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CNN RELIABLE SOURCES

Conservative Media Mogul Backs Hillary; "USA Today" Story Exposes NSA Phone Tracking System

Aired May 14, 2006 - 10:00   ET

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


(BEGIN VIDEOTAPE)
HOWARD KURTZ, HOST: Hillary's media man. Why is Rupert Murdoch embracing the former first lady? And why are liberal bloggers trying to derail her from regaining the White House?

Eavesdropping furor. Did "USA Today" go too far in disclosing that federal authorities are tracking millions of phone calls, maybe even yours, in the war on terror?

Plus, are the media scaring people to death? ABC's John Stossel says journalists are scare mongers. Is he stretching the facts?

And playing hardball. The two reporters who got inside the Barry Bonds steroid probe face subpoenas and possibly jail. Editor Phil Bronstein on the latest threat against the press.

(END VIDEOTAPE)

KURTZ: Welcome to RELIABLE SOURCES, where today we turn our critical lens on the strange alliance between a conservative media mogul and a potential Democratic president. I'm Howard Kurtz.

There was a time when Rupert Murdoch's "New York Post", not to mention some anchors on his FOX News cable outlet was constantly attacking Hillary Clinton, first when her husband ran for president and again when she ran for the Senate six years ago. But soon a truce of sorts was worked out.

And then Senator Clinton showed up at a FOX party in Washington attended by Murdoch. And this week came the eye-opening news that Murdoch, a major Republican Party donor, will host a Senate fundraiser; that's right, actually help raise money for the New York Democrat. Murdoch himself talked about it on, no surprise, his own network.

(BEGIN VIDEO CLIP)

RUPERT MURDOCH, MEDIA MOGUL: She's going to get re-elected. There's no opposition or Republican Party New York state any longer, it would seem, and I think, you know, she's -- she's doing -- she's doing very well for us, and I'm talking particularly nor New York state.

NEIL CAVUTO, HOST, FOX News's "YOUR WORLD WITH NEIL CAVUTO: How about as president? Would she make a good president?

MURDOCH: That's a different question. I didn't even know that she's going to run.

(END VIDEO CLIP)

KURTZ: But while mending fences with the billionaire on the right, Clinton is being loudly criticized by bloggers on the left, including Markos Moulitsas of Daily Kos, who say she's not liberal enough and, besides, she can't win in 2008.

So what accounts for all these strange bedfellows? Joining us now here in Washington, Michelle Cottle, senior editor of "The New Republic"; in Los Angeles, Arianna Huffington, editor of HuffingtonPost.com, which is celebrating its one-year anniversary this week.

And in New York, John Podhoretz, columnist for the "New York Post", a FOX News contributor and author of the new book, "Can She Be Stopped? Hillary Clinton will be the Next President of the United States Unless."

Arianna Huffington, you used to be a conservative and ally of Newt Gingrich. Now you're quite liberal. Could Rupert Murdoch be undergoing some kind of transformation by backing Hillary Clinton?

ARIANNA HUFFINGTON, EDITOR, HUFFINGTONPOST.COM: No, I think it's a question about power and access, and that's what this alliance is about. I mean, after all, Rupert Murdoch is the Tony Soprano of the right-wing media machine, and the idea that Hillary Clinton, who famously coined the phrase the vast right wing conspiracy, is now aligning herself with him is really very emblematic of who she is as a candidate, a triangulating, calculating, stand for nothing, try to please everybody candidate who cannot win.

Ultimately, that is really the main problem that we in the blogosphere have for her. She can not win. The public has moved on.

KURTZ: We'll come back to that. I didn't know that triangulating was now a dirty word.

John Podhoretz, I remember when "The New York Post" was constantly attacking Hillary Clinton with headlines, columns, cartoons. And on Friday, if we put up the front page, the banner headline was "Grow Up! Our Kids are Lazy, says Hillary." Kind of a routine speech getting very nice treatment. So thanks to Murdoch, is your paper now giving her kinder and gentler treatment?

JOHN PODHORETZ: Well, I mean, it employs me, and I've just written a book that arguing that her ascension to the presidency would be a disaster for the United States and that she is a disastrous politician. So I'm not sure you can make the claim that, you know, Rupert has gone soft on Hillary, no.

KURTZ: But you're an opinion guy. What about the news side of the paper? PODHORETZ: Well, I mean, that speech is actually kind of an interesting political moment, as Arianna mentioned before. I mean, she is triangulating, sort of sounding like the, you know, Dana Carvey's grumpy old man. You know, "In my day, we worked for a living, and these kids today don't work for a living." It is a sort of funny moment, a speech before the U.S. Chamber of Commerce in which she sort of sounds like, I don't know, Ross Perot, you know, taking Maalox or something.

KURTZ: That's an interesting metaphor there.

Michelle Cottle, given Murdoch's hands-on approach to journalism, could his embrace of Hillary Clinton soften the coverage of her, not just in the "New York Post", but even on FOX News?

MICHELLE COTTLE, "THE NEW REPUBLIC": You know, I don't think that FOX, which you know, traffics in very strong opinions is necessarily going to ease up on the great boogie men of the right.

