The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: A summary of the news, a chronicle of today's batch of congressional hearings about the sins of Enron; a priorities debate between White House budget official Mitchell Daniels and Senate Budget Chairman Kent Conrad; a second John Merrow report on educating young scientists; and a conversation with Mitt Romney, the man in charge of bringing off a safe and sound Salt Lake City Winter Olympics.

NEWS SUMMARY

JIM LEHRER: Two congressional committees subpoenaed the former chairman of Enron today. They ordered Kenneth Lay to appear next week. He refused to testify voluntarily yesterday. He could still invoke his right against self-incrimination and refuse to answer questions. We'll have more on this story and the day's hearings on Enron in a few minutes. President Bush voiced confidence today in the Justice Department's handling of the Enron matter. Senator Ernest Hollings, a South Carolina Democrat, had called for a special prosecutor. He said the Bush Administration had too many ties to Enron to conduct the investigation itself. In response, the President said the Justice Department is conducting a full investigation. He said wrongdoers would be held accountable. Economic stimulus appears to be dead in the Senate. Majority Leader Daschle said today he planned to take the issue off the schedule tomorrow. He said neither Democrats nor Republicans had the votes for their competing bills. He said Republicans had insisted on new tax cuts and blocked attempts at compromise.

SEN. TOM DASCHLE: I think it is fair to say that there is a growing number of economists that question the stimulus, but keep in mind, one thing they did say is do no harm and I think the Republican package does serious harm to the budget, to fairness in tax law, and to a number of other issues that the American people care deeply about.

JIM LEHRER: But earlier, Treasury Secretary O'Neill said a stimulus bill, including tax cuts, would make a recovery even stronger. Late this afternoon, President Bush reacted to the news from the Senate as he returned to the White House from Pittsburgh.

PRESIDENT GEORGE W. BUSH: I'm very disappointed. There is a lot of workers who hurt, and they need help. Our economy -- while there is some good news -- needs more stimulus. I still think we need to pass a bill that will help workers and help stimulate the economy.

JIM LEHRER: In a related development, the President's Council of Economic Advisers issue its 2002 forecast today. It said the economy is likely to emerge from recession by the middle of this year. And it predicted the economy will return to long-term growth for the rest of the decade, inflation will remain low and stable, and unemployment will peak at about 6% later this year, then slowly decline. The Bush Administration defended its 2003 budget before Congress today. At a Senate hearing, the White House Budget Chief, Mitchell Daniels, said a return to deficit spending was justified by the war on terrorism. Democrats said they supported a major increase in defense spending, but they said the President wanted to take Social Security revenues to pay for new tax cuts. We'll have our own debate on the issue later in the program. A federal grand jury today indicted John Walker Lindh, the American who fought with the Taliban in Afghanistan. The ten-count indictment formalized earlier charges, including conspiracy to kill Americans. It also added new charges. Those include: Contributing services to the al-Qaida, plotting to aid the Taliban, and using firearms in violent crimes. Attorney General Ashcroft made the announcement in Washington.

JOHN ASHCROFT: As today's indictment sets out John Walker Lindh chose to train with al-Qaida, chose to fight with the Taliban, chose to be led by Osama bin Laden. The reasons for his choices may never be fully known to us. But the fact of these choices is clear: Americans who love their country do not dedicate themselves to killing Americans.

JIM LEHRER: Lindh could get life in prison if convicted. Earlier today, his attorneys filed papers for his release from a federal jail in Alexandria, Virginia, pending trial. They said there's no evidence he would flee, or that he's committed any crime. There's a hearing tomorrow on his status. In Afghanistan today, a new security force under the government's control took up positions in Mazar-e-Sharif. It was part of a deal local warlords struck. Talks continued in the eastern city of Gardez after factional fighting there last week. In Kabul, interim Prime Minister Hamid Karzai said the fighting underscored the need for a national army. In the meantime, he appealed again for a larger international force. Excuse me. Major League baseball will not eliminate any teams this year. Commissioner Bud Selig announced that today. Owners had wanted to drop the Minnesota Twins and Montreal Expos because they've been losing money. But a Minnesota court ordered the Twins to honor their stadium lease and play through 2002. Selig said the owners will try again next year to eliminate teams. And that's it for the News Summary tonight. Now it's on to more and more Enron, the budget priorities debate, making scientists, and putting on the Salt Lake City Olympics.

UPDATE - INVESTIGATING ENRON

JIM LEHRER: At the capitol today, there was Enron, Enron, and more Enron. Kwame Holman has our report.

KWAME HOLMAN: Members of the Senate Commerce Committee had to cancel their hearing yesterday because the most wanted man on Capitol Hill, former Enron CEO Kenneth Lay, reneged on his commitment to appear.

SEN. ERNEST HOLLINGS: The committee will please come to order.

KWAME HOLMAN: Members said Lay should address an Enron bankruptcy that has shaken people's faith in major parts of the economic system.

SEN. MAX W. CLELAND: There are teachers in my state that are scared to death about their economic future, about their pensions, and it's because of the actions of Mr. Lay and his top officials. So I think that's where the explaining has to come in, not so much to us, but to the people of America that trusted him and trusted his corporation.

