For Immediate Release
Office of the Press Secretary
January 16, 2002
Press Briefing by Ari Fleischer
Listen to the Briefing
- President's schedule
- Tax cut
- Environmental Regulations
- Argentina
- Enron
- Richard Reed
- Philippines
- Taliban Prisoners of al Qaeda
- Tonight's speech
- Haiti
- Harvey Pitt
- India and Pakistan
The James S. Brady Briefing Room
12:51 P.M. EST
MR. FLEISCHER: Good afternoon. I'll give you
a brief opening on describing the President's day, then I'll be more
than happy to take your questions.
The President this morning had a briefing from the Central
Intelligence Agency and the Federal Bureau of Investigation to cover
the latest developments in the war against terrorism, then he convened
a meeting of his National Security Council.
Later today, the President will meet with the Prime Minister of
Turkey to discuss Turkey's strong cooperation with the United States in
the war against terrorism and to talk about other regional issues.
And then this evening, the President will give a speech at the
Organization of American States, to the World Affairs Council national
conference, entitled "The Future of the Americas." In the
President's remarks tonight, the President is going to talk about the
importance of prosperity and democracy in our western hemisphere.
The President will talk about the importance of preserving
political freedom and democracy in the region, the importance of
strengthening security in the region and the importance of advancing
economic development through economic reforms and through free trade.
And with that, I am more than happy to take your questions.
Q Ari, can you respond to Senator Kennedy's
calls today to roll back the later stages of the tax cut?
MR. FLEISCHER: Well, the President views this as a tax
increase on the American people that he will oppose. The
President thinks it is wrong to raise taxes on the American people; he
thinks it will hurt the economy; he thinks it's unfair to America's
workers who need to have more money in their paychecks. And
the President thinks it's the wrong approach for our country.
Q Can you explain how it would hurt the
economy? And, secondly, do you disagree with the premise,
Kennedy's premise, which is that the tax cut was envisioned at a time
when the country's finances were much different?
MR. FLEISCHER: Not only does the White House dispute the
premise of what Senator Kennedy proposed, but many Democrats in the
Senate do, as well -- especially conservative Democrats and Democrats
who have worked with the White House in a bipartisan way on tax
issues.
So this really exposes some big differences within the Democratic
Party, particularly with the rank and file. I think it also
shows that at the leadership level, the Democratic Party is aching to
raise people's taxes.
Q But that's a political response and is
unresponsive to the economic point, which is why would it hurt the
economy?
MR. FLEISCHER: Well, on the economy, the President has
said repeatedly that he believes the best way to get the economy
growing again is to let people have more money in their pockets so that
they can spend that money, producing jobs and providing products to
consumers that consumers can purchase because they have more resources
in their pockets. And when consumers purchase products, it allows
manufacturers and companies to hire more workers who make those
products.
And that's why the President thinks that the last thing you should
do and the worst thing you should do in the middle of a recession is
raise taxes on the American people. And the President is
proud to be joined in that by a good number of Democratic senators who
do not see it the way Senator Kennedy does.
Q Just one more on this, because that's
still not responsive to -- I know what his views are about this, but
what Kennedy is talking about is something that wouldn't take place
until 2004. So how would that have that sort of impact by
that point?
MR. FLEISCHER: Because a tax increase is a tax increase
is a tax increase. It's wrong now and it's wrong then, in
the President's opinion; and I dare say in the opinion of many
Democrats.
Q That's a political
statement. But what about -- as a matter how it affects the
economy?
MR. FLEISCHER: Because the President opposes raising
taxes. He thinks it's the wrong thing for the
economy. And, you know, I think really in so many ways, you
know where the President stands on this. I think the
interesting question needs to be put to Senator Kennedy's fellow
Democrats. It seems that it's the Democrats in the Senate who don't
know what approach they want to take on taxes. There are
some Democrats who continue to want to work with the President on a
bipartisan plan to help the economy recover.
But I do think what you're seeing here is a real yearning by the
Democratic leadership, as announced by Senator Kennedy today, to raise
taxes on our country. We've been down that road before with
Democrats. They always say that these are tax cuts only on the
wealthy, but it's always the middle class that gets soaked.
Q Let me follow up on that. Will
you concede Senator Kennedy the point that this tax plan was drafted at
a time when the economy was booming, in 1999?
MR. FLEISCHER: The tax plan was drafted --
Q The tax plan was proposed when the economy
was booming.
