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CNN LIVE EVENT/SPECIAL

Arianna Huffington Speaks to Reporters

Aired August 14, 2003 - 14:05   ET

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

KYRA PHILLIPS, CNN ANCHOR: I am told Arianna Huffington is stepping up to the mics. Let's listen in.
(JOINED IN PROGRESS)

ARIANNA HUFFINGTON (I), CALIF. GOV. CANDIDATE: ... of Enron held a secret meeting with prominent Republicans, among them Mike Milken and Arnold Schwarzenegger.

So, we have a few questions we would like the media to ask Arnold Schwarzenegger about this meeting, the reasons for the meeting, why it happened, what was discussed in the meeting and what was the purpose behind it?

Given the billions of dollars that Lay, Enron and the other crooked have cost the state of California, it is very important to put in context the Bush administration's policies and the connection with the energy crisis.

So far, in the little he has said in his campaign, Arnold Schwarzenegger has positioned himself as the people's governor who is not going to be, basically, driven by political interests on either side of the isle. Then what was he doing cozying up with Ken Lay, Mr. Special Interest himself?

What we want to say today, as the president is arriving in our state, he's in San Diego today, is that Arnold Schwarzenegger is a Bush Republican through and through. And don't be fooled by the naming of Warren Buffet as one of his advisers.

In fact another question you need to ask Schwarzenegger is, does he agree with Warren Buffet, who said that the tax cuts of the Bush administration scream of injustice. That's a direct Warren Buffet quote. And you need to ask the candidate whether he agrees with his adviser.

Also, as you know, Schwarzenegger has campaigned for President Bush. He's held a meeting, a private meeting with Karl Rove in April. and Karl Rove was quoted saying that having Arnold Schwarzenegger as a governor would be nice. It would be really nice, he said. It would be really, really nice.

Clearly, Schwarzenegger is a very good friend of the Bush administration. But this administration is no friend to the people of California. Indeed, at times it seems as if the Bush administration has declared war on the people of California. Let's start with the energy crisis. The White House repeatedly rejected the state's plea for help during the crisis, preferring to side, instead, with the likes of Enron and Ken Lay. Dick Cheney even went so far as to blame California for causing its own problems.

And it was the president who appointed energy company-friendly members to the Federal Energy Regulatory Commission who turned a blind eye when all the crisis was unfolding. They also refused to impose wholesale energy price caps and they forced California to honor $12 billion in long-term energy contracts even after it was proven that the corporate energy crooks had gained assistance.

And this is not all. The Bush administration has also gone to court to try and overturn California's federally authorized right to set our own clean air standards. So much for state rights. And the White House has also lent its support to all companies looking to drill for oil off the coast of California without having to undergo state environmental review. A very different position than the White House has taken when it comes to Florida where Jeb Bush is governor.

Now, I realize that the president lost California by 1.2 million votes in 2000. But the administration has taken the idea of political payback a little too far. So here are the questions that I want you to ask Arnold Schwarzenegger whenever he decides to start answering questions.

No. 1, what was discussed at the May 11, 2001, meeting with Ken Lay? And why did Schwarzenegger attend such a meeting since at the moment California was enduring a third round of unnecessary rolling blackouts?

No. 2., why, if he wants to be the people's governor, has he appointed Pete Wilson, the grand old man of deregulation, directly linked to the current budget crisis, to chair his committee?

Three, why did he pick, as a senior adviser, Marty Wilson who during the energy crisis was a spokesman and P.R. consultant for Reliant Energy, one of the companies federal regulators found had manipulated the California energy market. If you want to clean house in Sacramento, do you put Martin Wilson, a Reliant spokesman, on your team?

Incidentally, Reliant was a major contributor to the Bush election process, and even offered private jets to fly the Bush team to Florida when they were busy stealing the election.

So here are some of the questions I urge you to ask Arnold Schwarzenegger. And now I'm ready to take your questions. Thank you.

QUESTION: Ms. Huffington, Why is it that you think that Arnold Schwarzenegger met with Ken Lay here? What was in it for him?

HUFFINGTON: You know, it's not for me to answer why he met with Ken Lay. I'm not going to speculate. All I'm saying is it's time that the media started doing their job and asking the questions of the candidate instead of asking questions of his spokesman. It's not Pete Wilson who is running for governor. It is Arnold Schwarzenegger. And yet, every television station I go to, I'm either preceded or followed by Pete Wilson. I'm getting a little confused.

QUESTION: (OFF-MIKE) follow up for a second? Why was it wrong for him to have this meeting, in your opinion?

HUFFINGTON: In my opinion, when the state is going through rolling blackouts and a senior Republican is meeting here with Ken Lay, the head of Enron, which was a company, to a large extent, responsible for the energy crisis in California, I think there's some answering to be done here.

QUESTION: Arianna, when you look at (OFF-MIKE) do you see school programs and...

PHILLIPS: OK. Arianna Huffington, let the mud slinging begin. Here we go. We're going to bring our Bob Franken back in. He's over course coving the recall election in Los Angeles.

All right, these are the accusations we were waiting for. Arianna Huffington making some charges against Arnold Schwarzenegger, saying he's come out calling himself the people's governor. Yet she first point she makes, Bob, this connection to Ken lay, of course, the former chair and CEO of collapsed Enron, the company that went under due to deceptive behavior. Is this just the beginning of a number of candidates coming forward and digging up things on each other?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Oh, sure.

PHILLIPS: Add the balance, Bob.

(LAUGHTER)

FRANKEN: This is a political campaign, after all. And of course she made the charge that it was -- Arnold Schwarzenegger is a Bush Republican through and through. And she's hoping that that resonates also in California, which is not Bush country. It is a state that has voted Democratic. It was a state that was considered probably almost certain to go Democratic before this latest turmoil occurred. Now it's in play again, so to speak.

Arianna Huffington saying that one of the best ways to discredit Arnold Schwarzenegger is to make that charge and to imply, at least, that he is a target of the special interest. Of course, she's going to have to answer her own questions.

As we pointed out a little bit earlier, this is somebody who claimed business losses and paid, even with her millions of dollars, paid no federal income tax for the last couple years. And for the last couple years paid only $771 to the state of California. Now, that's one, that no matter what the explanation, could resonate against her.

But welcome to a political campaign. They don't say that politics is hardball for nothing.

PHILLIPS: Bob Franken, following that for us in California. Thank you. Hardball. Key word.

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