CNN Late Edition

Exactly How Big Should the Federal Tax Cut Be?; How Should Clinton be Penalized for Pardoning Marc Rich, if at All?

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: It's noon in Washington, 9:00 a.m. in Los Angeles, 5:00 p.m. in London and 8:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks for joining us for this two-hour LATE EDITION.

We'll get to our interviews with Congressman Dan Burton and former UN Ambassador Richard Holbrooke shortly, but first the hour's top stories.

(NEWSBREAK)

BLITZER: We'll have a lot more on this pardon coming up with Congressman Dan Burton, who's heading the House investigation.

But we turn now to the sinking of the Japanese trawler by the U.S. Submarine Greenville. New underwater video of the sunken ship was just released overnight.

BLITZER: CNN's Martin Savidge is in Honolulu, and he joins us now with the latest.

(NEWSBREAK)

BLITZER: Joining us now from New York to talk about the renewed tensions between Washington and Baghdad is the former U.S. ambassador to the United Nations, Richard Holbrooke.

Ambassador Holbrooke, welcome back to LATE EDITION. I take it this is your first television interview since leaving government service, what, about a month or so ago. And we're happy that you're joining us.

RICHARD HOLBROOKE, FORMER U.S. AMBASSADOR TO THE U.N.: Well, it wouldn't be with anyone but you, Wolf.

BLITZER: Thank you very much.

Let's talk about what President Bush said about this airstrike against Iraq. He called it routine, but a lot of people are insisting it was anything but routine. Do you think it was a routine airstrike?

HOLBROOKE: It actually was routine. And President Bush, Secretary Powell, Condi Rice, when they said it, were saying basically a correct statement. This was...

BLITZER: The reason, though...

(CROSSTALK)

HOLBROOKE: Sorry, Wolf. It was well within the bounds of previous policy. It may have been a little more intense, the targeting may have been a little more specific. They may have used a little more ordinance. But it was well within existing policy boundaries.

And it's my understanding, and I've talked to senior members of the administration about this as recently as two hours ago, that their original intent wasn't even to make it public. But because CNN reported accurately that Baghdad was setting off the sirens, they confirmed it. And so I think it was routine in that sense.

But it sent an important signal to Baghdad, which is that they should not try to use the early months of a new administration to test whether or not they can get away with something.

BLITZER: The reason some people are suggesting it was anything but routine is because it's been more than two years since there were these kinds of strikes north of the 33rd parallel, the no-fly zone in the south. I want you to listen to what Senator John McCain had to say earlier today in supporting this operation but being quite critical of the policies over the past few years of the Clinton administration towards Iraq. Listen to this.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I think given the fact that he is a fellow who is engaged in all kinds of war crimes, not only against his neighbors but other people, and I think it's entirely appropriate that we take measures, such as called for in the legislation which really the Clinton administration never pursued with vigor, to say the least.

(END VIDEO CLIP)

BLITZER: Accusing the Clinton administration of not pursuing these policies, in his opinion, with vigor.

HOLBROOKE: First of all, Wolf, let me add to my previous answer that what the administration did was correct and appropriate, and they really had very little choice. And I, too, support it, just as John McCain does.

As far as the past goes, I'm not going to get into a lengthy discussion with John McCain, who is a friend and whom I respect greatly.

All I would say is that the policy needs to be reexamined with a view to recognizing two things: One, in the short-run, it is essential to continue to deny Saddam the ability to create weapons of mass destruction and to jeopardize the neighborhood. And Colin Powell is going to that very neighborhood this week. Symbolically, that will be his first trip outside the United States. And it will be a particularly important trip in light of this.

And secondly, in the long-term, we, the United States, and our allies and the Arab neighbors of Saddam who are listening to this program today, must recognize that as long as Saddam Hussein remains in power, he is a destabilizing factor for the entire region. He is a very dangerous man. I used to say Saddam and Milosevic were the two most destabilizing forces in the world. Well, one down, one to go.

And while this goes beyond the U.N. resolutions, I personally believe that we have to confront the fact that Saddam and a regime change of Saddam is essential. I met with the Iraqi National Council last year, as did Madeleine Albright and Vice President Gore and other members of the administration. And I think that trying to get something out of that confused, chaotic group of opposition is a long shot. But we should pursue that, which is what Senator McCain was talking about, and we should look for other ways to undermine them.

BLITZER: I want to get to a little more elaborate discussion about the Iraqi opposition in just a moment. But I want to get your response to what we heard yesterday from Scott Ritter, former U.N. weapons inspector in Iraq. He was on CNN in a telephone interview.

He made the point that Iraq's weapons of mass destruction, really posed no significant threat to the U.S. or to anyone else, that the Iraqi's have been neutralized on that front. And he went on to say that the kind of policy the U.S. and Britain are now engaged in is really counter-productive. Listen to what Scott Ritter said.

(BEGIN VIDEO CLIP)

SCOTT RITTER, FORMER U.N. INSPECTOR: In fact the very policies that we are executing today only alienate us abroad, strengthen Saddam Hussein and give him cause to reconstitute these capabilities once he has the means.

(END VIDEO CLIP)

BLITZER: Were you surprised by that kind of statement from Scott Ritter?

HOLBROOKE: Look, what Ritter is addressing is a fundamental break point on this issue. It depends on whether you think Saddam is just another normal bad guy of the sort you have all over the world, bad leaders, who are bad for their people, bad for the immediate neighborhood, but no more. Or whether you he is a truly dangerous, major destabilizing force who can trigger the kind of historic chain reaction which drag everyone in.

I think that Ritter neglects one critical fact, which is the explosive situation just a few miles to the West, and I'm talking, of course, about the tremendous tensions between Israel and Palestine that have erupted since the end of September. And so I respectfully disagree with Scott Ritter's minimization of the threat. BLITZER: Why do you believe the UN sanctions that were imposed against Iraq in the aftermath of the Gulf War in 1991 seem to be crumbling big time, if you will, over these past couple years, flights coming in, commercial flights coming into Baghdad from Russia, even from France, from China, from several countries in the Arab world? There doesn't seem to be a whole lot of support for sanctions with the exception perhaps of the United States and Britain.

HOLBROOKE: It is quite true that sanctions has been one of the most difficult issues among the senior members of the Western alliance and that the French have joined the Russians and the Chinese in expressing concern. But let's not leave your viewers with the impression that sanctions have completely crumbled. On the key issue of allowing weapons and weapons and materials in to Iraq, while there's undoubtedly been some cheating on the side, that has not yet broken apart.

Nonetheless, you're right, that there has been a tremendous erosion and of all the issues I dealt with at the UN, this along with the Arab-Israeli problem, were the two in which there were the most bitter divisions between us and our allies. And I think the new administration is going to have to deal with that.

BLITZER: The Russians are especially outspoken in criticizing the latest air strikes against Iraq. I want you to listen to what a Russian foreign ministry spokesman said this weekend, speaking through an interpreter. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): This unprovoked action shows that Washington and London continue to believe in military actions against Iraq. This line contradicts U.N. resolutions and other norms of international law, as well as complicating an already difficult situation in the Middle East and Persian Gulf area.

(END VIDEO CLIP)

BLITZER: Looks like the Russians are not going to be part of any coalition the next time around, if in fact there is another military confrontation with Iraq.

HOLBROOKE: No question about it. There's nothing new in that statement, and given the circumstances, I would say it was routine. I wouldn't attach particular importance to it.

BLITZER: Let's talk about the Iraqi opposition, a subject you raised earlier in this interview, suggesting that perhaps more could be done to try to topple Saddam Hussein, working through the Iraqi opposition. This has been a line that we've heard, I guess, since the end of the Gulf War. It really doesn't appear to have had much of an impact yet.

Richard Perle, as you well know, a former Reagan administration official at the Pentagon, he was on ABC earlier today, and he made the case that a lot more can be done to work with the Iraqi opposition. Listen to what Mr. Perle had to say.

(BEGIN VIDEO CLIP)

RICHARD PERLE, PENTAGON OFFICIAL: There is, I think, a better policy, and that is to support the internal opposition to Saddam Hussein, who with proper support and encouragement -- and we should look at them as freedom fighters. They want to take their country from the scourge of Saddam -- with proper support from the United States, I believe that they can bring down Saddam's regime.

(END VIDEO CLIP)

BLITZER: Do you believe that's true?

HOLBROOKE: I'm not sure if the last part of Richard Perle's comment is correct, but I absolutely believe that, although they are disparate -- when I met with them, they argued among themselves, they put on a very bad show. But so did Milosevic's opposition when we started working with them.

You have to work with them as a long-term goal. I support the effort to increase our interface with them and work more with them. But because of the total totalitarian nature of Saddam, the kind of people power that overthrew Milosevic in Belgrade last September is very unlikely.