"The New York Post" has been working with the people in Hillaryland. It's been an ongoing process. Hillary's people have been very shrewd about kind of softening up "The Post" reporters and giving better access and things like that all along. But I don't think you're going to necessarily see her go away as, like, this great rallying cry for the FOX audience.

KURTZ: All right. Arianna, day after day you and your fellow liberal bloggers are openly dissing Hillary Clinton. Just this morning, you write on HuffingtonPost.com that she's a phony, and you criticize her relentless unabashed pandering. I'm wondering whether your real problem with her is that she's not liberal enough for you.

HUFFINGTON: No, you know what, it's not really about left and right and liberal and conservative. It's about inauthenticity. She's so inauthentic. And the zeitgeist has moved on. You know, what worked for Bill Clinton in '92 and '96 is not going to work for Hillary in 2008.

And the main thing that we're talking about is what the American people are looking for. They're looking for somebody who stands for something. And at this very moment, when so much is imploding, Hillary Clinton is there helping pass the bills on flag burning and having fundraisers with Rupert Murdoch. What does she stand for? It's not just the blogosphere, Howie.

KURTZ: You say in the very column that one of our problems is -- one of your problems with her is that she doesn't oppose the war in Iraq. So if she did oppose the war in Iraq, then you'd say she was authentic?

HUFFINGTON: No, it's over. Opposing the war in Iraq right now will not make any difference. The fact that she stood by and supported the war and went on about how charming George Bush is last week shows that she's not really connected with the deep, deep discontent in the American public, which goes way beyond liberals. Many people in the red states, millions of them, are discontented and angry.

KURTZ: OK, well, John, go ahead.

PODHORETZ: Look, interesting position that I'm now defending Hillary Clinton, a left-wing politician, who actually governed in ways that Arianna Huffington would like and she's attacking her.

But she has an 80 percent approval rating among Democrats. She is -- she is 25 to 30 points higher than any comparable Democrat. In polls of Democratic primary voters in 2008, the liberal blogosphere is out of touch with the Democratic Party and probably with the country at large.

And the notion that, because they scream very loudly and speak intemperately, they represent a body of opinion that is actually going to derail her candidacy is, I think, short-sighted and a little delusional.

HUFFINGTON: Well, John, you're going to be surprised, because it's not at all delusional. The truth of the matter is that Hillary Clinton is not in touch with the Democratic base and they are the people who vote in Democratic primaries. And she has basically been abandoned, not just by the bloggers, but by people like Molly Ivins and "The Washington Post" today and by major Democratic contributors who are shopping around. And watch out for Al Gore.

KURTZ: Listen, that may be true or that may not be true, but she is going to have more money than anybody who has ever had to run for office by the middle of 2007. She is by far the frontrunner. There hasn't been a leading figure like this in a Democratic primary two years out in I don't know how long.

KURTZ: All right, let me -- John...

HUFFINGTON: Do you want to bet, John?

PODHORETZ: I'll bet.

KURTZ: Hold on. I want to get Michelle Cottle in. You two can make the wager off camera.

So what accounts for this. John Podhoretz writes a book saying Hillary Clinton can't be stopped unless Republicans follow 10 ten- point plan, and liberal bloggers like Arianna are saying that she can't win. How do you explain these polarizing views here?

COTTLE: Well, I think there's a difference between she can't be stopped and the primaries, which I think is -- she is the 800-pound gorilla in the room. You have to get past her in the primaries.

And I appreciate that the liberal bloggers don't like her, but, you know, we're talking about the Clintons here. She still excites a lot of the base a lot of places, and, you know, she does have the huge fundraising machine.

Now when it comes time for the general elections, though, I think you have a real problem for very much the same reason. Clinton name still excites the Republican base like, you know, even more than excites the Democratic base.

KURTZ: Do liberal bloggers, Michelle, tend to fall in love with -- or liberal columnists tend to fall in love with candidates like, for example, Russ Feingold, who excite their hearts but who can't win?

COTTLE: Oh, sure, everybody does. This is one of the -- one of the issues you have to deal with in both parties. I mean, the Republican base, you know, is controlled by a certain element that tends to be a lot more conservative than mainstream Republican voters. The exact same thing is true of the Democratic base.

KURTZ: Arianna Huffington, why is there this gap between the mainstream media's treatment of Senator Clinton and that in the liberal blogosphere? It seems to be -- it's almost like we're talking about two different people.

HUFFINGTON: Well, you know what, Howie? There's conventional wisdom that there's simply wrong around Hillary. One of them is that she did well in upstate New York; therefore, she's going to do well in red states. The truth is that both Al Gore and John Kerry did better in upstate New York than Hillary Clinton did.

The idea that she's going to appeal to red states just because she's had endless photo opportunities with Bill Frist and Tom DeLay and Newt Gingrich on minor policy issues while abandoning the big issues that the Democratic base cares about, like the war in Iraq, like the NSA domestic spying is simply laughable.

Trust me. I will wager right here she will not be the Democratic nominee and not just because liberal bloggers don't like her, but because she will never, ever appeal at this moment in the cultural zeitgeist for this need for authenticity and for really standing for something.

