Newsmaker: Sen. Tom Daschle
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MARGARET WARNER: Welcome Senator Daschle, thanks for being with us.
SEN. TOM DASCHLE: Good evening.
MARGARET WARNER: Good evening.
After days of a lot of rhetoric on both sides, suddenly late this afternoon all of these major amendments are sailing through 96-zip, 97-zip. What’s going on?
SEN. TOM DASCHLE: Well, I think what’s going on is that there is a broad realization that we have an opportunity here to do some real good, to put a framework in place that would serve as a real opportunity to create a new environment, and deter crimes like we’ve seen or at least potential crimes like we’ve seen so far this year.
I think that this piece of legislation will be an extraordinary accomplishment if we can complete it in the next few days.
MARGARET WARNER: As I sit in my office trying to — watching it on C-SPAN it’s hard to understand what’s in a lot of these amendments, and I particularly wanted to know whether the president’s proposals, the ones that he made yesterday, for instance creating this new task force, doubling the penalties for wire fraud and mail fraud, have those passed?
SEN. TOM DASCHLE: They have passed, that’s correct, they passed this afternoon.
They were part of a so-called Leahy Amendment. The Leahy Amendment has about seven or eight provisions, and the president’s proposals included three of those seven provisions.
So we passed those, we passed the Leahy amendment, which sets up a new securities fraud law that now allows the Justice Department and the SEC to clearly define what is right and what is wrong with regard to securities law and not have to use the mail fraud laws that we’ve had in years past. So this will also clarify just how the enforcement mechanism can be used in the future.
MARGARET WARNER: Now, just yesterday, a senior White House official briefing reporters specifically refused to endorse that Senator Leahy proposal, essentially saying he thought that the president’s proposals were enough. How do you interpret the 97 to zip vote?
SEN. TOM DASCHLE: Well, I think that Republicans joined Democrats in saying look, we understand what you’re saying, Mr. President, and the administration, but we don’t think you go far enough.
We really have to go farther, we have to set up a system that protects whistle blowers, we have to ensure that we don’t have to use the mail fraud laws, we have to ensure that we have tougher laws with regard to the statute of limitations that we go out farther than what is current law. Those are the kinds of things that the Leahy amendment does beyond what the president proposed, and that I think was the surprise of the day, that we saw the overwhelming support on both sides of the aisle for the Leahy amendment.
MARGARET WARNER: And yesterday after the president’s speech, you said, well, he spoke loudly but carried a very, very small stick. I guess what I’m wondering is, do you feel differently now?
Do you feel that the White House essentially has also given the green light to Republicans to go for these proposals that you Democrats have been pushing?
SEN. TOM DASCHLE: Margaret, I don’t know whether they’ve given the green light or not. As you noted with your last question, they have already expressed opposition for some of these things.
But I think the Republicans in the Senate are showing some independence, they’re showing that they believe that we’re right, that we do need to go farther than what the administration said, that the administration’s stick was too small. And that really was the essence of the message today — not that there’s any points to be made here.
But I think, if anything, what we want to do is to send as clear a message as we possibly can that we’re going to change the corporate environment, we’re going to restore corporate integrity and increase the confidence level among stockholders, employees and the American people.
MARGARET WARNER: The Senate did defeat one amendment today, mostly Democrats defeated it, offered by Senator McConnell (R – Ky.), which would have required labor union officials to have to certify their financial statements just as you’re asking CEO’s to do, and Senator McConnell pointed out a lot of working people have their money tied up in labor pension funds.
Why defeat that one?
SEN. TOM DASCHLE: Well, because you have the circumstance proposed by Senator McConnell of a local union, maybe five or six people having to live with the accounting requirements of a Fortune 500 company. That doesn’t work.
What we do have is a very tough regimen that’s set out in the Labor Department. We have laws that require accounting today that is monitored and enforced and very effectively, I might add, by the Labor Department, that takes into account the differences between a labor union and a corporation, especially of the magnitude of the ones we’re talking about.
