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How Did Media Cover Enron?; Lewinsky, Condit Back in the News

Aired March 2, 2002 - 18:30   ET


HOWARD KURTZ, HOST: Welcome to "RELIABLE SOURCES," where we turn the critical lens on the media. I'm Howard Kurtz.

Just ahead, we'll talk about the press coverage of the relentless Enron scandal.

But first, the subject of two media frenzies, both involving interns, Gary Condit and Monica Lewinsky back in the news. Congressman Condit is fighting for his political life and trashing the press in the process.

The lawmaker who was thrust into the news last summer because of his affair with Washington intern Chandra Levy is running for reelection and facing a difficult Democratic primary this Tuesday. He has little money, no TV ads and rarely speaks to reporters.

But he did talk to this past week to CNN's Larry King.


REP. GARY CONDIT (D), CALIFORNIA: The media has created a tremendous amount of negative for me. I mean, I usually win by like 70 percent of the vote. And they've peeled off a lot of support just, you know, on hearsay, rumors, innuendoes, and so on and so forth.


KURTZ: Joining us now, "Newsweek" investigative reporter, Michael Isikoff. And in New York, Rich Lowry, the editor of "National Review."

Michael Isikoff, let me put this as politely as I can. Where does Gary Condit, who stonewalled the press for months over his relationship with a missing and presumably dead intern, get off blaming the media for this?

MICHAEL ISIKOFF, "NEWSWEEK": Well, it does take quite a bit of cheek for him to do that. Look, the defining moment for Condit is when he did that Connie Chung interview last summer. That was the one chance he had to finally sort of come clean, present his case to the public, show that he really did cooperate and was concerned.

And he blew it. He blew it by his own admission. And I think that people -- that registered with people. There was a lot of anticipation, build-up for that. This was his chance. He blew it. And I think he's going to probably suffer the consequences on Tuesday.

KURTZ: Rich Lowry, despite Condit blaming this on the no-good, terrible, horrible, very bad press, he's still refusing to answer the questions about Chandra Levy. He did the same thing in the King interview.

RICH LOWRY, EDITOR, NATIONAL REVIEW: Yes, well I don't know, you know, what we should expect from him at this point, Howie. And he's obviously not going to go on a TV show and have a Perry Mason moment where he comes clean or confesses to anything.

Let me say this though, about the media. The media has been a little schizophrenic about the Condit story. You know, we were all obsessed about it last summer, and then just, you know, two or three weeks ago, we were all laughing about it, you know, how silly and frivolous it all was. And I think it was -- it really should have been a little bit in the middle. It was always a legitimate story, a congressman involved with a woman who goes missing, but it was also overplayed a little bit.

KURTZ: There's no question the over-coverage was very serious, but that still doesn't negate the fact that the congressman has to answer some questions as the Tuesday primary approaches.

Now, let's turn now to another sort of blast from the news past, Monica Lewinsky. She says, she wishes she had her anonymity back. But she's rehashing the whole tawdry tale in an HBO special airing Sunday night.

Let's take a look.


MONICA LEWINSKY: And it was sort of obvious to me, you know, there was this mutual thing going on and I was -- and then, so I sorted blurted out, "I have a crush on you."


LEWINSKY: And he smiled and he said, "Well, you want to come into the back office?" And...



KURTZ: Mike Isikoff, any inconsistency here between Lewinsky saying the press painted a terrible picture of her, and yet doing this HBO documentary?

ISIKOFF: I mean, you touched on the obvious one: Why is she doing this? And that's that.

I should say, a bunch of us in "Newsweek" actually watched the tape the other day. And she comes off, I have to say, as more engaging and sympathetic in this presentation than she did previously. And it'll be interesting to see how many people actually tune in on Sunday.

I wouldn't be surprised -- I think a lot of people think that she may have a future in TV after all, maybe as a talk show host, because she does handle herself pretty well.

KURTZ: Yes, well I thought she acquitted herself pretty well, too. But the question, Rich Lowry, is, an HBO staffer tells me that the producer when first pitched the idea of doing this at all about Lewinsky said, "Who cares, this is old news."

