your CAPITAL GANG "Trivia Question of the Week." Who was the last North Carolina resident on a national ticket? Was it, A, Strom Thurmond, B, Elizabeth Dole, or C, William Alexander Graham? We'll have the answer right after the break.


ANNOUNCER: Before the break, we asked, Who was the last North Carolina resident on a national ticket? The answer is C. Graham was the Whig vice presidential candidate running with Winfield Scott in 1852.

SHIELDS: Welcome back. President Bush was asked how Senator Edwards stacked up against Vice President Cheney.




SHIELDS: Other Republicans took aim at Kerry's new running mate, and Senator Kerry fired back.


REP. DENNIS HASTERT (R-IL), HOUSE SPEAKER: Senator Edwards didn't even carry his home state in -- in the primaries against Kerry.

REP. TOM DELAY (R-TX), MAJORITY LEADER: When even people in North Carolina find out how liberal John Edwards really is, not how he talks but his actions and his voting record, they will reject him, too, as other Southern states will reject him.

KERRY: I think that Mr. Cheney's been the sort of ideological hard-liner, and I don't believe his judgments have necessarily led America to a safer place.


SHIELDS: The Bush campaign is airing a new TV add hitting Senator Kerry.


UNIDENTIFIED FEMALE: Missed a vote to lower health care costs by reducing frivolous lawsuits against doctors, missed a vote to fund our troops in combat. Yet Kerry found time to vote against the Laci Peterson law that protects pregnant women from violence. Kerry has his priorities. Are they yours?


SHIELDS: Margaret Carlson, does the Republican strategy pose problems for the Democrats?

CARLSON: Ed, didn't you just do that ad for us here?


GILLESPIE: I'm on message, Margaret. CARLSON: Yes. You know, I -- the strategy is, Hey, they're too liberal for America. But I think when you -- when you see them and when you mention tort lawyer, as is done a hundred times since Edwards was chosen, I think it's hard to make somebody who represented paralyzed children against negligent corporations into a monster. I don't think it worked in that race against Faircloth, which Edwards won, and by the way, he won the North Carolina primary.

Listen, much has been made of the -- of the fund-raiser at which, you know, some Democratic performers said things...

NOVAK: Whoopi Goldberg...

CARLSON: ... said things that were -- that were off-color. Don't need to defend Whoopi Goldberg. I don't like her, in particular, and I don't think what she said -- and I imagine Kerry didn't know what she said. he was probably on the phone somewhere. But you know, Rush Limbaugh says things that -- Dick Cheney goes on that program -- that I don't think Republicans...

GILLESPIE: Wait a second!

CARLSON: ... subscribe to. He calls John Kerry a gigolo, calls Hillary Clinton "testicle lockbox," I mean, awful things, and hasn't been repudiated. But if I were Kerry, I would have repudiated Whoopi Goldberg's remarks, but I don't think their values are bad because of it.

GILLESPIE: But in fact, what he said -- and let's be clear, Margaret. This was a Kerry-Edwards event. This was sponsored by the campaign. And the fact is that what Whoopi Goldberg said was so crude, it couldn't even be reprinted in a newspaper or you couldn't run it here.

And in fact, they won't release the tape, which they should. You know, every single Bush-Cheney fund-raising event that is not in a private home is made public. The press has made a big deal out of that. They ought to do the same thing here. And he didn't not only not repudiate it, he stood by it.

He said that every single performer here tonight represents the heart and soul of America. I just disagree with that. They -- they called the president a cheap thug. They called him a killer and they called him a liar. And then Whoopi Goldberg said other things that we can't even talk about here, and I just don't think that was...


NOVAK: Let me say something -- let me say something about the trial lawyer thing because if you say, Who are you for, crippled children or -- or the lawyers trying to get justice...

HUNT: OK, answer it.

NOVAK: Of course! What are you going to say if that's the way you put it! But the way the president put it yesterday was, Are you for small business or trial lawyers? It's the way -- the way you put the thing. Everybody knows that the trial lawyers are now the more important special interest group in the Democratic Party, more important than the labor bosses. And if you got the trial -- trial lawyers with their man as vice president, I think that's a hell of an issue for the Republicans.