MR. FLEISCHER: Well, let's walk through the history of
the tax plan. The President, in 1999, announced his support for
across-the-board tax cuts for marriage penalty relief for elimination
of the death tax, for example. The President announced that at the
time for the following reasons. One, he thought it was
important to let people keep more of their own money. Two, he thought
that it was less money that was sent to Washington, the less money
Washington would have to waste on spending programs that were not
effective. And, thirdly, the President said at that time it
was an insurance policy against a future economic downturn.
Flash forward to 2001, when the President was elected, he of course
proposed it to the Congress. And the recession began in
March. The tax cut wasn't even signed into law until
May. And that's, again, where I think many Democrats have
said that the explanation that several Democrats have offered that the
tax cut caused the recession just doesn't hold water.
Q How was the economy doing in 1999 when he
proposed it?
MR. FLEISCHER: The economy was strong.
Q Ari, does the President believe that
companies that violate OSHA and environmental restrictions --
regulations should be rewarded?
MR. FLEISCHER: I'm not sure what you're driving at,
Helen.
Q I'm driving at the fact that the President
has killed this Clinton plan to not give new government contracts to
companies that violate OSHA and environmental regulations.
MR. FLEISCHER: I think that's an over-reading of the
administration's actions focused -- because the administration's
actions focused on setting a standard by which all actions would be
reviewed and that it was called a black-listing or black-balling
companies. But just as if a union, for example, were to
engage in one act that was questionable, does that mean that union
should be denied everything that the government has to offer? The
answer would be no. People need to be held liable and
responsible for acts of wrongdoing and corrective measures need to be
taken. But does that mean that they should have a
government-wide ban on the receipt of all funds from the government and
all accounts? I think that would be just as unwise to do to
unions as it would be to business.
Q -- clear-cut violations and may have been
proved, they should get a new government contract?
MR. FLEISCHER: Again, the standard that the White House
put in effect was that each individual instance will be examined and
the appropriate action should be taken, based on the merits of what was
found in that case.
Q Ari, the Argentine banking system is
teetering on the verge of collapse. What specifically is the
administration -- either through the Treasury Department or the White
House -- doing to stop the hemorrhaging?
MR. FLEISCHER: Well, Terry, as you know, the position of
the Treasury Department and the President's directions to the Treasury
on this is to work closely with Argentina, as Argentina develops a plan
for sustainable economic growth. And the United States will
continue to work with Argentina in development of that plan.
It's important for Argentina to take the necessary steps, in terms
of economic reform and internal actions that will create an environment
for sustainable economic growth.
Q So there needs to be improvements in the
workings of the Argentine market, as far as the administration is
concerned?
MR. FLEISCHER: Well, and I think you can talk to
Treasury to determine exactly what specifics they are talking to
Argentina about, but the President has made clear that he will remain
helpful and the United States government wants to help through the
International Monetary fund; but, first, it's important for Argentina
to take the necessary steps to achieve sustainable growth.
Q The reason I ask is, when Enron was going
down, the administration did nothing, despite please from Enron, and
that is now being defended by the Secretary of the Treasury and the
chief economic advisor as essentially showing how capitalism works, the
genius of capitalism. Is that what's happening with
Argentina as far as the administration is concerned?
MR. FLEISCHER: I don't think you can make really valid
comparisons between domestic actions with a company and international
relations that have a whole different set of issues and more
complications, including issues of contagion, for
example. Our obligation is to work through the International
Monetary Fund wherever we believe that it is in the interest of the
nation we are working with, as well as a careful examination of what
internal procedures a different nation has put into place.
I understand the philosophical approach people take to
it, but I think it's a little overly simplified and simply
painted, when it's much more complicated to compare one nation's
relations with a sovereign nation as opposed to a domestic issue with a
company.
Q Ari, there are calls today that for SEC
Chief Harvey Pitts to recuse himself in the Enron investigations, given
the fact that he also has a history with the failed corporation, as
well. Do you think that's something that the White House
would get behind? Is that something that you folks support?
MR. FLEISCHER: You know, again, I think the SEC, first
of all, is an independent agency, and the President has appointed
Harvey Pitt to the post at the SEC. Having said that, the
President has full faith and confidence that Mr. Pitt, as well as all
members of his administration, will do the right things for the right
reasons and will comply with all ethics provisions.
But I do want to make one point, though, about the general approach
which has been raised in this issue, and I would refer you to the SEC
for the specifics of Mr. Pitt. I think they have information
they would provide to you. But I do want to say that if the
suggestion is it is somehow unwise or improper to put somebody who has
a background in accounting at the Securities and Exchange Commission
because that could raise the possibility of the appearance of a
suggestion of a perception of a conflict of interest, the logical
conclusion would be that you need to appoint a farmer to head the
Security Exchange Commission, or that you need to appoint an accountant
to head the Department of Interior.