Nonetheless, working with the opposition to strengthen them is an important component of a policy that needs to be refined and sharpened in the coming months.

BLITZER: Let me put you on the spot and ask you a question involving your diplomatic experience over the years, this time involving your former boss, President Clinton's controversial decision to pardon Marc Rich, the billionaire living in Switzerland.

In his op-ed page article in The New York Times today, he cites, among other things, foreign policy considerations for granting Rich that pardon.

Listen to what he says. He says, "Many present and former high- ranking Israeli officials of both major political parties and leaders of Jewish communities in America and Europe urged the pardon of Mr. Rich because of his contributions and services to Israeli charitable causes."

Would you justify the pardon on the basis of that kind of foreign policy consideration, because the Israelis in effect asked him to do so?

HOLBROOKE: Well, first of all, I read President Clinton's article very carefully this morning. He made a strong case for his position on the pardon.

But I must say that I was shocked to hear Eric Holder say in his testimony that he had been influenced when he heard that the Israelis wanted the pardon. That is not the job of the deputy attorney general of the United States. He should give only legal opinions to the president. It is the president who integrates them and the president has his reasons, and that's another issue. But Holder was, in my view, way out of line when he said that foreign policy influenced his legal judgment. That's not his job.

As for the whole Marc Rich business, I worked on Wall Street for 15 of the last 20 years, the other five I spent serving the United States government. And I can tell you that there is very widespread negative feelings among my colleagues, most of whom are Democrats, many of whom are Jewish, and most of whom applaud President Clinton and the administration's achievements in the last eight years in both the foreign and economic field. People do not feel comfortable with what happened here.

And those of us who served in the administration with pride -- and I say this very carefully, Wolf -- those of us who respect the historic achievement of President Clinton and the administration in the foreign field, are saddened. And I speak not only here for myself but for every member of the former administration I've talked to. Saddened by the fact that the end of the eight years, this dispute has overshadowed the past and gotten far more attention -- as "RELIABLE SOURCES" showed in the program immediately preceding you -- gotten far more press attention in recent days than what really matters, which is the new administration's policies.

And I would pray and hope, but forlornly and with very little likelihood it's going to be true, that this article today would end the debate. But I suspect, having just heard Eileen's report, that it's going to just fuel it further. And I think that's a terribly unfortunate thing.

BLITZER: We only have a couple seconds left, Mr. Ambassador. But I want to ask you about your potential successor. We're hearing that it might be one of your former roommates in Saigon in 1964, 1965.

HOLBROOKE: My only former roommate.

No, listen. I don't know whether it's going to be John Negroponte, but John was my roommate in Saigon, he was my deputy when I was assistant secretary of state for East Asian affairs. He and I have been close colleagues. I say teasingly he's the only person who was both the deputy to me and to Colin Powell.

If it's John Negroponte, the United States is lucky, the UN is lucky. He speaks five languages, Vietnamese, French, Greek, Spanish and some other obscure language. He's served in Honduras, the Philippines and Mexico as ambassador. He was, very importantly, assistant secretary for oceans, environment and science, which means he knows these environmental and scientific and cultural issues. He is a real professional, currently a senior executive at McGraw-Hill, a very close friend of mine. And I would be thrilled if in fact the news is correct.

BLITZER: OK. Richard Holbrooke, a voice of endorsement for John Negroponte as potentially the next U.S. ambassador to the United Nations. HOLBROOKE: Without reservation.

BLITZER: Thank you very much for joining us, and we hope to have you back soon.

When we return, the Clinton controversies, as both sides of Capitol Hill investigate the former president's pardon of billionaire Marc Rich. We'll talk with the man who's chairing hearings on the House side, Indiana Republican Dan Burton.

LATE EDITION will continue right after this.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D), SOUTH DAKOTA: I don't know what they're doing. I think what they're doing is what they've been doing for the last eight years. They just can't seem to help themselves. You know, they will investigate. I'm sure they will investigate Bill Clinton's grandchildren.

(END VIDEO CLIP)

BLITZER: The Senate Democratic leader Tom Daschle commenting on Republican-led investigations in both the House and Senate into former President Clinton's controversial pardon of financier Marc Rich.

Welcome back to LATE EDITION.

Joining us now from Palm Springs, California, is the Chairman of the Reform Committee, which has been holding hearings into the Rich pardon recently, the Indiana Republican Congressman Dan Burton.

Mr. Chairman, thanks for joining us on LATE EDITION.

I assume you've read by now President Clinton's op-ed page article in "The New York Times" in which he outlines eight reasons why he decided to grant this pardon. Can I take it this clarifies the matter and you will drop your hearings now and case closed?

(LAUGHTER)

REP. DAN BURTON (R-IN), REFORM COMMITTEE CHAIRMAN: Not hardly. I mean these arguments are the same arguments that Jack Quinn made before the committee. In fact, when I read the article, I thought maybe Jack Quinn wrote it. The only exception was that he mentioned three Republican attorneys, one of which is the chief of staff for Vice President Cheney. And all three of them have categorically denied they had anything to do with the pardon.

So once again President Clinton was in error, and you know, he's been in error so many times, I think the American people question many things that he says.

BLITZER: I spoke earlier today with two of those attorneys, Leonard Garment, who worked as a White House counsel during the Nixon administration, and William Bradford Reynolds, who was a Justice Department official during the Reagan administration. They both insisted, of course, as does Scooter Libby, Lewis Libby, the chief of staff for Dick Cheney, through a White House press secretary, they had absolutely nothing to do with President Clinton's decision to grant the pardon.

But they also made the case they thought the original charges, the tax charges against Mr. Rich and Pincus Green, his partner, were unfounded, a strong case could be made that that original indictment should not have gone forward. That's the case they made of course when they were representing Mr. Rich.

BURTON: Well, the fact of the matter is, there were 51 charges against Mr. Rich. He had double sets of books. He kept his secret money in what they called the pot. He paid almost $170 million in fines. His attorneys at the time pleaded guilty, and they were some of the finest attorneys in the United States. And because they pleaded guilty, he chose to flee the country because he thought those criminal indictments would stick.

Now, if he really thought that there wasn't anything that he had done that was wrong, then why did he flea the country, renounce his citizenship and continue to break the laws? I mean, this man was dealing with the Ayatollah, he was dealing with Moammar Gadhafi, he was dealing with almost every country that we had an embargo with, breaking the embargoes. Those were violations of law. Had nothing to do with the tax issue. And he is one of the six most wanted fugitives by the FBI.

So when somebody tells me that, you know, one part of this shouldn't stick. Well, there's 50 other counts. Let's look at all of them.

BLITZER: So obviously your investigation is going to go forward. What some people are suggesting, including your counterpart in the Senate, Senator Arlen Specter's holding his own hearings, is that in the end you're really going to need President Clinton to come and answer questions. Listen to what Senator Specter said earlier today on Meet the Press.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (R), PENNSYLVANIA: The president ought to testify, just as Gerald Ford voluntarily came in and testified after the pardon of President Nixon.

(END VIDEO CLIP)

BLITZER: Do you want President Clinton to testify before your committee?

BURTON: Well, as I've said before, if we find there's a need for President Clinton to testify, then we probably would ask him to testify. But the fact of the matter is, he has the authority under the Constitution, or had the authority, to pardon whomever he wanted to. Now, if there was a quid pro quo, if there was anything illegal that was done, then of course we would want to talk to him. But barring that, I don't think that he's the one we should be talking to about this.

I think what we should be doing, though, is talking to those who were involved in the pardon issue, like Denise Rich, and to check the bank records and to check the records over at the president's library foundation to find out if there was some kind of a quid pro quo. If we find that, then we'll push forward with the president.

BLITZER: Where does that stand, the decision to try to get Denise Rich to testify before your committee? There was some talk that you would want to grant her immunity in exchange for her testimony. But now, as you know, Mary Jo White, the U.S. attorney in the southern district of New York, has her own criminal investigation. Where does it stand, as far as you're concerned, giving Mrs. Rich immunity in exchange for her testimony?

BURTON: Well, we always have -- when we wanted to grant immunity, we always wrote to the Justice Department to find out if they had a criminal investigation ongoing or were about to start one. And if they did, of course we would defer to them.

But we're going to be watching what the U.S. attorney does there in New York. If it's a thorough investigation and if they get all the facts out, then we'll be watching and working with them. Then we may not have to call Ms. Rich.

Conversely, if the investigation isn't really thorough, and we hope it is, then of course we will call Ms. Rich and other witnesses, as well.

BLITZER: You know, some Republicans don't have a whole lot of confidence in Mary Jo White. There was an editorial, in fact, in the Wall Street Journal on Friday suggesting that in the past she's dropped the ball. Do you have confidence that she's serious about pursuing this investigation?