KURTZ: All right. We'll make a point of saving this tape.

John Podhoretz, let me ask you a publishing question. There have been 40 books written about Hillary Clinton already, including the truth about Hillary, Madam Hillary, the American Evita. Now yours, and of course her own best seller. Can conservatives that are writing these books just not get enough of slapping around the former first lady?

PODHORETZ: Well, you know, I think we've moved beyond slapping around the former first lady. One of the points that I make in my books is that the conditions and things that she did made her such a lightning rod are fading into the past. We're talking about 10 years ago. You know, 1990 it will be 10 years ago in 2008.

And under those conditions, I think the American people and, peculiarly enough, even not the conservative hardest (ph) base, but a lot of conservatives are not going to have the same fire in the belly against her that they might have had before, which is why I've written my book, actually, to fire them up again. KURTZ: Right.

PODHORETZ: But I think -- I think the phenomenon is there, that you know, that American politics, 10 years, 15 years is not a lifetime. It's like a millennium.

KURTZ: Well, it seems to me that if the media can dredge up John Kerry's Vietnam history 30 years earlier but can certainly...

PODHORETZ: But people didn't know about that.

KURTZ: I see.

PODHORETZ: And the fact is that everybody in this country who, you know, is sentient has a opinion about Hillary Clinton had it formed ten years ago, and so she doesn't have to deal with a lot of new information.

KURTZ: Right. Let me get a break here.

Coming up next, "USA Today's" front-page story on the Bush administration tracking millions of phone calls. Did that story damage national security? And was it really new news?

And later "20/20's" John Stossel has plenty to say about what he calls media myths. Everything we think we know is wrong, he says. We'll see about that.

(COMMERCIAL BREAK)

KURTZ: Welcome back to RELIABLE SOURCES.

"USA Today" touched off a political furor this week by reporting that the National Security Agency is tracking millions of Americans' phone calls, with the cooperation of three telecommunications giants, in an effort to spot possible terrorist activity, and the president wasted no time in going before the cameras to criticize that story.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As a general matter, every time sensitive intelligence is leaked, it hurts our ability to defeat this enemy.

(END VIDEO CLIP)

KURTZ: Some pundits denounced the massive surveillance efforts, while others defended the administration.

(BEGIN VIDEO CLIP)

JACK CAFFERTY, CNN ANCHOR: Does it concern you that your phone company may be voluntarily providing your phone records to the government without your knowledge or your permission? If it doesn't, it sure as hell ought to. JOE SCARBOROUGH, HOST, MSNBC'S "SCARBOROUGH COUNTRY": It is dangerous. It breaks FCC laws, and it endangers all Americans' right to privacy.

BILL O'REILLY, HOST, FOX NEWS'S "THE O'REILLY FACTOR": if the government was listening to my calls or secretly taping them, then I'd have a big problem. But simply trying to ascertain where the calls are going is no big deal to me.

(END VIDEO CLIP)

KURTZ: And "TIME" and "Newsweek" cover stories out this morning. "TIME" magazine: "Does this man, General Michael Hayden, formerly NSA, have your number?" "Newsweek": "Spying on Your Calls, Is It Legal? What Else Don't We Know?"

Michelle, how new is this "USA Today" story? When "The New York Times" first broke the domestic surveillance situation back in December, it reported that there was a massive monitoring by the NSA.

COTTLE: Well, but at the time the administration was talking about, and it stressed that at the time that it was only doing international issues. I think if they hadn't have played that up to such a big degree, nobody would have jumped on it.

Again it's perceived that somebody has been dishonest with the American public. You know, whether or not we should have known this at the time, and since it was stressed that it was just the al Qaeda people and just international calls and stuff, the administration caused some trouble for itself.

KURTZ: John?

PODHORETZ: I think that's not fair. I mean, honestly, we were -- when the story about the NSA monitoring first broke by "The New York Times" last year, we were listening into phone calls, the text of phone calls, from abroad.

This story, which emerged in "The New York Times" around the same time as that story, simply indicates that calls, the numbers, and the fact of the calls are being registered by the NSA in the United States, not what is being said in the calls.

COTTLE: But absolutely the administration...

PODHORETZ: The two are not the same.

COTTLE: The administration made it seem as though -- I mean, they were not trying to make that fine distinction that you're making. They wanted everybody to be comforted that they were targeting international calls and potential terrorists.

PODHORETZ: Well, they are targeting calls -- and terrorists.

COTTLE: So if they are not going to make -- if they are not going to make that fine distinction, I'm not sure why anybody else should be expected to when it turns out that they are collecting all this information.

PODHORETZ: Oh, I see. So then the White House should voluntarily, itself, when it does not choose to...

COTTLE: I'm saying, when it's been shown repeatedly to be happy -- to mislead the American public.

PODHORETZ: That is not misleading the American public.

COTTLE: You cannot -- it cannot be surprised when it happens again and somebody else gets up upset.

PODHORETZ: Michelle, Michelle, you can continue talking but the simple fact of the matter is that it does not mislead the American public if you -- if you acknowledge essentially...

COTTLE: You're talking about...