One of the strengths of the government is people come from a
background in which they have expertise that then they apply in a way
that represents the best policy to protect the nation. And I
don't think it should surprise anybody to see that the Securities and
Exchange Commission is led by somebody who has expertise that comes
from being -- having spent a career in the relevant working field.
Q That's a very good point, but that wasn't
the inference here.
MR. FLEISCHER: Ken, go ahead, follow up.
Q What I was basically saying is because he
has a connection to a corporation that's being investigated, not
whether he's qualified to have the job he has, but because he has the
position --
MR. FLEISCHER: The point is the same -- the connection
to a corporation. And, again, no suggestion of
wrongdoing. It's just, again, the suggestion that because
somebody, somehow, worked in a background, worked in a field in which
they developed expertise working for a corporation that is connected
somehow suggests wrongdoing of that person.
Now there are recusal rules, there are recusal
procedures. They will be followed by all government
officials as appropriate. They make those determinations
based on the facts at hand. But I wanted to address the
broader issue, because I think there is a risk that many people get
tarred with something that is not accurate, wise or helpful to the
nation because they come from a certain field of expertise.
Q Can I have one more?
MR. FLEISCHER: You've had two.
Q I know.
MR. FLEISCHER: Let's just move it around the
room. We'll come back.
Q Ari, regarding the alleged shoe bomber,
Richard Reed, can you confirm that additional federal charges will be
brought against him today and what those charges --
MR. FLEISCHER: If that were to be the case, the
Department of Justice would be the appropriate place to make such an
announcement.
Q You can't confirm if --
MR. FLEISCHER: I would urge you to talk to the
Department of Justice.
Q Can you give us, though, before that,
which we expect to be today, a broad sense of what the government
believes his motives were to be and his ties to Osama bin Laden's al
Qaeda group?
MR. FLEISCHER: That would come from the Department of
Justice, not the White House first.
Q Ari, last week you said there's nobody
here that I'm aware of that it was brought to my attention about
contacts -- who Secretary Evans and Secretary O'Neill
told. We've since learned that Mitch Daniels had gotten a
call from Mr. Lay and that Secretary Evans --
MR. FLEISCHER: That's correct.
Q -- told Andy Card.
MR. FLEISCHER: That's correct.
Q What did Andy Card do with that
information?
MR. FLEISCHER: Andy said thank you to Secretary Evans
and left it at that.
Q He did nothing?
MR. FLEISCHER: That's correct.
Q Isn't that odd that he wouldn't tell the
President that two Cabinet officers and the Chief of Staff would not
inform the President of the United States that an appeal is being made
for government help or a bailout?
MR. FLEISCHER: Helen, as you can imagine, Cabinet
secretaries, the Chief of Staff receive information on all kinds of
issues about all kinds of topics, and they make a determination about
what they think needs to be brought up to the President's level.
I think particularly in the case where a determination was made, as
you know, from the Secretaries talking to each other that no action was
taken, there was nothing to report. Those are the
determinations that Cabinet Secretaries and Chiefs of Staff are paid to
make, to use their judgment about what they feel they need to advise
the President about.
And Secretary Evans and Secretary O'Neill have answered that
question, themselves, repeatedly on I don't even know how many shows by
this point and they've given their reasons why they took the action
they did, and saw no reason to inform the President.
Q Is there some order from the President,
only tell me what you think is important to me?
MR. FLEISCHER: No, it's at the discretion of the Cabinet
members, of course.
We're going to keep moving it around here. We'll come
back up.
Q Is there an informal review underway at
the White House and at various agencies, to see if any other
individuals talked to Enron executives to make sure it is reported and
out there and made public? Is there any informal review
underway?
MR. FLEISCHER: Kelly, I think there are three major
issues with Enron that the White House is looking at. One is
the question of criminal wrongdoing. And the President is
deeply concerned about criminal wrongdoing that has been alleged to
have taken place in this case, by Enron or anybody else. And
that is being pursued vigorously by the Department of Justice, and they
will pursue it as they see fit and the President wants that to be
pursued.
Secondly, it is vital that the government review the policies that
could have allowed this to happen in the first place. The
President has directed his Secretary of Treasury, his Secretary of
Commerce and the Secretary of Labor to begin a policy review to see
what can be done to protect other people's pensions in other companies
and to review accounting procedures, so that accounting firms cannot be
in a position where this takes place again.
Those are the two areas that the President is focused
on: a criminal investigation to get at the bottom of what
wrongdoing was done; and a policy review to protect people's pensions.