GILLESPIE: Right after George Soros now, Bob.


HUNT: Well, I guess, you know, if Ed's going to hold people accountable for what they say at rallies, you must have been shocked at that -- at that guy in 2000 who, at a George Bush rally, said that John McCain didn't like -- didn't like veterans. I'm sure you were shocked at that.

GILLESPIE: And you spent a lot of time talking about it.

HUNT: It's the same -- same thing.

GILLESPIE: I'm sure you don't want to talk about this...


HUNT: Well, no. Exactly. But I'll talk about trial lawyers because I'll tell you something, Bob. In Southern parlance, which I know you don't understand, that dog won't hunt. That means it doesn't cut. People don't pay any -- people like trial lawyers down there. And I noticed, for instance, the tort reform group put out a 37-page report this week -- 37 pages about how awful trial lawyers and John Edwards -- didn't mention a single Edwards case or wasn't critical of a single Edwards case.

And if you want to go to the South and you want to go to the Midwest, if you want to go the far West, and you want to say, What do you want, a trial lawyer or the CEO of Halliburton, I think that's a great debate to have.


NOVAK: Mississippi governor Haley Barbour just passed a terrific tort reform bill, and it's very popular in the state. And this is -- the South is no longer going to be a haven for these unscrupulous trial lawyers!


GILLESPIE: We're talking about policies here, Al. That's...

HUNT: If you think Halliburton -- the CEO of Halliburton's a more popular post than a trial lawyer?

NOVAK: I'm not -- I'm not fond of either one of them.

SHIELDS: Margaret? CARLSON: And by the way, I don't support Whoopi Goldberg, but do you support Vice President Cheney saying that Senator Leahy, and saying it on the floor of the Senate, should go do something very nasty to himself?

GILLESPIE: Well, first of all, it was a...

CARLSON: And then saying he felt good about it?

NOVAK: Private conversation!

GILLESPIE: Well, it was a private conversation. It was not an official function...

CARLSON: But it was on the Senate floor.

GILLESPIE: ... of the campaign -- it was at a photo...

CARLSON: It was in a sacred...

GILLESPIE: ...on the -- on the Senate floor. It wasn't a debate...

CARLSON: a sacred...

GILLESPIE: ...on the Senate floor.

CARLSON: a sacred building.

HUNT: Whoopi Goldberg was a fool, Ed. You're right.


HUNT: She was a fool.

GILLESPIE: Well, it'd be nice of Senator Kerry would make that same point.

SHIELDS: There's no -- there's no question about it. And I don't understand why anybody has self-indulgent people at their things to say -- to say things that are outrageous, indefensible and counterproductive.

HUNT: But not everybody, Mark. Paul Newman, for instance, said that...

SHIELDS: Paul Newman was...


HUNT: give a tax cut to a rich thug like me, Paul Newman...

SHIELDS: Absolutely!

(CROSSTALK) HUNT: cut to a rich thug like me is outrageous. Even more outrageous is to give a tax cut to a rich thug like Bob.


NOVAK: Wait a minute! Wait a minute!


NOVAK: Wait a minute! Wait a minute!

GILLESPIE: When Howard Dean had a similar event occur...

SHIELDS: He did.

GILLESPIE: ...he -- he said that, This does not represent my point of view. John Kerry, at the end, said, These -- every single one of these performers represents the heart and soul of America.

NOVAK: Are you calling me a thug?

HUNT: No, rich.

NOVAK: Are you calling me a thug?

HUNT: No, you're not, but you're rich.

CARLSON: We're just calling you...


SHIELDS: All I can remember vividly is George -- George W. Bush in 2000, when that nutbag stood up there and accused John McCain of turning his back on POWs...

NOVAK: Oh, let's not go over that again!

SHIELDS: ...and MIAs...


SHIELDS: I'm still waiting for that repudiation. I hope Kerry does repudiate.

Next on CAPITAL GANG, the Senate's indictment of pre-war intelligence on Iraq.


SHIELDS: Welcome back.

The Senate Intelligence Committee issued a unanimous report condemning the CIA's intelligence leading to the invasion of Iraq.