Do you think that much of the country may share that initial reaction?

LOWRY: Yes, it definitely has a sense about it of Monica kind of ringing the last little bit of her 15 minutes of fame for a couple of more drops of attention. And I don't really blame her for that. You know this is probably, unfortunately, the most consequential thing that she'll have happen in her life.

But, you know, you're right that her case is shot through with inconsistencies. It all struck on "LARRY KING" when she complained that the media over -- was over blowing the story of her showing her thong to Bill Clinton, and she complained that this was the media unfairly creating the image that she may have behaved inappropriately in the Oval Office. And you kind of wonder what planet she's living on.

KURTZ: Yes, showing that thong. I mean, why would that be possibly a story?

Well, turning now to the Enron story. And joining us is, "New York Times" columnist Paul Krugman, a professor of economics at Princeton University.

The press, Paul Krugman, is now covering the Enron scandal, in my view, pretty much as a business scandal, less so with the political scandal involving possible favors from the Bush administration. Do you think journalists are letting off the White House a bit too easy?

PAUL KRUGMAN, "NEW YORK TIMES" COLUMNIST: I think they're letting off the political system a bit too easy. It's not clear to me -- you know, we haven't got smoking guns pointing straight at the White House. You know, I wouldn't be surprised if a couple of pistols show up.

But you know, what's amazing to me is how much the system Enron built -- all of the policies from electricity deregulation in California to, you know, to the Cheney energy plan has really been spared serious discussion. This is all sort of gotcha. And because we haven't found, you know, Dick Cheney with a partner in the Raptors, everyone says, "Oh, well, you know, this is just a business scandal."

KURTZ: Well, Rich Lowry, a lot of serious discussion about campaign finance reform. I wonder if you think that journalists have used the Enron story and the Enron bankruptcy and all the people who were hurt there to kind of push the cause of campaign finance reform, which now seems on the verge of passing Congress.

LOWRY: Yes, all journalists love that story of campaign finance reform, and it was because they're all sort of beholden to the Bob Woodward view of the world, which is follow the money and money explains. Well the world's much more complicated than that and politicians have a lot of different pressures on them rather than money including their own ideologies and temperaments. And you know I think there's -- I disagree with Paul, there's been a lot of attention on the Cheney energy plan, but I would disagree with the characterization that somehow that energy plan must have been bought or it was just a creation of Enron.

You know Bush and Cheney, the whole idea of that energy plan was to create a greater supply of energy. So of course you're going to talk to Enron. You're also going to other big energy companies. There's no scandal there.

KURTZ: But all the money has a nice ring, Mike Isikoff. And haven't you written about 50,000 stories in which big money contributions have appeared to influence either the White House or Congress?

ISIKOFF: Well certainly you can't ignore it. And I mean it's an essential part, but it doesn't explain everything. But it certainly can explain a lot.

And if you take a step back in the Enron story, leave aside the energy plan for the moment. But you look at all the various ways in which Enron did influence the political system through derivatives deregulation, legislation passed by Congress last year, and other acts like the accounting problems, why the big accounting firms who clearly were able to weigh in and stop Arthur Levitt's efforts to crack down on the conflicts of interest...

KURTZ: And is this undercovered or over-covered?

ISIKOFF: Well no, those things are clearly undercovered, and that's the area where big money does make a difference. In these highly technical areas that -- you know, when the public isn't looking, you know, big money and big lobbyists can go in and influence the process. There's no question about it.

LOWRY: Howie, I don't think these, in any sense, have been under covered. I mean they've been extensively covered, and the problem I have, you know, money does have an influence -- there's no doubt about -- doubt about it. It influences the debate in Washington, but the press has such a simplistic view of these things.

And the prime example of someone who's been smeared by the media is Phil Graham, who is betrayed as doing Enron's bidding to enrich himself and his wife and getting through this pro Enron -- this rule change at Enron wanted a year or two ago. And it turned out to be totally wrong. Newspapers played this on the front page, then they ran corrections a couple of days later, and corrections never play as big, because ...


LOWRY: ... he had nothing to do with this thing.