SEN. OLYMPIA SNOWE: Enron in and of itself has really rattled the economic underpinnings in this country. It's reflected and manifested itself in the markets. So this isn't a run-of-the-mill bankruptcy. This is deception and manipulation and complicity and duplicity on a widespread basis with the largest bankruptcy in the history of this country. It deserves our attention. And whether Mr. Lay decides to testify or not before this committee, that should not deter us from doing what is right and finding out how exactly did this happened.

KWAME HOLMAN: With that, all the committee's democrats and Republicans voted to issue a subpoena.

SPOKESMAN: Clerk call the roll.

KWAME HOLMAN: February 12 was set for lay's appearance, but Senators acknowledged an appearance may be all they get because a subpoena cannot force him to testify.

SEN. JOHN BREAUX: He's going to come here as a result of this subpoena. But I t you a dollar to a doughnut that he doesn't testify and invokes his right under the fifth amendment.

SEN. CONRAD BURNS: I also want to associate myself with the words of Senator Breaux, that if you think he's going to tell us anything in this room, I'll probably eat my hat in front of the Senate steps. And that's kind of dry chewing.

KWAME HOLMAN: Simultaneously this morning, another committee rebuffed by Kenneth Lay heard from the head of Arthur Andersen, Enron's accounting firm. Andersen CEO Joseph Berardino already had testified before Congress. Today's appearance before the House Financial Services Committee was his first since the release of an Enron internal investigative report. The report by a new committee of Enron's board accused the Arthur Andersen firm of lax oversight that contributed to Enron's collapse.

JOSEPH BERARDINO, CEO, Arthur Andersen: The Committee did not speak to people at Andersen. When the Committee was formed, we offered to assist it. But the company's lawyers indicated they were not ready to discuss anything with us. We did provide the committee with our work papers when requested. The committee asked to speak with some of our people. We were in the process of working out interviews when Enron fired us. We never heard from the committee again.

KWAME HOLMAN: The board's report said Arthur Andersen should have reveal the hidden and tenuous partnerships created by top Enron officials that ultimately brought down the company.

REP. RICHARD BAKER: Is there some evidence that there was active participation in the crafting of these off- the-books entities, that Andersen did play a role in setting these up. That is true, is it not?

JOSEPH BERARDINO: We were aware of the transactions.

REP. RICHARD BAKER: You were more than aware.

JOSEPH BERARDINO: We gave judgments.

REP. RICHARD BAKER: Steve Powers was pretty clear in saying that there was clear evidence that Andersen's people were involved from the get-go in creating these off the books entities. Now that... Are you... Is Andersen denying that they were involved in the take off of these?

JOSEPH BERARDINO: Mr. Chairman, I think we're talking past each other in terms of what involved and what this setting up means. This committee did not talk to us, did not get our perspective on what our involvement was. I wasn't there. I can't tell you how active and what the nature of all our people's judgments were. Suffice it to say, that we were very much involved as a company was setting up transactions -- giving our advice on whether they would pass the rules.

REP. GARY ACKERMAN: Mr. Bernardino, let me tell first before I ask you a question what's on my heart. You've come back now for the second time to amend some things that you said before that weren't necessarily as accurate as you would have liked them to be. And we've been listening to you for a while and we've basically got nothing. I'm finding it difficult to believe that a person who has risen to a position of such prominence and importance in the financial community can present himself as knowing absolutely nothing about what is going on in his own business. And maybe it's better to be dumb than culpable. But we want some answers.

JOSEPH BERARDINO: We are still getting facts. You want me to give you conclusions without all the facts.

REP. GARY ACKERMAN: How long... How long have you been the auditors of this company and how long have you been their consultants?

JOSEPH BERARDINO: This committee had conclusion that's use words like apparently...

REP. GARY ACKERMAN: Could you just answer that question first, how long have you been the auditors for...

JOSEPH BERARDINO: Our firm has bee the auditor since I think the mid-80s.

KWAME HOLMAN: Even as members pressed for answers on the role of Enron's accounting firm, the man whose report sparked the latest Enron firestorm was preparing to testify before the House Energy Committee's investigative branch. Last October, William Powers, dean of the University of Texas Law School, joined Enron's board of directors charged with raveling the complex partnership schemes that brought down the mammoth company. Having testified before another committee last night, Powers told his story for the second time today.

WILLIAM POWERS, Enron Investigator: What we were charged with was investigating transactions between Enron and partnerships controlled by its chief financial officer or people who worked in his department. That's what our report discusses and frankly Mr. Chairman as I have said before, what we found was appalling.

KWAME HOLMAN: Powers said his probe focused on the activities of Andrew Fastow, Enron's former chief financial officer.

WILLIAM POWERS: First, we found that Fastow and other Enron employees involved in these partnerships enriched themselves in the aggregate by tens of millions of dollars that they should never have received. Fastow got at least $30 million, Kopper at least $10 million, two others $1 million each, and still two more in amounts that we believe were at least in the range of hundreds of thousands of dollars, so there was self enrichment. Second, we found that some transactions that were improperly structured. But if they had been structured correctly, Enron could have kept assets under accounting rules-- especially debt-- off of its balance sheet. But Enron did not follow the accounting rules. Finally, we found something more troubling than individual instances of misconduct or a failure to follow accounting rules. We found a systematic and pervasive attempt by Enron's management to misrepresent the company's financial condition. Enron management used these partnerships to enter into transactions that it could not, or would not have done with unrelated commercial entities. Many of the most significant transactions apparently were not designed to achieve bona fide economic objectives. Let me say that while there are questions about who understood what concerning these many very complex transactions, there is no question that virtually everyone knew, everyone from the board of directors on down. Everyone understood that the company was seeking to offset its investment losses with its own stock. That's not the way it's supposed to work. Real earnings are supposed to be compared to real losses. As a result of these transactions Enron improperly inflated its reporting earnings for a 15 month period from the third quarter of 2000 for the third quarter of 2001. It overstated its earnings or inflated its reported earnings by more than one billion dollars. This means that more than 70% of Enron's reported earnings for this period were not real. Now how could that have happened? Tragic consequences of the related party transactions and accounting errors were the result of failures at many levels by many people. A flawed idea, self-enrichment by employees, inadequately designed controls, poor implementation, inattentive oversight, simple and not so simple accounting mistakes and an overreaching culture that appears to have encouraged pushing the limits.