SEN. PAT ROBERTS (R-KS), INTELLIGENCE COMMITTEE CHAIRMAN: Today we know these assessments were wrong.

SEN. JAY ROCKEFELLER (D-WV), INTELLIGENCE COMMITTEE RANKING MEMBER: We would not have authorized that war with 75 votes if we knew what we know now.


SHIELDS: The committee's Republican chairman was disputed by the acting CIA director.


ROBERTS: Most, if not all, of these problems stem from a broken corporate culture and poor management and cannot be solved by simply adding funding and also personnel.

JOHN MCLAUGHLIN, ACTING CIA DIRECTOR: No, I -- I don't think we have a broken corporate culture at all.


SHIELDS: The committee's Democratic vice chairman had a complaint.


ROCKEFELLER: The committee's report fails to fully explain the environment of intense pressure in which the intelligence community officials were asked to render judgments on matters relating to Iraq.


SHIELDS: Al, does this report suggest it was not President Bush's fault that the U.S. went to war on bad information from the CIA?

HUNT: George Bush has rewritten Harry Truman's old motto. He now says, The buck stops with somebody else, you know, not with me. The CIA obviously made huge blunders, as this -- as this report reveals. My favorite story is the -- is the mobile labs. Remember the ones that Colin Powell talked about? The source was a -- a drunken informer named "Curveball," and it was totally bogus.

But it wasn't just the CIA. And the CIA, in fact, was skeptical about a couple things that other people in the administration pushed. For instance, the al Qaeda-Saddam link, which also was phony, you know, Mohammed Atta over in -- in Prague. Don Rumsfeld's -- Paul Wolfowitz, the Defense Department, had their own intelligence apparatus. Dick Cheney was determined to go to war from 2001. And to blame this on the CIA I just think is not very attractive.

SHIELDS: Bob Novak, the CIA obviously dropped the ball here badly and gave bad information.

NOVAK: We all agree on that.

SHIELDS: Yes. OK. But I mean, does the president have any accountability?

NOVAK: Well, of course he's got accountability. He made the decision. But the idea that he forced the CIA into this is just not substantiated in the evidence of the committee. That's -- the reason this -- this took so long to put out is some very partisan guys on the committee, Dick Durbin and Carl Levin, senators, were -- were just refusing to put out this report. Jay Rockefeller, to his credit, finally let it go out. But if you read the individual views, the Democrats won't let loose of the thing that the president somehow forced the CIA into this. They rely on the -- on a very shaky, ambivalent evidence of one CIA official. And if you read the report, if you wade through it, the evidence is just not in it.

SHIELDS: Margaret Carlson, the United States' credibility is diminished. The United States' standing in the world is diminished. The hatred of the United States has increased exponentially, and we're probably more vulnerable than we were before the war with Iraq. I mean, is that a fair conclusion?

CARLSON: At one point, I would have said Iraq is safer as a result of our going there, but I'm not even sure of that anymore. But certainly, America isn't any safer. And that Curveball -- an analyst read the -- what Colonel -- what Colin Powell was about to say to the U.N. and said, Hey, stop. That's based on Curveball. He got back a message from his boss at the CIA saying, Don't bother. The powers that be want to go to war, and they don't care whether Curveball is reliable or not.

And there's a story in Bob Woodward's book about Bush saying, Listen, Joe public isn't going to think we should go to war on the -- this information, he says to George Tenet. And George Tenet says, Don't worry. I'll come back with a slam-dunk case. And everybody was imbued with the idea that they had to make the case...

NOVAK: But that is not...


GILLESPIE: Of course it's not, and they found no indication whatsoever of -- of the White House putting pressure on the CIA. There are system problems here. There's need for reform. The president has called for that himself and set up the commission with -- with former senator and former governor Chuck Robb to head to try to find some solutions here, to do other things that are necessary in terms of human intelligence. We have to readapt the intelligence operations of this country in the same way for the war against terror like we did in the cold war. And the fact is that we are safer today as a result of Saddam being removed. To say that all of a sudden we're hated now completely discounts the fact that before this war, we were attacked on September -- not only on September 11, but the World Trade Center was attacked in 1993. The USS Cole was attacked. Our embassies in East Africa were attacked. We have been subject to a war against us for years in this country!

