The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, a summary of today's news, a preview of Congress' public scrutiny of the Enron disaster, a look at what's involved in rebuilding Afghanistan, and an Elizabeth Farnsworth conversation with Israeli writer Amos Oz.

NEWS SUMMARY

JIM LEHRER: Congress opened its 2002 session today, and got some bad news on the budget. The Congressional budget office estimated the federal surplus will total $1.6 trillion over the next ten years. That's down 70% from a year ago. The CBO also projected deficits the next two fiscal years. At a Senate hearing, the numbers touched off fresh debate between Democrats and Republicans.

SEN. KENT CONRAD: The President told us and told the American people that we could have it all. He told us that we could have massive tax cut that he proposed, that we could have a big defense buildup, that we could save every penny of the Social Security and Medicare trust funds and still be able to pay down the maximum amount of our debt. Unfortunately he was wrong and he was wrong by a country mile.

SEN. PETE DOMENICI: Recessions occur from time to time and we now have got one. And for all of the talk about our President being the person, the primary motivator of this because of tax cuts, we can continue to talk about it, but I think we ought to move to another subject if we want to talk about anything that is politically relevant to the American people.

JIM LEHRER: The White House budget chief today projected deficits of nearly $200 billion over the next two years. President Bush announced today he'd ask Congress for the largest increase in defense spending in 20 years. He said the Pentagon needs nearly $50 billion more for new weapons and a military pay raise, among other things. Congressional leaders said today they hope to break the stalemate on an economic stimulus plan. Senate Majority Leader Daschle said Congress should pass the items on which republicans and Democrats agree. Minority Leader Trent Lott said that was a good first step. The major sticking points remain tax cuts and health benefits for the unemployed. On the Enron story, a potential star witness will refuse to testify at a Congressional hearing tomorrow. Former Arthur Andersen accountant David Duncan has been subpoenaed by a House subcommittee. He said through his attorney today he would invoke his constitutional right against self-incrimination. Andersen fired Duncan last week for his role in destroying documents. An American who fought with the Taliban was flown to the United States today. Major news outlets reported John Walker was on a military flight from Afghanistan. The U.S. Marshals Service said he would appear in federal court tomorrow, in Alexandria, Virginia. He's charged with plotting to kill Americans. In the Philippines today, President Arroyo won approval to use U.S. forces in efforts to fight a militant Islamic group. But protests continued. We have a report from Louise Bates of Associated Press Television News. (Yelling)

LOUISE BATES: There were angry scenes outside the Presidential palace in manila. Riot police, armed with shields and truncheons, clashed with protesters angry about what they argue is a growing U.S. Military presence in the Philippines. They gathered to demonstrate against planned joint exercises between the Philippines and the U.S. Military, designed to help the Filipino government win its battle against the Abu Sayyaf. As protests continued outside, inside the palace the powerful National Security Council gave its full backing for the exercises to President Gloria Arroyo.

RIGOBERTO TIGLAO, Presidential Spokesman: She herself informed President Bush that it will be the Filipino soldiers who will do the fighting. American soldiers would be there just to train our Filipino soldiers. We repeat again, we emphasize: U.S. soldiers will not be involved in combat operations.

LOUISE BATES: But demonstrators aren't listening to the President's promises. They argue the exercises mean death to their democracy, and a close alliance with the United States could expose their small Asian country to attacks by Washington's enemies.

JIM LEHRER: Some 600 U.S. Troops are expected to take part in the joint exercises. Thousands of volcano victims received food aid today in Congo. The World Food Program handed out 22 tons of beans, flour and oil in the ravaged city of Goma. A volcano 12 miles away erupted January 17. The lava wiped out 90% of the businesses and a third of the homes in that city of half a million people. The reward in the U.S. anthrax letter investigation was doubled today, to $2.5 million. U.S. Postal inspectors and the FBI said they're also sending out fliers in Pennsylvania and central New Jersey. Four letters containing anthrax spores were postmarked last fall in Trenton, New Jersey. A spokesman for the Postal Inspection Service said investigators have some leads but need more.

KEVIN BURKE: This individual responsible for these acts may well be a neighbor, may be a work associate, but we're very, very comfortable that the people in the public in this part of New Jersey and possibly on the river in Pennsylvania could contribute very important information that would help us piece together this puzzle and bring this investigation to a successful resolution

JIM LEHRER: Five people died from inhaled anthrax last year. And officials believe they came into contact with the letters, or were infected by cross- contamination in the mail. Cleaning up the ruins of the World Trade Center in New York will take less time and less money than expected. That's according to the city's Design and Development Corporation. It now estimates removing all the debris will cost about $1 billion. Earlier estimates ran as high as $7 billion. The job could be finished around June instead of September. Stanley Marcus died last night in Dallas, at age 96. He was the long-time head of Neiman Marcus, and a renowned arbiter of taste and class. His father opened a single clothing store in Dallas in 1907. The son took over in 1950, and turned the company into a national symbol of high fashion and quality, with 32 stores. He retired in 1975. Stanley Marcus went on to write six books, and to contribute regular commentary to a variety of newspapers and magazines. That's it for the News Summary tonight. Now it's on to investigating Enron, rebuilding Afghanistan, and talking with Amos Oz.

