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Page   1 - Duke Energy Employee Advocate

Washington - Page 24

"Corrupt corporate executives are no better than common thieves when they betray their
employees and steal from their investors" - Attorney General John Ashcroft - CBS Market Watch

Firefighters to Boycott Bush

Reuters – by Steve Friess – August 15, 2002

LAS VEGAS (Reuters) - The International Association of Fire Fighters voted unanimously on Wednesday to boycott a national tribute to firefighters who died on Sept. 11, in an angry response to U.S. President George Bush's rejection of a bill that included $340 million to fund fire departments.

Bush is expected to speak at the Oct. 6 ceremony in Washington D.C., where the National Fallen Fire Fighters Foundation is hosting its annual tribute to those who died in the line of duty during the prior year.

The ceremony will honor 343 firefighters who died responding to the Sept. 11 attacks on New York and Washington, as well as about 100 others who also died in the year.

The IAFF, the umbrella organization for the nation's professional firefighter unions, is enraged by the president's rejection of a $5.1 billion appropriations bill that included $150 million for equipment and training grants requested by some of the nation's 18,000 fire departments.

It also include $100 million to improve the communications systems for firefighters, police officers and other emergency personnel as well as $90 million for long-term health monitoring of emergency workers at the Ground Zero site where New York's World Trade Center towers once stood.

Firefighters and survivors will be urged to skip the Oct. 6 event in protest, said R. Michael Mohler of the Virginia Professional Fire Fighters Local 774.

Mohler made the boycott motion before about 2,000 union leaders convening in Las Vegas for the IAFF's first national conference since Sept. 11.

"The president has merely been using firefighters and their families for one big photo opportunity," Mohler said. "We will work actively to not grant him another photo op with us."


Bush said Tuesday the bill was bloated by less important projects and a White House spokeswoman said Bush remained committed to firefighters and other emergency groups.

"The president is committed to our nation's first responders," White House spokeswoman Claire Buchan, traveling with Bush in Des Moines, Iowa, said.

The firefighters' boycott vote followed anti-Bush speeches by Senate Majority Leader Tom Daschle, and IAFF general president Harold Schaitberger in which accused the president of neglecting the heroes of Sept. 11.

Schaitberger ridiculed as insincere Bush's videotaped remarks shown Monday at the conference, in which Bush expressed sympathy and admiration for the firefighters who responded to the Sept. 11 attacks.

"Don't lionize our fallen brothers in one breath, and then stab us in the back by eliminating funding for our members to fight terrorism and stay safe," Schaitberger said. "President Bush ( news - web sites), you are either with us or against us. You can't have it both ways."

Daschle, a South Dakota Democrat, told the firefighters: "I strongly urge the President to reconsider. If he refuses to do so, however, I am prepared to do everything I can as majority leader to see that you get the resources you need to do your jobs safely and effectively."

Bush Takes It Out on Lawyers

L. A. Times – by Edwin Chen - August 13, 2002

Barbs show a disdain for "frivolous lawsuits" that he says "can ruin an honest business." His hostility has stalled major legislation.

CRAWFORD, Texas -- President Bush doesn't care much for lawyers, and it shows.

Even when talking about the war on terrorism, he finds a way to bash them, although cloaking his contempt in humor. Such barbs occasionally baffle his audiences, but usually elicit guffaws all around.

The bad blood between Bush and trial lawyers is neither a mystery nor a laughing matter. Such attorneys make their living suing big businesses, which tend to be cozy with the GOP; and many of them donate tons of their earnings to Democratic candidates.

Bush's hostility is a primary reason behind the holdup in Congress of some key legislation, including a patients' bill of rights and a terrorism insurance measure. The president's antagonism toward the plaintiffs' bar, and his efforts to restrict litigation, have surfaced in an array of issues.

Now Bush is exploiting trial lawyers in an effort to inoculate himself from voter displeasure with the sluggish economy and corporate corruption.

Leading up to the economic forum he is hosting Tuesday in nearby Waco, Texas, Bush has been furiously plugging the notion that restrictions on lawsuits would be a sure-fire tonic for an ailing economy.

Whatever economists think of that argument, it certainly has political resonance. "It's tough to defend business these days, but it's still profitable to attack trial lawyers," said Larry J. Sabato, a University of Virginia political scientist.

Lashing out at trial lawyers may come as second nature to Bush, a University of Texas Law School reject before he enrolled at the Harvard Graduate School of Business.

As Texas governor, he waged a titanic and ultimately successful crusade for tort reform, backed by business moguls such as former Enron Corp. Chairman Kenneth L. Lay. Along the way, Bush and fellow Republicans collected millions of dollars in contributions from corporate interests that have a stake in seeing limits imposed on trial lawyers.

White House Communications Director Dan Bartlett, who also worked on Bush's gubernatorial staff, said his boss' views toward the plaintiffs' bar were shaped by his years in Austin, Texas.

"The judicial system and the civil system were completely out of whack. It was rigged against the common taxpayer, who was trying to run a business, meet payroll and provide for his family," Bartlett said.

"This is something he understands and feels strongly about."

