CNN LIVE EVENT/SPECIAL
Ari Fleischer Holds Daily Press Briefing
Aired June 28, 2002 - 12:53 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Dominating White House discussions, you heard the president speaking just moments ago about the responsibility of corporate leaders. Right now, let's listen in to what else is being said from the White House, this time from our Kelly Wallace, addressing Ari Fleischer.
Let's listen in.
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ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: Well, one of the things that Congress can do is pass the president's request. There's money in the supplemental right now for $20 million for the Securities and Exchange Commission to have another 100 enforcers of the law. And that's something the president has worked with Congress on. It's in the supplemental that's pending in the Congress, and that's action that can be taken so the Securities and Exchange Commission has even more resources to go after these bad apples. And the president supports that funding; he hopes Congress will be able to pass it.
And let me walk you through several of the president's other proposals on corporate responsibility.
FLEISCHER: Go ahead.
QUESTION: When did the president first become aware of the tremendous abuses?
FLEISCHER: Well, the president made these proposals back in March. And this is something, as you know from being on the trail with the president, you hear him talk about it very often.
Let me walk you through some of the president's specific proposals dealing with how to clean up corporate America and make certain that their actions are above board and that shareholders and investors and the public have confidence in the information they're receiving.
QUESTION: Ari, this is a 10-point plan?
FLEISCHER: That's right. These are some proposals the president made earlier, way before WorldCom, because the president recognized the need for better enforcement, to take action to make certain that corporate books are honest, open and accurate.
And here are the president's proposals.
The president believes that investors should have quarterly access to information needed to judge financial performance, conditions and risks; that CEOs need to personally vouch for the veracity, timeliness and fairness of the companies' public disclosures, including their financial statements.
And on that point, I want to note that the Securities and Exchange Commission just yesterday ordered CEOs and CFOs of the thousand largest public companies to certify that the financial information they submitted last year was fair and accurate. So they're going to make them go back and show that it's accurate, which is a helpful step to promote consumer and investor confidence.
The president also believes, as I indicated earlier, that CEOs and officers should not be allowed to profit from erroneous financial statements; that if they received any bonuses or any stock options, incentive-based forms of compensation that were based on phony, pumped up, fraudulent numbers, they need to give the money back.
And the SEC has been taking action on that. That's called disgorging the profits.
And finally, as I indicated earlier, CEOs and officers who clearly abuse their power should lose their right to serve in any corporate leadership position.
QUESTION: Does the president believe that if people are found to be, quote, "cooking the books" that they should go to jail?
FLEISCHER: Absolutely. All determined by the Department of Justice and in accordance with the laws. And what you're seeing in the case of Enron, in the case of Arthur Andersen is vigorous enforcement of the laws.
QUESTION: The president said today, the Justice Department will hold people accountable. Was he confirming that the Justice Department is looking into the WorldCom case?
And separately, can you confirm what's been in the papers today, that you're looking at even more initiatives for July?
FLEISCHER: I will always allow the law enforcement agencies to describe their own law enforcement actions. I don't think the White House should get in the specifics of the law enforcement action. That's for the individual agency to detail.
The president will be giving a speech on July 12 in New York City about corporate governance. Again, the president spoke out about it today at his luncheon. And as those of you who travel with the president, you've heard him talk about it on a repeated basis, he will continue to say it, because he thinks it's important to hold corporate American responsible. Having said that, what I want to emphasize is the president has tremendous faith in our free enterprise system. The president believes that America's free enterprise system is a system that has done very well for the American people. It's lead to much comfort. It's lead to strong way of life for the American people. And that if there are any bad apples, those bad apples need to be targeted, the light shone, and they need to get after.
QUESTION: You said it was July 12. Are you sure it's not July 9?
FLEISCHER: Is it July 9?
FLEISCHER: I'm sorry, July 9. Thank you for the correction.
QUESTION: When the president made these proposals (OFF-MIKE) Enron was an isolated case; now we know that's not the case. So hasn't he changed his opinion at all about what needs to be done, including, perhaps, more sweeping changes at the SEC or anything...
FLEISCHER: Actually when the president made these proposals, he made it because he thought these were the right proposals for all in corporate America to protect investors and shareholders and the public, so it was aimed more broadly.
QUESTION: What's the president's position on the Sarbanes legislation, which seems to be gaining ground in the Senate?
FLEISCHER: The president shares the goal of the Sarbanes bill. He believes that we need more disclosure, we need better information, increased corporate responsibility and a crack down on corporate wrongdoing. He's pleased that Senator Sarbanes' bill calls for a stepped up enforcement by the SEC.
And we do have some concerns that the Sarbanes' bill doesn't give the president -- that doesn't give the SEC administrative authority to ban officer and directors from serving on those positions if they're involved in wrongdoing.
The president wants the SEC to be able to do that administratively, so that way it can be done quickly and fast, and done where the case is deserving.
On the accounting board, we think that Chairman Pitt has laid out a good approach that'd be speedier and more effective in creating greater accountability.
We'll continue to work with the Congress on this. The measure that passed the House that the president proposed passed by an overwhelming bipartisan vote of 334 to 90, so there clearly is bipartisan support for the president's approach.
QUESTION: There are those who have said for some years now that if you rob a bank, and you're caught you go to jail for a long time. If you're a corporate officer who's guilty of fraud or juggling the books in some way -- or misrepresenting the accounting, you go to jail for a short period of time, you get a fine, and then you go back, and you're still a zillionaire. Does the president feel that way at all? Does he feel that the sentencing is out of kilter?
