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Political Wrap with Mark Shields and David Brooks

January 25, 2002 at 12:00 AM EDT


MARGARET WARNER: And for our end-of-the- week political take, syndicated columnist Mark Shields and David Brooks of The Weekly Standard.

So, Mark, the hearings are open, the Enron hearings, with much fanfare. Do you think it means that, as Paul said, we’re going to see a more aggressive government watchdog, or is this an investigative show, but there aren’t going to be any real changes that would prevent another Enron-Andersen debacle?

MARK SHIELDS: Let me just first say, I have not seen a better piece on Enron in print or anywhere than Paul’s done this week. I just really… Terrific. “Take the money ‘Enron'” is going right into the language. This was marked by regulators who didn’t regulate, directors who didn’t direct, and you can see the transformation. Will the Congress act? We’ve got born-again regulators, we’ve got watchdogs on Capitol Hill now. The President himself is a born- again populist this week.

He belatedly discovered his populist roots in the form of his wife’s mother having lost money on Enron. He was furious — enraged by it. So, yes, will they act? Yes, they’ll act. What they will do I think is unclear at this time. There is a resistance, obviously, and strong resistance from large corporate interests to do too much, but at the same time I think there will be… Arthur Levitt, who was the chairman of the SEC in the last administration, a reviled figure in the American accounting industry and Wall Street as well, is now revered on Capitol Hill. He has genuflected before.

MARGARET WARNER: And remind us: He was the one who a couple years ago wanted to at least bar the accounting firms from having auditing contracts and consulting –

MARK SHIELDS: — consulting at the same time — the same kind of cheerleading and conflict of interest. He also wanted the limits to exposing Wall Street analysts’ conflict of interest. So will there be? I think there will be tougher rules on, for example, pensions and their diversification, that they aren’t all concentrated in one place. I think there will be greater transparency, especially on insider sales, insider stock sales, which now go essentially unreported in large part. And I think there will be, I think the Congress is forced to act and required to act, and you have to, if you have received Enron money, prove that you weren’t bought and you are independent. So how do you do it? You do it by voting for reforms.

MARGARET WARNER: But, David, for instance, Arthur Levitt’s proposal came to naught because 13 Senators in different ways pressured the SEC to back off. Is that kind of thing really going to stop? Are we going to see a rolling… A reimposition of the same controls that they fought all along?

DAVID BROOKS: I think it may actually — I think what we’ve seen this week is that Enron turned into sort of a Whitewater-Watergate political scandal, which it is not. It is, however, an important cultural and political moment. And I think the moment is this: We’re going into an information- age economy where people have 401(k)s – where most people are involved in the stock market, and people are willing to go into that sort of privatized, deregulated world. They don’t want to go back into the 1950s with big pension plans and big Social Security programs.

But if they are going to go into this world, the bargain has to be, it has to be fair. There has to be fair competition; there have to be rules safeguarding my entry into that world of private stock ownership, and people are going to demand that. They’re not demanding it as anti-capitalists; they are capitalists; but they’re going to demand some sort of rules. So what people in Congress have to decide, and especially Republicans, “am I pro-business or am I pro-competition?” Because, as we just saw in that report, the two are not the same thing.

MARGARET WARNER: And do you agree with Mark that the fact that so many of these members– I think 211 of the 245 who are on these committees– so many members of Congress and the Senate took money from Enron or Andersen will actually make it more likely now that something will pass, because they’ll demonstrate essentially their…

DAVID BROOKS: This is the case where I think Enron giving money will hurt them because nobody can afford to look positive. Having said that, it is off to a shabby start. I watched the hearings yesterday in the House yesterday. Members of Congress were warming up their sound bites. John Dingell was happy because there was a member of the cast of “The Sopranos” in the audience sitting there. The members of Congress were incredibly rude and “showboaty” to the witnesses. This Andersen lawyer was… Would utter four words – she’d get cut off by Billy Tauzin, the chair of the committee. She’d utter four more words, he would cut her off in an angrier tone. It was just a sham. If Stalin appeared before the committee, you’d feel sorry for Stalin, but I think eventually there are going to be some sort of real changes.

MARGARET WARNER: Did you think it was showboating, Mark?

MARK SHIELDS: To be honest with you — I did not watch yesterday’s hearings. I was on the Hill, doing other business on the campaign finance reform. There is also an impulse, an inclination to show that you are outraged, you are upset by it. Badgering of witnesses is not one way. I think in Chairman Tauzin’s case, he was the principal recipient of aid from Arthur Andersen, so there’s a little overcompensation perhaps to show he was not cowed or neutralized by being the beneficiary.

MARGARET WARNER: If you were working on campaign finance reform, is it fair to say that’s political fallout from Enron, the fact they got the signatures needed to force a debate in the House?