Bush may have inherited some of his dislike of lawyers from his father. The 41st president railed against the plaintiffs' bar on national TV during his 1992 acceptance speech at the Republican National Convention, describing them as "sharp lawyers" in tasseled loafers "running wild."

Such attacks are nothing more than a "Trojan horse," said Linda Lipsen, a spokeswoman for the Washington-based Assn. of Trial Lawyers of America.

"Attacking trial lawyers is good for fund-raising. Bush is raising money from corporations that put products out there that roll over and tires that explode--corporations that don't want to be regulated by Congress or the courts," she said.

Among the proposals stalled in Congress is a terrorism insurance bill that would provide government assistance in insuring against major loss from terrorist attacks.

Hit with huge claims after the Sept. 11 attacks, insurers are refusing to issue policies covering catastrophic events. This has caused developers to delay large commercial real estate projects until they can get government help in paying sky-high insurance rates.

Republicans and Democrats agree on the need for such a bill, but it has stalled because Republicans insist on imposing limits on lawsuits and punitive damages.

The stalemate, Bush said in Madison, Miss., on Wednesday, is costing the nation billions of dollars worth of job-rich construction projects.

"We need to get a terrorism insurance bill that will provide some surety so that these commercial projects can go forward, so that our construction workers will be back to work," the president said.

But the bill must not "provide a gravy train for personal injury lawyers," he said in May at a GOP fund-raiser in Columbus, Ohio.

More recently, the president denounced trial lawyers for what he called an "explosion" in medical malpractice litigation.

"Junk and frivolous lawsuits can ruin an honest business," Bush said, adding that such litigation is a major reason behind the rising cost of health care.

The popular patients' bill of rights, designed to empower consumers by imposing new standards for health insurers and HMOs, also has foundered because of disagreements over the rights of patients to sue and over caps on damages for serious injuries.

Party differences over the role of trial lawyers also have figured in other matters.

The corporate responsibility measure was slowed in part because of a squabble over how much time consumers and investors should have to sue a company and its officers.

Despite his strongly held view, Bush signed a bill that doubled, to two years, the time during which such lawsuits may be filed--a reflection of his determination to avoid being tainted by the corporate scandals.

Another issue that has raised hackles at the White House centers on how much senior officials might have known before Sept. 11 about an impending terrorist attack.

Some trial lawyers contend that the existence of government warnings supports claims of negligence brought against the airlines whose jets were hijacked.

At Bush's insistence, even the now-enacted education reform bill, one of his top priorities, included a "teacher protection" clause to limit lawsuits.

"It says that teachers and principals and school board members can take reasonable actions to maintain order and discipline in the classroom without the fear of being sued," the president said May 8 at a Milwaukee high school.

"And that's good law--I don't like it when frivolous lawsuits disrupt quality education."

Bush also has taken his fight with lawyers beyond the plaintiffs' bar.

Shortly after he took office, the White House eliminated the American Bar Assn.'s semi-official role in the vetting of potential candidates for the federal bench, arguing that the ABA was biased against conservative judges.

For his part, the president seems content to press his case against the profession by using a touch of humor.

In his favorite riff, Bush cites the Sept. 11 hijackers, and then adds as he did at a GOP fund-raiser last month in Washington:

"They must have thought we were so soft, and so materialistic and so self-absorbed that all we would do is call our favorite plaintiff's attorney and file a few lawsuits."

Media Unnerved by Gore’s Populism – by Richard Blow - August 13, 2002

Richard Blow is the author of American Son: A Portrait of John F. Kennedy, Jr.

(8/12/02) - Whenever the media is united in disapproval of something, you can be sure that its consensus reveals more about the press than the subject of its disapproval. Just look at how America’s punditocracy has reacted to Al Gore’s call for a politics based on “the people versus the powerful.”

Gore kicked off the brouhaha by writing an August 4th New York Times op-ed. “How do we make sure that political power is used for the benefit of the many, rather than the few?” Gore asked. “…This struggle between the people and the powerful was at the heart of every major issue of the 2000 campaign and is still the central dynamic of politics in 2002.”

The reviews of Gore’s populist manifesto came fast and furious. As per usual, the Times’ Maureen Dowd avoided the political and went straight for the ad hominem. “For some inexplicable reason, no one wants you to run again,” she wrote of Gore. “…Since you are not popular, you must become a populist.”

Slate’s William Saletan called Gore’s message “lousy politics,” adding that “Gore’s defense of it illustrates his ineptitude as a candidate.”

On CNN, pundit Jonah Goldberg called Gore’s approach “deeply cynical.” Said Goldberg, “I don’t like populism of any kind, from the right or the left.”

And in the New York Post, columnist Dick Morris wrote that “while all of America is hanging signs out their windows saying ‘United We Stand,’ Al Gore has identified the enemy: our fellow Americans.”

I could go on, but you get the drift: Both liberals and conservatives hated Gore’s message. (Full disclosure: Will Saletan is an old friend whose writing I usually admire, and to the extent that I think of him, I have long thought that Jonah Goldberg is a dolt, even before he gave my book a bad review.)