BURTON: Well, here's the problem I have, Wolf. For the past four years, I have had a terrible time with Janet Reno and the chief counsel at the White House. They have blocked every investigation, they would not give us subpoenaed documents. They dragged cases out for a long period of time so that we couldn't get information. And so I didn't have a lot of confidence we were ever going to get cooperation with the Justice Department. I do now that Mr. Ashcroft's going to be the attorney general.

But let me just say this: This is a Clinton appointee. If she does her job properly, then we won't have any problem. But if I see the same tactics that were employed when Janet Reno was attorney general, you bet we'll push forward.

BLITZER: Have you subpoenaed some of these former White House officials like John Podesta, the White House chief of staff, Beth Nolan, President Clinton's counsel at the White House, I guess Bruce Lindsey, who was also one of the deputy counsels at the White House, a close aide to President Clinton? Have you subpoenaed them to come before your committee, or invited them to come before the committee?

BURTON: Well, I just did Face the Nation some time ago, and I said we had subpoenaed them. We did send letters of invitation. We have not, as I understand it, heard from all of them yet. And so if we don't hear from them in a short period of time, subpoenas will go out. But one way or the other, they will testify.

BLITZER: And is that the case with Denise Rich and Beth Dozoretz as well?

BURTON: Yes, I mean, like I said before, the only way we would not call these people to testify is if there was a ongoing criminal investigation and our bringing some things out in a public forum might endanger the investigation. Barring that, we'll go ahead with our hearing which is scheduled for March 1.

BLITZER: And the point of the hearing on March 1 is to determine specifically what?

BURTON: We want to find out who was in meetings with the president, who talked to him about the Rich pardon, and find out what was said, what happened and who all was involved. Once we find that out, we'll have some idea of what happened and why the president did what he did.

BLITZER: And the point of the hearing, though -- and let's assume you come up with some new information -- what would you do with that information? What recourse, in other words, is there to the president who has this absolute authority under the Constitution to grant pardons to whomever he wants to?

BURTON: Well, the fact of the matter is, nobody's questioning that the president had the power to pardon whomever he wanted to. What we're trying to find out is why. The American people want to know why one of the most wanted fugitives in the world was granted a pardon.

And so what we want to find out is why he did it. This editorial does not explain it. And we want to find out if there was a quid pro quo. If there was a quid pro quo, that's a felony. And we want to make sure that we get all the facts out on the table and let the American people know it. If there was no quid pro quo, then it was just bad judgment and the president didn't do his job properly.

He didn't contact any of the intelligence agencies and I have, and we found some very disturbing things about Mr. Rich that aren't in the public forum.

BLITZER: All right, Congressman Burton, we have to take a quick break. We have a lot more to talk about.

When we come back, we'll also be taking your phone calls for Chairman Dan Burton. LATE EDITION will be right back.

(COMMERCIAL BREAK) BLITZER: Welcome back. We're continuing our discussion with Indiana Republican Congressman Dan Burton, chairman of the House Government Reform Committee.

Chairman Burton, you just said before the break that you had information that was not in the public domain about Marc Rich. And I remember the last time I interviewed you, you said you had access to some classified information that you couldn't release, but you've been trying to get that released. Have you been successful yet in convincing the authorities to allow to you release some of that information?

BURTON: Wolf, I can't answer that right now. My staff has been working on trying to get some that declassified. But as you know, sometimes that takes some time. But we are working on trying to get it declassified, because I think the American people need to know all the facts.

The thing that's troubling to me is that the president of the United States, Bill Clinton, before he pardoned Mr. Rich, could have just picked up the phone, and in 30 seconds he could have had his staff get all the intelligence information he wanted, and he would have known about these things. It seems to me he chose deliberately to ignore an awful lot of facts about this case so he could go on with the pardon and claim, "Well, I just didn't know all the things that were going on."

BLITZER: President Bush spoke out this week on this whole issue aboard Air Force One, speaking informally with reporters. But he did say this: "The Congress is going to do what they're going to do. My attitude is, you know, all this business about the transition, it's time to move on, it is. It's time to stay looking forward, and that's what I'm going to do."

Has the president told you that, and other members of Congress as far as you know, move on and get on with other business?

BURTON: Wolf, the president is doing the right thing. He is moving forward. I have great admiration and respect, and I think he's doing a great job. President Bush has a great Cabinet, a great program, and I'm going to support it fully.

Now, the thing we want to find out is if laws were broken. The law should apply equally to everybody. Nobody has been able to explain, Democrat or Republican, anybody, has been able to explain why Mr. Rich was pardoned, one of the most wanted fugitives in the world.

And so what we want to do is, we want to get the facts out for the American people. And if there was wrongdoing, then those who did it should be held accountable. Now, if there was nothing that was done wrong, then of course we'll get this thing over with as quickly as possible and move on.

BLITZER: I think we have a caller from Cleveland, Ohio.

Please go ahead with your question. CALLER: Yes, Representative Burton, I'm one of those Americans that you keep referring to, and I would like to know what other significant issues on the American agenda do you believe we should be talking about?

You know, this isn't feeding people, it's not educating people, it's not heating people's homes.

And I'd like to understand what you and your colleagues are going to do to address those issues that Americans, which I am one, would like you to focus on.

BURTON: Well, we are doing that. As a matter of fact, in the last session of Congress, we did have energy hearings, and we were very concerned about the high price of oil and gas and the energy problems we're going to face.

I'm going to have three hearings in California regarding the energy crisis out there and the rolling blackouts that they've had.

The problem is, that many of the things we're doing on a day-to- day basis don't merit the 60 seconds on national television. The things that get on television are things that are sensational. But we're doing a whole lot of other things.

I have eight subcommittees. All of my subcommittee chairmen are doing an excellent job; they're looking at every area of government. And the Congress is working with the new president, President Bush, to make sure that we cut taxes, deal with educational problems, Medicare, Social Security, all those things.

So don't be distressed because you see us talking about this investigation. All these other things are going on, and we are going to move on as quickly as possible once we get this behind us.

BLITZER: Is it only this pardon of Marc Rich and Pincus Green that you're investigating right now? Because there has been, as you know, some controversy surrounding some of the other pardons, including John Deutch, the former CIA director, a cocaine dealer out on the West Coast, some political friends of the president. Is this the only one you're really looking at, or are you looking at all of the pardons?

BURTON: No, we're not going to look at all of the pardons. I think there's a lot of questions about the pardons, and we could spend probably a year or two doing that.

This was the glaring example that nobody could figure out, and that's the reason we're focusing on that. Once this is over with, we'll, in all probability, go on and work on the nation's business.

BLITZER: OK, Congressman Dan Burton, the Chairman of the House Government Reform Committee. We'll cover your hearing on March 1. Thank you so much for joining us.

BURTON: Thank you, Wolf. BLITZER: Thank you.

And later on LATE EDITION, we'll have much more on the pardons with the former White House special counsel, Lanny Davis, who worked for President Clinton, and the former Bush Attorney General Dick Thornburgh.

But up next, we'll ask two United States senators what they think about the pardons. We'll also talk with them about how the 50-50 Senate will effect tax cuts, the budget and much more. We'll speak with Virginia Republican Senator George Allen and North Carolina Democratic Senator John Edwards.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. Joining us now to talk about the pardon controversy this morning as well as the prospects for President Bush's tax cuts are two members of the United States Senate: in Richmond, Virginia, Republican Senator George Allen, and in Raleigh, North Carolina, Democratic Senator John Edwards.

Senators, welcome to LATE EDITION, good to have you on your program.

And Senator Allen, I want to begin with you. We've been talking much of this morning about President Clinton's op-ed page article in The New York Times. Among other things, he writes this: "The suggestion that I granted the pardons because Mr. Rich's former wife Denise made political contributions and contributed to the Clinton Library Foundation is utterly false. There was absolutely no quid pro quo." Do you believe the president?

SEN. GEORGE ALLEN (R-VA), VIRGINIA: Well, I think we need to see all the facts. The U.S. attorney in the Southern District of New York is investigating this. I think that in reading through that piece and having served as governor and had people petition for clemency and pardons, I think what he missed out on doing is using the good judgment of listening to the prosecutors, to law enforcement officials, and getting all the facts and all the information before making this decision.

And I think had he done so, maybe he would have come up with a different decision. But at least there wouldn't have been all the questions as to the ethics in why he made this decision to pardon Mr. Rich, which is obviously, to many people, seems to be very suspect. And maybe the facts will come out through various hearings or the investigation from that U.S. attorney in New York.

BLITZER: So, if I'm hearing you correctly, Senator Allen, what you're suggesting is that you're not necessarily ruling out the possibility that there could have been a quid pro quo?