FOCUS - INVESTIGATING ENRON

JIM LEHRER: Kwame Holman begins our look at Congress and the Enron investigation.

KWAME HOLMAN: Members of Congress drifted back to a rain-soaked capital today for their first session in more than a month. Congressional leaders trooped to the White House early for an opening day meeting with the President.

SEN. TOM DASCHLE: A new year brings a new opportunity to start over. We're going to do that and work in hopefully a very positive and bipartisan spirit.

KWAME HOLMAN: But as Congress reconvenes, one item overshadows everything else: The fresh round of hearings on the collapse of former energy giant Enron. At a late morning news conference on Congress' agenda, Senate Minority Leader Trent Lott was asked about the dominance of the issue.

SEN. TRENT LOTT: It could be a distraction. But look, this is the beginning of a new year. We have an opportunity here to get some things done that we need to do for the American people. Those things go on a separate track. So it could be, but I hope it won't be, and I expect it won't be a distraction.

Last month, without much fanfare, a handful of Congressional committees began investigating how Enron went from a multibillion-dollar energy-trading firm to bankruptcy and allegations of financial wrongdoing.

REP. RICHARD BAKER: We are here today to examine and begin the process of understanding the most stunning business reversal in recent history.

KWAME HOLMAN: A House subcommittee called on Joseph Berardino, the CEO of Enron's auditing firm, Arthur Andersen.

SPOKESMAN: It is an illegal act to withhold information from an auditor.

SPOKESMAN: Well, I understand that, and believe me, in my experience in Louisiana political life, having something be illegal is not necessarily a prohibition. (Laughter)

KWAME HOLMAN: But in recent weeks, Congress' interest in Enron increased substantially after news Enron officials knew about the company's massive losses months in advance, yet encouraged employees to keep their pension fund shares of Enron stock. Then came reports workers at the Arthur Andersen accounting firm shredded documents related to an audit of Enron, and yesterday, that workers at Enron's own Houston headquarters shredded documents. Today, no fewer than ten committees are preparing to investigate the Enron collapse and related issues. Veteran Congress watcher Thomas Mann says the upcoming hours and hours of Congressional hearings are warranted.

THOMAS MANN, Brookings Institution: Unlike most Washington scandals, this involves matters that ordinary citizens can understand: The disappearance of one's pension funds while the big boys at the top of the company cash out. The utter lack of reliability of information about the financial well-being of a company who... Which is attracting all kinds of investors, and I think finally, the close association of the CEO and chairman of the board of Enron with President Bush.

KWAME HOLMAN: Enron and its CEO Kenneth Lay were heavy contributors to President Bush's political campaigns over the last decade. But Enron's political contributions are a complicating factor for both Republicans and Democrats in Congress, as well. The nonpartisan Center for Responsive Politics reports that 187 of the 435 members of the House accepted a total of $600,000 from Enron and its officers from 1989 to 2001. In the Senate, 71 sitting members received $530,000 in campaign contributions from Enron during the same period. One of them was Joseph Lieberman of Connecticut, chairman of the Governmental Affairs Committee, which will have a central role in investigating what happened at Enron. He received $2,000 from Enron in 1994, and talked about it on the NewsHour last week.

SEN. JOSEPH LIEBERMAN: That was $2,000 out of about $5 million that I had to raise that year, so I don't feel at all affected by it. But you know what this all does show, Jim, is that this is a company obviously whose business relied in some sense on government regulation or lack of regulation. They were giving to everybody-- not everybody, but all around in both parties-- and it puts a taint, a cloud over all of us in government.

KWAME HOLMAN: Meanwhile, the effort to secure witnesses is underway. Today, a lawyer for David Duncan, accused by superiors at the Andersen accounting firm of destroying Enron documents, said Duncan will refuse to testify before a house panel tomorrow. The Energy and Commerce Committee also subpoenaed three other Arthur Andersen officials. For his part, Enron CEO Kenneth Lay has said he will keep a commitment he made to appear before the Senate Commerce Committee on February 4. In the Republican-controlled House, four committees plan to examine facets of an Enron scandal that touches on everything from private pensions to government regulation of financial markets. In the Senate, where the committee chairmen's gavels are in the hands of Democrats, seven panels have announced Enron inquiries thus far. That number raised the eyebrow of one Senate Republican leader, Don Nickles of Oklahoma.

SEN. DON NICKLES: I wasn't aware that we had seven Senate committees. I think that's too many. I think Senator Daschle needs to consolidate, and that's really his call. He needs to do it. But hopefully we'll have a focused review, not repetitive, redundant, House, Senate and multiple Senate committee investigations.

KWAME HOLMAN: The latest Enron hearings get underway tomorrow morning with simultaneous meetings of the Senate's Governmental Affairs Committee, and the investigations panel of the House Energy Committee.

JIM LEHRER: And to Gwen Ifill.

GWEN IFILL: Joining me are two members of the House Energy and Commerce Committee. John Dingell of Michigan is the panel's senior Democrat. And Republican Jim Greenwood of Pennsylvania is the chairman of the panel's oversight and investigations subcommittee. Gentlemen, welcome.