REP. PETER DEUTSCH: One of the mandates of your committee was to recommend discipline at Enron. What discipline is the committee going to recommend?

WILLIAM POWER: We did not recommend discipline in the end, and the reason was, I'll... We have been going nonstop getting this done. My testimony was... Had been requested. We wanted to get this report out and thought that frankly exhausted at the end of it we didn't want to make judgments about discipline and I think the facts speak for themselves and others are going to have to make the judgment we didn't in the end... We didn't mean to imply there should not be discipline imposed here.

KWAME HOLMAN: Finally late today the second congressional committee spurned by Kenneth Lay announced it had served a subpoena compelling him to appear.

FOCUS - SIZING UP THE BUDGET

JIM LEHRER: Next, a new budget with new priorities. Gwen Ifill has that.

GWEN IFILL: The new White House budget lays out the nuts and bolts of the Bush Administration's two-front war. For the war on terror, the President is asking for a $48 billion increase; almost 15% for the Pentagon. That's the biggest jump in defense spending since Ronald Reagan's 1981 budget. On the domestic front, the Administration wants to double spending for homeland defense, including $11 billion to beef up border crossings, $5 billion to improve airport security, and $6 billion to prevent biological attacks. The President defended his request for homeland security money today rally in Pittsburgh.

PRESIDENT GEORGE W. BUSH: It's money that will enable me to say that we're doing everything we can to protect America at home. But I want to remind you all the surest way to protect America at home is to find the enemy where it hides and bring them to justice.The surest way to protect America is to unleash the mighty arm of our United States military and find the killers wherever they hide and rout them out and bring them to justice.

GWEN IFILL: The White House also wants to spend $591 billion over the next ten years for tax cuts including money to help the unemployed buy health insurance and to promote charitable giving. But there are tradeoffs in the $2 trillion plan. To pay for the wartime budget, other programs take a hit, like job training. The plan eliminates eight programs to save $500 million. And highways -- road-building programs, popular in many states, would lose $9 billion. The Army Corps of Engineers would lose almost $13 billion for new projects like dams and bridges. Other tradeoffs: Cuts for the international space station, for low-income heating aid, and for teaching hospitals, which get much of their support from Medicare. The President's budget would also run a106 billion deficit this year, and continue in the red until at least 2005. One casualty: Pledges to wall off Social Security surpluses. The lockbox to protect that program is now wide open, with nearly $1 trillion from the Social Security surplus now tapped for other government programs. Democrat John Spratt, a member of the House Budget Committee, said Social Security should not be financing the war.

JOHN SPRATT: We're going to support the parts that have to do with fighting the war on terrorism, and protecting the American homeland. We are going to ask for justification. We're not going to be standing, we're not going to nickel and dime you, but obviously we've got a job to do; we're going to ask hard questions and we're going to raise a debate, too, as to whether or not it is right, proper, and fair to use the surpluses in Social Security Trust Fund to pay for the war, to pay for homeland security. Is this the proper means of financing it?

GWEN IFILL: For more of that debate, we're joined by the White House Budget Director, Mitchell Daniels; and Senator Kent Conrad, Democrat from North Dakota, and chairman of the Senate Budget Committee.

Mr. Daniels let's start picking up where John Spratt left off -- the question of the deficit and whether this is the best way for the government to be proceeding right now. What's your response?

MITCHELL DANIELS: Gwen nobody likes a deficit less than that President or me for that matter. But events have put us in a very different situation. This budget makes choices in favor of the first priority of government, which is the defeat of terror, the defense of Americans in their homeland and it also calls for action to bring back economic recovery sooner through a stimulus package -- some would say that's not necessary. We'd rather have a budget that's in or close to balance and not do that. The President would prefer to act on jobs; frankly over the long term getting a good recovery going soon is the best way to get back into surplus is which is where we all want to be.

GWEN IFILL: Senator Conrad are these necessary war time budget evils?

SEN. KENT CONRAD: Well in part they are. Certainly we share the priorities of defending this nation. We all understand our first obligation to protect our country and defend the homeland. That's not where we have a disagreement. What we do disagree on is the Administration putting us on a course to take over two trillion dollars over the next ten years out of the Social Security and Medicare Trust Funds and to use those monies to finance a tax cut and other government expenditures. We think that's especially unwise because the baby boom generation starts to retire in just six years and raiding every trust fund in site nuts country in a very deep hole.

GWEN IFILL: Mr. Daniels even some members of your own party like Tom DeLay, the House Republican Whip, have worried that this idea of perpetuating deficits even in the short-term could be a problem, could start country on the wrong path. What are you telling Republicans about this?