KURTZ: OK, Paul Krugman, another big business story, big bankruptcy is the telecommunications sign Global Crossing, which some conservative groups are saying is getting less attention because it gave more of its campaign lobby dollars to Democrats. Now, you mentioned in one column, Terry McAuliffe, the Democratic chairman, having made an initial $100,000 investment in Global Crossing, turning that into $18 million. But do you think that you should be doing more on Global Crossing?

KRUGMAN: I don't think so. And the reason is actually it's not as interesting -- well, I mean, you know, I'm no fan of Terry McAuliffe, but the Global Crossing is a much less interesting business story.

You know, go through the "Mackenzie Quarterly" (ph) for the past few years and you'll find story after story holding up Enron as an exemplar of the new economy company. You're not going to find any Global Crossing stories like that.

So I don't think the focus on Enron is because it's a gotcha against the Republicans. I mean, you know, some people would like to fight it. But I think the point is that Enron is a real revelation. This is something that -- you know, Global Crossing was not big on people's radar; Enron was. And the trouble was we read the image all wrong.

KURTZ: Michael Isikoff, in fairness to Terry McAuliffe, he sold his stock three years ago before there was any hint of trouble with the company. But William Safire of the "New York Times" and others are complaining that he won't release the details of just exactly when he bought the stock, which was before the company went public. A DNC spokesman, the Democratic Committee, told me that well this -- he was a private citizen, this is a question of his privacy.

You think the media ought to be making more about the chairman's transactions here?

ISIKOFF: I don't know. I mean, the question I would have would be not so much when he sold his stock. I presume the issue there would be did he have some inside information about that the company was going to go south. I doubt it.

Although you can say that about Gary Winnick, the CEO who did sell his stock right up to the end then go out. Or you can certainly raise the question.

But with McAuliffe is, did he help Winnick and others at Global Crossing with his political connections in Washington to advance what the company was trying to do. For instance on the DOD contract that it was awarded and in other efforts before the FCC. That would be the question I would have about McAuliffe.

KRUGMAN: Howie, can I just raise -- if we're going to be talking about timing then, you know, there's George Bush the elder, who sold his stock a lot closer to the collapse than McAuliffe did.

So if you want to make -- you know, if we're going to play this game -- Global Crossing is going to get everybody really smeared a little bit in the process.

LOWRY: Well, the point -- Enron's getting more attention for two reasons, and I think this is undeniable. One is that just that it went first. You know, it had the novelty and got some of the coverage before Global Crossing ...


LOWRY: Sure. Sure. But there -- Howie, it's also undeniable that political reporters are expecting, maybe even hoping that there is a real Bush political angle to this because then it blows up as a huge political scandal and someone has something to go to dine out on for months and months. I think that's in deniable and a scandal that involves Bill Cohen and Terry McAuliffe is not as sexy for those reasons.

KURTZ: I would say it's not only undeniable, but undeniable. And Enron was the biggest corporate bankruptcy. It was the seventh largest corporation.

When we come back, we'll ask Paul Krugman about his past relationship with Enron.


KURTZ: Welcome back to "RELIABLE SOURCES."

Paul Krugman, before you joined the "New York Times" you were paid $50,000 for being on an Enron advisory board. At the time...

KRUGMAN: That's not quite right, by the way.

KURTZ: OK. Well, I'll let you correct it in a second. At the time were writing for Sun Publications, such as "Fortune" and "Slate." And I want to play a clip from a past program of ours. This is columnist Andrew Sullivan talking about this subject on "RELIABLE SOURCES" in late January.


ANDREW SULLIVAN, COLUMNIST: The question is, if you've taken $50,000, how can your readers not suspect, some of them suspect, you might be unable to be completely independent about this issue?


KURTZ: Your thoughts?

KRUGMAN: Gosh. I mean, the thing was that at the time the only time I wrote about Enron for "Fortune" I disclosed the relationship -- not the sum, but the relationship. The sum turns out to have been $37,500, by the way. The first I wrote about Enron for the "New York Times" I disclosed the relationship.