Congressman Greenwood, tomorrow your subcommittee gets to work. What is it you're going to be look for?

REP. JIM GREENWOOD: We have committed to make sure that no stone goes unturned in this investigation. And one of things that we discovered early as we reviewed documents and as we talked to witnesses was that Arthur Andersen destroyed thousands of documents. There's an urgency on our part to make sure that we find out which documents were destroyed, what were on those documents, who ordered the destruction of those documents. Were those documents destroyed as we actually know that they were when Arthur Andersen knew that there was pendency of the investigations by the Securities & Exchange Commission as well as a potential litigation? All that needs to happen so we can begin to make sure that we have all the pieces of the puzzle so that we can get to the bottom of Enron collapse.

GWEN IFILL: As Kwame Holman just reported, the star witness for tomorrow's hearing David Duncan from Andersen has said that he will not testify, that, in fact, if he shows up at all he will take the 5th. Are you prepared to grant him any kind of immunity?

REP. JIM GREENWOOD: I received a letter today from Mr. Duncan's attorney saying that if we would grant him immunity, he would be pleased to testify. We reject that notion. Mr. Duncan is a key player. He has much to tell the nation about his conduct that had an impact on thousands of lives of American citizens. He spoke for four and a half hours to our investigators. We think he should come and tell the members of our committee what he did and why he did it, if somebody told him to do those things. We insist that he come. He has a right it invoke his 5th Amendment guarantees. We regret that he will do that but we think we can get to the bottom of this through interviewing our other witnesses.

GWEN IFILL: Mr. Dingell in your opinion, are you searching in these hearings for evidence of political malfeasance, corporate malfeasance? What?

REP. JOHN DINGELL: I think we have to get all the facts, all the circumstances, everything that happened, and then we'll make whatever judgments should take place with regard to proper Congressional action. If there was improper action anywhere including in government or in Enron or in the accountant Andersen, it should be brought it light it see what needs to be done to correct this kind of situation and see to it it's not repeated.

GWEN IFILL: Where do you start with this Mr. Dingell? Is there a regulatory question that you ask first?

REP. JOHN DINGELL: Well, I must say my friend Mr. Greenwood and Mr. Tozan, who are the chairman of the committee and the chairman of subcommittee respectively, will be making those decisions. We will be working with them in a bipartisan fashion as we have up until now and hope that we'll be successful in that undertaking and see to it that the committee works together to bring out all the facts.

GWEN IFILL: But as the senior Democrat on the committee you must have opinions about what you think are the biggest problems that you'd like to see questions answered on first.

REP. JOHN DINGELL: Well, there is a plethora of mischief here: Criminal activity possibly... Possibly obstruction of justice inside trading, inside accounts improperly used -- the question of Mr. Cheney's commission and Enron's participation in that are all involved in this matter and I think we have it get to the bottom of all of it. We have it look at the accountants Andersen, why was it that Andersen destroyed documents? Why was it this Enron destroyed documents? This raises a presumption almost on its face of wrongdoing. What happened to the inability or the reluctance of Andersen to deal with the accounts of the partnerships, which were kept off books and why? The fact that Andersen functioned both as an accountant and also as a consultant raises great questions that have to be gone into. There's plenty to occupy everybody here.

GWEN IFILL: Mr. Greenwood, plenty to occupy everybody. Are these issues, which are being raised now in this investigation in both the House and the Senate, are they a sign of something larger, or are they an anomaly? Did Enron do this and is this unusual?

REP. JIM GREENWOOD: At the center of this whole crisis is that fact that the company took hundreds of millions of dollars, invested them in relatively risky ways and failed to report that in its financial statements and did that with the complicity of its auditors. What we have to do if there can be a happy ending to this terrible story is that we in Congress have to make laws and make it very clear that every liability that a company has, every investment that it makes, every dollar that has at risk is transparent, is known to the investors. We need to have confidence in our country that you can make investments as risky as you want or as safe as you want but at least you know what it is you're getting into. And that's what we have to accomplish so that this never happens again. Is this an anomaly? I think it is an anomaly in that we haven't seen anything like this before. It's hard it believe on the other hand that it doesn't happen elsewhere. I would hope to the extent that other corporations -- other accounting firms have been engaged in other activities - that right now they are busily cleaning up their act but we have a responsibility to make the law clear so that it can't happen again.

GWEN IFILL: You're talking about things that Congress has to do. There's a phrase about closing the barn door after the horse has gotten out or something like that. Do you feel that Congress should have been doing this prior to this happening?

REP. JIM GREENWOOD: Well, I think it probably comes as a surprise to most members of Congress -- if not all members of Congress -- the transactions of these magnitudes and of these natures could, in fact, be kept off the books. I for one, fully expected that it was required that these kinds of deals be kept off the books. I think it's become way too easy to have a small amount of investment by an outside party in a big partnership, big investment by this corporation cause it to be kept off the books. We have to change that. Is this closing the barn after the horse is gone? It is in some extent but it is also closing the barn doors before any other horses get out that could cause tragedy for any other families.

GWEN IFILL: Mr. Dingell what do you have to say to that? Did Congress perform its oversight role in is this?