A close reading of Gore’s op-ed makes the pundits’ venom hard to understand. Gore calls for a broad prescription drug plan, a patient’s bill of rights, and an eco-friendly environmental policy. He opposes the Bush plan for partial privatization of Social Security, and calls on the administration to release the names of lobbyists who met with Dick Cheney to discuss energy policy and documents regarding Bush’s oil company stock sale.

This is hardly rabble-rousing. In fact, it’s standard Democratic policy. The difference is that Gore frames the debate in a language that makes the pundit class queasy. He talks about issues that rarely get a candid airing in American politics: class, greed, the power of special interests.

You’d think that journalists would appreciate a politician who speaks of what is usually taboo. These commmentators, however, are affluent white-collar professionals. They’re not worried about their 401(k)s being trashed by Bernie Ebbers or Ken Lay. With the exception of Goldberg, they work for powerful (and stable) corporations: Saletan for Microsoft, Morris for News Corporation, Dowd for the New York Times.

I’m not arguing that they consciously defend their employers’ interests, but that working for huge corporations inevitably distances these pundits from the problems of real people. So does the very nature of being a pundit, because most pundits don’t do much real reporting — they just hang out with other pundits.

All of which means that the interests of the lower and middle classes in this country will never get a fair hearing in the commentary of the pundit class. Populism — even a populism as mild as Gore’s — doesn’t go over big with an insular clique of out-of-touch yuppies.

Now, it’s true that Gore is an awkward populist. It’s hard not to wince when he writes that “there has always been a debate over the destiny of this nation between those who believed that they were entitled to govern because of their station in life and those who believed that the people were sovereign.” Until his defeat in 2000, Gore always appeared to be the one believing that he was the one entitled to govern.

But Gore does address his privileged upbringing by pointing out that FDR attacked moneyed interests “even though it earned him the hatred of his patrician social peers as a ‘traitor to his class.’”

The same dynamic is occurring with Gore, the former journalist, who is now being attacked as a traitor by the pundit class. Because when Gore speaks of “the people versus the powerful,” it’s not only corporate fatcats he’s referring to, but also media bigwigs.

Number 3: Why Washington Stinks

Scripps Howard News Service – by Lance Gay – August 9, 2002

(August 06, 2002)

- It is not just Wall Street that has been inflating assets, hiding red ink and using arcane accounting procedures - Congress has been doing it for years.

When Congress overspends and runs its budget into the red, it doesn't have to hide assets on a Caribbean island or move some operations to another corporation to make the books balance out. The lawmakers just move the payday for federal employees - as they did two years ago to save $7.8 million, by pushing back paychecks for the military from Sept. 29 to Oct. 2.

Like corporations, Congress is supposed to follow a budget. But lawmakers have given themselves an out that private industry doesn't have: the option of declaring an emergency so they can spend more.

The supplemental spending bill Congress passed in response to Sept. 11 is an example. Although it was supposed to pay the costs of Sept. 11, it also includes non-terrorist issues - $4 billion in highway projects, an additional gift of $20,000 for each senator's office expense account, $1.1 billion for disabled veterans - and $80 million to pay claims from wild fires in New Mexico.

Even the 2000 Census was classed as an "emergency" so Congress could pay for it without having the money declared in its budget.

While Harvey Pitt, chairman of the Securities and Exchange Commission, has given corporate chief executives until Aug. 14 to swear - on penalty of being charged with fraud - that their corporate financial statements are correct, there is no similar requirement for Washington.

In fact, for the last five years in a row, the congressional General Accounting Office has been unable to certify that government books are correct in accordance with generally accepted accounting principles - the basic standard required of all U.S. corporations. Wall Street companies have seen their stocks collapse when accountants can't certify the books.

Frustrated GAO auditors last year said the Agriculture Department had lost track of $1 billion, and Amtrak has no idea of the future revenues that would come from the trains it runs. GAO Comptroller General David Walker said the Pentagon is the worst offender, having lost track of weapons that were paid for, or wasted money on unnecessary purchases consistently year after year. He complained the Pentagon doesn't show any indication of reform.

"Washington is far worse than Wall Street, and the evidence is the financial statements of the federal government," said Chris Edwards, a budget analyst at the Cato Institute, a Libertarian think tank.

Edwards said it is frustrating that while Wall Street executives are facing criminal trials for corporate mismanagement of disgraced business giants like WorldCom and Andersen, no one in Washington is held accountable for financial mismanagement. "Bureaucrats never get fired for poor performance,'' Edwards said.

Edwards said Congress is too busy devising clever budget tricks to worry about how the executive branch is mishandling money. For the first time since 1974 lawmakers this year have failed to pass the budget bill needed to head off a spending free-for-all this fall. "These folks could teach the financial hucksters at Enron a few tricks," he said.

Edwards said a balanced budget amendment to the Constitution might work to force Congress to keep better books but wouldn't close all of the loopholes.

The Enron and WorldCom debacles show how companies can use creative bookkeeping to hide mountains of debt - in WorldCom's case the amount involved was $3.9 billion.