Now, if you're asking is the White House engaged in any effort to
determine whether or not any contact was made with anybody at Enron for
any reason, I suggest to you that there is no hint there of any
wrongdoing. If you have any information, any evidence you
would like to bring forward about potential wrongdoing, we will do our
best to track it down for you.
But other than that, I liken it to a fishing expedition -- such a
broad request, that we will be helpful to provide information about any
allegations of wrongdoing. To date, nobody has made any
allegations of wrongdoing or has even any suggestions of them.
Q Ari, on a different subject, has the
President been involved or the administration been involved in any
effort to persuade American allies not to ship weapons, missiles,
whatever, to either India or Pakistan --
MR. FLEISCHER: I'll have to check on that, David.
Q On the Philippines, how far is the United
States willing to go to help in their fight against Abu Sayyef?
MR. FLEISCHER: Well, as part of the war against
terrorism, the President is very concerned about combatting terrorism
wherever it may exist. There is a terrorism problem in the
Philippines, as is well known, and the President wants to be helpful to
the Philippine government in combatting terrorism there. And
so the United States has sent a team of advisors to the Philippines to
be helpful to the government there in fighting terrorism, and --
Q -- mission?
MR. FLEISCHER: I'm sorry?
Q Is this an open-ended mission?
MR. FLEISCHER: They will be there so long as the mission
is required. And the Department of Defense and the Department of State
did consult with the Congress in the process of doing this.
Q I have two questions, Ari. The
first one has to do with the criticism that is out there by some civil
rights and human rights groups on the way the Taliban prisoners of al
Qaeda are being treated in Cuba, as far as lodging. Some are
complaining that the fact that their beards were shaved
off. What do you say to that?
MR. FLEISCHER: The President is very satisfied with the
treatment that the detainees are being given, that it is humane, it is
respectful, and the President is satisfied at all levels with the
actions that the Department of Defense has taken in the treatment of
these people. These are very dangerous
people. These people have been known to engage in -- in a
prison uprising that have cost a lot of lives.
These are, as Secretary Rumsfeld said, among some of the worst of
the worst of the al Qaeda with whom we have fought. But the
President is satisfied that they are being treated as Americans would
want people to be treated.
Q Excuse me, can I get my second question?
MR. FLEISCHER: Go ahead, you get a second question.
Q On Terry's question about Argentina, and
the President going to speak tonight on the future of the
Americas. One of the criticisms that's being felt down there
-- countries like Argentina and other countries went through the decade
of the 90's putting in a lot of reforms to the IMF and the U.S.
government and the World Bank were sponsoring, and in most of the
cases, the people aren't any better off. In some cases,
they're worse off. Will the President address that in his issue in his
speech today?
MR. FLEISCHER: Well, you will hear his remarks tonight,
and as I indicated, I'm going to do my best to try to get you an
advance text because of the hour of the speech, and so you will see
what the President is saying. But, you know, in many places
in South America and Central and Latin America, reforms were put in
place similarly, which have led to tremendous growth in those countries
and in those economies. They were the right reforms taken
for the right reasons.
Each nation has different reasons. Some were successful
with those reforms. Argentina, of course, has had a
longstanding struggle with keeping its economy strong. So
there are unique issues that focus on Argentina that also are relevant
here.
Q Getting back to your response to Kelly's
question, will the administration respond to subpoenas and requests
from congressional investigators for all contacts between
administration officials and Enron and Arthur Andersen, as related to
financial problems at Enron?
MR. FLEISCHER: I think that depends entirely on
something that is just pure conjecture and speculation about -- on
something that has not happened and that is unknown. So I
don't know how to answer a question like that.
Q They have let it be known that they're
going to request all contacts between the administration -- any
administration officials and Enron regarding the financial --
MR. FLEISCHER: The administration has received no such
request from the Congress.
Q Ari, back on the tax cut issue, Terry
McAuliffe last night said it's not fiscally sound to have a tax cut in
the midst of war and recession. And President Bush, himself,
just a couple of weeks ago said that we would be running -- would have
running deficits and about the budget may not balance this
year. What are your thoughts about the fact that people are
saying this is not fiscally sound and we're in the midst of a crisis
and there's no cushion, and you're looking at taking this money out?
MR. FLEISCHER: I think that the call today to raise
taxes and the statement made by the leaders of the Democratic Party as
a reminder of the big difference between the two
parties. The Republican Party and some group of Democrats
want to work to lower taxes because they believe it's the right thing
to do to let people keep their money and because it will create
growth.
There is another group of Democrats that really is represented by
the Democratic leadership who, in all times, good and bad, looks to
raise taxes on the American people. Today is another
reminder of that.