REP. JOHN DINGELL: Well, Congress has done worse than that. First of all, we were warning about the problems back in the 80s of having an accountant and auditor on the one hand be also a consultant. We warned that this was a fine opportunity for rascality and mischief. I would note that Andersen has twice before been involved in significant abuses and paid large sums out of a result of lawsuits against them -- the first instance being Sunbeam, the second instance being, the second instance being Waste Management Incorporated -- serious offenses. It is to be noted that Arthur Leavitt, the then chairman of the SEC, did everything he could to bring this practice of abuse in the accounting profession, particularly the accountant and consultant problem to a halt. The Congress beat the bejabers out of him. They threatened to cut his money over this. So this is not a surprise. I am hopeful that the barn door is not being locked I'm sure there's other rascalia which can and will occur if something is not done about this, and I want to see to it that it is done with the utmost vigor so that we can correct all of the aspects of this including whether or not the SEC did its job.

GWEN IFILL: Mr. Dingell you mentioned a moment ago about Vice President Cheney's role. One of his aides, Mary Madeleine, has been quoted as calling this guilt by contribution, that is people who have received money from Enron or from Andersen are being tainted by that. Do you feel that members of Congress like yourself who have received money from these kinds of corporations are in a position to investigation them?

REP. JOHN DINGELL: Well, first of all, any member of Congress receives money on the assumption that it is for the serving of the public interest and that he is expected to carry out his duty of looking to the public good. And if Andersen made these contributions as an investment, they made an investment that is about as good as an investment in Enron's stock. Having said these things, I would simply note to you that I have had the pleasure of taking that money, giving it to the fund for the employees and we will have a vigorous and thorough investigation of Enron, Andersen and we'll get to the bottom of matter and I hope that the necessary corrections take place, including perhaps a fine jailing or two for some deserving people.

GWEN IFILL: And Mr. Greenwood, how do you respond to that question about contributions, which went to members of Congress who now have to investigate these entities?

REP. JIM GREENWOOD: Well, I happen to be a member of Congress who doesn't accept campaign contributions from Political Action Committees. We looked back and we found out that four years ago Mr. Lay made a personal campaign contribution of a thousand dollars to me that's apparently the result of the fact that my campaign manager was in the same fraternity. I also made a contribution or am about to make a contribution to that fund as well it. But I think it does to the question of campaign - the need for campaign finance reform. There are several layers of this. There are individual contributions that max out at $1,000. There are PAC contributions that can be as much as $5,000 a year, but then there's the big soft money contributions. We know that Enron wrote checks for as much as $100,000 at a time to the Republican and Democratic National Committees. That's the essence of the campaign finance reform embodied in Shays-Meehan. I'm a co-sponsor of that, signed a discharge petition to get that out on the floor. We ought to pass that and the help to restore confidence in the political system for the American people.

GWEN IFILL: Have you detected a change in attitude among your colleagues about the campaign finance reform legislation because of this?

REP. JIM GREENWOOD: Slightly. This is still very, very uphill sledding for us to try get this kind of reform passed. The old adage of American politics is that when the American people decide something needs to happen, it will happen. As long as the American people keep returning to office people who don't support campaign finance reform we won't have campaign finance reform. When the American people decide that that's an issue that is critical to the casting of their vote - hopefully they'll do that this year -- that will put pressure on all members of Congress to do something about this urgent need for campaign finance reform.

GWEN IFILL: Final question to you and also to Mr. Dingell: We heard Trent Lott and Don Nickles bemoaning the potential for distraction; that there so many committees investigating this Enron scandal. What do you think of that? Do you think this could be a distraction for other things Congress could be getting done?

REP. JIM GREENWOOD: To the contrary -- we can walk and chew gum -- but the fact of the matter is that what we have to do for this story, as I said, to have a happy ending is we have to pass laws that make it impossible or certainly illegal for companies to play the shell game that Enron played in hiding its liabilities from its investors. The more members of Congress that are engaged in learning about this issue, understanding what happened, asking the right questions of the right witnesses, reading about this, the sooner it will be that Congress will be in a position to intelligently legislate so this never happens again.

GWEN IFILL: And Mr. Dingell, your response about whether this is indeed a distraction or not.

REP. JOHN DINGELL: Well, I think we urgently need it have campaign finance reform. There's too much money in politics. It may not be corrupting the situation but it's certainly threatening public trust, and it's certainly created a situation where too much attention is given to things that ought not be heeded so much and more attention is needed to the business of the nation. But, having said that, I don't think that we're going to see less than a thorough investigation. There's too much going on to force it. You're going to find that criminal prosecutions, investigations by the SEC, civil lawsuits and other things plus the activity of the press is going to see that this matter goes forward properly. I also am prepared it believe and I think that my colleagues are going to do the best job possible they can in terms of investigating this. And very frankly, I think this is a fine mess that needs a thorough going investigation, serious legislative and other correction, and very frankly some very serious sanctions against wrongdoers.

GWEN IFILL: Okay. Congressmen, we'll be watching. Thank you for joining us.

REP. JIM GREENWOOD: Thank you for having us.

JIM LEHRER: Still to come on the NewsHour tonight, rebuilding Afghanistan, and a conversation with Amos Oz.