ALLEN: I don't know if there was or was not. That's his statement. Nevertheless, I think those, as you start following the money trails, I suppose people may have other questions. Again, had he listened to law enforcement, whether they're prosecutors or others in the Justice Department, and sought their advice and their council and their insight, I think there'd be less of these questions.

This is a president who made his statements, and people will see the voracity of them as the facts come out. I'm not saying I believe or disbelieve him. I just think that he -- just the whole process and the way he went about it is completely differently than I did as governor when faced with similar requests.

BLITZER: What about that, Senator Edwards? You're a former lawyer, I guess you're still a lawyer. But you're a loyal Democrat, as well. A lot of loyal Democrats, including former aides to the president, are not happy with his decision.

SEN. JOHN EDWARDS (D), NORTH CAROLINA: Well, Wolf, I disagree with the decision, I've said that before. I will say, though, I think there's a huge difference between disagreeing with his decision and finding that something illegal has occurred here.

And I think the president himself, if I remember correctly in his piece in The New York times today pointed out that he believes he probably should have contacted the prosecutors in New York and recognizes that that's something he should have done.

The other thing I would add, Wolf, is out there in the real world, when I'm traveling around here in North Carolina -- and I suspect Senator Allen sees the same thing in Virginia -- amazingly enough, people aren't talking much about this. I mean, they're talking about schools, prescription drugs and things that effect their lives. And I'm not suggesting this is unimportant, but I think for most of the American people this is not quite as important as it sometimes seems.

BLITZER: Senator Edwards, now that the president has written this lengthy article in The New York Times, should that be it? Or do you think that he should, as Senator Specter is suggesting, come forward, voluntarily testify before perhaps the Senate or the House of Representatives?

EDWARDS: Well, I don't know the answer to that question, Wolf. And that's a judgment that the president himself needs to make, and I wouldn't presume to make it for him.

I think it would probably be helpful beyond his written word for him to at least grant an interview on this subject so he could be questioned about it and answer some questions.

There's something sort of inherently unseemly about the president coming -- unless he's doing it completely voluntarily, coming and testifying before a congressional committee. I know President Ford did it because he felt like he needed to explain what he had done, and I think this is a judgment the president has to make.

But it seems to me it would be helpful to have something other than this written column for the president to explain verbally to the American people why he did what he did.

BLITZER: Would that be a good idea, Senator Allen, as far as you're concerned, for the president to voluntarily testify before a Senate committee?

ALLEN: Well, whether it's before a Senate committee or somehow in some reliable way where he's cross examined, maybe by you, Wolf, you can cross examine him on these questions.

I do hear a lot of people, I will say this, just generally disgusted by the way, the actions and so forth, of President Clinton as he left office.

But on the other hand, for the business of the Senate, I would like to move forward on things that really matter for the future, which are reducing taxes, improving schools, strengthening our national defense, and not get distracted into this matter. Because even if he is not telling the truth, is the Senate the place or the House of Representatives the place really where justice would be served?

It will be served in the courts and not in the legislative branch. So while it might all be interesting to find out the truth, I think it's best found and sought in the courts of law. Because I think the main concern that most people have is the fair and impartial administering of justice, and the feeling that there is a possibility, with this poor judgment in this Rich case, that there isn't equal treatment and fair administration of justice. But that's for the courts, not the legislative branch.

BLITZER: I think everybody wants to move on, at least to a certain degree. I'm ready to move on and talk about tax cuts.

Senator Edwards, unless you have a last word you want to say as far as the pardon situation is concerned.

EDWARDS: No, Wolf, I think you've covered it very well.

BLITZER: All right, let's move on and talk about tax cuts.

Senator Edwards, as you know, President Bush is pushing a $1.6 trillion tax cut across the board. Democrats this week, Richard Gephardt in the House, Tom Daschle in the Senate, came out with a half deal, anywhere between $750 billion to $900 billion tax cut. There is at least one Democrat, Senator Zell Miller of Georgia, who says $1.6 sounds pretty good to him. How does it sound to you?

EDWARDS: Well, my feeling is, Wolf, we're at a remarkable place in our country's history. We have a chance to do things we've never done before. We have an opportunity to make sure every school in America is a high-quality school, to provide prescription drugs for our senior citizens who have needed them for so long, pass campaign finance reform, pass a real patients' bill of rights, which Senator McCain and I have been working on.

But like every American family, our country has to make decisions. There are choices to be made. I mean, we can't have everything. And the American people know we can't have everything.

So the question becomes whether we want to engage in the investment, for example, in our school system, that's so desperately needed while doing the other things such as accountability and measurement that are also needed. Whether we want to make every school in America the best quality school it can be, or whether we want a very large tax cut as opposed to a more moderate tax cut. You know, given those choices, I would choose the schools.

We also have to decide whether we want to put investment in prescription drugs for our senior citizens so that everybody has access to prescription drugs or whether we would rather have more moderate tax cut or larger tax cut. Also we have to decide whether we're going the pay down the debt, continue to pay down the debt with a portion of this surplus, which most of us believe -- I mean, there's a lot of discussion among proponents of this tax cut that the surplus belongs to the American people. Absolutely. This surplus belongs to the American people. Unfortunately the deficit also belongs to the American people. That's the responsibility they have also.

BLITZER: All right, Senator Allen, I know you have very strong views on this tax cut issue as well, and we're going to get to those. But we have to take a quick break before we do. You'll have plenty of opportunity to talk about that, plus some phone calls.

For our international viewers, World News is coming up. For our North American audience, stay tuned for the second hour of LATE EDITION.

We'll check the hour's top stories, take phone calls for Senators George Allen and John Edwards. Then we'll talk about the legal ramifications of all the Clinton controversy surrounding the pardons with former White House Special Counsel Lanny Davis and former Bush attorney General Dick Thornburgh.

All that and much more is ahead in the second hour of LATE EDITION.

(COMMERCIAL BREAK)

BLITZER: This is the second hour of LATE EDITION.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We have got a very good chance of getting a tax package through.

(END VIDEO CLIP)

BLITZER: Can President Bush sell his tax plan to Capitol Hill? Two senators, Republican George Allen of Virginia and Democrat John Edwards of North Carolina, debate the size of your tax return.

Then, we'll get the legal perspective on the Clinton pardons from former White House special counsel Lanny Davis and former Attorney General Dick Thornburgh. Plus our LATE EDITION roundtable: Steve Roberts, Susan Page and David Brooks. And Bruce Morton has the last word on the message of Black History Month.

Welcome back to LATE EDITION. We will continue our discussion with Senators George Allen and John Edwards in just a moment, but first let's go to Donna Kelley in Atlanta for the top stories.

(NEWSBREAK)

BLITZER: Now, back to our conversation with Republican Senator George Allen of Virginia and Democratic Senator John Edwards of North Carolina.

Senator Allen, I want to start off with you. We let Senator Edwards have the first word on tax cuts, thinking that what the president is proposing, $1.6 trillion, simply too much.

As you know, there are some Republicans like Jim Jeffords of Vermont, Lincoln Chafee of Rhode Island, suggesting they also agree it's too much, it should be a more modest tax cut.

ALLEN: Well, that is their views. I think the people of America deserve a tax cut, and I think that many of the ideas that Senator Edwards were talking about can be achieved.

What we Republicans are trying to come up with, along with President Bush, is a very responsible approach, where you, first and foremost, I think, take a businesslike approach, and every dollar that comes in from Social Security gets put into a lockbox. And that discipline helps reduce the national debt. And indeed, by using that fiscal discipline over 10 years, we'll completely eliminate the national debt.

Medicare should be protected. Then I think you should take care of priorities, such as national defense, education ideas -- and there are a lot of good ideas there to improve our schools, by trusting parents, improving the academic quality and accountability in our schools -- also, basic scientific research is important, law enforcement and also important national concerns.

But there ought to be a dividend for the shareholders, the taxpayers of America. And this proposal, the amount of it, $1.6 trillion, is just 25 percent out of the $5.6 trillion projected surplus.

And the federal tax code is too big, it's too burdensome, and it's unfair. We ought to get rid of the marriage penalty tax, we ought to eliminate death taxes. An estate should not be taxed then, but when they sell it for capital gains.

And so I think we ought to be putting the taxpayers first in some of these concerns and let them decide what their priorities are for their families and themselves.

BLITZER: We'll get to that estate tax in a moment, but Senator Edwards, what's wrong with Senator Allen's arguments?

EDWARDS: Well, what's wrong with it is, it's not all ice cream. I mean, we have wonderful opportunities in this country, chances to do things that have not been done before. But we can't have everything. That's not the way things work for families in this country. It's also not the way it works for our nation.

To do the things we need to do, we can't have a huge tax cut and have the investment we need in education, the investment we need in prescription drugs.