CARLSON: And this is the second report which says there's no relationship between al Qaeda and 9/11 or Saddam Hussein. GILLESPIE: No one's said -- no one...

CARLSON: And secondly...

GILLESPIE: ... indicates there was a relationship between al Qaeda and 9/11! What they said was that...

CARLSON: The vice president...

GILLESPIE: ... there was a relationship between al Qaeda...

CARLSON: The vice president...

GILLESPIE: ... and Saddam, and...

CARLSON: ... keeps saying that.

GILLESPIE: ... that is -- that was indicated on eight different occasions in the report!

CARLSON: Not in relationship...


HUNT: ...Dick Cheney has made...

GILLESPIE: Contacts.

CARLSON: Contacts.


GILLESPIE: ... eight different contacts.

HUNT: ... that case repeatedly, including the bogus, you know, Mohammed Atta...

GILLESPIE: But this commission...

HUNT: ... meeting...

GILLESPIE: But this report...


HUNT: I don't disagree with much of what you said, but you know, you can't blame the CIA for the Bush White House giving us...

NOVAK: Could I...


HUNT: ... entirely now phony rationale for going to war.

NOVAK: Can I just make a -- get above the battle between you fellows? I'm going to intervene... HUNT: I'm not battling, I'm agreeing.

NOVAK: I'm going to intervene between you...


SHIELDS: Gee, Bob, it's very big of you.

NOVAK: It is -- I'm going to -- I'm going to -- I'm going to say that this is a -- this is a political year. This has become a political debate on whether or not the CIA was bludgeoned into making assessments. And if you read that -- is that -- is that it? No, it isn't. But if you read that report, Margaret, there's no evidence in that report!


HUNT: That's a secondary issue. The main issue is...

NOVAK: That's what the whole issue is!

HUNT: ... is what -- is what this administration -- Donald Rumsfeld -- Paul Wolfowitz didn't rely on the CIA, Bob. And I'll tell you something. The more they trash George Tenet -- you know, Mr. Tenet may write a book.

SHIELDS: The moral premise of a preemptive war is a clear and existing danger to your country. There was no clear and existing danger from Iraq to the United States, and that is sadly the case. That's the reality, whoever -- however we came to that conclusion, that's the tragedy of this. It was a tragedy that became a disaster.

Ed Gillespie, thank you for joining us and for bringing Kerry (ph) with you.

Coming up in the second half of THE CAPITAL GANG, our "Sidebar" story is the indictment of former Enron CEO Ken Lay. We'll go "Beyond the Beltway" to California, where Governor Arnold Schwarzenegger is deadlocked with legislators over the budget. And our "Outrages of the Week." That's all after these urgently important messages and the latest news headlines.


CAROL LIN, CNN ANCHOR: More Cap Gang in just a moment, but first a look at what's happening now in the news.

The fate of a Filipino hostage in Iraq remains uncertain. Hours ago, officials in the Philippines said the 46-year-old truck driver was being released. That may not be true.

Militants holding Angelo de la Cruz say they still have him and are extending their deadline by 24 hours. They've also added a demand for Philippine troops to leave Iraq by July 20.

A U.S. Marine who disappeared in Iraq in mid-June turned up in Lebanon this week and is now being debriefed in Germany. He may soon be home.

Marine Corporal Wassef Hassoun could return to the U.S. as early as Monday or Tuesday.

And President Bush reiterated his support of a ban on same sex marriage today in his radio address. Mr. Bush says legalizing gay marriage would re-define the most fundamental institution of civilization.

The Senate is considering a constitutional amendment that would ban same-sex marriage. A vote on the amendment could come in the Senate as early as next Wednesday.

And that's what's happening in the news right now. I'm Carol Lin keeping you informed. CNN, the most trusted name in news.

Now back to Mark Shields and the CAPITAL GANG.

ANNOUNCER: Live, from Washington, THE CAPITAL GANG.

SHIELDS: Welcome to the second half of THE CAPITAL GANG. I'm Mark Shields with Al Hunt, Robert Novak, and Margaret Carlson.

After a two and one-half year investigation, federal prosecutors announced the indictment of former Enron CEO Kenneth Lay on criminal charges.