FOCUS - REBUILDING AFGHANISTAN

JIM LEHRER: Spencer Michels begins our coverage of the Afghanistan story.

SPENCER MICHELS: Afghanistan is a devastated country. Ten years of Soviet occupation in the 1980s, civil war in the 1990s, five years of Taliban rule and three years of drought have left the country with no basic infrastructure and a decimated economy. There are few paved roads and thousands of unexploded land mines that maim about 3,000 people every year. Many of the buildings in the capital, Kabul, have been destroyed. Almost two thirds of the power lines don't work. And it can take over an hour to make a local phone call. The Taliban, before departing, emptied the central bank, plundering more than $5 million. Government workers have not been paid in more than six months. About two thirds of Afghan adults are illiterate. Many schools have only recently reopened. And women and girls are just now being allowed back in classrooms. One third of the population depends on donated food to survive, and half the children are chronically malnourished. One in four children dies before reaching age five. To help bring Afghanistan back from the brink, now that the U.S.-led anti-terror war is winding down, some 60 countries pledged more that $4.5 billion. That's about half of what the United Nations suggested for a rebuilding package. At a two-day meeting in Tokyo that ended yesterday, the assembled nations promised to deliver $1.8 billion this year. Much of the money will not go to the newly formed interim Afghan government, but instead through humanitarian organizations. Even so, Afghanistan's new interim leader, Hamid Karzai, expressed immense satisfaction.

HAMID KARZAI: We are happy with the result of the conference that we had yesterday and today, and I hope we can go back to our people to give them the good news. And I also hope that the pledges that were made by the international community are made true immediately in the coming days so that we can begin the process of reconstruction and take the country forward.

SPENCER MICHELS: At the Tokyo meeting, the United States pledged nearly $300 million, but many countries have warned the donated funds should not go to local Afghan warlords. Much of the $4.5 billion is to be disbursed over the next several years. It will go toward security, public health and education, government and economic management, infrastructure, and agriculture and natural resources. But there are lingering concerns about security. United Nations peacekeepers patrol in Kabul, but safety in much of the rest of the country is problematic. There are daily reports of armed bandits attacking aid workers and stealing food rations. Karzai promised the money would be used appropriately.

HAMID KARZAI: I will make sure, sir, that the money that comes for aid is not utilized by individuals or by anybody, that it goes to the Afghan people. Andif it doesn't go, you will see that we will make it known. There is no way that that can be allowed.

SPENCER MICHELS: Participants in the Tokyo conference agreed on the urgent need to disburse the money quickly, especially to get the new government functioning.

JIM LEHRER: Margaret Warner takes it from there.

MARGARET WARNER: And for more on the rebuilding plans and challenges, we turn to Mark Malloch Brown, administrator of the United Nation's development program-- he just returned from the donors conference in Japan; Haron Amin, charge d'affaires in Washington for the interim government of Afghanistan; and Helena Malikyar, research associate with the Afghanistan Reconstruction Project, a nonprofit organization in New York that advises the UN on Afghanistan issues. Welcome to you all.

Mr. Malloch Brown, beginning with you, with a country this devastated where do you start?

MARK MALLOCH BROWN, United Nations Development Program: Well, it's a good question. I think you start with the very human basics. The first is to get Mr. Karzai's government up and running, properly funded. We were able to put in resources this week to allow them to pay the first month's salary. The second thing you have to address straight away -- as your report made clear -- is security -- not just sort the blue helmets peacekeeper sided security but policing in the villages and streets of the country, and then there are a couple of very urgent priorities in the eyes and words of ordinary Afghans. They want their kids back in school. And the school year starts in March. They need it get corps into the field to break these four years of drought and crop failure, so the priorities in a sense speak for themselves. And a little bit further back in the line comes rebuilding of the basic infrastructure of the country, which will take longer, be more capital intensive and rather harder to get done.

MARGARET WARNER: Mr. Amin, did what he just said track with the priorities of your government?

HARON AMIN, Charge D'Affaires, Interim Afghan Government: Well, indeed. Remember that there are -- the most important thing is provision of security, making sure that the food that is provided by the international community gets to the people, making sure that it makes it across the valleys and the gorges and elsewhere and to the population centers of Afghanistan. But beyond that paying for example for the 240,000 civil servants - their salaries - that haven't paid for months -- that would pay the attention away from maybe stealing to adequate work. And of course, gradually starting reconstruction, rehabilitation, repatriation, and development on a long term basis whether that is in the social sector, whether that is in the political sector, whether that is in the economic sectors, all of them on a long term basis but indeed the priorities go to basically getting the attention away from -- over coming warlordism, overcoming banditry -- making sure this government that has been established with the international community - this effort and with a genuine desire of the Afghans on track to engage in building Afghanistan.

MARGARET WARNER: Mr. Malloch Brown let me follow up on the security question because we'll take say Jalalabad and the province around it, and let me try to give a concrete example where apparently just the food aid is being stolen by the local warlords and then turned around and sold in the hotels to western journalists. If they are stealing the food aid and you want to rebuild a school there how do you actually do it? Do you send in a whole team? How doyou keep the materials and the cash from being stolen as the food is?