George and I agree, we do need additional investment in the defense of this country. I think those are very important things. We do need to pay down the debt, which has a real impact on people's lives, brings down their mortgage rates, brings down their car loan payments, and can help stimulate the economy. In fact, most people believe that that's the most important and most efficient way to stimulate the economy.

But the real thing here, Wolf, is you can't have everything. There are choices that have to be made. I believe we need a tax cut, Senator Allen and I completely agree about that. But I believe it needs to be of a size that allows us to do the other things that are important: making every school in America a quality school, prescription drugs for our senior citizens and increased defense spending.

BLITZER: Senator Allen, you raised the issues of estate tax, but many critics call the death tax, saying that that should be eliminated across the board.

You may have noticed a full-page ad in some newspapers this week sponsored by some billionaires, some very wealthy people saying, and perhaps a surprise to some, this is a bad idea.

Look, we have a full-screen graphic: "If the estate tax is eliminated, someone else will pay -- you." An ad signed by 200 people including William Gates, Sr., Steven Rockefeller, David Rockefeller, George Soros, the actor Paul Newman saying that this elimination of the estate tax is going to hurt charitable contributions, hurt academic centers, hospitals, cultural centers because the incentive to give charity is just going to be destroyed in part, they're arguing. What they're saying, eliminate some of the estate tax, but not for the very wealthy.

ALLEN: Well, the death tax, I consider to be a completely unfair tax. You should not tax an asset just because of a death. It seems to me an asset ought to be taxed at a capital gains rate when that asset is sold, but there shouldn't be a tax just because someone has died.

And these folks may have all their views and if they want to send in the money and give all the contributions they want, they're welcome to do so. But I've seen too many family farms, land that is somehow accessed at its highest and best use busted up here in Virginia, just to pay the federal government these death taxes. The same with small family businesses, that they can't be passed on or they don't make the improvements to it and upgrades because they're worried about death taxes.

Now, the reality is, in this country, Americans are paying more in taxes than they pay for food, shelter and clothing combined. The tax rate is the highest rate it's been in peacetime history in our country. And if we can't reduce taxes now, when will we be able to reduce taxes while also meeting our priorities?

And I think you'll see that the budget that's hammered out in the next few months will be one that takes into account the important responsibilities, while also taking care of the taxpayers and letting them have more freedom for the money they have earned.

BLITZER: Senator Edwards, on that argument on the estate tax that -- why tax people because they die? It's a compelling argument that Senator Allen makes, so where do you stand on that?

EDWARDS: Actually, I agree with him conceptually. I think that the idea of taxing people in the event of death is a troublesome idea for most Americans.

But this falls in that same category we've been talking about, Wolf. There are choices and decisions and priorities. I think, with respect to the estate tax, it is absolutely critical that we give complete relieve to small businesses, people who want to pass on family-owned businesses that have been in their family for generations, and that we protect our farmers in this country, so that they can pass on their farms. He's exactly right. We've had problems with that, and we need to correct that problem. It ought to be done today. We ought to quit messing around about it.

But the second question that comes with estate tax relief is: Are we going to give complete relief to people with estates over $100 million, you know, the richest people in the country? And while, conceptually, I personally don't like the estate tax, the question is, are we going to do that or are we going to do these other things we're talking about: schools, prescription drugs, increased defense spending?

Every time we talk about these things, Wolf, there are choices to be made. They are not decisions in the abstract. You can't isolate these things. Every time we're making a decision, we're making a choice. And it's a choice for the American people, and these are absolutely critical choices to the American people's future.

BLITZER: All right, unfortunately, Senators, we have to leave it right there. We are all out of time. Senators Allen and Edwards, always good to have you on our program, we hope you'll be returning soon.

And when we return, Bill Clinton's pardon problems. Is there anything at stake legally? We'll get some perspective from two veteran attorneys, former Clinton White House special counsel Lanny Davis and former Bush Attorney General Dick Thornburgh.

LATE EDITION will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SPECTER: This absolute pardon power comes from the divine right of kings, that kings can do no wrong. Well, times have changed. And the founding fathers provided for amending process, and the Senate hearings are looking to the future.

(END VIDEO CLIP)

BLITZER: Senator Arlen Specter speaking this past week about the Judiciary Committee's hearings into the former president's controversial pardon of fugitive financier Marc Rich.

Welcome back to LATE EDITION.

Joining us now to help us sort through the legal implications of the Rich pardon are two guests: Lanny Davis, he served as special counsel to President Clinton, and Dick Thornburgh, he served as attorney general under the first President George Bush.

Gentlemen, always great to have you back on our program.

I want to begin with you, Dick Thornburgh. You probably read the president's article in The New York Times today. Among other things, President Clinton wrote this: "I believe my pardon decision was in the best interest of justice. If the two men were wrongly indicted in the first place, justice has been done. On the other hand, if they do personally owe money for Energy Department penalties, unpaid taxes or civil fines, they can now be sued civilly."

DICK THORNBURGH, FORMER BUSH ATTORNEY GENERAL: Well, there is a lot of difference between a civil penalty and a criminal charge. And I think that is what the president glosses over in what is a very clever but somewhat convoluted and in some cases misleading essay in The New York Times today.

He is working hard to convince us that he has done nothing wrong, but he can't show us that he has done something right. Marc Rich was an extraordinary defendant, charged in the biggest tax fraud case in U.S. history, $48 million he allegedly defrauded the government of. He renounced his citizenship, he's been a fugitive for the last 17 years. There is nothing ordinary about a man who thumbs his nose at the system of justice and to reward him, in effect, with a pardon. I think generally most people agree, Republicans and Democrats alike, is outrageous.

BLITZER: And Lanny, President Clinton does in that article acknowledge he made a mistake, at least in this respect. Let me read to you what he writes. He says, "While I was aware of and took into account the effect that the United States attorney for the Southern District of New York did not support these pardons, in retrospect, the process would have been better served had I sought her views directly." LANNY DAVIS, FORMER WHITE HOUSE SPECIAL COUNSEL: Look, two things should be said that I was impressed with in the piece. The first is that he is talking about the merits. I do not believe that a campaign donation or even a telephone call from the prime minister of Israel would be enough to convince him to do a pardon that he must have known to be controversial unless he sincerely believed on the merits that it was justified.

The second thing that is apparent to me is that everybody that I know disagrees with his decision, including his former chief of staff John Podesta, who on Meet the Press today made it clear that he disagreed with it. I'm told that Beth Nolan, the White House counsel, and that Bruce Lindsey, some of his closest advisers, disagreed on the merits.

So this must have been a very, very tough decision by President Clinton. I don't understand why he did what he did. But he overrode the advice of his senior staff of senior lawyers, it must have been something he felt strongly about.

BLITZER: Well, one of the reasons he says is because for foreign policy consideration that the Israelis across the board in Israel were asking for this. Is that enough of a justification if he thinks it could have helped, for example, a peace process in the Middle East for the pardon of Marc Rich and Pincus Green?

THORNBURGH: Well, this is another curious rationale for this pardon. Not only did the president bypass the Department of Justice, where not a single person ever laid eyes on this pardon application, but he bypassed advice of secretary of state, Dennis Ross, his emissary to the Mideast, Sandy Berger, his National Security Advisor. He wouldn't seek their views on this pardon.

And it raises, unfortunately, increasingly a strong suspicion that at least in part this pardon was bought and paid for by a $1.5 million in campaign contributions and contributions to other interests in which the Clintons had some influence by Denise Rich, Marc Rich's ex-wife. That's an unfortunate thing, and we're going to have to wait and see until the congressional investigation and the United States attorney's criminal investigation plays out to put that to rest if it can be.

DAVIS: Well, see that's where I -- with all due respect to Dick, I think that is an unfair, innuendo-based comment. There is no evidence whatsoever that President Clinton isn't telling the truth, that he was influenced by campaign donations.

He looked at this on the merits and decided to make that decision over the advice of some of his most senior people. The fact that Dan Burton or anybody else says that there's a possible connection is no different than what they did on Whitewater, where there was never any wrongdoing shown, on the FBI files, on the travel office. Innuendo after innuendo, and that's where I draw the line here. I have no doubt of his sincerity, but there's no evidence he was influenced by campaign donations. THORNBURGH: This is not just Dan Burton and Republicans, this is the United States attorney for the Southern District of New York, an appointee of President Clinton's, who has now opened an investigation into whether or not criminal conduct ensued. We don't know, but I think there's a large body of thought out there that suspects there must be more to this than simply accepting President Clinton at his word.

Denise Rich took the Fifth Amendment; she wouldn't testify with regard to whether or not there had been any connection between her sizable donations and the pardon. And it's up to the U.S. attorney and the Congress to follow the money and see if there's anything there.