MITCHELL DANIELS: The President has always said there are only a few reasons, but there are at least three why a deficit might be temporarily justified: War, recession and emergency. We have them all. Now, Senator Conrad was a little careless with language as sometimes happen and talks about money coming out of the trust funds -- not at all true. The trust funds contain bonds and they will contain exactly as many as they would have if we had a huge surplus this year. What he's saying is he would rather take monies -- those monies and use them to pay down debt. We agree that that's a good thing to do. But it's not as urgent as winning the war on terror and defending the homeland and stimulating the economy. That's an honest debate but it should not be confused with loose and fallacious talks of raids. Those monies will be used for one thing or another and in the current emergency we think debt reduction regrettably as to wait a little while.

GWEN IFILL: Senator Conrad is that what you're saying?

SEN. KENT CONRAD: No, I want to be very clear. When you take money that is raised from payroll taxes on the pretext that will support Social Security and Medicare, you take those funds and instead of using them for Social Security and Medicare, you use the to pay for tax cuts, you use them to pay for other government programs. I believe that constitutes a trade. It reduces our ability to meet the long-term obligations of this government, and it's precisely the same kind of policy that got Enron into trouble. The fundamental problem of Enron is that they hid debt from their creditors, from their investors and prepares even from themselves. I see the federal government doing much the same thing. It isn't acknowledging the fundamental debt that it is building and the results will be serious. We'll have a big price to pay in the future by not facing up to this debt by taking money from trust funds to pay for the other functions of government.

GWEN IFILL: Mr. Daniels, obviously, I want you to respond to this allegation that you're hiding debt but also I would like for you to answer how does... How do you work it out that the surpluses will return in 2005 or 6? It seems so different from last year at this time when we were talking about how to spend the surplus; now we're talking about how one gets back to surplus.

MITCHELL DANIELS: Well things are different of course. No one last year forecast the recession, which we now know was well underway. That alone took us well below the Social Security surplus Senator Conrad is concerned about. I don't know who he blames for that but if there was never a tax relief bill last year, if we had not spent one penny more on any of the needs of the American people, we would still be as he puts it raiding Social Security. He wants to raid it too; he just wants to use the money to pay down debt. We always use it for one purpose or another. He's a leader of the Senate and will have his opportunity soon to write his own budget and he at that point can show how he would do it differently and how he would use the money in the -- that other way to pay down debt -- what he would not spend on new priorities.

GWEN IFILL: Which brings me neatly to my next question Senator Conrad: what would the Democrats propose doing instead?

SEN. KENT CONRAD: Well, we had a very clear budget proposal last year and in that budget proposal we set aside every penny of Social Security and Medicare funds for those trust funds. In addition we used another $900 billion of general government funds to strengthen our long-term position with Social Security. So that was a difference in priorities. Instead the President wanted more money for a tax cut. That's what put us on the course that we e currently following. That's going to go deep into the trust funds over the next decade and use the money to pay for other tax cuts, more tax cuts, and pay for other government programs. I just think it's profoundly mistaken and is going to dig a very deep hole for this country.

GWEN IFILL: Mr. Daniels, Secretary Rumsfeld was on this program last night. One of the things he suggested is that one cannot have guns and butter -- that these kinds of choices must be made. At the same time some of the folks at Pentagon are saying that the $48 billion increase the President proposes isn't near enough. How do you begin to sort all of that out?

MITCHELL DANIELS: Work with Secretary Rumsfeld -- a perfect Secretary of Dense for these times. He's both as he's proven a tremendous war leader in prosecuting the war against terror in determining what it takes and applying those resources and a first rate manager who is telling his Department very publicly that it must transform itself to immediate the needs of the 21st century, that he still hears too much old thinking around there. So make no mistake -- the President's instruction was clear -- this budget must who do what it takes to win the war on terror and to defend Americans here at home. Everything else will have to be tightly scrutinized as it was. I think you'll hear lots of complaining from people whose pet projects will be asked to slow down or grow very slowly so that we can win a two front war.

GWEN IFILL: Including folks in the Pentagon perhaps?

MITCHELL DANIELS: I would hope on close inspection that folks there and advocates of defense will feel very good about this major step forward. It's certainly true our defenses had been allowed to erode; we spent the peace dividend of the 80s a couple of times over in the last decade and let our defenses run down again. And now they must be rebuilt while we fight a war and that will cost money.

GWEN IFILL: Senator Conrad, we've talked about where the surplus has gone, where the deficits are going to be, but what about the butter that is getting cut out of this budget for highways and job training and issues like that, do Democrats have any intention trying to restore any of that?

SEN. KENT CONRAD: First of all I think it's very important we make clear that we stand shoulder to shoulder with the President on this question of the resources necessary to defend this nation. Our adversary should have no doubt that there is no daylight between us on that issue and I commended the President today for his leadership in this war effort and I commended the director, Mr. Daniels, for the way he and the rest of the Administration have conducted themselves in that regard. But look, yes there are other places where we may have some differences but by far the biggest one is this fundamental question of the fiscal future of the nation. Does it really make sense to take two trillion dollars out of the trust funds of Social Security and Medicare to pay for tax cuts and more tax cuts and to pay for other government programs? That's where we have the biggest difference.

GWEN IFILL: Will you attempt to restore any of the money for some of the domestic programs that we named in our opening piece?