MARK MALLOCH BROWN: Well, I think, you know, in this first phase there's clearly a need for agreements with the local warlords that they don't steal it. But they are in a sense undermining themselves with their own people when that happens, and I think local political arrangements are in place, being put in place -- but in the longer term they mustn't undermine our real peace building goal here, which is to reestablish the authority of the central government across the country. And in that sense it's a balance between temporary arrangements to make sure the food meets the people it's intended for and the integrity of the international operation is not undermined by that kind of diversion or theft but in the longer term it's to reestablish honest government in all corners of the country, and that brings us back to the need to build up the capacity of the new government. And I do just want to make it cheer that this issue of the first month salaries of allowing civil servants who haven't been paid for the last six months has been a critical priority for us. And we're proud that while there's no banking system yet and we had to take in the money for the 240,000 civil servants in cash, we had to take it into the country, but in the last two days at the end of the first month of the new government's life civil servants have been receiving their pay across the country. And I think this is the first clear sign to all Afghans that after 20 years plus they have a functioning central government which is going to do things for them and be a force for good in all their lives.

MARGARET WARNER: Ms. Malikyar, if we take the other priorities that your two fellow panelists just laid out in education and building infrastructure in health, in agriculture is there enough expertise, as you understand it, enough expertise in Afghanistan to help run these projects, or do you think a lot of it is going to have to be done since so many people left the country by outside experts?

HELENA MALIKYAR, Afghanistan Reconstruction Project: No. There is some expertise left in Afghanistan obviously and not everyone could leave the country when there was trouble or perhaps chose not to leave. But also you have an enormous amount of human capital and the near Diaspora and neighboring states in Pakistan and Iran and then of course there are Afghan communities, refugee communities in Europe and the United States, and as far as in Australia, and one could draw on their expertise, their education and experience for the rebuilding process.

MARGARET WARNER: And what are the biggest challenges you see? What is the biggest stumbling block or potential pitfall?

HELENA MALIKYAR: To the....

MARGARET WARNER: To the entire effort?

HELENA MALIKYAR: There are many obstacles. To begin with the funneling of funds, the money that has just been pledged by the donor nations, how this money will reach Afghanistan and the various reconstruction projects has not been worked out very precisely yet. The donor nations seem to show more favor towards working on a bilateral basis on individual projects in Afghanistan.

MARGARET WARNER: Meaning that - let me just interrupt -- meaning in other words that the United States would kind of establish its own relationships, run its own projects and so on?

HELENA MALIKYAR: Exactly, yes. This, as opposed to putting all the money into a single fund managed by say the United Nations. This has dangers because for one thing, if there isn't a coordinated and coherent program for the development of Afghanistan you run risks of repeating projects, I mean -- having funding for one sort of project more than something else. And on another level if the donor companies decide to work with local commanders or warlords on specific projects, that will mean empowerment or further empowerment of the warlords at the expense of the central government. And the important thing here should be to help Afghanistan reestablish this... its state and institutions.

MARGARET WARNER: Let me get back to Mr. Amin here. Mr. Amin from reading about the Tokyo conference, it seemed as if one reason the donor countries were reluctant to sort of turn over the running of it to the Afghan government, was this concern about corruption? What can you say to the donor countries, or what are you promising to the donor countries to ensure that the money actually goes for the projects intended and to what degree does the Afghan government, interim government want to have -- believe it is going to have control over this?

HARON AMIN: Well, first of all, Chairman Karzai explicitly stated that he intends to make sure that there will be transparency and accountability. We have every desire. Remember, you can raise money. If you don't spend it right, you cannot raise an enormous amount afterwards. That's the intention and the international community is being very cautious about it. Our administration would want it make sure the projects aimed at in Afghanistan would be tangibly realized making sure that efforts would not be duplicated. So indeed the whole notion of corruption stems not so much from Afghanistan but from elsewhere also. I mean there are efforts in the past and in other countries that have failed. They want it make sure that is not repeated in Afghanistan. But our government is going to stand by the international community and is even going to hire an auditing firm hopefully to make sure that the money would go to the appropriate projects. And then, back to the question, the whole notion of security, the government being paid is able to pay its civil servants so there's sense of security, provision of the security for the entire country, and that other thing that's going to address the whole issue of brain drain -- attracting capital flow into Afghanistan. So these are all integral parts of an overall platform or set up that requires international encouragement, international enhancement, international corporation.

MARGARET WARNER: And very briefly, though, do you think you're going need international troops, international force to go beyond Kabul to some of these other regions?

HARON AMIN: It's something that has been discussed with us. We would welcome it, contingent that it be specifically explicitly told where, how many, and to what end.

MARGARET WARNER: Back to you Mr. Malloch Brown for final word on this question of corruption, the risk of corruption, the danger of corruption, what is the UN and the donor community looking for there?

MARK MALLOCH BROWN: We've got to have an operation of absolute integrity. We're talking very large sums of money over the next few years and we can't afford any slipups or corruption, which discredits the whole effort.

MARGARET WARNER: How do you prevent that?