But Pete Sepp of the National Taxpayers Union said Washington's debts are so mountainous, they can't be hidden. Some analysts say the unfunded liabilities of Social Security now amount to $9 trillion and that the agency will run out of money to pay the claims of retirees by 2041.

"This is a massively ill government as far as finances go - it's pervasive and continuous," Sepp said. "You see waste, fraud and abuse and a lack of effort to remedy it. On Wall Street, stocks would suffer and executives would be sacked, and there would be calls for a crackdown," he said.

Sepp said that what's disheartening is that Congress can't seem to find a way of fixing what's wrong. There have been several high-profile efforts. In 1974, Congress set up House and Senate budget committees to set annual budget targets and make adjustments when spending exceeded them - but federal deficits just grew larger as lawmakers ignored the limits.

In 1985, lawmakers agreed to automatic spending cuts when deficit targets were missed, but kept on adjusting the targets to put off having to make the cuts.

Tough new rules were imposed again in 1990 and 1997 but each time the rules were promptly broken. Congress simply delayed spending bills until after the new fiscal year began Oct. 1 and ignored its own budget goals. Recently, House Republicans even floated the idea of declaring that a fiscal year has 13 months so spending that couldn't be fit into 12 months would be accommodated.

Bob Bixby of the Concord Coalition, a budget watchdog organization, said the return of federal deficits after four years of surpluses is likely to rekindle public interest in Washington's spending and force renewed efforts for lawmakers to reach a budget that sets limits on federal giveaways.

"It's been a bad year all around," Bixby said.

Number 2: Why Washington Stinks

The Washington Post – by Jim VandeHei – August 8, 2002

WASHINGTON — In contrast to their campaign to crack down on crooked businessmen, lawmakers are increasingly choosing to overlook alleged transgressions by their own colleagues. The trend reflects the result of an unwritten détente struck five years ago by Republican and Democratic congressional leaders, and as a consequence several cases of questionable conduct have led to little or no action by the House and Senate ethics committees.

For example, top Republicans are resisting calls to investigate allegations of wrongdoing by Democratic Reps. Paul Kanjorski of Pennsylvania and James Moran Jr. of Virginia, according to lawmakers and aides.

GOP leaders backed off from filing charges against Kanjorski for allegedly steering government money to companies closely tied to his relatives after a top aide to House Minority Leader Dick Gephardt, D-Mo., threatened to retaliate by going after Republicans with ethical questions.

Moran, who accepted a $450,000 loan from credit-card company MBNA shortly before intensifying his support for legislation sought by the company, has escaped congressional scrutiny despite calls for an investigation by a top state Democrat, among others.

Government watchdogs say the undeclared accord also has deflected scrutiny of the relationship that House Majority Whip Tom DeLay, R-Texas, has with corporate lobbyists and the assistance that Rep. Solomon Ortiz, D-Texas, provided to a company of which he is listed as president.

In the most recent self-policing action, the Senate Ethics Committee issued a warning letter Friday to all 100 members rather than take more direct action against Sen. Rick Santorum, R-Pa., as some Democrats had urged.

The letter, which mentioned no one by name, cautioned senators not to use political affiliation as a basis for deciding who gets access to them or their staffs. Santorum had hosted a meeting in the Capitol in which GOP operatives discussed a list of Democratic lobbyists who should be denied government access and jobs because of their party affiliation.

Sen. Harry Reid, D-Nev., has privately talked to Democratic lawmakers about filing ethics charges against Santorum. But to Senate Minority Leader Trent Lott, R-Miss., even Friday's comparatively gentle letter was too much. He called the response to the lobbyist list "totally, totally ridiculous, total partisan politics."

Cases that do trigger punishment, such as the recent expulsion of Rep. James Traficant, D-Ohio, and the admonishment last week of Sen. Robert Torricelli, D-N.J., typically occur only after federal prosecutors win a felony conviction, as in Traficant's case, or pass along stacks of investigatory evidence, as in Torricelli's case.

Some ethics experts say Congress, cowed by the ethics battles of the 1980s and '90s, is shirking its duty to police its members' behavior. The Constitution empowers the House and Senate to set and enforce ethics laws and scold — or even expel — members found guilty of breaking them.

"Democracy is not well-served when allegations of corruption are not thoroughly investigated to determine what's true and what's not," said Gary Ruskin, who as head of the nonpartisan Congressional Accountability Project advocates tougher ethics rules.

Charles Lewis of the nonpartisan Center for Public Integrity said: "Right now, there seems be a crowded runway of clouded cases not being addressed. It has been a problem for years, and it's getting worse."

Lawmakers' reluctance to police their colleagues reflects, in part, a widespread worry that if one party calls for an investigation, the other will retaliate — the political equivalent of mutually assured destruction.

Some lawmakers cite a more benign reason for the détente. After years of using highly publicized ethics allegations to harass their political enemies, Republicans and Democrats alike said they want to remove politics from the process by deferring to the committees and federal prosecutors to decide who should be investigated.

Abuses of the ethics process "created a very ugly form of warfare between the parties," said Thomas Mann, a Brookings Institution congressional scholar.