PODHORETZ: Can I finish my sentence?

COTTLE: Absolutely.

KURTZ: Let John finish.

PODHORETZ: OK. If you acknowledge implicitly that you are, in fact, listening in to the substance of telephone conversations but do not acknowledge that you are recording the fact of phone conversations, the two are entirely different. They are not the same thing.

COTTLE: When you are...

PODHORETZ: It beggars reason to say that they're the same thing.

COTTLE: Well, when you are talking about a surveillance program that people are concerned is indeed looking at a broader swath than the administration made it out to be...

PODHORETZ: Yes. So what you're saying is that despite the fact that -- despite the fact that...

(CROSSTALK)

KURTZ: John, I'm going to jump in.

PODHORETZ: ... despite the fact that you're they're not the same thing that you're saying.

KURTZ: John, John, I'm going to jump in here. Arianna Huffington, I want to bring us back to the coverage on the "USA Today" story. John seems to be saying the story is not that big a deal, because we're not talking about listening into the actual content of these phone conversations. So why is the president of the United States getting up and talking about how terrible it is that this information was leaked? HUFFINGTON: Well, first of all, I'm amazed that John is saying this is not a big deal, because I know John and I know that he believes in the Bill of Rights and he believes in check and balances and he believes in an executive branch that is accountable.

And this story is a huge deal, because it shows that this executive branch is completely unaccountable. It is basically, as Michelle has been saying, collecting data without any kind of authorization from Congress, against law.

And, also, against what the president has been saying. There is no question. Michelle is absolutely right, they've been focusing on this being domestic, not domestic spying. On this being only terrorist events, as they're calling it, and only international.

And here we are seeing that, with the cooperation of three major corporate giants, they're actually collecting data against the knowledge and the will of the American people. And that is very important. Look at the news reports. Sorry one second...

KURTZ: First of all, I'm going to jump in here. I'm going to jump in here again, because I don't want to debate the legality of this. I want to talk about the media coverage.

I'm going to ask Michelle Cottle about this morning's "New York Times" reporting that two senior intelligence officials say that Vice President Cheney pushed the National Security Agency to intercept calls and e-mails without warrants. And General Michael Hayden, then at the NSA, now the nominee to be the CIA director, refused and the sources, according to the "Times," both spoke favorably of General Hayden.

Does that seem like a story that was leaked, perhaps, to buttress General Hayden's nomination?

COTTLE: Well, this administration is known for its strategic leaking so I think anything is possible at this point. I mean, you know, Dick Cheney is not coming up for anything, and it wouldn't surprise anybody that he was up to this. So, sure, why not?

KURTZ: And John Podhoretz, the original "USA Today" story published on Thursday, do you believe was leaked? We don't know who the sources are, of course, in order to damage the nomination of Hayden to head the CIA?

PODHORETZ: I don't know if it was specifically leaked to damage Hayden. I do believe that the leak is a hostile leak. Its intent, its purpose is to damage the administration as it is on a downward, you know, slope. And under those conditions, maybe it hurts Hayden, maybe it doesn't hurt Hayden.

I think that the story today is probably not a sanctioned White House leak, but, rather, something done by friends of Hayden within the CIA, who want him to -- who want him to be the nominee.

HUFFINGTON: And, Howie... KURTZ: Go ahead, Arianna.

HUFFINGTON: Once again, we see how the media are actually being used by anonymous sources. Again, "The New York Times" story today is full of anonymous sources, saying things favorable to Hayden. Why are we just relying so much on anonymous sources that clearly are manipulating the story in a particular direction?

PODHORETZ: Absolutely, Arianna, you're absolutely right. It's a shock and an outrage, and I wish I'd heard you say this about the Dana Priest story on secret prisons, and the use of anonymous sources to surface that story.

HUFFINGTON: Thank God for Dana Priest.

PODHORETZ: Of course. There we have an anonymous source that you just love, an anonymous source that was just fired for breaking the law.

HUFFINGTON: Dana Priest is no longer...

(CROSSTALK)

KURTZ: I wish we could continue this for another two hours. John Podhoretz, Arianna Huffington, Michelle Cottle, thanks very much for joining us.

Tomorrow on CNN, join Wolf Blitzer and Lou Dobbs in "THE SITUATION ROOM", 7 p.m. Eastern for special coverage of the president's prime-time immigration address. And at 8:30 a special edition of "LOU DOBBS TONIGHT", live from Washington.

And coming up on RELIABLE SOURCES, a newspaper editor winds up on page one after calling in a tip about her own bad news. That and more in our media roundup.

(COMMERCIAL BREAK)

KURTZ: Time now to check on the latest in the world of media news.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): When Janet Weaver, editor of "The Tampa Tribune", was arrested on a drunk driving charge this week, she didn't wait for her newspaper to check the police blotter.

Weaver called the "Tribune" from jail with word of her arrest and stayed out of the paper's handling of the story, though she told the editor and publisher that she would have put the story on page one. The "Tribune" did just that. Weaver apologized to her staff for the embarrassment.