Q Wait a minute, let's talk about it being
fiscally sound, though -- taking money, giving people money when you're
trying to fight a war which is going to cost millions and maybe
billions of dollars, then you also have a recession where people are
losing their jobs. How can you talk about giving people
money when you need money?
MR. FLEISCHER: No one is giving people
money. The President wants to let people keep the money that
they make because it's theirs. Senator Kennedy today
proposed taking away people's money. And that's the
difference between the two parties.
Q On Haiti, on January 1st, President
Aristide accused the United States of economic terrorism for
withholding an American Development Bank loan. Our
ambassador apparently walked out of that meeting. What's the
administration's position now on the Aristide
government? And does the President also have a position on
the harassment of journalists by that same government?
MR. FLEISCHER: That's the first I have heard on the
premise of that question, so let me take that and report back to you.
Q I was going to ask you an Afghanistan
question, but I'll wait until tomorrow. Back to this -- I
want to make sure I understood the Enron question. You're
saying that the President is interested -- the government is pursuing
the Justice Department investigation and that, this broader thing of
how to make sure that this doesn't happen before. But that
in the White House there is no effort being made to gather together the
contacts?
I want to make sure I understand that, because that's a rather
novel way of managing a crisis and I want to make
sure. Nobody is interested in who called Enron in this White
House or in the government, and getting together those people, what did
you tell them, so that you don't know? But that if we find
out about one of these calls, you'll --
MR. FLEISCHER: Again, if you have any suggestion -- and
no one has -- of any wrongdoing, I urge you, bring it forward, present
it, ask it to me, ask of me on the record, ask it to be on background,
ask it to me wherever you like, and we will do our best to track it
down and find out.
But if you're asking -- if you're asking if the White House is
chronicling any contact with anybody in this administration and anybody
at Enron over anything, I think that's such a broad request that it's
characterized as a fishing expedition. But that's exactly
what the question is.
Q I'm not talking about any -- I'm talking
about when the company was in trouble, calls they made or did not make
to the White House or the senior staff or the
Cabinet. You're telling me you don't even want to know those
calls that might have been made?
MR. FLEISCHER: Calls about what?
Q Help or anything. I don't -- I
can't --
MR. FLEISCHER: See, again, there you go, you're asking
me are we doing something that you can't even define. You're
saying to me, are you engaged in a -- hold it, hold it -- you're asking
me are you engaged in a -- I'm getting there.
You're asking me, are you gathering information about any contact
with Enron about what? Ask the question.
Q -- financial position.
Q Communication.
MR. FLEISCHER: Exactly, any communication.
Q But that's in --
Q Wait, wait, can we follow up?
MR. FLEISCHER: Go ahead, Russell.
Q I have a couple Harvey Pitt
questions. Harvey Pitt is here at the White House,
apparently now with Richard Grasso, head of the New York Stock Exchange
and leaders of the securities industry for a 1:00 p.m.
meeting. What is that about?
MR. FLEISCHER: That's a bill signing. That's
a signing of legislation that passed by unanimous consent in the
Senate, and I think 414 votes in the House, dealing with fees that are
collected.
Q Two follow ups. One, is the
President concerned that his buddies at Enron are going to jail?
MR. FLEISCHER: The President thinks that it is vital for
the Department of Justice to pursue this wherever it goes, to whoever
it goes and to do whatever it takes to investigate any criminal
wrongdoing.
If, as a result of that, anybody ends up with a prison sentence,
that is the American system of justice and that is proper and that is
the way it should work. And that is what the President wants
to see pursued. That and the policy reviews is what this
administration is dedicated to.
Q One more. Harvey Pitt, he was a
defense attorney for Arthur Andersen, before he came to the
SEC. Arthur Andersen is accused of destroying documents,
they've admitted destroying documents in this matter.
Now, Harvey Pitt wrote in a law review article in 1994, on
destruction of documents, this, "each company should have a system of
determining the retention and destruction of documents. Ask
executives and employees to imagine all of their documents in the hands
of a zealous regulator or on the front page of the New York
Times. Obviously, once a subpoena has been issued or is
about to be issued, any existing destruction policy should be brought
to an immediate halt."
He seems to be saying there -- and this is what white collar
defense attorneys advise their clients -- destroy incriminating
documents right up until the time a subpoena arrives.
Are you concerned that Harvey Pitt, as a defense attorney, gave the
green light to clients like Arthur Andersen to do exactly what they
did?