In the late 1980s, Rep. Newt Gingrich, R-Ga., turned the ethics process into an art of political war, torpedoing the career of then-Speaker Jim Wright, D-Texas, over a dubious book deal and questionable payments to his wife.

Gingrich bombarded Wright with so many ethics charges that Wright pleaded upon his resignation, "We members on both sides must resolve to bring this period of mindless cannibalism to an end." They didn't.

After the 1994 elections, which elevated Republicans to the majority and Gingrich to the speakership, Democrats turned the ethics weapon on him. It culminated in 1997 with the House ethics committee fining him $300,000 after an investigation into his vast political empire, as well as his own book deal, which paid him $4.5 million in upfront royalties.

"Anyone who looks at the circus that went on back then must conclude that 99 percent of all that sound and fury was politics," said GOP lawyer Jan Baran, who represented Gingrich.

Shortly after the Gingrich case, congressional leaders finally heeded Wright's advice. They agreed to a conditional cease-fire in the ethics war, said several lawmakers and aides involved in private talks about the ethics process. They overhauled the process by preventing individuals and outsiders from initiating ethics probes.

But critics said the move simply provided an additional layer of protection to lawmakers engaged in questionable actions.

With the exception of a few minor dust-ups, the agreement has remained intact. Lawmakers have filed only two ethics charges in the past five years. The most recent was in July 2001 by Rep. Bob Barr, R-Ga., alleging that Rep. Gary Condit, D-Calif., had obstructed a police probe into the death of former intern Chandra Levy. The committee took no action.

Why Washington Stinks

New York Times – by Carl Hulse – August 4, 2002

WASHINGTON, Aug. 3 — With a pierced tongue, a goatee and previous employment as the owner of a record store and label called Seven Dead Arson, the young man is not a typical buttoned-down Washington lobbyist. But Joshua Hastert, 27, does have something increasingly common in lobbying circles — family ties to a Congressional leader.

Mr. Hastert is the eldest son of J. Dennis Hastert, the speaker of the House. Chester T. Lott Jr., the son of the Senate Republican leader, Trent Lott, is a registered lobbyist. Linda Daschle, the wife of the Senate majority leader, Tom Daschle, is a senior public policy adviser at one of Washington's premier lobbying firms, serving aviation interests.

Numerous relatives of Congressional and administration officials are employed in lobbying shops around Washington, as they have been for years. Some ethics watchdogs say such arrangements are potentially troublesome, and the fact that relatives of three of the four top members of Congress work as lobbyists illustrates how pervasive and accepted the practice has become.

Others say the lobbyists have every right to pursue their line of work as long as they observe ethics rules and keep their professional distance from their powerful relatives.

Mr. Hastert and Mrs. Daschle, 47, say that their well-known last names can hurt as well as help, and that they are entitled to pursue their chosen livelihood, especially in a city where so much employment is government-related.

"Why should a spouse, just because she is married to a high-profile public official, have to walk away from a career?" asked Mrs. Daschle.

No rules prohibit lobbying by relatives, and any effort to regulate it raises free speech concerns. But it has always made ethics groups a little uneasy.

"It is the smarminess and incestuousness that is most objectionable," said Charles Lewis, the director of the Center for Public Integrity. "It blurs the distinction between the public and private sector when part of the family is in the private sector enriching themselves through the public sector."

Mrs. Daschle, who works at Baker, Donelson Bearman & Caldwell, reported in Congressional lobbying records that her firm received almost $1.5 million last year from her clients, which included American Airlines, Northwest Airlines, the American Association of Airport Executives, the Cleveland airport, Boeing, Loral and L-3 International, one of the companies chosen by Congress to supply airports with bomb detection equipment.

She said that in the interest of complete disclosure, her reporting of her lobbying income included fees for activities other than traditional lobbying on Capitol Hill.

Mr. Lott represents some clients on his own and others through a partnership with Larry Hopkins, a former congressman from Kentucky. Last year, the firm of Lott & Hopkins reported being paid about $60,000 by BellSouth, $60,000 by an insurance firm and $30,000 by a manufacturing company.

This year Mr. Lott has registered Lott & Associates to serve as a lobbyist for the National Thoroughbred Racing Association and a company in Louisiana that designs and builds vessels used in the offshore oil and gas industry. Both of Mr. Lott's firms are based in Lexington, Ky., where Mr. Lott also oversees some Domino's pizza franchises, a fact his father is fond of noting when discussing the burdens government can place on free enterprise.

"My son is a small businessman and he has to deal with OSHA and E.P.A. and all the government requirements that come," Senator Lott said in a recent speech.

Neither the senator nor his son would comment for this article, but in June, Senator Lott told the Capitol Hill newspaper Roll Call that he did not discuss relevant legislation with his son.

Mr. Hastert, who as a youth spent considerable time in Washington because of his father's Congressional duties, only this summer joined a small lobbying firm, Federal Legislative Associates, which specializes in clients in the high-tech industry.

"I'm just kind of learning the ropes," Mr. Hastert said.

He originally planned to move his record label here. Then he ended up doing some government affairs consulting for an Internet music enterprise and enjoyed it.

