Evening Exchange; News Analysis

Hi I'm Derek Ward sitting in for Kojo Nnamdi. Welcome back to evening exchange. Former Enron CEO and chairman Kenneth Lay became the fifth current or former Enron executive to refuse to testify before congressional committees investigating the company's downfall. Just one of the stories we'll be discussing with Jack White of Savoy magazine. How would Dale of The Washington Times. Mark Plotkin of WMU radio and political commentator Charlotte Harley you know the headline update what's the latest on this this ongoing scandal I guess you could call it Will there be for connoisseurs of financial scandal it doesn't get much better than we got this week when we were treated to the enlightening spectacle of Ken Lay the same kid Lay who last week said his wife found to explain how terribly he felt about the plight of Ali and mine employees who lost their life savings who this week sold one of his many houses in Aspen for 10 million dollars three thousand three hundred dollars a square foot which is more than twice as much as anybody ever received before. Explaining that this badly as he feels about this and no matter how much he wanted to answer these questions he could not testify on the advice of his counsel.

And of course no members of Congress believe this he was beaten up or very severely he was called Kenny boy I believe by the chairman because they were clearly this was Bush's nickname for him. You got that there was some sarcasm there. He may not answer questions now maybe but sooner or later the bottom of this that we're going to get to the bottom of the story. And believe me it's going to be an ugly ugly thing when they get there it seems to me that he's going to be spending most of his time now that he has so much free time testifying before various congressional committees because well I thought he caught them died of copping the fifth one for various and I still can I just want to add one factual note far be it for me to make these links. But his attorneys are all sober. Who is the former U.S. attorney. And you might remember him because he was the U.S. attorney for the district Columbia during Watergate. And I think that the Democrats feel that this is this is a blessing this is just dropped in their lap for the congressional races.

And I try to separate and try to distinguish how much they receive compared to how much the Republicans you know when all the species we come out on the other end is clearly going to go write a book and somewhat competently somewhere in obscure I mean that I think it's too soon to tell I mean as Jack indicated there's so much that we have to get to you know bottom of this but I think yesterday didn't satisfy anyone after all this grandstanding that's been done. The end of the day people need to get. People need to find out what happened. And I you know I really believe that lots of people would prefer to bypass all the grandstanding and let's get down to the bottom of the situation and forget you know we don't need to see everyone take the Fifth. We really don't need to see that what we need to know is what happened and how do we prevent it from happening again and I think also that we need to reassure American investors and there are lots and lots of them lots of us who have money and poor wanky plans that companies all over are not doing what Enron did. I think there are lots of American Americans and many of them Republicans Republican voters who tend to be stockholders

back waited to great who will look at this and not ask the politicians what are you doing to protect my savings. We want to get one of the great changes that is happening in America in the last generation is that roughly half of all Americans now are stockholders in Sister class went to class you can not believe what you are told and they and finance reports by companies and the biggest scandal here is going to turn out to be I think the way Congress has changed the accounting rules to allow some of this very very peculiar financial reporting. That's a scandal that's going to be down not only on Republicans but also on Democrats including Senator Joseph Lieberman who were involved in every writing so it was the right decision in the stuff to have this was one of the most reputable firms out there they did a lot of work in the District of Columbia they have they get well they merge with state how do they really the other thing about a former chair of the Securities Exchange Commission is becoming the hero of this because he warned against accounting firms it inherent conflict in the writers.

Do your books doing the accounting also all by the way we can do consulting work for you. Yeah they are to everybody. You didn't have to be a financial wizard to figure out that there are compromises it seems to me the object really really coming if it were lost has changed the way that our pension systems are structured probably theirs. I mean everybody is scrambling now to try and get the distillations through Congress Bush has his version. There is no rational version of Summer's family no sure assimilated reforms are taking place in the investment banking firms as well where analysts who were supposed to be independent objective analysts of stock offerings have in fact seemed to have tailored their filings in order to promote the investment banking operations of the company. They clearcut just interest all over the place and I also think it's a wake up call to the investors and consumers that it may not be the wisest decision to put all of our retirement money in one company's stock and you know this is also I mean you could only see good reason for all of us to

better educate ourselves about what exactly are. You. If you don't have a financial planner you should educate yourself on what exactly is going on if you do have financial literacy day. But I'm not all that you know a lot of things have a lot of these investors especially the smaller ones who are investing in other companies that happen to get gobbled up by Enron and they didn't necessarily know they are synonymous with all this. That's good advice. But let's not forget some awfully big boys got caught up in this scandal as well. The former secretary of the Treasury in fact who was now a consultant the cold cold in the White House trying to get some help. Robert Louis Robert Ruben because his company which is cities are clearly at Citibank which is clearly a very sophisticated company they have a lot of money coming up in this mess too so you're right. The BUT THEY problem about about seeking advice but there's not so much that the little guy can do as long as the big guys don't play fair. But that's really what the Major saw it seems to me and I don't I don't want to sound like a socialist or capitalist is on the capitalistic system they're saying that if stocks companies

publicly own publicly traded companies if the figures are caught it's just not then right it could be any I go through the whole financial integrity of reporting of people inflating because you know they're not worth what's just what we're used to seeing small countries. I got it. And here we have it right here on the long story which is what you know you really when you talk about the indignation that's been expressed by all the members of Congress and also you know we see that we also see the list of how much they've gotten through you know for Enron from Kenneth Lay. Is that going to play well with voters or people make scoring any political points on this by beating up on Kenneth Lay. Well I don't know if. That Enron money. I mean it. Everyone had their hands in the Enron Kitty and you know making it a political scandal I just don't think it's helpful and all this stuff financial scandal that I mean it hits it hits Democrats Republicans independents. Everyone but you remember the post office scandal where in terms of rust and