He pleaded not guilty to heading a scheme to hide more than $7 billion in corporate losses.


KENNETH LAY, FORMER ENRON CEO: As CEO of the company, I accept responsibility for Enron's collapse. I firmly reject any notion that I engaged in any wrongful or criminal activity.

ANDREW WEISSMAN, PROSECUTOR: Rather than come clean and tell the unvarnished truth about Enron, Lay chose to conceal and distort and mislead.

ROBERT MUELLER, FBI DIRECTOR: The message to those in corporate America who would abuse their positions should be very clear. Executives who deceive the investing public and manipulate financial reports will be held accountable.


SHIELDS: Bob Novak, justice denied is justice delayed -- why has it taken two and a half years to indict Ken Lay?

BOB NOVAK, THE CAPITAL GANG: It is very difficult, Mark, to build a case against him and I'm not even sure they've got a case right now.

It's not clear that he was in charge of the company and we have a system of justice in America where you have to convince a jury -- and we just had the Adelphia case where they acquitted one of the people; they did -- they had a hung jury with another one.

So just because the Justice Department sends somebody to be indicted doesn't mean you have to be. This is a terrible blow for the Democrats, his indictment, because they say oh boy, oh boy they haven't indicted Kenny Boy Lay. Isn't that terrible?

I'm going to say one other thing. And that -- and that is this. That I have -- I am offended by the perp walk of taking this man and putting him in handcuffs. He's been convicted of nothing.

He is not a rapist, he is not a murderer, and they have this long, slow walk across the parking lot just for publicity. I didn't like it when Rudy Giuliani -- as he was attorney general years ago, and I don't like it now.

SHIELDS: Al Hunt -- Al, I'm going to have to ask you one thing and that is, if I'm not mistaken, Enron was the single biggest contributor to President -- to George W. Bush's -- political career, and I don't know how that becomes a problem for the Democrats, but maybe you can explain.

AL HUNT, THE CAPITAL GANG: It was, and Bob doesn't like perp walks for rich white guys. I haven't heard him complain about any others. And -- "problem for the Democrats" is just silly.

Look, I don't know the particulars of this case. I don't know if Kenny boy is -- is guilty or innocent. I don't have any idea if they'll be successful or not. What I do know is that if he's innocent it's because he didn't know what was going on.

He was really basically an idiot. And Kenny Boy, this idiot, met six times with Dick Cheney's task force in 2001 to plot energy strategy, which raises questions about the judgment of the Republican administration.

NOVAK: Well, that just...

MARGARET CARLSON, THE CAPITAL GANG: Well, the Bush administration can blame the CIA for faulty intelligence, and they -- Kenny Boy is blaming his underlings for -- for his problems. I don't think it's going to work, and I think a perp walk is perfectly appropriate, given that this is not a victimless crime.

There are thousands of Enron employees that are penniless. There are pensions that were plundered, that are gone. They are unemployed; they have nothing. Nothing. And Ken Lay still has his mansion and other things.

So I think it's a good idea to show that -- Bob, stop looking at me like that.

NOVAK: Well, hold on -- you're not alone.


SHIELDS: Go ahead, Bob. NOVAK: I will say this: the hatred of you liberals toward corporate executives is such -- is such -- that you...

CARLSON: Corporate criminals.

NOVAK: That you just -- you just -- you want them intimidated. He is not a criminal. He has not been convicted of anything.

And I talked to a former U.S. attorney and said why do they put the cuffs on? You put the cuffs on a guy because they might run, strike back at the officer, or flee.

Do you think Kenny Boy and he didn't have the cuffs on is going to run across the parking lot into a sedan which is going to take him to a car which would push him into the Grand Cayman Islands? Is that what you thought?

SHIELDS: I take great -- a matter of personal privilege here. I like a lot of CEOs. None probably more than Warren Buffet who objected to the tax plan President Bush's, the taxes on billionaires at a lower rate than his secretary's. So I mean there are good CEO's, there are enlightened CEOs, aren't there, Margaret?

CARLSON: Yes, but corporate criminals should get treated as criminals.

NOVAK: I just hope you are not indicted and they say that Margaret is a -- is a criminal before she is -- before the bar of justice.