"I realized that doing consulting and government relations on the Hill took up a lot less time than running a record store and brought in a lot more money," Mr. Hastert said. He said that politically he considered himself an independent who saw good and bad in the approaches of both parties. He is now assisting an Illinois company that is helping Congress and the Department of Labor develop programs to prepare displaced workers for jobs at high-tech industrial sites.

David Miller, a principal in the lobbying firm who brought in Mr. Hastert, said he was impressed by Mr. Hastert's approach to issues. He also said Mr. Hastert was not one to trade on his family name.

"The fact that he is the speaker's son was certainly a factor, but he's really cool," Mr. Miller said.

Mr. Hastert said that he would never lobby his father and that he had had to disabuse prospective clients of the idea that as the speaker's son he could have his way in the Capitol. "Inevitably, the Hastert name helps," he said. "But a lot of offices think I have more pull than I really do, so I have to work twice as hard." He said he had told prospective clients, "If you think I am going to the House leadership, and especially my father's office, to get this pushed, it isn't going to happen."

Mrs. Daschle said she chose not to lobby the Senate on behalf of her clients. Though the Senate must ultimately approve any legislation, she said her husband could not be expected to be aware of obscure bill language she was working on with House legislative aides.

"Staff members are pretty junior and may or may not know who I am," said Mrs. Daschle, who was a deputy administrator of the Federal Aviation Administration during the Clinton presidency. "When clients retain me, they don't retain me because I am Tom Daschle's wife."

Many other lobbyists have familial connections to the Bush administration or Capitol Hill. Brad and Lorine Card, the brother and sister-in-law of Andrew H. Card Jr., the White House chief of staff, are lobbyists, as is Diane Allbaugh, the wife of Joseph Allbaugh, the director of the Federal Emergency Management Agency.

Scott Hatch, the son of Senator Orrin G. Hatch, Republican of Utah, has prominent clients. The son and son-in-law of Senator Harry Reid of Nevada, the second ranking Democrat in the Senate, work as lobbyists, and several congressmen have wives or children who work the halls.

A few years ago, lobbying by Randy DeLay, the brother of the House Republican whip, Tom DeLay, led to accusations of favoritism, and Representative DeLay banned his brother from his Congressional office.

Gary Ruskin, the director of the Congressional Accountability Project, said lobbying by relatives was acceptable as long as the lawmakers and their kin observed the boundaries.

"In a world where power couples exist, it is unfair to punish the spouse," said Mr. Ruskin, who said "strategic fire walls" should be put in place to prevent undue influence. "The key question is whether or not the members provide special favors or benefits for the clients of their relative lobbyist. Those ought to be investigated by the appropriate ethics committee."

Twice as Bad as Hoover - August 3, 2002

(July 23, 2002) - George W. Bush is shattering records for the worst first 18 months in office for a U.S. president as measured by the benchmark Standard & Poor’s 500. In his first year-and-a-half in the White House, Bush presided over a 36.9 percent decline, almost twice the percentage drop of Herbert Hoover, the president who led the nation into the Depression.

Hoover recorded an 18.6 percent decline and now ranks third from the worst, with Richard Nixon in second place with a 23.6 percent fall in his first 18 months. In other words, in the 75-year existence of the S&P 500, no president has seen the stock market index fall as much as one-quarter, before Bush’s decline of more than one-third.

Ironically, given the Republicans’ business-friendly reputation, the four worst performing stock-market presidents in the first 18 months are all Republicans. Ronald Reagan’s 15.3 percent decline joins Hoover, Nixon and Bush at the bottom. The top two performing presidents, as measured by the S&P in their first 18 months, are Democrats, Lyndon Johnson at a plus 27.5 percent and Franklin Roosevelt at 55.1 percent.

Bill Clinton ranked sixth with a 4.2 percent gain in his first 18 months.

While almost doubling Hoover’s decline in the S&P, Bush trailed the Depression-Era Republican slightly in the blue-chip Dow Jones Industrial Average, which measures the performance of 30 top U.S. companies. In Hoover’s first 18 months, the Dow fell 24.8 percent. In Bush’s 18 months, the Dow’s drop was 24.3 percent. [NYT, July 22, 2002]

Though some presidents reversed the early returns of the stock markets, Bush has so far failed to inspire confidence either with his personal performance or his policies. The stock market has greeted speech after speech by Bush with double-digit declines in the Dow.

Accelerating Pace

The pace of the stock market crash under Bush also is accelerating. In the 10 trading days since Bush visited Wall Street to promote his economic plans, the Dow has dropped almost 1,500 points or 16 percent. [NYT, July 23, 2002]

The Bush speeches have done little to persuade investors that happy days are here again – or for that matter, likely in the foreseeable future. Bush’s top economic proposals speak to different conditions than are apparent today.

His demand for a permanent repeal of the inheritance or “death” tax had more appeal to Americans who were watching their stock portfolios swell in the Clinton Era, along with their inflated dreams of multi-million-dollar wealth to pass on to their descendants. Now, after a battering of their net worth, many of these Americans are simply hoping to have enough money to pay for a modest retirement.