BLITZER: You're an experienced lawyer, but to the average person out there, Lanny Davis, if you hear that somebody is taking the Fifth Amendment, pleading the Fifth, refusing to testify because what they say might incriminate them, it certainly does give the impression that she has something to hide.

DAVIS: Well, she's exercising her constitutional rights, but I do agree -- I cannot understand the judgment not to disclose the campaign donations to the library or to negotiate on that. There ought to be complete, total transparency.

I think President Clinton will do a good job volunteering to appear before the committee and tell the entire story. There's nobody better than he to do that.

And I don't understand the exercise of the Fifth Amendment by Ms. Rich. She's under the advice of a counsel, I can't second-guess it. But I wish she would volunteer to testify and get everything out and put this behind us.

BLITZER: As you know, lawyers are always cautious, so they're always advising their clients not to say anything or do anything. But is this a case where lawyers are overly cautious, Denise Rich's attorneys, in suggesting that she take the Fifth, instead of just saying, "Well, look, here's what happened." In other words, if you were representing Denise Rich, would you tell her to plead the Fifth?

THORNBURGH: Well, another thing lawyers don't like to do is to second-guess their colleagues, but let me say this about the criminal investigation in particular.

This is going to be a very difficult investigation to pursue. If in fact there was some arrangement here, it wouldn't be embodied in a written document or an oral testimony or in any court-authorized wiretap, as prosecutors generally rely on. More likely than not, if there was arrangement, it was made with a wink and a nod, and there was an understanding as to what would happen. But you'll never be able to prove that sufficiently by legally admissible evidence in a court beyond a reasonable doubt to convict anyone.

Nonetheless, I think there's enough of a predicate here for Mary Jo White, the U.S. attorney to undertake the investigation, see what's there.

BLITZER: All right, we're going to have a lot more to talk about. We want to take your phone calls, as well, but we have to take a quick commercial break. When we return, more with Lanny Davis and Dick Thornburgh.

(COMMERCIAL BREAK)

BLITZER: Welcome back. We're continuing our conversation on the Clinton pardon of Marc Rich with former Clinton White House special counsel Lanny Davis and former Bush Attorney General Dick Thornburgh.

We have a caller from Lincoln, Nebraska. Please go ahead with your question.

QUESTION: Yes, I'm wondering, since Congress so is concerned with fairness in perceptions, don't you think there is obligation to revisit former President Bush's pardon of Caspar Weinberger in some detail? And also, what was Bush's stated rationale for that pardon?

BLITZER: Let's ask the attorney general at that time, who can give us some history.

THORNBURGH: Well, it was after my watch, but I think it's pretty well-known that President Bush sought to put the whole Iran-Contra situation behind us. He felt that the independent counsel had abused his authority, just as President Clinton felt that. And there was an opportunity -- of course the Congress at that time was in Democratic hands -- to review that, but they chose not to do so.

There was no allegation of any money having been paid. There was no fugitive status on the part of any of the subjects. So it's quite a different situation.

BLITZER: Is it fair for Clinton supporters, Lanny Davis, to keep bringing up President Bush's pardon of Caspar Weinberger as a similar kind of situation?

DAVIS: They're different. The reason that we're bringing it up is the double standard that the same Republicans that are now insisting on a full explanation from President Clinton didn't insist on a full explanation from President Bush, and they should have.

I happen to agree with what President Bush did. I think the indictment of Weinberger was way beyond what the independent counsel should have done, the timing of it was horrible. And I think President Bush acted correctly. But he also should have been available to respond and explain.

And the Republicans today, insisting on answering all these questions, are simply showing a bit of a double standard, because they were silent at the time of the President Bush pardon of Weinberger.

BLITZER: The ranking Democrat of the House Government Reform Committee, Henry Waxman, made a similar point speaking about a double standard earlier today on Face The Nation. Listen to what he had to say.

(BEGIN VIDEO CLIP)

REP. HENRY WAXMAN (D), CALIFORNIA: So I think, to some extent, President Clinton is held to a double standard, a different standard than other presidents have, who again given controversial pardons in the past.

(END VIDEO CLIP)

BLITZER: Is President Clinton being held to a double standard?

THORNBURGH: Different cases, different rules.

You may recall that President Ford went before the Congress to explain the pardon that he gave to President Nixon, ex-President Nixon, at the time. The rules are going to be the same, it doesn't necessarily mean a double standard. What it means is you've got different facts and different cases.

BLITZER: One of the things that has outraged a lot of people, Lanny, including a lot of Democrats, about the way President Clinton went about this pardon of Marc Rich was the fact that he really only heard from one side of the case.

Listen to what Mayor Rudy Giuliani said earlier today, and remember, Rudy Giuliani brought the original charges against Marc Rich when he was the U.S. Attorney in New York. Listen to what Rudy Giuliani said on ABC earlier today.

(BEGIN VIDEO CLIP)

MAYOR RUDOLPH GIULIANI, NEW YORK: The president has concluded now that they were wrongfully indicted. However, the way he went about it was just to talk to the defense lawyers. This would be a very, very strange thing to happen in the future. I mean, virtually every indictment in America would be dismissed, if all you did was talk to the defense lawyers.

(END VIDEO CLIP)

BLITZER: That is sort of outrageous, isn't it, that it he only went to those who were defending Marc Rich like Jack Quinn and some others to hear their side of the story, never asked Mary Jo White, never asked any of the prosecutors who were involved, those who testified actually later, what they thought?

DAVIS: I think the process was terrible. I think it was a product of his doing it at the last minute, in the last week or so when he was concentrating on Mr. Ray and negotiating that and lots of other issues that were on his desk. And I think he regrets that it happened that way. He should have listened to the other side. He's a great lawyer, apart from being a great president. He would have benefited by hearing the prosecutors explain to him why this was more than just about a RICO count, which is the argument I hear being made. There are a lot of other issues that should have been addressed by Mr. Rich in the criminal justice system here rather than becoming a fugitive.

DAVIS: But that being said, I don't remember that argument being made to former presidents who didn't always consult with the prosecutors, including President Bush.

THORNBURGH: Lanny and I will scour the countryside, I'm sure, for situations where we can present only our side of the case and not be encumbered by having the other side of the case stated. I think the point's very well taken and obvious.

BLITZER: There's one other bit of testimony we heard this week from Roger Adams, who is the chief pardons officer at the Justice Department, and he got that midnight call from the White House only 12 hours before President Bush was sworn in. President Clinton was leaving office. And he told the story of how he heard first about this pardon. Listen to what he testified earlier this week before Senator Specter's committee.

(BEGIN VIDEO CLIP)

ROGER ADAMS, CHIEF PARDONS OFFICER, JUSTICE DEPARTMENT: I was told by the White House counsel staff that the only two people on the list for whom I needed to obtain record checks were Marc Rich and the Pincus Green, and that it was expected would it be little information about two men, because, to quote the words of the White House counsel's office, they had been living abroad for several years.

(END VIDEO CLIP)

BLITZER: His point, Dick Thornburgh, was that nobody bothered to tell him they were really fugitives.

THORNBURGH: Yes, that is a little bit of abuse of the English language, I think, more than anything else. These folks were not just living abroad, they were fugitives from justice and had been so for 17 years in the face of very serious charges here at home.

BLITZER: That is sort of unusual, to make that call 12 hours before leaving office to the person who is supposed to review pardon applications.

DAVIS: The process was terrible. I'm sure President Clinton, who has admitted to having preferred to have given Eric Holder some more time, looking at this on the merits and hearing both sides, in my judgment, President Clinton never would have done this decision if the process had been correct.

That being said, the central charge by the Republicans, which we have heard a little bit today from Dick, at least suggested, is absolutely, categorically denied by President Clinton. And we ought to be very careful before suggesting a connection between money and maybe an incorrect decision on the merits. That is a very, very big leap. And certainly we ought to give Bill Clinton the benefit of the doubt, the same way people were quick to rush to judgment about all the other so-called scandals and accusations from Chairman Burton and others that turned out to be absolutely zero. BLITZER: We only have a few seconds.

THORNBURGH: We also have to be very careful about buying into all the arguments that president made in essay. He's already been forced to backtrack on the assertion that he made that three Republican lawyers supported the pardon. Each of them categorically said that they did not, and that misstatement had to be cured in a later edition of The New York Times. That raises people's suspicions, and I think rightfully so, given this artistic use of the language, often seeking to avoid liability.

BLITZER: OK, Dick Thornburgh, Lanny Davis, thanks for joining us.

DAVIS: Thank you, Wolf.

BLITZER: Just ahead, more on the pardons and President Bush's first month in office. We'll go around the table with Roberts, Page and Brooks when LATE EDITION returns.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Time now for our LATE EDITION roundtable. Joining me: Susan Page, Washington bureau chief for USA Today, Steve Roberts, contributing editor for U.S. News and World Report, and David Brooks, senior editor for the Weekly Standard.