CARLSON: I agree with you. I finally agree with you. I hope I'm not indicted.

HUNT: If you are, I'll perp walk with you any time. Thanks.

CARLSON: Thank you.

HUNT: But Bob, I actually kind of agree with you. I think the perp walks are unnecessary. I'm just thinking let's just not complain when we're talking about rich white guys. Let's complain about the whole system in general.

NOVAK: If a guy -- if a guy is in danger of fleeing or attacking, the federal officer put cuffs on him. But we all know that this is an attempt by the Justice Department to get President Bush off the hook with Enron, to make him look good and of course -- and the reason I -- I didn't understand what I was saying -- why it's bad for the Democrats is they can't moan and whine they haven't indicted Ken Lay.

HUNT: So it's worked. The strategy has worked. They've gotten George Bush off the hook and they've hurt the Democrats? Right?

CARLSON: White-collar criminals get off all the time up until now.

SHIELDS: I would just say if Ken Lay starts talking about the people he put on his payroll who were active in Republican politics, it could be a very bad day for this administration.

Next on CAPITAL GANG, a CAPITAL GANG classic. Al Gore's pick for vice president.


SHIELDS: Welcome back. One week before the 2000 Democratic convention, presidential candidate Al Gore made history by picking the first Jewish nominee to join a national ticket.


AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: He believes, as I do, that the earth is the (UNINTELLIGIBLE) and the fullness thereof.

SEN. JOE LIEBERMAN (D) CONNECTICUT: Dear Lord, maker of all miracles, I thank you for bringing me to this extraordinary moment in my life.


SHIELDS: CAPITAL GANG discussed this on August 12, 2000, from the Democratic convention in Los Angeles.


NOVAK: Oh, well, he is really going to play -- it remains to be seen. Particularly when it comes out that he is not some kind of a maverick who has his own ideas. He's going to be in lockstep with Al Gore on everything, and he really does -- he may talk the moderate talk, but he has always walked the liberal walk.

HUNT: One of the things some of those Democrats have told me about when I -- and I suspect you, too, is they expected Gore to make a politically calculated pedestrian decision, and it looks like it was not. It looks like it was a good decision.

CARLSON: People tend to turn the TV off when Al Gore comes on, and Joe Lieberman actually has this, you know, really quite wonderful countenance.

I mean he's exuberant and he beams light. He's just a -- he's just a great guy to have in the room.

UNIDENTIFIED FEMALE: Joe Lieberman is sort of a reminder of Clinton in a way that John Kerry wouldn't have been, and John Edwards wouldn't have been, and sort of a reminder of Al Gore's own failings.

SHIELDS: He gave Gore the best week he's had since 7th of March. We found out about it and it pre-empted the news and put the Republicans on the defensive. (END VIDEO CLIP)

SHIELDS: Al Hunt, in retrospect did we exaggerate the impact in 2000 of Senator Lieberman?

HUNT: Teeny bit. Joe Lieberman was Mr. August; he was not Mr. October when he blew the debate encounter with Dick Cheney. But Al Gore lost that election all by himself.

SHIELDS: Bob Novak.

NOVAK: Well, people in the media just get all excited about a vice president, get all excited about Edwards. Lieberman didn't count, and Edwards won't count.

CARLSON: Well, let's hope that Bush does not dump Cheney, as some people have suggested, the Dems should hope, because I think John Edwards has Lieberman's good qualities except he is a trial lawyer who will hone in and will not be, in the debate, I think, as easy a combatant as Lieberman was.

SHIELDS: Important to remember the two worst vice presidential choices in my lifetime. Spiro Agnew in 1968 and Dan Quayle in 1988 were both on winning tickets.

HUNT: Yes.

SHIELDS: Next on CAPITAL GANG, beyond the beltway looks like another budget impasse and this time in California, this time under "the governator." We'll be joined by Dan Walters of the "Sacramento Bee."


SHIELDS: Welcome back. With Republican governor Arnold Schwarzenegger and the Democratic-controlled legislature unable to agree, the California state government missed its June 30 budget deadline for the ninth time in 11 years.