Fast-track trade agreements also are out of sync with a world far less enamored of U.S. economic leadership. Further, deregulation of industry and tort reform -- backed by Bush and Republicans in Congress -- have helped unleash some of the avarice that led to corporate collapses at Enron Corp., WorldCom Inc. and other companies.

Missing from Bush’s economic plan is any initiative that can inspire Wall Street with visions of economic expansion. By contrast, the Clinton-Gore administration promoted technological advances like the Internet that created a framework for the private sector to innovate. In Election 2000, Vice President Al Gore also proposed a partnership between government and industry to develop environmentally friendly vehicles and alternative energy sources, in part, to prime the pump for economic growth.

Major stock indexes are Wall Street’s rough measures of expected business growth. At least during George W. Bush’s first 18 months, investors are judging that those expectations are lacking – on a historic scale.

Bush Turns Soft on Corporate Reform

Atlanta Journal-Constitution – by Amy Schatz – August 2, 2002

(8/1/02) - WASHINGTON -- Lawmakers from both parties accused President Bush on Wednesday of undercutting the whistle-blower protections in the corporate reform legislation he signed Tuesday.

Bush also faced new questions about Harken Energy Corp., where he sat on the board of directors, amid revelations that the company formed an offshore subsidiary to avoid taxes.

Just hours after Bush signed the corporate responsibility bill Tuesday, the White House released its interpretation of several provisions, including one that provides federal protection for workers who reveal details of corporate wrongdoing.

In the White House's view, whistle-blowers will have protection only if they provide information to a congressional committee during a formal investigation.

That interpretation drew bipartisan criticism Wednesday from Congress members who said it would weaken the new law.

Congress intended to give whistle-blowers protection, no matter whether their revelations are made to an individual member of Congress, committee or media outlet, said Sen. Charles Grassley (R-Iowa).

"I hope the White House will rethink its interpretation of this law and show it isn't going soft on corporate fraud before the ink is even dry," Grassley said.

Grassley helped write the whistle-blower provisions with Sen. Patrick Leahy (D-Vt.). The two senators sent Bush a letter Wednesday urging him to reconsider because the interpretation is "at odds with the plain language of the statute."

Said Grassley: "Our intent was plain: to protect corporate whistle-blowers, period."

Even Senate Minority Leader Trent Lott , without commenting specifically on the White House move, was skeptical about anything that might diminish protections for corporate informants.

"Whistle-blowers that are trying to do the right thing and provide information within the government or corporate world, certainly you don't want them to be harassed," said Lott (R-Miss.). "Most members of Congress would take a pretty firm position on that."

Bush officials defended the decision, saying Congress could designate members or committees to grant whistle-blower protection, if necessary.

The White House will "leave it up to Congress to determine through their own rules and procedures who would get whistle-blower protection," press secretary Ari Fleischer said.

Also Wednesday, the president was dogged by questions about business practices at Harken Energy, based in Dallas, where he was a board member from 1986 to 1993.

On Tuesday, the New York Daily News reported that Harken established an offshore subsidiary in the Cayman Islands, a well-known tax haven, which would have shielded it from liability and U.S. taxes.

The subsidiary was formed in 1989 to handle revenue from a $25 million deal with the government of Bahrain for oil exploration.

Since no oil was found and no revenue was made, the subsidiary did not lower Harken's tax bill, the White House said Wednesday.

Halliburton Co., an Dallas-based energy services company, registered at least 20 subsidiaries in the Cayman Islands when Vice President Dick Cheney was chief executive from 1995 to 2000, according to Securities and Exchange Commission records.

In both cases, officials denied that the purpose was to evade taxes.

Setting up offshore subsidiaries is not illegal, though Congress is considering legislation to ban corporations from using them to avoid paying taxes.

Bush was on Harken's board when the subsidiary was established. He said Wednesday he did not agree with the company's decision to drill for oil in Bahrain. He did not say whether he agreed with Harken's decision to form an offshore subsidiary.

"I think we ought to look at people who are trying to avoid U.S. taxes," Bush told reporters Wednesday, calling the practice "a problem."

"I think American companies ought to pay taxes here -- [it's] part [of being] good citizens," he said.

Neither Harken nor Bush has been found to have done anything illegal. But Bush has been put in an awkward position as he has tried to portray himself as a forceful opponent of questionable corporate practices.

He or Harken took part in some of the actions targeted by the corporate reform bill he signed into law Tuesday. While he was a Harken director, the company was accused of overstating profits and was forced by the SEC to revise its reported profits.

The SEC investigated Bush about his sale of Harken stock in 1990, two months before the company reported a bigger-than-expected loss and its share price tumbled. The SEC chose to take no action against Bush.

Bush also accepted loans from his company, a step that was severely restricted in the law signed this week.

Information from news services was used in this article.

Two More Executives Arrested – by Jeffry Bartash – August 2, 2002

(8/1/02) - NEW YORK (CBS.MW) -- Federal officials on Thursday arrested two former WorldCom executives accused of orchestrating an effort to hide nearly $4 billion in expenses at the bankrupt phone carrier.