Cosco I was right the depth of their behavior. Senator Hollings said he took 3000 got 3000 dollars from Enron but Kay Bailey Hutchison the senator from Texas got nearly 100000 and he said I consider she's not even the chairman of the committee you get to the million songs. So yes dammit maybe I do that and I take is you more and they're just a little bit culpable. Yeah I mean let's let's move on to another subject. We've had a terrorist alert this week. Perhaps the most specific that we've had since September 11 in that it gave us a date and perhaps even some suspects the date came and passed so far nothing's happened. Do we work the risk of having our Tom Ridge and perhaps the Attorney General Ashcroft be the man who cried wolf or are we still as vigilant as the public that we as we need to be. I think that we do run the danger of them. I wouldn't say they're crying wolf because I'm sure they have good reasons for these warnings but the warnings are so nonspecific

and they have particularly just after 9/11 they came at such a furious pace that you wonder what you were supposed to do. The president told us to go about our lives and you know John Ashcroft told us to you know go looking around for terrorists. I didn't do anything differently yesterday and I'm you know surely grateful that nothing happened but I don't know what I was supposed to do. Well I think part of the promise at this particular terrorist alert was a little bit confusing. I mean it may be it was going to happen at the embassy in Yemen. The detainees over Cuba gave some conflicting information. So what we did sort of know is that there wasn't going to be anything happening on mainland United States. But there were in these other areas and I mean I think they're doing the best that they can by alerting Americans because you don't want to be caught off guard but on the other hand you do have to be concerned about this crime all the other big news on the terrorist terrorism front this week is that is that according to Colin Powell

It looks as though we're now putting together some sort of plan to go after Saddam Hussein in Iraq sooner or later. After this I have to be honest I'm with the. Business is finally cleared up and this is causing enormous jitters among some of the other countries that have been involved in most with the enemy in the coalition against terrorism and yet somebody like Laidley terrorism in Afghanistan. It looks as though they're going to try to pick some kind of a fight with Saddam Hussein over this question of the inspections of his weapons of mass destruction expecting him to turn it down and therefore give them a reason a pretext to do something else more forceful. But I thought he said before the committee that this is not imminent. And in terms of the other countries and the troika of the axis of evil North Korea and Iran he didn't address those. Yes I think he said there was no war going to be mounted against those two countries but it's not imminent doesn't mean never.

Well yes I mean I was right I mean it's well you know I mean sooner or later but I think you've got to look at the implications of having Saddam there not just sitting as this ugly little dictator he is but a knuckle dictator with weapons of mass destruction that he might like to hand to some of these terrorist groups you know there I mean. That is really I mean that that is the reason why he is such a danger. Right and he's continually denied the inspectors be able to go in there and this is something we're keeping these two loose connections between Saddam Hussein and the anthrax that has turned up here with you know a lot of people say is of weapons grade and maybe that will end there this is where they are a produce a body of opinion fueled by columnists like Charles Krauthammer and Ken Edelman saying that Iraq would be a tough military target that we wouldn't get bogged down and they mention the fact that casualties wouldn't be great and this was the time. This is the time to do it can we ever expect now to fight a conventional war especially as it involves anything in the Middle East now after after what we've gone through. I think we've gotten you know we've gotten a break. I mean Bosnia the

Persian Gulf and now Afghanistan we're not used to body bags coming home. That's right. Great magnitude a great number. And I don't know what would happen after those three occurrences if if of course you could never condition yourself. But with the American public tolerate that it didn't happen last time either. That's what I'm saying has an app that will tell you things they're looking around now to see if there is an Iranian opposition to our I'm sorry Iraqi opposition that they can that they can use in the same way that the anti-Taliban we use and Afghanistan. The reports indicate that they've been making nice to these people recently but there's of course a lot I'm so MRO our friends in the area poor who are afraid that the consequences for them of us taking military action against Saddam Hussein may not be so positive. Turkey in particular was struck by that. What will this do to the U.S.-Saudi alliance which is you know it's been an up and down affair since the temporal Leventhal but they seem to it seems have been proceeding on two fronts at least the public one where the Saudis could beat up on a lot more sort of fostering Saddam