SEN. KENT CONRAD: I think the one place that clearly needs to be addressed and we're already hearing on a bipartisan basis is the $9 billion in road building cuts. Nobody anticipated that. I don't think anybody favors it and my state it would mean a cut of as much as 30% according to our state highway engineer. I think there is a strong feeling that we've got to find a way to reduce that cut.

GWEN IFILL: Mr. Daniels you have said that Medicare is broken. How does this budget begin to fix it?

MITCHELL DANIELS: It proposes first of all immediate help on the biggest problem with Medicare, which is the lack of prescription drug coverage and yet again the President is proposing a near-term option to help people at the lower end of the income scale not have to make an unacceptable choice between medication and other necessities and then it proposes $190 billion for comprehensive reform of Medicare to include prescription drugs but also to widen choice and to help Medicare beneficiaries receive higher quality health care.

GWEN IFILL: And, Senator Conrad, as the two of you seem to disagree so fundamentally on so many items was the budget aside from the war on terror is this budget aside from that basically dead on arrival in Capitol Hill?

SEN. KENT CONRAD: No. I think any time you're in a wartime situation what the President requests in large measure he will receive. But let me just say on Medicare, what Mr. Daniels didn't tell you is to strengthen Medicare they're raiding it. They're going to take every penny of the Social Security and Medicare Trust Fund surpluses and in this case the Medicare Trust Fund surpluses -- every penny and use it for tax cuts and to pay for other programs that. That doesn't strengthen it -- that weakens it.

GWEN IFILL: Do you want to respond Mr. Daniels?

MITCHELL DANIELS: I guess it will finally come down to one question. The Senator and we certainly appreciate his vigorous support of our defense efforts -- and I know he supports for instance new farm spending that we have included room for in this budget. If he's for all of those things, and then is dissatisfied that we don't have enough money to continue paying down lots of debt, which is what this whole Social Security rhetoric is about, then it comes to one issue: You would have to want higher taxation of the American people. We think that's a bad idea. Americans are being attached today at rates still well above historical averages and in a weak economy we think it's especially risky to talk about let alone a jack up today's level of taxation. But that's finally what I suppose an alternative budget would have to come to.

GWEN IFILL: Final question for both of you gentlemen. You talk about the weak economy. Today Senator Daschle announced that tomorrow they plan to pull the economic stimulus bill that the President was asking the Congress for from the Senate floor tomorrow, your response Mr. Daniels?

MITCHELL DANIELS: It's very disappointing news. I hope still - I know the President will hope that this bill can be retrieved. There are plenty of encouraging signs and there are some people saying let's just forget about it, but the President would rather act and would rather try to make sure that recovery comes swiftly and surely and so I hope that today is only a temporary setback. This bill should have passed in December. It had the votes in the Senate to pass; it already had passed the House. And I think it could pass today if Senator Daschle could get himself organized.

GWEN IFILL: Senator Conrad is it a temporary setback or is it dead?

SEN. KENT CONRAD: I hope it's temporary setback because I do think an economic recovery package would be useful for the country. But, look, Senator Daschle is not taking down this bill. He has said to the Republicans, look, we have got to bring it to conclusion. They have been stalling; they've been filibustering and he is saying tomorrow is the time to choose. Do we go forward or will he have to take it off the floor so we can get to other priority business?

GWEN IFILL: Okay we'll all be watching to see what happens tomorrow. Thank you very much for joining us.

JIM LEHRER: Still to come on the NewsHour tonight, developing scientists, and staging the Olympics.

SERIES - YOUNG SCIENTISTS

JIM LEHRER: The world of high stakes science competitions. John Merrow, the NewsHour's special correspondent on education, has part two in a series on high school science students.

JOHN MERROW: It's midmorning at Townsend-Harris High School in New York City. These young scientists have a lot of work to do.

STUDENT: I have not done any of my abstract work, which is really bad.

JOHN MERROW: This may not look like science, but for these high school scientists, it's essential. They're finishing up a year's worth of work, and if they don't get their entries in the mail by the end of the day, they won't be eligible for more than $3 million in college scholarships and the prestige that goes along with competing. About one million high school students from all around the world enter their work in competitions sponsored by Westinghouse, Intel, Toshiba, Siemens and NASA, among others. Intel's International Science and Engineering Fair, called ISEF, is the most prestigious contest of all. Students submit their own research findings, the results of projects they've spent many months working on in labs and hospitals. Their research was guided by a mentor, a real scientist, engineer or medical researcher. For these 16- and 17-year-olds, the first step was to find a professional willing to work with them. For an adolescent, that can be intimidating. Vito Dilenna, who is studying the effect of cow bacteria in South America, remembers searching for a mentor.

VITO DILENNA: A lot of people aren't very willing to take in high school students. So that process can be strenuous also, because you get a lot of rejections, just people saying no. First meeting was nerve-wracking because all you see behind his desk are his plaques and all of his awards and trophies. So, you see this and you're... I'm thinking to myself, "what do I have that compares to this?"

JOHN MERROW: Marisa Cohen's research involves the effect of drugs on the immune system.

MARISA COHEN: I was intimidated because he has a lot of articles printed. He's a renowned scientist, and I was just coming and I didn't really have that much experience in the lab. I mean, in school we do lab work, but there was a lot of new equipment, new machines. So I just basically had to learn the ropes.