Howard Stern and the rest of the gang at Sirius Satellite Radio will have some new neighbors down the hall, he Roman Catholic Archdiocese of New York. Sirius chief executive Mel Karmazin has cut a deal for the Catholic Channel to begin this fall.

Meanwhile, another underserved group is getting its own channel, the diaper set. Baby TV launched week on satellite television, and could come to cable, with programming aimed at those 6 months to 3 years old. Well, advertisers always say they like the younger demographic, but Baby TV will have no commercials.

"60 Minutes" has a new contributor, and he's less than half of Mike Wallace's age. The CBS program announced this week that CNN's Anderson Cooper will report up to five stories a year for the news magazine.

This isn't a first. CNN's Christiane Amanpour once had a similar arrangement. But it further boosts the profile of Cooper, who's on the cover of this month's "Vanity Fair", with an excerpt from his new book about growing up as Gloria Vanderbilt's son.

(END VIDEOTAPE)

COOPER: And speaking of "60 Minutes", we'll have a special interview with Mike Wallace on his stepping down from the program, or at least cutting back, next Sunday, right here on RELIABLE SOURCES.

Coming up in the second half of our program, why the authors of the Barry Bonds' steroids expose could find themselves in jail.

And before that, ABC's resident myth buster insists the media are scaring us to death. "20/20's" John Stossel joins us live, after a check of the hour's top stories from the CNN center in Atlanta.

(COMMERCIAL BREAK)

BETTY NGUYEN, CNN ANCHOR: Well, good morning, everybody. Happy Mother's Day. I'm Betty Nguyen at the CNN Center in Atlanta. RELIABLE SOURCES will continue in just a moment, but, first, here's what's in the news.

A deadly weekend in Iraq, where violence has killed at least 32 people, most of them Iraqi civilians. Fourteen of those civilians were killed in a suicide car bombing on a road to the Baghdad airport.

In the latest evidence of sectarian tensions, six Shiite shrines were leveled by explosions.

Well, despite fears of a full-fledged eruption at Indonesia's Mt. Merapi volcano, some evacuees are still visiting their homes to tend to live stock and crops. Smoke, as you see there, continues to belch from that volcano on the densely populated island of Java, which is about 250 miles east of the capital, Jakarta.

It's a somber Mother's Day observance at the Vietnam Veterans Memorial in Washington. Women who have lost children in military conflicts gathered to remember their sons and daughters. One mother called the pilgrimage a healing experience.

We're going to have more headlines for you in 30 minutes. RELIABLE SOURCES continues right after this break.

(COMMERCIAL BREAK)

KURTZ: Welcome back to RELIABLE SOURCES.

You've seen these kinds of stories for years about dangerous chemicals, dangerous toys, dangerous hospitals, dangerous schools, hazards in your home, hazards in the workplace. More often than not, ABC's John Stossel has a different view.

(BEGIN VIDEO CLIP)

JOHN STOSSEL, ABC NEWS: The world is running out of oil. Now, how can that be a myth? Everyone knows that's true. Isn't it?

(voice-over) So next time someone scares you about radiation, remember that you're exposed to it all the time, without harm. And some people even want more of it.

(END VIDEO CLIP)

KURTZ: Stossel faults the media for simplistic and exaggerated reporting, a case he makes in his new book, "Myths, Lies and Downright Stupidity: Get Out the Shovel, Why Everything You Know is Wrong".

John Stossel joins us now from New York.

You spent years as a consumer reporter in New York, talking about phony diets and all the cures and the like, and now you're a pretty big critic of the kind of reporting you used to practice. What happened?

STOSSEL: I got smarter. I wised up and started putting things in perspective. If all these things are big risks, where are the bodies? We're living longer than ever.

KURTZ: Let me quote from your book, John, now "the scarier and the more bizarre the story, the more likely it is that our bosses will give us more airtime and a front-page slot." So are you saying that many journalists are deliberately hyping the risks out there?

STOSSEL: Deliberate is a tough word, but we know that more of you are going to watch "Tonight on CNN, Howard Kurtz is going to kill you," than if we say things are OK.

KURTZ: You say that the media are clueless, especially on science and economic matters. That sounds like a pretty sweeping indictment to me. Are all journalists clueless or just some journalists clueless?

STOSSEL: I would say most journalists are clueless when it comes to science, and there this pride in the newsroom of not being able to do your expense account. We hear all these stories about record-high gas prices and this being so evil. I'd say journalists are hostile to capitalism and clueless about science and economics. What do you base it on? KURTZ: Hostile to capitalism. What do you base that on?

STOSSEL: I base it on the people I work with. People just don't like business. We hate our employers who pay us but love the government, which takes a third of our money and squanders it. There's a bias against business.

KURTZ: We'll come back to that. But let's talk about the person who reported the following. "A Florida researcher studied murders in Dade County and found more murders were committed during full moons than any other time. So tonight, watch out." Who was that guy?

STOSSEL: That's in my own myth book about me, messing up. I'll admit my own mistakes. That's one of those bad junk science stories that I fell for, and I went on TV to apologize for it.

KURTZ: Oh, and I think it was good of you to point that out. But was that from a period of time when you were more susceptible to doing these kinds of questionable stories?