MR. FLEISCHER: The President is very concerned about the
allegations of destruction of documents at Arthur
Andersen. And that is, again, why this is being
investigated. And I think what you'll find, too -- and I
urge you to talk to the Securities and Exchange Commission, they will
be happy to explain to you what is happening there with the ethics
rules and how the enforcement unit of the Securities and Exchange
Commission conducts its investigations.
Q I'll try to state this carefully so you
don't have to restate the question, you can just give me a "yes" or
"no" if you can. Is the White House determining whether or
not administration officials or White House aids have received any
calls from Enron since the summer of 2001?
MR. FLEISCHER: On any topic, on anything?
Q That's my question, have they received --
MR. FLEISCHER: On any topic, on anything?
Q Have they received any calls, are you guys
determining whether or not White House officials or administration
officials have received calls from Enron since the summer of 2001?
MR. FLEISCHER: Again, the standard the White House has
put in place is that if you have any suggestion of any wrongdoing, as
opposed to such a broad, open-ended question --
Q I'm asking whether or not you guys are
determining whether these calls were made. I'm not asking
you --
MR. FLEISCHER: "These" calls meaning which calls?
Q I'm asking you whether or not, yes or no
--
MR. FLEISCHER: You said, "these
calls." Describe the calls.
Q -- yes or not, is the administration
determining who in this administration got calls from Enron in the last
six or 10 months.
MR. FLEISCHER: About any -- now it's six or 10 months.
Q Since he summer of 2001.
MR. FLEISCHER: About any topic or
anything? Again, the administration is interested, if
anybody has any evidence of wrongdoing --
Q I'm asking yes or no --
MR. FLEISCHER: I think you've heard the answer.
Q No, no, I haven't. I want to
know if the White House cares enough about this to investigate?
MR. FLEISCHER: The White House views this as a matter of
a criminal investigation and a policy review. And if
somebody has a suggestion that something was wrong, it will be
investigated and reviewed. But other than that, that is such
a broad question about any topic, any conversation about anything.
What you're saying is, communication in itself, that all
communication in itself needs to be brought under scrutiny.
Q It's a simple "yes" or "no."
Q With all due respect, the question
couldn't be narrower. It's "yes" or "no," are you
investigating who received these calls? You either are or
you aren't. I'm not asking you --
MR. FLEISCHER: Wrongdoing should be
investigated. Communication -- I want to again remind
everybody here -- communication --
Q So the answer is "no"?
Q Why won't you say "yes" or "no"?
MR. FLEISCHER: Because it is not being handled in the
way that I think you all are looking for it to be handled, because
you're trying to make comparisons to previous
administrations. That is not the White House approach.
Q -- different way. I understand
your point of, we're not going to engage in a fishing
expedition. But look at it this way. Are you guys
doing a review, not of any calls about anything, but checking with
different agencies, just like Evans and O'Neill got calls, just like
Robert Rubin made calls, did anybody else here get calls about Enron's
financial problems? Is that specific question being inquired
so you have the information?
MR. FLEISCHER: I think all the agencies are aware, as a
result of the questions that they've gotten from the press, as well as
conversations that we've had with the agencies, that if there are any
questions that the press is asking about those contacts, they should
look into it and see if they can't answer reporters' questions.
And what you have seen is, all those questions have been answered
by each agency as those questions are put to them.
Q Except this one. You --
MR. FLEISCHER: Go ahead, Ron. Let's stay with
it.
Q Except this agency, the White House will
not say who in this White House received calls from Enron since 2000 --
you won't even tell us whether or not you're asking White House
aides. And you certainly won't tell us what White House
aides, if any, have received these calls.
MR. FLEISCHER: Again, because you're asking, again, the
question that is so broad, has there been any connection or
conversation with anybody at the White House about Enron, about
anything, anything at all. That's what you're asking the
White House to see if it is investigating. And I'm telling
you, and I'm answering the question by telling you that the White House
is going to focus on this again on a criminal matter, on a policy
matter.
But the communication, in and of itself, there is nothing wrong
with it. It would not surprise me at all if there have been
conversations with people at Enron throughout the
government. It wouldn't surprise me if former Clinton
administration officials talked to the White House. It
wouldn't surprise me if people at Enron.
The point is, no one but no one has made any allegation or
suggestion of wrong doing. And by asking the White House,
are you chronicling something, you're suggesting that there should be
something to chronicle, because there might be wrongdoing.
Q You're putting that inference yourself,
for the record. None of us here suggested that.