GOV. ARNOLD SCHWARZENEGGER (R) CALIFORNIA: I don't want them to go through this whole routine that they're used to, which is let's drag this on throughout the whole summer. I want to have it done now.


SHIELDS: The legislature adjourned for the weekend, and the governor traveled to his native Austria, there to lead the U.S. delegation for the funeral of the Austrian president.

He left behind a controversy caused by his secretary of education, Richard Riordan, the former mayor of Los Angeles, who while visiting at the Santa Clara central library said:

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: Did you know that my name actually means, in Egyptian, goddess?

RICHARD RIORDAN, CALIF. SECY. OF EDUCATION: It means -- it means stupid, dirty girl.


SHIELDS: Riordan apologized and the governor accepted his apology, so far resisting calls for Riordan's resignation.

Joining us now from Sacramento is Dan Walters, political columnist to "Sacramento Bee." It's good to see you again, Dan.


SHIELDS: Dan, is the honeymoon now ending, or fraying at the edges, for Governor Schwarzenegger?

WALTERS: I think the honeymoon is over for Gov. Schwarzenegger in the media. The media weather has turned pretty cloudy and even stormy of late.

I think it's over with the politicians in the capital. Even his fellow Republicans who are -- I think the celebrity has worn off, and they're seeing him as a not too reliable politician who tends to tell one group one thing and another group another thing.

But it's not over yet with the voting public. He still has a sky-high approval rating. You know, like 70 percent plus in some of the more recent polls, so yes, it's getting a little tougher for him. It's not quite the piece of cake that he thought it would be.

SHIELDS: Bob Novak.

NOVAK: Dan, the Republican Party has been in very bad shape in California, of course. President Bush experienced that in the polls.

Do you think this is just an individual -- this support from the people that you mentioned? Is this just an individual thing for the governor, or does it have any effect on the presidential race, or not even that -- any effect on the legislative races in the year 2006?

WALTERS: Probably on neither. I don't think anybody gives Bush any chance at all in California. This is a -- this is a wash out state for him. This is a state that carried the state (ph) for granted.

And there are very, very few legislative races. No, this is about Schwarzenegger and to a certain extent maybe about some ballot measures in the fall, but it's basically about Schwarzenegger.

I mean he's the sort of guy who kind of sucks all the oxygen out of the air and everything runs around him.

And he's finding it to be very tough. You know, he said he was going to do this, and he was going to do that and he was going to set the budget right and he was going to balance everything. And he's not doing it.

He's given in. He's turned out to be something of a pussycat, actually. And much to the chagrin of Republicans.

SHIELDS: Margaret Carlson.

CARLSON: Hey, Dan. Among the things that Schwarzenegger's waffled on is just how much he's going to campaign for the president. I know he's going to the convention, but do you have an idea of what Arnold's actually going to do?

WALTERS: Very little, I think. Very little indeed. I think he's going to kind of find something else to do in the fall, for the most part. California is not going to be in play anyway. He'll make a few token appearances, I'm sure, but California is basically not going to be in play.

Now Schwarzenegger believes that his political success lies in not being very partisan. Being kind of above it all, being a kind of a citizen politician, not just another grubby sort of partisan politician. So I think he's trying to avoid getting involved as much as he can.

Although he's not going to go to the Democratic convention. Originally he was going to go there, at least be there in town, while Maria Shriver was there, but he's not going to do that now.


HUNT: Dan, one of the pledges that Arnold made was that he was not going to raise taxes. Do everything possible not to raise taxes.

Is he now going to have to raise taxes and if so what effect will it have on him in the Republican Party?

WALTERS: He's not going to have to raise taxes this year. They've got enough borrowed money still in the till. Credit cards haven't quite been maxed out in California, but he's -- he'll max them out during this -- this coming year.

I think the question is what he has to do next year and the budget that he's ready to sign is probably $7 billion in deficits next year and $10 billion the year thereafter, so he's probably going to have to consider taxes and much to the chagrin of Republicans.

He did not do the kind of spending cuts that he said he was going to do, therefore he's probably going to have to look at taxes next year.