STOSSEL: Yes, I was younger.

KURTZ: OK. Now, you say that reporters go along with environmental activists and other activists who you more or less describe as scare mongers. How much of this is influenced by your views about government regulations? You've been critical of the regulatory bureaucracies. You said that you wouldn't mind if the Food and Drug Administration just went away. So how much of this has to do with your own philosophy on these things?

STOSSEL: From my years of consumer reporting I have concluded that almost all government regulation makes life worse, so, yes, I look at life with that spin. I have a point of view.

KURTZ: You write, in fact, that -- or you've said that competition protects us if government gets out of the way. Now, that's...

STOSSEL: Beautifully.

KURTZ: That's a perfectly legitimate viewpoint, but it is a viewpoint. So what I'm asking is, when you talk about these are all myths, are they myths or are they just a view of the world that doesn't agree with your view of the world?

STOSSEL: I think there are myths backed up by facts. And I list the facts and myths lies and stupidity.

KURTZ: Are there exceptions, whether it's dealing with tobacco or superfund toxic waste sites where government regulation is needed?

STOSSEL: Sure. And thank God we've had environmental regulation. I went for a swim in the Hudson River, and that was caused by regulation. But how much do we need? We keep passing more rules. Government's now 40 percent of GDP, and every year we add thousands of pages of regulations. It's time to stick a fork in it and say, it's done.

KURTZ: All right. Now, it seems to me that you set up some straw men in this book and knocked them down. For example, you write, "Myth, businesses rip us off. Truth, most don't. You think reporters are saying that most businesses are dishonest?

STOSSEL: Reporters look at business with great suspicious. And hype Enron and WorldCom as if that's the norm. And in a 10 trillion dollar economy, you're going to have Enrons and WorldComs, but they are the exception. I think reporters cheer on the ignorant politicians, who then pass laws like Sarbanes-Oxley that end up hurting the poor.

KURTZ: You seem to view journalists, from your own description here, as advocates, advocates for government regulation, openly skeptical of business. I mean, it seems to me what makes Enron or WorldCom newsworthy is that it is an aberration, that most corporations are not engaged in multibillion dollar accounting fraud.

STOSSEL: But the intensity of the and the sneering tone, suggests to me yes, they are an advocate, that you're an advocate.

KURTZ: How am I an advocate?

STOSSEL: I -- you did a page and a half on me and found no one positive to quote, at a time when I had 18 million viewers who presumably liked my work. When you profiled Al Hunt, you were filled with gushing quotes.

STOSSEL: Well, it seems to me that -- that my profile of you 10 years ago was a little more fair on grounds than you remember. But I'll give you your view of it.

Another myth cited in the book, "Schools are violent. Truth? Schools are pretty safe." Now, clearly there were thousands of stories about the Columbine massacre, and when there are problems in a particular school, the local press tends to write about that. But are the media really reporting that most schools are dangerous?

STOSSEL: At the time of Columbine, there were stories about how can you protect your child in school? How dangerous is school? Scary as all was "TIME" cover stories, when kids were safer at the time in malls and -- I'm sorry in schools than in malls and at home. But the gist of the reporting was that school violence was up, and it was down.

KURTZ: OK. It seems to me that 10 or 15 years ago, John Stossel, you have a point, there was a lot of alarmist reporting about chemicals and pesticides and the like.

My sense in recent years is that the media focus more now on conflicting evidence, on how studies are confusing, whether it's chocolate or coffee or breast cancer tests. Do you not -- would you not agree there's been some improvement...

STOSSEL: Yes. KURTZ: ... in this reporting?

STOSSEL: Yes, yes. Thank goodness, there's been some.

KURTZ: What do you think accounts for that?

STOSSEL: I think people get smarter. I hope I've had a tiny effect, making fun of people for hyping risks.

KURTZ: You also write in the book about the myth of experts, financial experts on television, telling you which way stocks will move.

Now, I agree with you on that. I wrote a book about the financial world. And I think that too many programs put these experts on as if they could help you make money in the market. But, after the big bust in the stock market, hasn't that myth been largely discredited?

STOSSEL: You would think it would have been. It is much better now, and the people coming on to tout businesses that they're dealing with, I think, happens less.

But the myth in the myths book that I think is interesting is you'd think all these experts, not just the ones on TV, the guys working full-time to study stocks, that they would have good advice, and yet the random averages outperform them most of the time, so monkeys throwing darts outperform these experts.

KURTZ: I want to come back to your point on journalists being advocates, journalists being anti-business, journalists being perhaps pro-government regulation. Aren't there a lot of journalists, who I read, some of whom I watch on television, who at least are trying to strike a balance and are not pushing an agenda? I mean, it just seems to me that you've concluded that they really are on one side of this debate.

STOSSEL: I don't think journalists are trying to push the agenda. I think most of you think you're right down the middle. But the people you hang around with all think as you do here in New York and Washington. And that leads to a bias.

KURTZ: So you think...

STOSSEL: Not everyone, but most.

KURTZ: So you think it is to some degree subconscious or, at least because -- in other words, you think that journalists are out of touch with ordinary people, who perhaps are and ought to be more skeptical of government regulations?

