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President Clinton's cabinet announcements and financial contributions answers are first. Our coverage begins with this report by Charles Krause.

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CHARLES KRAUSE: There was little room to spare this afternoon as outgoing and incoming members of President Clinton's domestic policy team lined a small platform at the White House. The President, himself, emerged moments later, ready to announce the remaining nominations and appointments to fill his second-term cabinet.

PRESIDENT CLINTON: I thought the era of big government was over, and then I saw all these people here.

CHARLES KRAUSE: To replace outgoing Labor Secretary Robert Reisch President Clinton chose the current director of the White House Office of Public Liaison, Alexis Herman.

ALEXIS HERMAN, Labor Secretary-Designate: I want you to know that I have continued to believe we must have a growing, innovative, and entrepreneurial economy if the living standards of working men and women are to rise.

CHARLES KRAUSE: Succeeding Henry Cisneros as Secretary of Housing & Urban Development, the President selected Assistant Housing Secretary Anthony Cuomo.

ANTHONY CUOMO, HUD Secretary-Designate: And let me assure you, Mr. President, that we at HUD stand ready to go with you as you lead this country in the last great transition of this millennium to the promise of a stronger and sweeter tomorrow.

CHARLES KRAUSE: Outgoing Transportation Secretary Federico Pena was asked to be the incoming energy secretary, succeeding Hazel O'Leary.

FEDERICO PENA, Energy Secretary-Designate: The Department of Transportation is a smaller but more effective organization now, and I hope to bring that same kind of efficiency to the Department of Energy.

CHARLES KRAUSE: And to succeed Pena at Transportation, Federal Highway Administrator Rodney Slater, who was Gov. Clinton's highway commissioner in Arkansas.

RODNEY SLATER, Transportation Secretary-Designate: I have been privileged to know our President for a long time, long enough to know that he understands that transportation is about more than concrete, asphalt, and steel. It's about people, how they get to work, how they visit friends, how they travel the far reaches of our great land to see America the beautiful. It is about how they pursue happiness.

CHARLES KRAUSE: The President also chose Ada Alvarez to head the Small Business Administration, Janet Yellen to head his Council on Economic Advisers, and Bruce Reed to be his assistant for domestic policy. The President also announced that his longtime friend, Mack McLarty, had agreed to stay on as counsel to the President, while accepting additional responsibilities as special envoy for Latin America. While the White House Press Corps showed routine interest in the President's cabinet selections, the questions that followed focused on a number of recent fund-raising revelations that have embarrassed the President. Just today the Washington Post revealed that a Chinese arms dealer, who later was implicated in a gun smuggling operation, attended a White House coffee with the President in February at the invitation of a Democratic fund-raiser.

PRESIDENT CLINTON: Well, first of all, I'm disappointed that it happened. It was clearly inappropriate, and I think what is obviously called for and what I have instructed to be done is to establish some sort of better screening provisions that are tighter to minimize this, you know, thousands of people coming in and out of the larger White House office complex all the time, but we have to develop some way of screening them, so I think I am disappointed. It was inappropriate. We must have better screening systems, we will have. I remember literally nothing about it. I'm not sure that the gentleman ever said anything at this coffee that I asked my staff to let me see the records of it when the story broke, and there are disparate people from different walks of life from all over the country there, and normally, what would happen in one of those conversations is that I talk for five or ten minutes, and then we'd either go around the table and let people say whatever they wanted to say, and, as I said, there were all different kinds of people from all different walks of life always. I'm not sure that--I have no recollection of meeting him. I'm not sure he ever said anything, and I can tell you for sure nothing inappropriate came from it in terms of any governmental action on my part, but we have to do a better job of screening people who come in and out of here.

CHARLES KRAUSE: Earlier this week, however, it was learned that $640,000 in suspicious contributions to the President's legal defense fund had to be returned. And now the Justice Department, reportedly, has subpoenaed records from the White House and the Democratic National Committee stemming from hundreds of thousands of dollars in contributions that have come into question over the past three months. Today, the President was asked if he's prepared for more Whitewater-style investigations on these matters.

PRESIDENT CLINTON: The American people ought to feel good about me. They spent $30 million or something, and there's been not a single, solitary shred of evidence of any wrongdoing on my part. I feel good about it. I think it's unfortunate for democracy, and I think, as I said, this special counsel thing ought to be reviewed in light of what Archibald Cox and others have said because the costs outweigh the benefits. But on the other issue, any questions that are raised about contributions ought to be answered and any records that are needed ought to be provided. That's no different than what happened in Sen. Dole's campaign, when one of his officials was charged with money laundering and had to plead guilty and pay the biggest fine in FEC history. I mean, that didn't reflect on everybody else in the campaign. Those things happen.

So if there's any question about what happened, the evidence, the information, should be provided, and we ought to determine whether anyone did anything wrong. My feelings are that in the areas where we had more direct control, our campaign and legal defense fund, as far as I know, the proper decisions were made because the proper scrutiny was applied. The Democratic Party officials have already admitted that they did not apply the proper review. And I am very displeased about it because 99 percent plus of all the contributors did not do anything wrong, and over 98 percent of the money appears to be in order. And the other 1 percent got all the publicity and thereby dis-serving the Democrats around the country, the people who gave, and everything else. That is wrong. And all they have to do is to institute a simple review system. Now, from time to time, mistakes may be made if you have over a million contributors, as both parties do now, that may happen from time to time, but common sense and strict review are the order of the day. It's not a press conference. We've been here a long time. We'll have another press conference early next year. Merry Christmas! I'll see you early next year.

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