Nothing that I've written about Enron looks like it's, you know, clearly influenced by -- what can you do? I mean, I had a life. In 1999 I was a professor and a consultant and a business speaker. I had a lot of things going on. I was being paid, you know, to give after- dinner speeches; I was being paid to go and spend the day talking with executives of banks about the global economic situation.

The Enron thing was not out of line in terms of the sums of money involved.

KURTZ: Right.

KRUGMAN: It was actually somewhat below my normal daily rate.

KURTZ: You absolutely did disclose it the first time you wrote about for the "New York Times" a year ago. But then when you started writing about it again in the fall, a year later, big story, huge story now, do you think in retrospect you might have disclosed it again just to clear it up?

KRUGMAN: I guess maybe I should have said it. I mean, certainly nothing I was writing was pro-Enron. It's worth pointing out, you know, that the first time I wrote about Enron a year ago was critically -- you know, had to do with the California energy crisis. And I disclosed the relationship then.

I don't know. I mean, you know, obviously I would have saved myself a little grief if I'd said it again. But I don't think that there was, you know, a question of journalistic ethics. I just can't see it.

KURTZ: Rich Lowry, Paul Krugman has also written that he thinks that a lot of conservative commentators and columnists have beaten up on him over this money that was taken in his pre-"New York Times" life because he's a liberal and it's politically motivated.

LOWRY: Well, I don't know. You know, Andrew Sullivan has kind of been leading the charge on this one, and I just don't agree with Andrew. I'm not outraged by this. In fact, maybe I'm a little jealous ...

KURTZ: You're not outraged, you're jealous, you want Enron money too?


LOWRY: I'm not outraged.


LOWRY: A little jealous, well, but yes, by any reasonable standard, you know, the not-so secret thing here is that this is basically money for nothing, and by all means Paul should rake in as much corporate money as he can. I think that's a good thing. It's a free country. KURTZ: Let me -- let me ...

LOWRY: Now what I -- what I object to, though, if I can just finish this up. What I object to is Paul sometimes and certainly his colleagues on "The New York Times" Editorial Board and editorial page often times suggest if anyone else takes corporate money, if Tom DeLay takes a little corporate money, then he is bought off by corporations and you can never trust him to deal honestly with legislation again. So the hypocrisy does bother me a little bit, because by the "Times" standards, only Paul apparently can take corrupt -- can take corporate money and still be an honest person.

KURTZ: OK. Let's let Paul in here.

KRUGMAN: There's a terrifically important thing to say, which is that there's a difference between who I was in 1999 and who I am now.

In 1999, I was, you know, doing a few columns on the side. They were not my occupation. I certainly could not and should not be doing that now, and in fact the "Times"' rules are remarkably strict. I took a pay cut to work at the "New York Times" because I can't do the kind of speaking and consulting I did before.

And I think if you look, I don't think it's fair to my employer to say that the paper goes after anybody who takes any corporate money. I think the question is, first, is it a lot? And secondly, is it clearly biasing the decision?


KURTZ: Mike Isikoff, let me have you jump in here. Whether it's Paul Krugman or Bill Kristol at the "Weekly Standard" or Larry Kudlow of the "National Review," does this kind of financial transaction make you uncomfortable?

ISIKOFF: Look, disclosure is always important. And I think the point Rich makes about hypocrisy is a legitimate one, because we do write -- because of campaign disclosure laws, we're able to write about how much Tom DeLay and other members of Congress get from various corporations.

But when it's large, you know, we make a point of it. And so I think that, you know, it's a legitimate thing to watch.

I should say very quickly, you know, obviously you write for the "Washington Post" and also write about CNN...

KURTZ: People can see that here.

ISIKOFF: Right. So, I mean, this is -- the more disclosure the better. The more it's up front for the public the better.

KURTZ: Paul Krugman?

(CROSSTALK) LOWRY: ... follow up on the hypocrisy point. I mean Paul and the column he wrote explaining this money and why he took it and why it's not a problem, I mean he basically suggested in that very column that Larry Kudlow was doing Enron's bidding when he ...


LOWRY: Yes you did.


KRUGMAN: No I didn't.


LOWRY: You clearly suggested that Paul, and you also misquoted him.


LOWRY: ... in one column, which is pretty good for one day's work.