STOSSEL: Yes. I think we are steeped like tea bags in "The Washington Post" and "The New York Times", and it affects the way we view the world.

KURTZ: Are there people who, at ABC News who don't like what you do or don't like your point of view on all this?

STOSSEL: Yes. But God bless ABC News, they still feel I deserve a place at the table.

KURTZ: Does that make you uncomfortable, that some of your colleagues do not agree with your approach to journalism?

STOSSEL: Yes, very. I would prefer everyone to like me, but they don't.

KURTZ: But it does show that ABC, by putting you on and giving you the airtime that you get, believes in diversity, no?

STOSSEL: And thank goodness, there's one libertarian reporter in the mainstream media.

KURTZ: All right, well, John Stossel, we'll leave it there. Thanks very much for joining us.

STOSSEL: Thank you.

KURTZ: When we come back, the San Francisco reporters who broke open baseball's steroid scandal find themselves being squeezed by the feds. Could they go to jail for protecting their sources?

(COMMERCIAL BREAK)

KURTZ: And tomorrow night Wolf Blitzer and Lou Dobbs will have special coverage of President Bush's speech on immigration. That's Monday night starting at 7 p.m. Eastern.

Welcome back to RELIABLE SOURCES.

As Barry Bonds remains one swing away from tying Babe Ruth on the all-time home-run list, a First Amendment showdown is brewing off the field.

The two "San Francisco Chronicle" reporters broke open the investigation into the giant outfielder's alleged use of steroids have found themselves a target of federal prosecutors.

Lance Williams and Mark Fainaru-Wada, co-authors of the recent book "Game of Shadows", have been subpoenaed to testify about their sources for leaked court documents involving a grand jury probe of the allegations. They have refused and could be cited for contempt or even in prison.

(BEGIN VIDEO CLIP)

LANCE WILLIAMS, "SAN FRANCISCO CHRONICLE": If they want to send me to jail for writing a true story in the paper, I guess that's where I'll go, but I really don't think it's going to come to that in the United States.

(END VIDEO CLIP)

KURTZ: And joining us now from San Francisco is Phil Bronstein, executive editor of the "San Francisco Chronicle." Welcome.

PHIL BRONSTEIN, EXECUTIVE EDITOR, "SAN FRANCISCO CHRONICLE": Thanks, Howard.

KURTZ: Why are prosecutors targeting your reporters in this case, which has nothing to do with national security, just the security of baseball?

BRONSTEIN: Well, it's not just the security of baseball. I mean, steroids has become a national debate after the stories that Mark and Lance did. That affects health, and it affects athletes in high school and college.

But, you're right, it's not national security, so it's a big question. We can't get it in the minds of prosecutors or the Justice Department, but there's some interesting points here. And one is that, you know, there has been a sort of steady stream of cases that the federal government has brought to try and subpoena reporters' sources. And to close off leaks to reporters. That's one thing.

The other thing is, the government has won a lot of those cases in other circuits, including the Washington, D.C., circuit court, federal circuit court. Here, we have the Ninth Circuit Court for northern district.

KURTZ: Let me just jump in, because these -- these particular stories date to 2004, and the grand jury that was investigating the BALCO lab in your area, which supplied the substances, has already done its job. So why now?

BRONSTEIN: Well, again, I think there's a -- first of all, the grand jury that was empanelled to look into the leak in southern California, not northern California, has been empanelled for about 13 months, so they've been spending all that time investigating only the leak.

Now, it's possible, you know, you talked about the reporters conceivably going to jail if we pursue this case and lose. You know, they could get more jail time, Howard, than the original BALCO defendants. It's slightly ironic.

KURTZ: At the same time, these are grand jury secrets we're talking about. They are protected by law. Now if a grand jury was investigating you, you wouldn't want to see details splashed in some newspaper. So how do you justify publishing this material?

BRONSTEIN: Well, first all, it's a misconception about grand jury secrecy. It's not blanket; it's not a tight seal. The grand -- the secrecy of the grand jury is limited to those people inside the room and not even all those people. A witness to the grand jury can come out and tell the press or anyone else everything that happened in there.

KURTZ: That's absolutely true, but that's not the case here. Your reporters got a hold of transcripts.

BRONSTEIN: They did get a hold of transcripts.

KURTZ: Of the grand jury proceedings. It wasn't voluntary on the part of the grand jurors.

BRONSTEIN: You know, Howard, there is a constant tension between what the press does if it's doing its job and what the government does. The government would like to keep these proceedings secret. It would have liked to kept the issue, the national security issue, of wiretapping secret, but that's not our responsibility. It's not our responsibility to maintain the secrecy provisions of the grand jury process.

In this particular case, the fact that we published those transcripts and wrote about BALCO and the ongoing investigation did lead to a major national debate about steroids.

KURTZ: At the same time, did you get a hostile reaction from some of your readers -- maybe some of them are Barry Bonds' fans or Jason Giambi fans -- who didn't think that the "Chronicle" ought to be publishing this secret information?