All right, let's start with you, Steve. The Tindle (ph) Report, which does a statistical survey of three network nightly newscasts, how much time they're devoting to various subjects. Look at this, former President Clinton, between February 12 and February 15, got 46 minutes. President Bush, the incumbent president, got nine minutes.

STEVE ROBERTS, CNN COMMENTATOR: Well, this is why Bush is saying, let's move on. I mean, yes, Republicans love to see Clinton in trouble. It certainly does add some luster to the Bush argument, "I'm going to restore honor and integrity to the White House." But as you see, he has trouble getting on television. A lot of TV talk shows much rather talk about the pardon and Clinton's real estate than Bush's tax bill.

I think, also, he's got to be very leery about the whole notion of restricting the right of people to pardon. He's the president now, the world looks a lot different.

And the third thing is, this notion that somehow it's improper for large campaign contributors to have access and get favors done, George Bush is going to name a whole lot of his big contributors to ambassadorial posts. They've got to be careful. They set up this standard. It could be used against them.

BLITZER: I was going say, David, there's a lot of Clinton supporters, Democrats, who are skeptical that the president really wants the country to move on, that this is a good-cop-bad-cop routine. Bush's supporters love the fact that he looks so presidential, so dignified, so moral compared to Bill Clinton.

DAVID BROOKS, CNN COMMENTATOR: Yes, well, we're developing sort of a European situation. You know, in Europe they have boring people who run the country and then self-indulgent people in all these royal families who entertain the country, and Bill Clinton is turning into our Princess Stephanie. So he's going to be on the beaches in the Riviera.

But it highlights an essential difference between the two, and Cheney has emphasized this. The idea is, some people were permanent campaigners, they were politicians, and some people are policy wonks. And we have this now media culture, which is some columnists and some shows that are based on the idea that politics is all about theater. And the Bush people are more boring than that. Politics is about governance for them, so it really is a contrast of styles and quite a good one for Bush, obviously.

BLITZER: Were you surprised, Susan, as someone who has covered Bill Clinton for many, many years, going back to '92, maybe even earlier as far as I know, that he called Geraldo Rivera of CNBC, who has a show on CNBC, on Thursday? And Geraldo later, reading from his notes, said the president said this: "I was blind-sided by this. I just wanted to go out there and do what past presidents have done, but the Republicans had other ideas for me."

SUSAN PAGE, CNN COMMENTATOR: Totally classic Clinton, both that he called Geraldo Rivera, who's been a friendly voice in the media culture, and also that he made this case that he's been sort of put upon by Republicans.

I think it's very hard to make the case that anybody but Bill Clinton is responsible for what's happened for Bill Clinton. I don't think the Bush White House has promoted it. I don't think you can blame congressional Republicans. I think it's all in Bill Clinton's lap.

And while it's a mixed blessing for the Bush White House, because it helps him in terms of the contrast with the exiting president but overshadows him some in news coverage, it is an unalloyed disaster for Democrats who are trying to figure out how they approach this new president, how do they respond to his legislative proposals, especially the tax cut. Meanwhile, they're forced into a position of either defending, discussing or expressing dismay about the past president.

BLITZER: And, you know, a lot of the president's critics have pointed out this is vintage Clinton in the sense that the president, in the past, he always saw political motives. He was always blaming the Republicans for all the scandals, the investigations, instead of taking the blame himself for making a mistake.

ROBERTS: I think the critics are right. I think that this is one more example of Bill Clinton saying, "I'm not responsible for my actions and the rules don't apply to me." And even his best friends -- this is the thing about Bill Clinton that has always driven them crazy, he can be self-indulgent. It is very hard to be a friend to Bill and Hillary Clinton, because they have always left a lot of wreckage in their wake.

And people who are going on the shows today and trying to defend them, I promise you they get off the set and they're saying, "Why has he put me in this position again? I'll go out there and do it for him one more time, but I hate doing this, he was wrong," and there's a lot of unhappiness with Clinton, even among his strongest friends.

BLITZER: In the article in The New York Times, President Clinton, writes this. He says, "I want every American to know that, while you may disagree with this decision, I made it on the merits as I saw them, and I take full responsibility for it."

I assume the president probably thought that once he laid out these eight reasons for the pardon it would end the story once and for all. But that is certainly not the case.

BROOKS: "By the way, I did not have sexual relations with that pardon."

(LAUGHTER)

That's how my colleague, David Tell, summarized it.

I don't know what he could have thought. He avoided some of the important issues about how the procedures were evaded. He avoided all sorts of things that led to the scandal, you know, midnight phone calls.

The essential problem with this was that word went out months ago, we've now learned from recent reporting in the L.A. Times and elsewhere, that lawyers should avoid the Justice Department and go straight to the White House with their pardon requests.

And so there was a whole culture of scandal being built up here, and Bill Clinton -- the tone of this op-ed piece was robotic, it was denial, it made me think that he just hasn't developed the candor which he never had about his own behavior.

PAGE: Can you credibly make the case that Marc Rich would have been pardoned if that wasn't being advocated by people with money relationships with the Democratic Party and with the Clintons? I don't think it's credible. They wouldn't have gotten a hearing.

ROBERTS: Look, I agree completely. I think this case can and maybe will give a boost to campaign finance reform. We talked about this around this table before. Here's finally a tangible example of what money can do.

On the other hand, the reason why I say the Republicans have to be careful to get too self-righteous about this is they have taken a great deal of money from a lot of powerful interests who are buying access to the Justice Department, to the Interior Department -- let's be honest about this -- and they are going to want to do a lot -- that is what happens when you win, you do favors for your friends. And they don't want to set too high a stand of moralism here. BLITZER: David, one of the things the president did write in the article, in the final version: "The case for the pardons was reviewed and advocated not only by Jack Quinn" -- his former counsel, the lawyer for Marc Rich -- "but also three" -- it says three -- "Republican attorneys," who had been hired over the years by Marc Rich, Lewis Libby, who is now Dick Cheney's chief of staff, William Bradford Reynolds, a high-ranking Justice Department official during the Reagan years, and Leonard Garment, who was Richard Nixon's attorney in the White House.

I spoke with two of them earlier today, and they say the original article that said the case for the pardons application or the application for the pardons had been reviewed by them. But all of them insist that they had nothing do with the pardon. Yes, they had defended and worked for Marc Rich over the years, but they never supported a pardon. They were looking for a plea agreement, basically, with the U.S. attorney in the Southern District of New York or something with the Justice Department.

BROOKS: Yes. There are two things here.

First of all, it's Clinton spin. He pushed it a little too far, and The New York Times had to pull it back when they found the truth. I suppose that is how it happened with the second edition.

The second thing is that Bill Clinton just hasn't reached any level of self-knowledge about this. It made me think, actually, that his memoirs are not going to be very interesting memoirs despite his intellect. You know, you have to be able to step back and say, "I made a mistake. Here's where I went wrong." And this was a possibility for Bill Clinton to say that. But he didn't even have the distance to say, "Here is where I made a mistake, here is what I did right, here is what I did wrong."

BLITZER: I want to wrap up this discussion of the pardons with Susan.

Bill Daley, who was the commerce secretary, Gore's campaign chairman during the election, he was quote by Richard Burke in The New York Times as saying this this week: "It's terrible, devastating, and it's rather appalling. Bush ran on bringing dignity back, and I think the actions by Clinton of the last couple of weeks are giving him a pretty good platform." That's from a loyal supporter of Bill Clinton.

PAGE: A loyal Democrat, a member of Bill Clinton's Cabinet, remember. But there is no shortage of people who have been close to Bill Clinton who are not out there defending him now. Even some of his friends are out criticizing like Bill Daley was, but there are many of them that are choosing not to defend him. I think it's a hard task to find a defender for Bill Clinton in town right now.

BLITZER: Even earlier on the show, Richard Holbrooke, the former UN ambassador, was not very kind about this decision.

We're going to continue our discussion, but we have to take a quick break. Up next, President Bush and the news media, how's he doing? We'll ask the roundtable when LATE EDITION continues.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our roundtable.

Let's talk a little bit about George W. Bush, as opposed to Bill Clinton.

ROBERTS: You're making our point.

(LAUGHTER)

BLITZER: A point here, you know, he says one -- $1.6 trillion, David, is just right, not too hot, not too cold, just right, $1.6 trillion, not going any higher, not going any lower. Is he going have to wind up going a little bit lower, though?.

BROOKS: Just a little. You know, I think we are beginning to see momentum here. The Democrats are coming up, there is a lot of centrists who are worried about whether the surplus is really there. But we are going to see some huge tax cuts. It may not be a 39 percent drop down to 35 percent.

BLITZER: Thirty-three.