KRUGMAN: No. Well, no I didn't. All right, I did misquote him, and I apologize for the misquote.

KURTZ: Let's give him a chance to respond.

KRUGMAN: What I was saying is that it's really pretty hard to accuse somebody of being subject to undue influence when it's fact everything he's written in the past year is contrary to the interests of that company, which is what was, in fact, true.

LOWRY: Well, I just think you should -- you should -- for Larry Kudlow, you could have -- you should assume he is as honest as you are unless you have reason to believe otherwise ...

KRUGMAN: Oh, I ...

LOWRY: ... and you don't.

KRUGMAN: Oh, I don't think that's fair. But in any case, the point is that, you know, there is something that's to be said -- I think Larry Kudlow is perfectly within his rights to go and collect -- you know, to be a consultant for corporations, because he's not a full-time journalist. I think it becomes more of a question when somebody really is.

KURTZ: OK, we're going to have to leave it there.

Paul Krugman, we hope you'll come back and talk about some other subjects with us.

KRUGMAN: Sure. Hope so too.

KURTZ: Mike Isikoff, Rich Lowry. And when we come back: Will "Nightline" lose its coveted spot to one of the big-time funnymen jumping ship from another network? And Bernard Kalb's "Back Page" on how the media killed disinformation at the Pentagon.


KURTZ: David Letterman is a funny guy, but no one is laughing at "Nightline" over ABC's effort to steal the "Late Night" comic from CBS. Sources tell me that ABC is in serious negotiations with Letterman to bring his stint to the 11:30 time slot, the same slot occupied by Ted Koppel for 21 years.

"Nightline" does well in the ratings finishing behind NBC's Jay Leno, but competitive with and sometimes beating Letterman's "Late Show." Some ABC executives are talking about moving Koppel to prime- time, perhaps with a new show. But sources say Koppel is furious at being blind sighted. And so are many at ABC News who feel the bosses at Disney just don't get the importance of the news division.

If Letterman indeed jumps to ABC, the battle is just beginning. Leno must be getting a chuckle out of all of this. But laughs aside, if Koppel is toppled from the "Nightline" throne, it would send an unmistakable message that serious news takes a back seat at ABC and yucking it up, if you can make more money that way, is even in this post 9/11 era the wave of the future.

Well, time now for the "Back Page." Here's Bernard Kalb.


BERNARD KALB, CNN CORRESPONDENT (on camera): The Pentagon, of course, would like to see the whole fiasco go away, get lost in history. But then again, to paraphrase that old pop tune, the melody may linger on and on.


KALB (voice-over): You might call this a military burial service for the very idea of the Pentagon spouting disinformation, with Secretary Rumsfeld himself delivering the obituary for the story that was leaked to "The New York Times" and front page last week.

And then, by the end of the week had backfired, backfired into a highly visible embarrassment. Now, the idea was officially kaput, finito, dead, dead, dead, killed, even before it could engage in combat.

The original motivation at the Pentagon was to find a way to counterattack the anti-American propaganda that had erupted in the wake of the Afghan war, and instead try to influence public opinion abroad. And how to do that? Well, according to the big leak, how about, among other little operations, how about maybe planting false stories in the overseas press. But the leak idea died in its infancy, and Rumsfeld was forced to go on the offensive, telling the media that the Pentagon was not in the lying business, and then he offered a coup de gras to the whole project.

RUMSFELD: It's pretty clear to me that it could not function effectively, so it's being closed down, as it ends its very short prominent life.

KALB: Now, the Pentagon would like the episode to vanish, as though it had never happened. But it's not that easy. Once the idea, the notion that disinformation has even been considered by some at the Pentagon, the truth itself becomes a hard sell. "It makes us all look bad," said one public affairs official, quoted in the "Times." "Every day now reporters ask me if I have lied to them."

(on camera): In other words, even though disinformation is officially dead, the melody lingers on. The echo still there.


KURTZ: Bernard Kalb.

Well, that's it for this edition of RELIABLE SOURCES. I'm Howard Kurtz. You can catch us again tomorrow morning at 9:30 Eastern. "CAPITAL GANG" is up next.





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