FLEISCHER: Well, I think there are some severe sentences that are available under the law. And this is why the Department of Justice makes individual decisions based on the facts before them on every individual case. And what the president has said is the law needs to be fully enforced and enforced vigorously. And that's how his approach is.
QUESTION: Yes, but he feel the need to be tougher so much as well as more of these people going to...
FLEISCHER: The president believes that the laws need to be enforced vigorously, and that involves putting people in jail.
QUESTION: Ari, besides giving a speech tomorrow and giving a speech in New York on July 9, the president has the bully pulpit and he has convened many conferences for (UNINTELLIGIBLE) the White House about different issues. There is a crisis of confidence out that. Will he convene a White House conference on this issue?
FLEISCHER: The president will continue to talk to the American people and to corporate leaders.
I can tell you there was a meeting the president had earlier this month with corporate leaders, to discuss getting them involved in Freedom Corps, having people who are involved in corporate America give their employees time to sign up for charitable work. And during that meeting -- it was an unrelated topic -- during that meeting the president called on these leading business leaders to exercise corporate responsibility, to make certain that their books were open and transparent and accurate, to make certain that their compensation packages were reasonable for the times.
So this is a message that the president brings up in public, he brings it up in private, and he'll continue to bring it up.
QUESTION: How about focusing on it in a White House conference?
FLEISCHER: I think you'll hear a lot from the president directly when he goes to Wall Street and talks about it in less than two weeks time.
QUESTION: One complication, when you said the accounting board that the chairman laid out and the president supports, you meant Chairman Pitt, not Chairman Sarbanes, correct?
FLEISCHER: That is correct, Chairman Pitt.
QUESTION: And what is the state of play on the debt limit?
FLEISCHER: We have -- the White House has not yet received the debt limit bill. It remains possible that it will be received today, prior to the president's departure. We'll keep you posted. As soon as the president receives it, he intends to sign it.
QUESTION: Ari, let's see, what's the scoop behind General Downing's departure, and what extent does this signal policy differences over the next phase for war on terrorism?
FLEISCHER: Yes, there's nothing to that in terms of signaling the next phase of the war on terrorism. General Downing accomplished what he set out to do when he was brought back to government service, and he has decided that he wants to return to private life, and the president has been very gratified by the good job that he did here. And he, once again, has answered the call to service that the nation asked him to do.
QUESTION: He was identified with a particular approach to the next phase involving Iraq. Are you saying that had nothing to do at all...
FLEISCHER: That's correct. His departure was not issue-based. His departure was based on the fact that he was able to accomplish what he set out to do with the creation of the office which he held, and he has been basically commuting from his home in Colorado. And so, I think that he's made, again, career sacrifices for America. He has made an additional sacrifice as a retired four-star general to come back in and do what he has done, to help create the office and get it started.
QUESTION: About dozen of Pakistani soldiers died fighting with Al Qaidas at the border. And is the president ready to send the U.S. forces inside Pakistan to find all the Al Qaidas and including maybe possibly Osama Bin Laden inside Pakistan, because that was request from Pakistan earlier to help on the border their soldiers?
Also, does the president have any comments on the Newsweek interview that General Musharraf gave the other day that he said that he never told Secretary Rumsfeld and Deputy Secretary Armitage that the infiltration into India's border will be permanent?
FLEISCHER: One, the president believes that President Musharraf has been doing an excellent job in fighting the war on terrorism. The Afghani-Pakistan border is a very difficult border to patrol. And he believes that Pakistan has committed itself and is doing a strong of taking action against Al Qaida within Pakistan's borders, as well as on the border areas. So the president is very pleased with the actions of President Musharraf and the Pakistani leadership.
Vis-a-vis India-Pakistan, the president remains pleased with the amount of diminution in the tensions that were present in the region just weeks ago. It remains an issue that the president is going to continue to monitor. It remains an issue that the administration at all levels continues to work very hard, because it is volatile, it's important, but it certainly is far less tense now than it was just recently.
QUESTION: If the president has any comments or worried about Russian and Chinese military-to-military deals, including submarines and other military (OFF-MIKE) Russia is sending to China? FLEISCHER: Do you have a specific military -- you need to give me a specific military.
QUESTION: (OFF-MIKE) Russia is sending about six or more submarines.
FLEISCHER: I don't have anything specific on that.
QUESTION: In general?
FLEISCHER: I don't have anything specific.
FLEISCHER: I'd have to take a look at the exact circumstances.
QUESTION: Aside from the speech that the president is going to be giving on corporate responsibility, his overall message, and aside from the 10-point plan which he already has proposed, does the president feel there are additional measures that need to be taken? Are you all considering anything else that's (OFF-MIKE) message?
FLEISCHER: I would invite you, again, to the president's speech, and I think you'll hear from the president directly about what he thinks needs to be done, including whether anything additional.
But one important starting place for additional activity to be done that goes beyond what the president has publicly called for is, Congress to pass the supplemental which provides for 100 more enforcement agents for the Securities and Exchange Commission. It's one more good reason for Congress to pass that bill and get it to the president. It's called an emergency bill for a reason. And the fiscal year is almost over. Congress needs to pass that bill.
QUESTION: Can you just respond to the criticism that the White House, kind of, just let these 10 points lie low quietly, until it was reminded again by WorldCom that this is a big problem that we need to pay attention to?
FLEISCHER: If it lied low quietly, then why did the House pass it by such a huge overwhelming vote...
WHITFIELD: You've been listening to Ari Fleischer, at the White House, talking about the India-Pakastani conflict, and of course another item that is dominating today's interest at the White House, the responsibility of corporate leaders.
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