Q If it was relevant to disclose the calls
that Rubin made, the calls that Lay made to Evans and O'Neill, and if
it was relevant for the Treasury Department to continue to find out, as
they did, that Under Secretary Fisher received a call from Rubin
subsequent to the Lay calls, why does it become a fishing expedition to
find out if Lay or any other Enron officer made telephone calls or any
contact with other administration officials on the specific point of
Enron's financial problems and what if anything could be done about
it? Because we know, because you've told us, that Don Evans
was asked for help. He was asked for help by Ken Lay, and
the administration said, no.
MR. FLEISCHER: In response to that much narrower, more
specific question, the administration is being helpful to reporters who
ask questions about, was there a conversation with anybody in the
administration and Enron about the financial condition of
Enron? That is entirely different.
What I have always said on that, and I say again today, is you have
heard about all the conversations that I have been made aware of, that
I'm aware of. And we will continue to provide you that
information about questions, did anybody at Enron reach out to anybody
at the White House about Enron's financial condition. But if
they're asking, again, was there any conversation with anybody at the
White House and Enron about anything else, that is such a broad
question, and there is no inference of wrong doing.
I think the first question was answered because there was a
suggestion that it could have been something the government knew that
it could have taken action on.
Q Are you at all being proactive,
then? Rather than us just bringing it to you, are you just
trying to find out, hey, everybody in the room at the White House, if
you got a call from somebody at Enron who wanted help, or who was
advising of their financial situation, would you let us know, so that
if the question comes up, we might be responsive?
MR. FLEISCHER: I think many of you know, because you
asked this question last week, and you were given the answer, the press
office does have routine conference calls with all the agencies, every
day, to go over any item that is in the news. And it's been
made plain to the agencies that these are questions that reporters are
asking. And if they ask you the question, do your best,
figure it out, tell people.
Which is exactly what you've seen happen here, whenever something
like that was reported, just as you point out, with Secretary Rubin, as
well as the calls that were made to Secretary Evans and Secretary
O'Neill, they told you.
Q So the answer is yes or no, that the White
House is asking aides and other officials in the White House whether
they had specific conversations with Enron, about their financial
condition?
MR. FLEISCHER: As I mentioned, on the calls with the
Cabinet officials, on the narrower question you asked, the answer is
yes, of course.
Q Using David's nice, tight definition, have
you provided us with all the contacts that you're aware of?
MR. FLEISCHER: I have.
Q If I can narrow this issue just slightly,
the key argument that Enron appears to have been making of the Treasury
was that their own bankruptcy or collapse, if it happened, could cause
a systemic effect throughout the financial system, the way Long Term
Capital Management did in '98. When that happened in '98, it
was a very hot subject for the President and his immediate aides.
Are you telling us that neither the President nor any of his senior
aides, to your knowledge, in this building, not the Treasury, were made
aware of Enron's concern or stated concern that their own troubles
would lead to a broader systemic risk for the American financial
system?
MR. FLEISCHER: Sure. Just as Secretary Fisher
of the Department of the Treasury took a look at that and came to the
conclusion at Treasury that there was nothing systemic. That
conclusion was shared by White House officials also, who took a look at
whether or not there could be any broader market-wide implications to
Enron's bankruptcy and reach the same conclusion.
Q I'm sorry, I don't think we knew that
before. Which White House officials looked at that?
MR. FLEISCHER: The economic team had conversations with
themselves to explore this -- not in reaction to any phone calls they
had with Enron officials. But as they took a look at what
was publicly known at the time with the collapse of Enron, they asked
the very logical question: could this have a broader impact
on the economy.
Q And did they know that Peter Fisher was
examining the same question because of concerns by Enron?
MR. FLEISCHER: Not because of concerns with any phone
call with Enron, but because they thought it in itself was a
meritorious question that's -- absolutely, I think, if the economic
team at the White House, having seen what was happening to Enron,
reading about it in the papers every day, did not ask the question,
does this have an impact, really, on the economy, they wouldn't have
been doing their jobs.
Q Which official was it?
MR. FLEISCHER: It was Larry Lindsey and his economic
team.
Q Larry used to be a consultant at Enron, so
he was familiar with the company and its operations.
MR. FLEISCHER: I think it's fair to say that the entire
economic team understood about the importance of looking into whether
Enron's collapse could have broader implications, and they came to the
same conclusion that the Under Secretary of Treasury did.
Q They took a broad look at this, but they
were not aware that Enron had made this case across the street at the
Treasury?
MR. FLEISCHER: Again, I would have to check to see if
they -- about that Enron made the case across the street?
Q Yes. When Enron called, what
started Peter Fisher down the line was Ken Lay and then some other
Enron officials saying it would be a systemic risk out here --
MR. FLEISCHER: Not that anybody has made me aware
of. They took a look at it because of the obvious
implications it could have had for the broader economy.