SCIENTIST: Don't put it directly on the middle. Put it along the edges.

JOHN MERROW: Rio May Del Rosario has learned about the importance of communicating with her mentor.

RIO MAY DEL ROSARIO: She understands what I'm saying. I mean, the thing about science research is you can't just go up to a person on the street and initially expect them to understand what you're saying. So, in a way, she's the person I go to talk to.

JOHN MERROW: Alka Mansukhani mentors Rio May at the NYU Medical Center.

DR. ALKA MANSUKHANI, New York University Medical Center: It's been very good to be with somebody young and somebody enthusiastic. And it's mentoring that makes the scientist, and making of a scientist starts... I think if the seed is planted at the... At the right time and nurtured, there's so much science to be done and there's so much that we don't know.

JOHN MERROW: Rio May is studying premature suture forming in bone cells.

RIO MAY DEL ROSARIO: You're working with cells that have been fixed with paraformaldehyde, so they're not exactly, you know, tough on... On the cover slips. So, sometimes if you're not very careful, you could suck up your whole three-week experiment, since you sucked off all the cells that you were growing. So, it's definitely very frustrating. And there definitely have been mishaps, but I think you learn that as you go along. I think this might have been the hundredth time I've done this. So you learn it as you go along.

JOHN MERROW: Jin Whan Choi is studying polymer coating of blood platelets. His mentor is Dr. Steven Schwarz, a physics professor at Queens' College.

DR. STEVEN SCHWARZ, Queens College: The student has to learn that science is not like the laboratory experiments in... In the classroom. There are many false starts, many repetitions required. The student is waiting for interesting data to appear. It takes time. And it's rewarding to see the students become more and more interested as the project proceeds.

JOHN MERROW: Because they are experienced, mentors bring a perspective to research that adolescents do not have. Dr. Leslie Kushner has worked for nearly 18 months with Gloria Lee, whose project focuses on women with urinary stress incontinence.

GLORIA LEE: I found something that I totally did not expect, and I would go to Dr. Kushner and say, "I don't understand this." You know, she's like, "let's look at the different levels and see where it might have gone wrong." And...

DR. LESLIE KUSHNER, Long Island Jewish Medical Center: What she found was no difference between two groups, and she was quite upset about that and talked to me a number of times about that. And it was important for me to explain to her that it meant she did the experiment well, because she proved the null hypothesis. So, she... She actually disproved her hypothesis, which was an exciting result. But that's uncomfortable for a student to go ahead with a hypothesis and then prove their hypothesis wrong. They feel they failed, but that's actually good science in my opinion.

JOHN MERROW: When the mentor relationship works well, these students experience science in a way most 16- or 17-year-olds never do in high school science classes.

JOHN MERROW: Do you feel like a scientist?

RIO MAY DEL ROSARIO: Um, I guess when I'm in the lab, I feel like a scientist.

JOHN MERROW: Do you feel accepted there?

RIO MAY DEL ROSARIO: Definitely. I feel... They speak to me as a peer and they think of me as a peer, so I'm not just the student who's working there and bumming off of them and using their... Their equipment, I'm a co-worker. So, I feel like I've proven myself in a sense and that's part of the... The victory.

GLORIA LEE: The best part was when during the lab meetings, I used to present what I was doing and talk about my work, and it seemed like, I'm sitting next to 40-year-olds and adults, and we're all talking about the same subject, and we're all on the same level. So I guess we're a team.

MARISA COHEN: There's a lot of different people in the lab, but they're all like older than me, and they treat me as an equal. I mean, I have a lab coat and I sit there and I'm doing my work, and they ask me questions sometimes, because they have a lot of resident doctors that were being trained there. And I showed them some procedures that I previously learned. And they had some other new Intel students there and I helped them, too. So I feel pretty important.

SPOKESPERSON: On this application, do you put your name on it also?

SPOKESPERSON: Everything on Intel has your name.

SPOKESPERSON: Okay.

JOHN MERROW: Back at Townsend- Harris, with only a few hours before the deadline, Jin realizes he's forgotten to get dr. Schwarz's signature, which is required to validate his research.

SCHWARZ: Okay, so just this one signature should be all that you need. A lot of forms. Fortunately, we have no vertebrate animals involved in our study of polymers.

JOHN MERROW: At Plainview Old Bethpage High School on Long Island, other young scientists we are following are completing their research projects.

SPOKESPERSON: Remember last year when you did your Dupont essay?

STUDENT: Yes.

SPOKESPERSON: And we had you find journal articles and books and write an essay on it? Basically, this is going to be the same thing.

SPOKESPERSON: See this beautiful sentence? The results reported indicate that... Whatever it is, acting by way of.. Is indeed a potent blah, blah, blah, mediator. This is big. This is important. You know, you're in the advertising business. You're advertising that Javid is brilliant. Javid has done a lot of work and he's made some new discoveries. Tell them your new discoveries.

ELIZABETH DENTEL, Biology Teacher, Plainview Old Bethpage High School: Because this is more general. Your intro should move from general to specific. At the end, you want it as specific as you can. You want to state your specific hypothesis, and specifically what you are doing.

JOHN MERROW: Elizabeth Dentel, a Biology teacher, is helping students, including Alan Salas, organize and write up their research.