MARK MALLOCH BROWN: Well, you heard Chairman Karzai propose international auditors. Now predictably enough, the wags in the conference room also - we hope not Andersen -- (Laughter) but behind it lies the fact that we do have procedures and organizations like mine or the World Bank or USAID are working in difficult governance environments around the world all the time and we realize that American taxpayers' money is very precious. It's entrusted to us, and we must ensure that is not squandered or lost. So we have a financial control regime, a disbursement regime and an audit regime intended to prevent. But if I could just say -- this conference one month after this government was formed, barely several months after the war was joined, the coalition war was joined in Afghanistan never before has so much been raised so quickly as part of an extraordinary outpouring of support to Afghanistan. And now is not the moment to lose the kind of confidence that took us this far. At every stage of this thing since October 7 naysayers said about the military campaign, said about the fight against terrorism and are now saying about the reconstruction of country it's not possible. Well, so far the naysayers have been disproved wrong, and I think the naysayers' last claim was you'll never raise billions in Kabul - in Tokyo for Afghanistan. We did. It was an extraordinary success -

MARGARET WARNER: All right -

MARK MALLOCH BROWN: -- and in the same way we'll defeat the pessimists on this corruption point. This is going to be a great day for Afghanistan.

MARGARET WARNER: Thank you so much. That has to be the last word. Thank you, all three.

CONVERSATION

JIM LEHRER: Finally, we continue Elizabeth Farnsworth's reports from the Middle East. Tonight a conversation with one of Israel's best-known writers.

ELIZABETH FARNSWORTH: Amos Oz, who was born in Jerusalem in 1939, has published 18 books and hundreds of essays in Israeli and in international magazines and newspapers. His most recent novel, "The Same Sea," was published in United States last year. Oz's works have been translated into 30 languages in over 35 countries. Since 1967, he has also been involved within various groups within the Israeli peace movement. Amos Oz, thanks for being with us.

AMOS OZ: It's good to be with you.

ELIZABETH FARNSWORTH: You once said that you hoped that the tragedy of the relationship between Israel and the Palestinians would be Chekhovian and not a Shakespearean tragedy. What did you mean, and is it becoming more Shakespearean?

AMOS OZ: Well, my definition of a tragedy is a clash between right and right. And in this respect, the Israeli-Palestinian conflict has been a tragedy, a clash between one very powerful, very convincing, very painful claim over this land and another no less powerful, no less convincing claim. Now such a clash between right claims can be revolved in one of two manners. There's the Sh4akespeare tradition of resolving a tragedy with the stage hewed with dead bodies and justice of sorts prevails. But there is also the Chekhov tradition. In the conclusion of the tragedy by Chekhov, everyone is disappointed, disillusioned, embittered, heartbroken, but alive. And my colleagues and I have been working, trying... Look to find the sentimental happy ending, a brotherly love, a southern honeymoon to the Israeli-Palestinian tragedy, but a Chekhovian ending, which means clenched teeth compromise.

ELIZABETH FARNSWORTH: And you had some hope over recent years that you were on your way to that. In your writings you expressed that hope. Do you still have that hope?

AMOS OZ: More than ever. We all know the bad news. Let me share some of the good news with you for a change.

ELIZABETH FARNSWORTH: That would be great.

AMOS OZ: I have seen for the first time in 100 years of conflict, the two peoples-- the Israeli people and the Palestinian people-- are ahead of their leaderships. The two peoples know now that in the end of the day, there will be a two-state solution. They don't like the solution. You will find thousands and thousands of heartbroken people on both sides, but they know it. If you passed a survey asking every Israeli-Jew and every Palestinian-Arab, "What would you regard as a just solution?" Not "what would you regard as a fair solution," but, "what do you think is going to happen at the end of day?" I suppose the vast majority would say a compromise and a two-state solution. Now that's a step forward.

ELIZABETH FARNSWORTH: What do you make of this current situation? Are you more worried now that you have been in many years?

AMOS OZ: I am more angry with both leaderships than I have been for many years. I think Arafat and Sharon are almost handcuffed to one another in the sense of being the slaves of the past, of the traumatized past -- lack of trust, lack of goodwill, lack of vision, lack of imagination, and lack of political courage. In many ways, I regard Sharon and Arafat as birds of a feather.

ELIZABETH FARNSWORTH: Do you see them as... I mean, as a writer they are fabulous literary characters, these people, each carrying, each haunted by their own past and confronting each another now. Do you see them that way?

AMOS OZ: Well, the two-- not just the two leaders, the two nations-- are haunted by their past. It may be interesting to point out that both Israeli-Jew and Palestinian-Arab are in victims of Europe in two different ways. The Arabs were victimized by Europe through colonialism, imperialism, oppression and exploitation; the Jews through suppression, discrimination and, finally, mass murder in the Nazi period. Now, two victims of the same oppressor do not necessarily become brothers. Two children of the same cruel parent do not necessarily hug one another. Sometimes the worst rivalries, in private life as well as in communal life, are precisely the conflict between two victims of the same oppressor. Two children of same cruel parents look at one another and see in each other the image of the cruel parent or the image of their past oppressor. This is very much the case between Jew and Arab: It's a conflict between two victims.

ELIZABETH FARNSWORTH: And how do you think that September 11 affected this conflict you have written so much about over all these years, been so much a part of?