We'll come back.
Q Let me follow that, Ari.
MR. FLEISCHER: Go ahead.
Q If I may go back to India and Pakistan,
these days very high-level visits are taken to and from
India. One, Defense Minister of India will be here tomorrow
-- whether he's meeting with the President or not, I do not
know. But Secretary Powell is in India and
Pakistan. Now whether Secretary Powell is carrying any
special message from the President and asking India or Pakistan to move
their forces because they are aiming at each other. And
while lots of wars are still there, and if Defense Minister meets with
the President tomorrow, if the President going to ask him to move the
forces from the border?
MR. FLEISCHER: Well, I'm not going to comment on
specifically, exactly what the topics of conversation
are. Secretary Powell will be able to address that himself
after his meetings. But the Secretary is there at the
direction of the President because of the ongoing concern about the
tensions between India and Pakistan.
There have been some very helpful developments in the last several
days, including President Musharraf's speech. And as you
know, the President praised President Musharraf for what he viewed as a
courageous speech. But the region does remain
tense. It remains an issue of vital priority and importance
to the administration, hence the Secretary's presence in the region.
Q When the President spoke with both leaders
in India and Pakistan, whether he asked them to -- not only that
tensions are high, but to move their forces, and not to aim or not to
go to war?
MR. FLEISCHER: I would refer you to the statement that
was made on the President's calls, right after he made them.
Q Let me understand when the national
economic team was assessing the implications of an Enron
collapse. Was this occurring about the same time that Ken
Lay was talking to two of the President's Cabinet officers, including
its former campaign chair? And was the President at all
consulted or made aware that the economic team was considering this?
MR. FLEISCHER: I'd have to check to see if they informed
the President about anything they found. But, again, I think
it's logical, natural. You should expect the economic team
-- you would hope the economic team is taking a look at the broader
implications when the 7th largest company in the United States
unexpectedly collapses in a way that surprised your business pages, as
well as people here.
Q Are we talking about October
here? Before that?
MR. FLEISCHER: Going to have to take a look at the
exact time line.
Q -- though, whether or not this assessment
was going on at the same time that Enron was contacting people --
supervising some of the folks dealing with the assessment, whether or
not they told their superiors they were undertaking the assessment and
whether the superiors, the President's Cabinet, told him?
MR. FLEISCHER: I know you've heard Larry Lindsey say
that he had no conversation with people at Enron during that period of
time. So he did it in his capacity, and wisely so, as an
economic advisor who would be charged with exploring whether or not the
bankruptcy at the 7th largest company could have broader
implication. It's just as --
Q -- as the President's Treasury Secretary
who did have contact with Enron at the same time.
MR. FLEISCHER: And are you alleging something, or are
you --
Q I would say that if he's looking into
this, wouldn't he have told the Treasury Secretary? Wouldn't
the Treasury Secretary have told him, Enron's called, and there are
some problems?
MR. FLEISCHER: Well, now, you're asking a question about
whether or not there was any contact in the administration to discuss
whether Enron's collapse would have broader implications on the
economy. Your point is?
Q The people involved in that would have
talked to each other. Yes?
MR. FLEISCHER: They may have. So what?
Q Did Larry Lindsey have any contact --
Q Why didn't they --
Q How is that discussion held --
MR. FLEISCHER: On the broader implications about whether
Enron's collapse has implications for the economy, I think if the
administration didn't look at that, you would be asking, why wouldn't
you look at that. Of course, they should look at that, and they did.
Q And how is that study undertaken, how is
that conversation held without somebody saying, well, the chair called
me the other day, the chairman of the company called me the other day
and said, it would have broader implications for these reasons.
MR. FLEISCHER: Well, again, I can only report to you
that they looked at it. You know that Secretary O'Neill and
Secretary Evans told you who they talked to about it. And,
again, if they didn't take a look at it, I think you would be asking
questions why didn't they. I think -- I really don't have
anything more to offer it, so --
Q Did Larry Lindsey talk to Ken Lay or
anybody at Enron?
MR. FLEISCHER: No, Larry was asked that, show on Fox
News Sunday a few weeks ago and he said no.
Q Ari, can you get back to us on the time
frame? You had mentioned earlier that --
MR. FLEISCHER: Yes, I will. Sure.
Q Ari, can I just clarify exactly what you
were saying to David, is that Peter Fisher didn't talk to Larry Lindsey
about his call about LTC --
MR. FLEISCHER: I said not that I've been made aware
of. I'll find out.
Q Thank you.
END 1:30
P.M. EST
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