Hussein. I'm not Saddam Hussein but Osama bin Laden but also on the other side with a bit actually made some moves to help the United States at a time of crisis perhaps by not raising the price of shipping more oil than OPEC's originally agreed to at the center of the U.S. So this is been sort of a unexamined relationship a quid pro quo that both sides don't really want to talk about. Colbert King surely has talked about it in the pages of The Washington Post in terms of the inequities of society there in terms of women and lack of democracy. So there's some hypocrisy in American foreign policy but they've been considered an ally and oil provider and part of our national interest. I see. I think it also complicates it. Now Saudi Arabia isn't doing too well. You know their jobs have decreased. They don't have as many young Saudis coming over to be educated here I mean as we know we were partly responsible for training Saudis in building up their infrastructure they don't have enough

jobs to accommodate all the people that need them. So we're also saying that they're not in the best financial situation so it's you know the further complicating our response the shoveling of really we've got to say there was a 15 of the 18 terrorists and 9 11 were Saudi. Yeah and they have their own problems with with fundamentalism you know attacks against their will because also notions of perhaps a double standard that they are more apt to come down strongly on people who attack the Saudi you know with the Kings and the government there. But if that same fundamentalism is aimed toward the west a little bit more lukewarm in their response we have in the United Nations I think that's absolutely the case. And in fact I think in sort of deference to the Saudis it was a long time before the administration started turning its attention to Iraq. You know us for the fallen and most of the winter before they actually start focusing on it because the Saudis did not want us to go there.

The US presence in the Saudi and Saudi Arabia I think early on when one of the first things that we heard from Osama bin Laden was that until every American every infidel is off of Saudi soil this will continue. That's not going to happen any time soon I would think especially not now but he's here and a lot of other people who are fundamentalists are urging that these bases the U.S. base there you know write a b be done away with politically is that could it happen politically militarily. Should it happen. Anything can happen but I think it's I think it's unlikely that the base is going to be removed as long as it stays there. It's going to be a continual source of frustration and irritation among among Saudis who agree with Osama bin Laden and U.S. troops should not be based in the hole in the in the in the in the Islamic holy land. I think this is this is this is this is indicative of all of the big ambiguity is that you have with the United States trying to form allies with governments that we really don't see eye to eye with but we have interests in common with it and also it's a question of how long the Saudi royal family will be there.

Thanks I don't have very divided government in and of itself and the people those fundamentalists who do not like us to be there many of them don't like the Saudi royal family to be there either but its greatest strength was supposedly stability running over a lot of the Democratic injustices and inequities because this was a a solid partner that we could and you know we were talking to. I want to make a slight traveling here in the Middle East I want to talk about what's going on with Israel and Gaza and how they seem to be the escalation another escalation in the conflict. We're seeing some heavier weaponry to Hezbollah apparently has a missile that has like a 500 mile range. The Israelis have responded with F-16 American made F-16s that never been used domestically like this in Gaza was how does this bode for the hopes of any sort of peace talks you know the sort of resumption. You should be aware that Israel says that Iraq is not their greatest threat Iran is and that even though they are saying democratically supposedly elected president the new

laws are really running the show and they supply and specially in and let and Lebanon and they feel that that's the real threat. Ariel Sharon was here and saw President Bush. He obviously feels that that he he wants to make Arafat irrelevant he feels that whoever would succeed him they could do business with that's if you accept that your own actually wants peace. You know I'm no expert in this area but it seems to me that the use of the American made. We have 16 fighters is a major escalation and it's there's not going to do anything to help bring about peace and it is going to cause a truce but it's going to escalate resentment against the United States for supplying Israel with the weapons of mass destruction which an F-16 that is all we should say in fairness to the second largest part enough of their enemies is it is Egypt in terms of foreign aid I mean America supplies military aid anything but not just Israel but the Egyptians are not using American equipment success to kill anybody right now what could be encouraging that is a status that come out from the palace the leader of the

Palestinian parliament who a lot of people in Israel are trying to push as a sort of moderate alternative to Yasser Arafat. It hasn't caused him to a change of view at all or much he said that you know this is wrong and that a military solution is not the way to go he didn't necessarily come out with strong indignation over the use of this heavy artillery. It remains to be seen though what comes out of that. I'd like to get into this hemisphere of Haiti with more problems. Five hundred million dollars of U.S. aid is being withheld because the U.S. is unhappy with the way the level of Lavalas Party is allowing or they're not happy because they're not really allowing any dissension and sometimes that is that's where the state might have a rather large dissension I think it was said journalists who criticized him who ended up getting hacked to pieces yes you know an angry crowd and thrown in a field. So you know that that is definitely I think Colin Powell is right to withhold the money. Obviously there is the government in Haiti is and

it's a very serious thing is not in any better shape than when I went into exactly to occupy Haiti in the beginning of the Clinton administration and you know that's the sad part aside it's raining. Like a hundred thousand dollars that they spent for their carnival. Preparations and I thought they would have been nice if they could spend a hundred thousand dollars leveraging maybe some public private partnerships. You know the economy is so bad and the people are so poor. I understand that a carnival celebration is you know very important but I think eight hundred thousand dollars could be spent. You know that's it. We're should be telling you know how to run their shop where I will live to celebrate half of these newly rebuilt about here. Now I'd like to think all well Pamela's would join us most of all I'd like to thank you for watching. Stay well and good night.