Scott Sullivan, WorldCom's former chief financial officer, and David Myers, the former controller, were arraigned Thursday morning. They were later released on bail.

Both were charged with two counts of conspiracy to commit securities fraud and five counts of making false filings to the Securities and Exchange Commission, according to the U.S. attorney in Manhattan. They could serve up to 65 years if convicted of each charge, prosecutors said.

"Corrupt corporate executives are no better than common thieves when they betray their employees and steal from their investors," said Attorney General John Ashcroft at a Washington news conference. Watch Ashcroft's statement.

Sullivan was fired June 25 after the ruse was discovered. Myers was forced to resign. So far, former Chief Executive Bernard Ebbers has escaped prosecution. He quit under board pressure in late April, but has strenuously denied any involvement.

Under Sullivan's direction, Myers shifted $3.85 billion in so-called line costs to the company's capital-goods account -- in effect treating ordinary business expenses as long-term investments.

"This transfer allowed WorldCom to defer recognizing a substantial portion of its current operating expenses, thereby allowing WorldCom to report higher earnings," prosecutors charged in their complaint.

By hiding those costs, the No. 2 U.S. long-distance carrier was able to report profits instead of actual losses during all of 2001 and the first quarter of 2002.

Once the extent of its losses became clear, bankers refused to lend more money, investors dumped the stock and vendors balked at providing supplies without upfront payments.

The financial strain became too much for WorldCom, which on July 17 filed the largest U.S. bankruptcy claim ever. It reported $41 billion in debt at the time of its filing vs. $107 billion in assets.

Washington steps in

The shocking revelation, the latest in a series of Wall Street scandals, stunned investors and generated a public outcry. It also forced U.S. lawmakers to take quick action on a key corporate reform bill that had been languishing in Congress. It was signed into law this week.

The White House, meanwhile, has pressured federal investigators to intensify their corporate investigations and to start making arrests.

Ashcroft's involvement in the case is a clear sign of the Bush administration's strong interest in the prosecution of malfeasant corporate leaders.

The White House has been stung by Democratic criticism that it's too close to business. Some conservatives, meanwhile, have argued that faith in free markets would be undermined if the government didn't take stronger action to protect investors and workers.

With congressional elections in November, many lawmakers in both parties have been clamoring to see some executives put in handcuffs as a demonstration of their intent to clean up Wall Street.

Like officials at troubled cable company Adelphia Sullivan and Myers were paraded before the media after the arrests were announced.

Wall Street, however, appeared nonplussed. Stocks fell.

Jeffry Bartash is a reporter for in Washington.

He Could Have Been a CEO

New York Times – August 2, 2002

(8/1/02) - For violating ethics rules, Senator Robert Torricelli of New Jersey faced the music this week but proved he doesn't really know the tune. Even as he said he agreed with the findings of the Senate Ethics Committee, he continued to deny that he had done anything wrong.

The committee report stopped short of saying specifically that Mr. Torricelli had accepted valuable gifts from David Chang, a New Jersey businessman who is now serving an 18-month prison term for making illegal contributions to the Torricelli Senate campaign in 1996. But the report made it clear there was considerable largess floating around. Mr. Torricelli's sister and his former girlfriend got expensive jewelry, his office was outfitted with expensive artwork and the senator himself got a big-screen television and stereo, although he later reimbursed Mr. Chang for the wholesale price. The committee ignored claims that Mr. Torricelli had received money and expensive clothing, saying the evidence was conflicting.

The committee report, while muted, was still a stunning rebuke, delivered only a few months before fall elections in which control of the Senate may hinge on whether Mr. Torricelli can win re-election. If he wants to put the Chang episode behind him, the first thing he should do is hold a press conference in which he answers any and all questions about his behavior. The voters have a right to know, for instance, why Mr. Torricelli brought Mr. Chang along to a meeting with the South Korean prime minister, and to hear him answer charges by a former American ambassador that Mr. Torricelli embarrassed the embassy by lobbying hard for Mr. Chang's business interests.

Mr. Torricelli should also stop fighting the disclosure of a letter from federal prosecutors that summarizes their findings after a four-year investigation. That letter, given to the Senate after prosecutors decided not to seek an indictment of the senator, is under seal in federal court. Several news organizations, including The New York Times, are seeking its release. The senator argues that releasing it would violate his privacy.

Voters will have to judge not only how serious Mr. Torricelli's misbehavior was, but whether he will steer clear of these conflicts in the future. History suggests that when it comes to ethics, the senator has trouble navigating learning curves, and his speech to the Senate was not heartening. Essentially, Mr. Torricelli delivered a mea culpa without the mea. He accepted the committee's judgment that he had violated the Senate rules, then reminded his colleagues that "it has always been my contention that I believe that at no time did I accept any gifts or violate any Senate rules." He left it to his audience to figure out whether that meant the committee was wrong, the contention was wrong or the senator's unwavering belief in his own innocence was wrong. But there is something wrong somewhere, and so far Mr. Torricelli has done nothing to identify exactly what it is.

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