AMOS OZ: In a strange sense, I felt it was a sobering lesson for everybody. If we don't stop somewhere, if we don't accept an unhappy compromise, unhappy for both sides, if we don't learn how to unhappily coexist and contain our burned sense of injustice -- if we don't learn how to do that, we end up in a doomsday.

ELIZABETH FARNSWORTH: In the context of everything that has happened since you started writing this new novel, why did you write a novel that, to somebody who reads it only once and superficially, might feel it's an unpolitical novel? It's about a very small little slice of life, very private, haunted in its own way by everything that has happened to Israel, but nonetheless not grappling with the political issues of the time?

AMOS OZ: "The Same Sea" is the crux of the matter. It's a novel about, precisely about every day life, about normalcy in times of madness, or to paraphrase Garcia Marquez, it's about love in time of cholera. Israel of the coastal plain, where eight out of ten Israeli Jews live far removed from the occupied territories, from the fiery Jerusalem, from the religious and nationalistic conflicts, is unknown to the outside world, almost unknown to itself. But "The Same Sea" is set precisely in this Israel, which never makes it to the news headlines anywhere. It is a novel about everyday people far removed from fundamentalism, fanaticism nationalism, or militancy of any sort.

ELIZABETH FARNSWORTH: An accountant who lost his wife and son who's a little lost.

AMOS OZ: Yes, a prodigal son, a bereaved father, a dead mother, a raving young lover, woman...a fraud, film script; it has a solid plot all right. One of the things I wanted to introduce in "The Same Sea" beyond transcending the conflict, is the fact that deep down below all our secrets are the same -- the fact that somewhere beyond race and religion and ideology and all other great dividers, the insecure, timid, hoping, craving and trembling self is very often very close to the next insecure, timid, craving, hoping, fearing, terrified self. In a sense, all our secrets are the same. That's what I wanted to convey through "The Same Sea" in a playful way. I wrote it, by the way-- and this what I am going to say now may have a sort of meta- political significance-- it is a novel that erases, deliberately, every boundary. It erases the line between prose and poetry. It erases the line between story telling, fiction and confession, because much of it is very personal, extremely autobiographical, directly without...

ELIZABETH FARNSWORTH: You appear in it?

AMOS OZ: I appear in it. It erases the line between literature and music because this book aspires to sing and dance, not just to tell a story. It is meant a work of music no less than it is a work of literature. And it erases a line between the living and the dead. You have Nadia, the dead mother, who is rapaciously alive and active. It even erases the line between humans there. The prodigal son takes a prostitute to bed with him in Nepal somewhere. The father in Israel, thousand of miles away, gives him a thundering Old Testamental dressing down in real-time and the dead mother defends him from the father. Of course, she is dead, but since when is being dead a problem for the Jewish mother defending their boy?

ELIZABETH FARNSWORTH: (Laughs)

AMOS OZ: So it's about erasing the lines.

ELIZABETH FARNSWORTH: Do you see out of these ordinary people that you say have go ahead of their leaders and that we read about the in book, do you see a solution for, first this more immediate crisis, and in the long term do you see some kind of a peace agreement that will work out? I mean, one could... Looking at the situation right now, one could lose hope. You could understand why some people are despairing.

AMOS OZ: If you read "The Same Sea" very carefully, you will find out that most conflicts-- individual as well as intonation or intercomunal-- those conflicts, most conflicts do not resolve; they fade through fatigue and exhaustion -- not when party suddenly opened his or her eyes to see how wrong he was and hug the other saying, "oh brother, oh sister, what have I done to you? Will you ever forgive me? Take the land, who cares about the land. Give me your love." Not like this. Fatigue, exhaustion, each one of the conflicted parties still maintains that he or she was right the other was wrong, and yet they have had it up to here and they learn how to unhappily coexist. I wrote "The Same Sea" not as a political allegory about Israelis and Palestinians. I wrote it about something much more gutsy and immediate. I wrote it as a piece of chamber music. It's about the cast of six or seven or eight very different people who learn not only to live together, but almost to conduct a mystical communion between them, to penetrate each other in every way. Ideally, those people in "The Same Sea" are not only in the same room together all the time even when they are far away, they are in the same bed together most of the time in their minds. So I haven't written a novel, I wrote an orgy. But it is set in a way that should remind us all that even on the slopes of an erupting volcano, there still may be everyday life. There still may be desire and loneliness and longing and death and desolation. These are the ever-lasting materials of life and they will be with us, I assure you, long after both Sharon and Arafat and Bush and bin Laden are forgotten histories.

ELIZABETH FARNSWORTH: Amos Oz, thanks very much for being with us.

AMOS OZ: Thank you for having me.

RECAP

JIM LEHRER: Again, the major developments of the day. The Congressional Budget Office estimated the federal surplus will total $1.6 trillion over the next ten years. That's down 70% from a year ago. And the former lead auditor of Enron's books said he would refuse to testify at a Congressional hearing tomorrow. David Duncan planned to invoke his constitutional right against self-incrimination. We'll see you online, and again here tomorrow evening, with full coverage of the Enron hearings, among other things. I'm Jim Lehrer. Thank you and good night.