MARK SHIELDS: No question. Enron has taken over the political dialogue and the debate. George Bush is no longer setting the national agenda. Enron determines and shapes the debate on the economy, on energy, on campaign finance reform, and, as David said, on the regulation, deregulation of government. Enron is everywhere. There is an Enron angle to it, and nowhere more dramatic than on campaign finance reform. A discharged petition in the House, which is required when you want to bring to the House floor for an up or down vote, something the leadership wants to keep out, you need 218 members, the majority of the body, to break with their leadership and go and sign that. It was going to happen anyway because there were 214 by the time they went to the break. They got the 218. Richie Neil of Massachusetts provided the 218th yesterday. Margaret, it was all Enron. It is driving this. As Chris Shays, the sponsor of the House bill, put to me, he had ten town meetings in Connecticut over the break. He said… He asked the people what they wanted to discuss at the town meetings, the war, the economy, unemployment. Three out of four people said Enron. And he said these people are angry. He said, “What upsets them most?” They saw the corporate treasury being used to buy access and influence, and it bought it in both cases, and that’s what people are angry about.

DAVID BROOKS: If you want to know how much the agenda has shifted, think about what we’re going to be talking about the next few months: Campaign finance reform, increasing the Pentagon budget, maybe increasing Americorps, a patriotic challenge, and big war abroad. John McCain somehow lost the election, but he won. This is the McCain agenda, the McCain Washington.

MARGARET WARNER: As Mark pointed out, President Bush took a slightly different tone this week. He was outraged at how little was shared or what was kept from shareholders and employees of Enron. How do you assess how the white house is handling this? Do you think they have some exposure here politically?

DAVID BROOKS: So far it hasn’t shown up. If you look at the Bush approval ratings, 80% to 85%, remarkably high approval ratings on economic issues. 67% of Americans approve. There are all sorts of fascinating data in the polls, lots of movement because of the war and because of Enron. One of the remarkable bits of data, for the first time since I’ve been following politics, and maybe in American history, more people identify themselves as Republicans than Democrats. Who do you trust on integrity and honesty? 52% Republican, 22% Democrats. So if there is exposure, it hasn’t shown up.

MARGARET WARNER: Yet every other day, mark, it seems there is a steady drip, drip, drip of stories of some connection with someone affiliated with the President. There was another one today. I mean, do people ignore that or does that ultimately become a problem?

MARK SHIELDS: I think what David has described is President bush’s dominance as a political figure on the American landscape as commander in chief. What is interesting, Margaret, is the war is seen as being above and beyond politics. Enron is politics and is defining the political debate in the country.

Today The New York Times reported that Karl Rove, the President’s principal political strategist, had gone to bat with Enron to get a contract for Ralph Reed, a leader in the religious right and key to George Bush’s nomination fight against John McCain. In politics we used to have what we called no- show jobs where you would put someone on the turnpike commission. I guess Enron, to read The Times and to believe it, was a cash cow that was available for such items. Ralph reed insists it was solely on merit, and Karl Rove doesn’t remember it, but I think to the degree, Margaret, that we move away from the war…

And Mr. Rove made a serious mistake when he, before the Republican National Committee – it was a dumb thing to do — said, “we’re going to use the war politically in the election of 2002.” As long as the President… And the President, by the way, went to great lengths to correct that in the leadership meeting at the White House this week where he said, look, “There’s not going to be any daylight between me and the Congressional leadership, Republican and Democrat.”


MARK SHIELDS: On the war — but to think for a second that you’re going to try and sell this as a political asset… It is a political asset, but becomes less of a political asset when you talk about it.

DAVID BROOKS: I agree with that. The big problem on Enron for the administration is if they think, hey, “we’re for business; they’re attacking business, so we’ve got to defend business.” If they do that, then they’re on the defensive for the next six months. But if they say, “we’re for free markets, we’re for competition, and business; these guys,” as we just heard in Paul’s report, “are actually hurting competition because people trying to be capitalists can’t get information,” then they can get on offense.

MARGARET WARNER: You’re saying don’t play defense, but play offense. They’re on defense on this question of Vice President Cheney’s energy task force. There’s the task force, of course, refusing to tell Congress of details how it came up with the plan. Is the task force right on this, but politically wrong? What is your sense of this?

DAVID BROOKS: They’re politically wrong and absolutely right. To me, the Constitution says we have separation of powers. Each branch of government gets to deliberate. Each branch of government is not allowed to interfere with the deliberations of the other. Congress is trying to use the crisis to interfere in the deliberation of the executive branch. Every President is right to fight this. It comes up in every administration. Every President is right to fight it, and Cheney is doing the absolutely right thing.

MARK SHIELDS: Absolutely wrong. I could not disagree more. The Republicans, you recall, a short time ago were haranguing Mrs. Clinton with her health task force and had to come out with the information, who was at the meetings. Dick Cheney is on political thin ice. Stonewalling is a dumb political policy and those in the White House who have the nerve to say it, tell him so.

MARGARET WARNER: We have to leave it there. Thank you both.