ELIZABETH DENTEL: It's important that they learn how to write. I think as they develop through this research program, the more practice they get in writing the papers, the better, because they did the research and that... You know, that's wonderful, but if you can't tell anyone about it, that's a shame, because it's the most important that you... You tell people about your results.

JOHN MERROW: Back at Townsend- Harris, time is growing short.

STUDENT: What happened?

SPOKESPERSON: First, what does this mean?

JOHN MERROW: When will you go to FedEx?

TEACHER: They're coming here.

JOHN MERROW: They're coming here? When do they come?

TEACHER: Sometime between 2:30 and 5:00; hopefully closer to 5:00.

JOHN MERROW: Akshta?

AKSHTA: Yeah?

JOHN MERROW: Are you going to make it?

AKSHTA: Yeah, I'm going to make it. I have to make it. I just need the last signatures from Ms. Brustein. I'm waiting for my abstract to come out.

JOHN MERROW: A few minutes ago, you looked sort of panicky. You yelled at Marisa, "I need your cell phone." What's that all about?

STUDENT: I have to call my mentor and just do some... Check up on.. See if it's right.

TEACHER: We have one hour.

JOHN MERROW: Are you going to be done?

STUDENT: No, I'm not going to be done.

JOHN MERROW: Although these students are in competition, they help each other out.

STUDENT: This is done, so just check that it's done for me.

JOHN MERROW: They're making multiple copies of their research because they'reentering regional and national contests. The ultimate goal, however, is the ISEF finals, which will be held this year in Louisville, Kentucky, in May.

SPOKESPERSON: They're here.

FEDEX PERSON: Where are the packages?

TEACHER: Anybody else for Intel? Be ready in one second.

FEDEX PERSON: No, I have... I have no time. If the package isn't ready, I just have to take it and I got to go.

TEACHER: If it's not in there now, it's not going, guys, because I can't risk everybody else's not being on time. Correct? Okay.

FEDEX PERSON: I don't have time to wait while you even make a phone call. I have other stops.

STUDENT: (running) Yo, guy!

JOHN MERROW: It was that close. But in the end, all the students got their papers in the mail on time. Now they wait while the judges decide who gets to go on to the next round.

FOCUS - OLYMPIC CHALLENGE

JIM LEHRER: And finally tonight the Olympian challenge of putting on the Winter Olympics and to Ray Suarez.

RAY SUAREZ: Three years ago the Salt Lake Winter Olympic games were racked by a bribery scandal that prompted several major investigations and forced the resignations of leaders who were organizing the event. Last year after September 11, new security concerns became a major focus for the games leading to unprecedented safety measures for both athletes and spectators. The man brought in to reorganize the Olympic Organizing Committee after the scandal is Mitt Romney, a Boston venture capitalist and former U.S. Senate candidate. He joins us now from Salt Lake City. Welcome.

MITT ROMNEY: Thank you.

RAY SUAREZ: About a week after September 11 when there was no baseball, when there were no planes flying, when winter athletes started to publicly talk about their own concerns about their safety in Salt Lake City, was there ever a low moment where you wondered if this day, 72 hours before the opening ceremony, was ever going to get here?

MITT ROMNEY: Well, there were certainly low moments, but those were associated with the tragedy that had befallen so many people in our country and people from around the world and thinking about how our world had changed. But there was never a time when anyone in the Olympic movement, myself included, thought the games couldn't go forward. Our commitment was to proceed, to make sure that the hours of sacrifice and energy made by the athletes could be fulfilled in these games, and in some respects, we also recognized that the games now had more profound meaning. That now the games affirmed civilization, affirmed humanity, if you will, and stood for everything which was the opposite of September 11 tragedy.

RAY SUAREZ: Well, in the ancient games, it was a time of truce when athletes would come together to compete. This time, our country is at war as the games commence. How does that change the experience?

MITT ROMNEY: Well, I think the world has changed from the days when wars only meant combat between two nations perhaps at their border. Now there is a sense of war on something as awful as terrorism, which knows no borders, which has no country which is its flagship, where there is no army opposing you, where your enemy is invisible. Like the war on drugs, it must go on constantly and our nation must be vigilant and aggressive in its pursuit of this war, even while perhaps the most visible event on the world stage that augers for peace, the Olympics, goes on. That's the nature of our modern world and I think the Olympics now is a symbol which is, perhaps, more powerful, stands out in more contrast to the awful terrorism that has befallen us.

RAY SUAREZ: About a week ago, the attorney general of the United States and the Justice Department expressed concerns that even with the tremendous emphasis on security at Salt Lake City, that maybe not enough, still, was being done. What have you done to tighten things up since the end of January?

MITT ROMNEY: Well, the good news for me is that I have virtually no responsibility for security. My job is to organize the games for the athletes and the spectators coming here, and I turn to the to the Secret Service, the FBI, FEMA, as well as the Utah Olympic Public Safety Command. Their job is to assure the safety of the athletes and the public and the spectators. The job they did, I think, is a very complete and comprehensive job and one that assures the highest level of security, but there is no question that every week that goes by with new pieces of intelligence or new reviews by people with security expertise coming in, that there will be changes made. That there will be additional officers or additional techniques and technology used, applied in particular areas. That's... That's expected. And so we were happy to have the attorney general here for almost five days touring the venues, looking at the perimeters and making some adjustments. That's going to go on, that's what you hope to have happen as opposed to people who are getting locked into the way things have been in the past.