So it wasn’t that we didn’t want labor unions to have the same degree of scrutiny. We just said the Labor Department is a much better entity to do that than the SEC.
MARGARET WARNER: Today Ari Fleischer, the president’s spokesman, said he thought that the White House and you all were essentially in at least 95 percent agreement.
Do you think you’re that close, or let me ask it another way, do you see any major differences now between where you want to go and where you think the White House is ready to go?
SEN. TOM DASCHLE: Well, I think the differences are narrowing. I think there were some very significant differences at the beginning. But as we go forward, I’m encouraged by the degree to which we find broad bipartisan support for many of the amendments and the legislation that the, that we have offered.
We started out 17-4 vote in the committee, we had the unanimous support in the Judiciary Committee for the tougher enforcement mechanism. So we’re now seeing that that same degree of support is available on the Senate floor. And that’s encouraging.
So I think at the end of the day, Margaret, we’re going to have a bill that Democrats and Republicans can feel pretty good about.
MARGARET WARNER: Speaker Hastert (R-Ill.) from the other side of the Capitol today noted that a lot of these proposals have been out there, have been introduced, that the House acted two and a half months ago. What took the Senate so long?
SEN. TOM DASCHLE: Well, we wanted to do it right. We wanted to make sure we did it in a comprehensive way. We wanted to do it to accommodate the many ideas that are out there. There are still many ideas.
As I said yesterday, we’re going to deal with accounting and enforcement this month. And we’ll deal with pensions as well. We want to protect 401(k)s and we want to make sure the retirement securities is part of this whole effort as well. But we’ll get to that a little bit later. But the main thing is we wanted to do it right.
I think when you look at what the House did, there were a lot of shortcomings and we’re going to have to work through all of those shortcomings when we go to conference later on.
MARGARET WARNER: After the president’s speech yesterday, the market slid nearly another 200 points, the Dow slid nearly 300 points today. What impact is this having in the environment in the Senate and how much certainty do you have that whatever you all do really will address and correct this crisis of confidence?
SEN. TOM DASCHLE: Well, I don’t think you turn confidence around overnight. I think it is a concern that all of us have. And my confidence grows, however, when you start looking at what we’ve been able to do, and the message we can send to stockholders and to employees and to businesses who want to make sure that they’re not branded with a lot of bad news that has been coming out.
I’ve had so many calls from business people who want to do the right thing and who are applauding the efforts made in the Senate to ensure that we have a clearer framework.
So I think that’s going to take some time. The reaction to all of this will not be noticed overnight, but over time I think you will see significant improvement in the confidence level.
MARGARET WARNER: On Sunday you joined Senator McCain’s calm for Harvey Pitt to step down or somehow lead as head, leave as head of the SEC.
Do you think that’s essential for restoring confidence no matter what you all may pass from the Hill?
SEN. TOM DASCHLE: I don’t think it’s essential. I think we could have found a stronger person in that role. But I think that the essential things are we’re doing right now, to create stronger laws, to create greater clarity, to ensure that there is better deterrence in the future.
Those kinds of things, regardless of who is in a given position at a particular time, will be what stands as the permanent way with which we deal with the issues that we’re confronting now.
MARGARET WARNER: Finally, some members of your party, I’m thinking of DNC Chairman, Terry McAuliffe, have questioned the president’s credibility on the issues, give his own business background, given some questions that were raised — accounting questions involving Harken Energy, the company he was on the board of back in Texas.
Do you share that view that somehow the president is tainted or lacks credibility here?
SEN. TOM DASCHLE: Well, I don’t know what Terry McAuliffe said, so I don’t agree or disagree, I haven’t seen that particular comment.
But I would say that the president obviously is struggling, as we all are, to do the right thing as we try to cope with the many policy questions. I do think this issue involving Harken is one that could be resolved if the SEC were to release the file. I would hope we could do that. But I certainly believe that the president is in a position to work with us to assure the country and to respond in a way that will allow us the opportunity to do the right thing, and to create a better framework in the future.
MARGARET WARNER: Senator Daschle, thanks for joining us.