SHIELDS: Dan, Jim Brulte, the Republican Senate leader confided that -- didn't confide -- revealed that Arnold Schwarzenegger had been to his office on his birthday twice on the same day, which was more than Brulte, one of the most respected Republicans in the entire state, had had either Gray Davis or Pete Wilson visited his office the entire time they'd been there.

Is this personal touch of the governor's -- has it been effective? Or is it -- is that starting to wear out a little bit, too?

WALTERS: No, the personal touch is very effective. He's not shy about going into legislator's offices. He doesn't expect everybody to trip to him. He's very accessible; he's very, you know, personable. Those all work to his advantage.

His problem is that I think he takes a Hollywood approach to bargaining. In Hollywood everything is wonderful and everything is this, and everything --and they leave it to lawyers and they nail everything down in 40-page contracts. But in politics, as you know, everything operates on a handshake.

And what he's been doing, he's been telling different groups and different politicians different things about the same subject and it's starting to haunt him a little bit.

He kind of is doing a double cross of some people in local government and then when they raise a stink he certainly backtracked immediately.

He has gotten some rough handling with the -- or at least his aides have and the Republican meetings over -- over things so his problem is I think he's bringing a Hollywood-style to politics and Hollywood style is always looking at the positive, never looking at the negative and leaving the details to lawyers. And it doesn't work that way in politics.

SHIELDS: Hey Dan Walters, thank you so much for being with us.

WALTERS: You're welcome.

SHIELDS: CAPITAL GANG will be back with the "Outrage of the Week."


SHIELDS: And now for the "Outrage of the Week."

Every four years, the nation's great newspapers urge intolerant Republicans to make their party a big tent on abortion by welcoming pro-choice voices and speakers to their national convention.

Well this year, GOP delegates will hear prime time speeches from two supporters of abortion rights and of gay rights, Rudy Giuliani and Arnold Schwarzenegger.

Now, do the tolerant open-minded Democrats have the guts to open -- have an open tent convention of their own by inviting a pro-life Democratic office holder to speak on TV in prime time in Boston? We'll find out -- Bob Novak.

NOVAK: It's an outrage that John Kerry did not name Hillary Clinton as his running mate. Senator Clinton displayed her qualifications for today's Democrats a week ago.

Addressing rich supporters, she said of tax cuts, quote: "We're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good." End quote.

That's good. But not as good as the master, Karl Marx. He wanted wealth distributed to each according to his need. But you're getting there, Hillary.

SHIELDS: Margaret Carlson.

CARLSON: Mark: the commanding general at Bush's Alabama unit never saw him, nor did two supervising officers at Ellington Air Force Base for over a year of his National Guard duty.

Bush says well, maybe he didn't show up consistently. Anyway, he got an honorable discharge, and, by the way, why not check the records?

Well, why not? The Pentagon announced today that those records have been destroyed. Now, let's hope the Bush administration and campaign go back and apologize for doubting whether Kerry was injured sufficiently to deserve his two Silver Stars and Purple Hearts.


HUNT: Mark, when he was in the House, Dick Cheney once called Democratic speaker Jim Wright, quote, "a son of a bitch," end quote, for keeping a vote open ten minutes to secure victory.

Now, that's become routine under House Republicans, the latest being this week when a vote was held open for 38 minutes as the leadership strong armed these Republicans to switch their votes and thus allow John Ashcroft to keep snooping into library records under the guise of anti-terrorism.

No word yet from our sometimes profane vice president.

Before tossing it back to you, Mark, I understand you are the newest grandparent on this panel.

Future president Jack Shields Doyle was born June 28. He weighed in at seven pounds and six ounces. Mother Amy, Dad, baby, his exceptionally young grandmother, and new grandpa are doing just fine.

And Mark, I assume you can deliver him to the Democratic column.

SHIELDS: Well, we've got him registered, that's for sure. Al, thank you.

This is Mark Shields saying good night to my son-in-law, Chris (ph), too -- and good night for THE CAPITAL GANG.


International Edition
CNN TV CNN International Headline News Transcripts Advertise With Us About Us
   The Web     
Powered by
© 2005 Cable News Network LP, LLLP.
A Time Warner Company. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines. Contact us.
external link
All external sites will open in a new browser. does not endorse external sites.
 Premium content icon Denotes premium content.
Add RSS headlines.