BRONSTEIN: Absolutely, we did. It's interesting, because we put up a blog on SFK (ph) at our web site, and a lot of comments came about the grand jury. We were expecting more about how could you do this to Barry Bonds?

But you know, I think a lot of people realize really this isn't about Barry Bonds. It is about what is becoming sort of an epic struggle between the government and the press.

You know, President Bush stood up a year ago at the White House Correspondents' Association and gave Mark and Lance an award for these stories and told them that these stories did a service. I guess the Justice Department is not paying attention to the president.

KURTZ: So do you see a disconnect between that particular event and the fact that the federal prosecutors, as you mentioned earlier in a number of cases, whether it's involving the CIA, secret CIA prisons, domestic surveillance, are investigating reporters' sources, where they got the information, as we saw from the Judith Miller situation, putting legal pressure and even sending to jail journalists? How can the president give your reporters an award and at the same time allow this other -- these other probes to go forward?

BRONSTEIN: Well, it's the wonders of the public relations of the federal government, I guess. I mean, the fact is, is that the job of government, as arguably the most powerful institution we've got going here, is to create mythology about what it's doing and its agenda and sell it. In other words, you know, it's their job to spin.

One of your previous guests today said something about, you know, the Bush administration is known for its strategic leaking. Every information is known for strategic leaking. If it suits the purpose and the agenda and the story they are trying to create, the government will do the leaking. And, really, it's somewhat the responsibility of the press to try and put that in some perspective. So, you know, we don't do selective leaking. We don't take selective leaks. We try and create a little air and a little light around stories like this.

KURTZ: Now, legal experts say, this is a difficult situation, facing your reporters, Lance Williams and Mark Fainaru-Wada, if they continue to refuse to identify their sources. Are you worried about these guys potentially going to jail?

BRONSTEIN: Yes. I think this is a very serious matter, and, you know, jail is no joke. And standing up for principle is vital and important and suits a lot of people in this country, but it also means if two of our reporters go to jail, that's a problem.

Now, the law is not good. You know, the law, as you pointed out, the last couple of years, have not gone the way of reporters and of the free press. So, you know, we're facing a daunting task. But, you know, fortunately we have really good lawyers, the corporate counsel, the Hertz Corporation, which owns the "Chronicle", Eve Burton is very personally and very directly and very aggressively pursuing this.

KURTZ: I've got 15 seconds. Did you think about the possibility of subpoenas and jail when you approved the publication of those stories?

BRONSTEIN: Yes, we did talk about it. We vetted this appropriately all the way along, and we knew what we were doing and the reporters knew what they were doing and knew what the risks were.

KURTZ: All right. Phil Bronstein, "San Francisco Chronicle", thanks very much for joining us.

BRONSTEIN: Thanks.

KURTZ: A programming note, next week we'll talk to "60 Minutes" Mike Wallace about a lot of things, including whether he's really planning to sort to retire.

And still to come, how one smart, savvy and hot-tempered editor transformed "The New York Times."

(COMMERCIAL BREAK)

KURTZ: Newspaper editors come and go and are rarely remembered by history. Only a precious few have a lasting impact.

(BEGIN VIDEOTAPE)

KURTZ (voice-over): Abe Rosenthal, who died this week, was a brilliant editor of "The New York Times", who nearly doubled the paper size in the '70s and '80s. He added such sections as "Science Times", home, and weekend, which were once derided as too frivolous for the august newspaper, but which may have saved it by, as Rosenthal once told me, putting more tomatoes in the soup. At the same time, Rosenthal was abrasive, vindictive, a petty tyrant who drove many talented people from the "Times", engaging in what the paper's own obituary called stormy outbursts in which subordinates were berated for errors and sidelined for what he recorded as disloyalty.

(on camera) Which got me thinking, could there be a connection here? To change a huge institution like the "Times", do you have to be a difficult, domineering personality?

(voice-over) We saw the same thing with Howell Raines, an intense, very smart, hard-driving journalist who led the "Times" to seven Pulitzer Prizes after the 9/11 attacks. Raines also sowed the seeds of his self-destruction by creating a climate of fear that alienated much of the staff.

Raines again defends this approach in his new memoir, saying he had to push hard to change a slow moving bureaucracy.

But here's the difference. Rosenthal could get away with his intimidating style under publisher Arthur Sulzberger Sr. because, at the time, there was little outside scrutiny of big media organizations. Raines had to deal with more media reporters, media web sites, cable shows, radio hosts and bloggers who criticized his approach to journalism.

So when the Jayson Blair fabrication scandal erupted, there was no hiding the fact that Raines had lost the confidence of the staff. Publisher Arthur Sulzberger Jr. fired him.

(on camera) For all Rosenthal's personal shortcomings, he enjoyed a second act as a passionate columnist, first for the "Times" and later for the "New York Daily News". And however difficult it may have been to work for him, today's multi-section, multicultural feature-oriented "Times" is, in some ways, Abe's paper.

Well, that's it for this edition of RELIABLE SOURCES. I'm Howard Kurtz. Join us again next Sunday morning, 10 a.m. Eastern, for another critical look at the media.

"LATE EDITION WITH WOLF BLITZER" begins right now.

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