RAY SUAREZ: Well, how do you strike that balance between enjoyment and safety -- the desire to move freely around a festival event like this and the need to take care?

MITT ROMNEY: Well, you know, we learned an important lesson from the games in Atlanta. Wonderful games, very exciting, and yet their celebration site where everybody came together at the end of the day did not have a fence around it or secure entry and exit. And because of that, we've now put in place a far more secure system for allowing people to come in together and celebrate at the end of the day, but without having to worry about whether or not they're safe. So downtown Salt Lake City, for instance, we've fenced off about an eight square block area complete with places for food and drink for free concerts; even a competition occurs within this eight-block area. And once you go through those magnetometers, you know you're in a safe area. But you don't have to worry once you're in that area and you don't have to be encountering security people every few feet. You've come inside a secure place, a safe place; that's the way it ought to be.

RAY SUAREZ: Well, winter events by their very nature, because you need mountains for some, flats for some, skating rinks for some-- you're moving lots of people around over a wide area. What are you telling people who want to come see events about what they should expect?

MITT ROMNEY: Well, any time you think about moving people up into the mountains, you know that you're going to have some traffic issues and perhaps some weather issues. These are, after all, the winter games. And so we're going to have some long lines. We're telling people, "Get ready for a bit of a wait getting into a venue. Make sure and wear very, very warm clothing, but recognize as well that the security screening is going to be more extensive than anything you have faced before." Not only on the ground, but also vehicles that want to get near a venue are going to have to be screened. Even aircraft in the air-- they're going to be monitored very carefully. During key times, they're actually going to be prohibited from coming within 50 miles of Salt Lake City. And military aircraft will be in fly... Will be enforcing this no-fly zone. That's the kind of security that has to be in place in a world that's been attacked as ours has been by the agents of terror.

RAY SUAREZ: The medals ceremony: There was a plan to have them in an open area where people could come and see them. Are you still able to stick with that plan?

MITT ROMNEY: We are - we're really excited about our medals program, because every night those athletes that have won medals will come to downtown Salt Lake City, they'll pass into our Olympic square area about eight square blocks, and there, there will be huge concerts going on for free and we have food and so forth there. And we're going to have the athletes come up on the stage, receive their medals. We built an outdoor arena that hosts some 20,000 people. At no charge, they can come in and experience what is one of the prime Olympic events.

RAY SUAREZ: What are some of the yardsticks that you're going to use as to whether this is going to be a success? When will you know that you've pulled this off for the athletes, for the fans, and that you've managed to be true, also, to the spirit of the games?

MITT ROMNEY: Well, when you organize something as big as the Olympics, you have to decide who really is the key audience. Who are you trying to satisfy and please? And it didn't take us long to realize that the audience that was most important to us was the athletes. That's the group that we have to make sure we've done everything to take care of and to make sure that their experience is one which gives them a fair chance to compete and to show their stuff and also to take their competition to the world. And so we've devoted our resources to creating great venues, a great Olympic village, terrific food, good transportation system; and when this is over, we want the athletes to say, "Salt Lake City did a great job hosting a world athletic competition." Now, we also hope people who come out to the American West say, "what a warm and hospitable place. What great volunteers, what great people they were out there in Salt Lake City." We hope that the Appalachian great games can be applied to the Olympic winter games in Salt Lake.

RAY SUAREZ: Well, you took over this job in less than optimal circumstances. Have you been able to put the Salt Lake Organizing Committee back on sound footing financially and live down what it threatened to be the taint of the earlier problems?

MITT ROMNEY: Well, I think the bid scandal is something that will always be with us and probably should be to remind us where we never want to go again as an Olympic world. We faced, also, some very severe financial challenges. We were some $379 million in the red. We had to cut our costs. We had to bring in new sponsors. We were able to get that done. You know, challenges in the Olympic movement had been around a long time. We're pleased that we've overcome most of those that we've faced. We'll probably face a few more before this is over. But we believe that fundamentally people watch the games not to learn about people like me or the United States Olympic committee or the International Olympic Committee and our problems, but instead, to see the athletes. And if we do our job well, we get off the pages of the newspapers, off the cameras and the athletes are front stage.

RAY SUAREZ: And you had to move from New England to Utah to take up this work. You thinking about hanging around when it's over? Are you going to go home?

MITT ROMNEY: Well, this is actually a wonderful place to live. I had come to Utah many years ago as a student in college. But living in a place as a student, you don't really get to know the community. Being here now with my wife and having our sons in this area, as well in a couple of cases, gives us a chance to really experience Utah and the outdoor life, the snow skiing, the horseback riding. The friendships we have formed will probably long be with us and we may well stay in this area. But who knows? There is a draw, also, to be back with our grandkids and some more sons back in Boston. We now have two homes.

RAY SUAREZ: Mitt Romney, have a good games. Good luck.

MITT ROMNEY: Thank you. We appreciate it.

RECAP

JIM LEHRER: Again, the major developments of this day. Two congressional committees subpoenaed former Enron chairman Kenneth Lay to appear next week. Senate Majority Leader Daschle said the Senate was deadlocked on economic stimulus. He said he would take it off the schedule. President Bush said he was very disappointed. And a federal grand jury indicted John Walker Lindh, the American who fought with the Taliban. We'll see you online, and again here tomorrow evening with a Newsmaker interview with Treasury Secretary O'Neill, among other things. I'm Jim Lehrer. Thank you and good night.