BROOKS: Yes, but it may get down do 35 instead of 33. The death tax may not be eliminated entirely.

But I think what we are seeing is a momentum to some sort of big tax cut, which he will declare victory on. It will be a big win.

PAGE: I think he have a as big problem, though, that he hasn't addressed yet, and that is that he hasn't made the case with the American people.

You know, a CNN-USA Today poll this week showed that if you gave people six priorities for the federal government, tax cuts came in last. George W. Bush still needs to make the case with the American people. It's very different than it was when President Reagan took over in 1981. The top tax rate then was 70 percent. A huge, overwhelming majority of the American people supported the tax cut. That's not the situation today.

ROBERTS: And he keeps saying, basically, the president said it in his radio address again yesterday, "We can have it all." Well, even with these surpluses, you can't have it all, and choices are going to have to be made. And when the tax cut of this size gets set against spending priorities, that is when that attitude is really going to come into play.

I think the other problem he have is on the estate taxes, because clearly this can be lambasted by Democrats as a handout to the rich. And when you've got this lobbying group, Bill Gates, Sr., and others saying this is going to hurt charities, because one of the problems with his tax plan is he is helping charities with one hand then hurting them with the other. It's a contradiction, and that's going to be a problem, I think, for him.

BROOKS: One of the problems he so far hasn't really had, David, I think you'd probably agree, is too much of a problem with the news media. He certainly hasn't had a full formal news conference, yet. William Safire, writing Friday in The New York Times, you probably saw the column, he said this: "These are the days that set the precedence for a presidency. If the Bush administration fails to set and adhere to a regular schedule of televised meetings with the press, he will be disserving the public and weakening his governing discipline."

Are people at the White House hearing that argument?

They may be hearing it, but I don't think hearing it from country. I don't think the public is clamoring -- you know, the Washington reporters are really not getting the sources that they really want. You know, they are not feeling sorry for us out there in country.

This is a CEO, corporate-like administration, they control information very closely. And they have maintained their discipline. Discipline a big word for the Bushies. Bush is not good at press conferences. They haven't had it. It's worked so far, and I suspect they will just keep doing that.

PAGE: But press conferences, big formal press conferences, where you stand you up there half hour and take questions on anything that comes forward are part the job of being president. And I think he is now lagging behind several other modern presidents in terms of doing his first news conference.

You know, all presidents love photo-ops because you get two or three questions, they are on the topic of the day. The difference between a photo-op and a real news conference is like the difference between having a pop quiz and defending your dissertation. It takes a lot more skill, it takes a broader range of knowledge. It's one of things presidents are supposed to do.

ROBERTS: It is one of the things presidents are supposed to do, I agree completely. And I think that this is a weakness with George Bush, and David said it.

We know this man has just come to Washington. He is not familiar with a lot of topics. It's one thing to hold a news conference or a briefing where you get a few questions on a given topic. You get up there in front of the press corps, they're going to throw things at you from parts of the world he has never even heard of before.

And I think the risk of making a mistake far outweighs the benefit at this point. He's going to stay out of sight until he's much more comfortable, because one mistake and ...

BLITZER: We have to wrap it up right there. But this note from our excellent research department: President Clinton held his first formal televised East Room news conference on? PAGE: I have no idea.

BLITZER: March 23 of 1993.

PAGE: Wow.

BLITZER: So there's still some time. I just want to point that out to all of you. I was at that press conference.

Thanks for joining us, our roundtable with David, Susan, Steve.

Just ahead, Bruce Morton's last word.

(BEGIN VIDEO CLIP)

BRUCE MORTON: We have come over a wave that with tears has been watered. We have come treading our paths through the blood of the slaughtered.

(END VIDEO CLIP)

BLITZER: As America observes Black History Month, Bruce shares the words of some prominent African-Americans.

(COMMERCIAL BREAK)

BLITZER: Time now for Bruce Morton's last word on the struggles and triumphs of black Americans.

(BEGIN VIDEOTAPE)

MORTON: This is Black History Month, so this week, some black history in the words of those who made it.

"The destiny of the colored American is the destiny of America." -- Frederick Douglass, abolitionist, 1862.

"We have come over a wave that with tears has been watered; we have come treading our path through the blood of the slaughtered." -- James Weldon Johnson, 1900.

"No race can prosper until it learns there is as much dignity in tilling a field as in writing a poem." -- Booker T. Washington, 1901.

"The cost of liberty is less than the price of repression." -- W.E.B. DeBois, 1909.

"I am not tragically colored. I do not weep at the world. I am too busy sharpening my oyster knife." -- Zora Neale Hurston, 1928.

"We live here, and they live there. We black, and they white. They got things, and we ain't. They do things, and we can't. It's just like living in jail." -- Richard Wright in the novel "Native Son," 1940.

"I had felt for a long time that if I was ever told to get up so a white person could sit that I would refuse to do so." -- Rosa Parks, 1955, recalling the Montgomery bus boycott she began.

"The Negroes' great stumbling block is not the white citizens counselor or the Ku Klux Klanser but the white moderate who is more devoted to order than to justice." -- Martin Luther King Jr., 1963.

"The day that the black man takes an uncompromising step and realizes that he's within his rights when his own freedom is being jeopardized to use any means necessary to bring about his freedom or put a halt to that injustice, I don't think he'll be by himself." -- Malcolm X, Al-Hajj Malek Al Shabaz, 1964.

"If the Freedom Democratic Party is not seated now, I question America. Is this America where we have to sleep with our telephones off the hooks because our lives be threaten daily because we want to live as decent human beings in America?" -- Fanny Lou Hamer to the 1964 Democratic Convention. Her delegation was not seated.

"Sheriff, I may be an agitator, but I'm not an outsider. I grew up 90 miles from here, and we are going to stay here until these people are allowed to register and vote." -- John Lewis (ph) to Sheriff Jim Clark, Selma, Alabama, 1965.

"Keep asking me, no matter how long, on the war in Vietnam I sing this song, I ain't got no quarrel with the Viet Cong." -- Mohammad Ali, Vietnam draft resister, 1966.

"Violence is as American as cherry pie." -- Rap Brown, 1967.

"`We, the people': It is a very eloquent beginning, but when that document was completed on the 7th of September in 1787, I was not included in that `We, the people.' But now through the process of amendments, interpretation and court decision, I have finally been included in `We, the people.'" -- Congresswoman Barbara Jordan, 1974.

"Keep on a'walking. Gonna keep on a'walking till I get to freedom land." -- All the many Americans who marched on a journey this is not finished yet.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thanks, Bruce.

Time now for you to have the last word. Leon from San Francisco wants to know: What's worse, a pardon for Marc Rich or Bush's massive tax cuts for the rich?

Colleen from Canada says this: The more the Clinton saga unfolds the more horrified and very sad I become. I think you should expose the other corrupt pardons. Marc Rich was not the only sleaze pardoned.

Another viewer writes this: I have a problem with the way the media is handling this pardon issue. Where was all this investigative reporting and holy indignation when George Bush, the elder, was pardoning all those involved in the Iran-Contra affair to avoid the possibility of impeachment?

David asks: Why do your Democratic guests condemn Clinton's actions and yet want to move on instead of finding out the facts? Is it OK that the Clinton's get away with anything as long as they, the Democrats, protect their party?

And finally, Don from Berlin has this compliment and piece of advice for me: One thing I admire about your work is that I can hardly guess where your preferences are. Objectivity and fairness are the exemplary characteristics. Let the other narcissists stick themselves in front of the issues.

Remember, I always welcome your comments. You can write to me at lateedition@cnn.com, and you can sign up to receive my free e-mail previewing LATE EDITION every weekend at cnn.com/email.

When we return, we'll reveal what's on the cover of this week's major news magazines.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Let's take a look at what's on the cover of this week's major news magazines.

Time Magazine has "The Incredible Shrinking Ex-President," with a tiny Bill Clinton on the cover.

Newsweek tells the inside story of "Bill's Last Days: Sleepless Nights and Secret Pardons" on the cover.

And on the cover of U.S. News and World Report, "Founding Rivals, John Adams and Thomas Jefferson: Startling New Research Shows Why America's First Political Wars Were Far Worse Than Today's." I want to read that.

That's your LATE EDITION for Sunday, February 18.

Be sure to join us again next Sunday and every Sunday at noon Eastern for the last word in Sunday talk.

And if you missed any part of our program today, tune it at 7:00 p.m. tonight for a one hour replay of LATE EDITION.

I'll see you tomorrow night on "WOLF BLITZER REPORTS," 8"00 p.m. Eastern. I'll talk, among other things, with "The Washington Post"'s Bob Woodward.

For now, thanks very much for watching and enjoy the rest of your weekend. I'm Wolf Blitzer in Washington.

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