The White House
President George W. Bush
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For Immediate Release
Office of the Press Secretary
January 16, 2002

Press Briefing by Ari Fleischer

      Listen to the Briefing

  1. President's schedule
  2. Tax cut
  3. Environmental Regulations
  4. Argentina
  5. Enron
  6. Richard Reed
  7. Philippines
  8. Taliban Prisoners of al Qaeda
  9. Tonight's speech
  10. Haiti
  11. Harvey Pitt
  12. India and Pakistan

The James S. Brady Briefing Room

12:51 P.M. EST

MR. FLEISCHER:  Good afternoon.  I'll give you a brief opening on describing the President's day, then I'll be more than happy to take your questions.

The President this morning had a briefing from the Central Intelligence Agency and the Federal Bureau of Investigation to cover the latest developments in the war against terrorism, then he convened a meeting of his National Security Council.

Later today, the President will meet with the Prime Minister of Turkey to discuss Turkey's strong cooperation with the United States in the war against terrorism and to talk about other regional issues.

And then this evening, the President will give a speech at the Organization of American States, to the World Affairs Council national conference, entitled "The Future of the Americas."  In the President's remarks tonight, the President is going to talk about the importance of prosperity and democracy in our western hemisphere.

The President will talk about the importance of preserving political freedom and democracy in the region, the importance of strengthening security in the region and the importance of advancing economic development through economic reforms and through free trade.

And with that, I am more than happy to take your questions.

Q    Ari, can you respond to Senator Kennedy's calls today to roll back the later stages of the tax cut?

MR. FLEISCHER:  Well, the President views this as a tax increase on the American people that he will oppose.  The President thinks it is wrong to raise taxes on the American people; he thinks it will hurt the economy; he thinks it's unfair to America's workers who need to have more money in their paychecks.  And the President thinks it's the wrong approach for our country.

Q    Can you explain how it would hurt the economy?  And, secondly, do you disagree with the premise, Kennedy's premise, which is that the tax cut was envisioned at a time when the country's finances were much different?

MR. FLEISCHER:  Not only does the White House dispute the premise of what Senator Kennedy proposed, but many Democrats in the Senate do, as well -- especially conservative Democrats and Democrats who have worked with the White House in a bipartisan way on tax issues.

So this really exposes some big differences within the Democratic Party, particularly with the rank and file.  I think it also shows that at the leadership level, the Democratic Party is aching to raise people's taxes.

Q    But that's a political response and is unresponsive to the economic point, which is why would it hurt the economy?

MR. FLEISCHER:  Well, on the economy, the President has said repeatedly that he believes the best way to get the economy growing again is to let people have more money in their pockets so that they can spend that money, producing jobs and providing products to consumers that consumers can purchase because they have more resources in their pockets.  And when consumers purchase products, it allows manufacturers and companies to hire more workers who make those products.

And that's why the President thinks that the last thing you should do and the worst thing you should do in the middle of a recession is raise taxes on the American people.  And the President is proud to be joined in that by a good number of Democratic senators who do not see it the way Senator Kennedy does.

Q    Just one more on this, because that's still not responsive to -- I know what his views are about this, but what Kennedy is talking about is something that wouldn't take place until 2004.  So how would that have that sort of impact by that point?

MR. FLEISCHER:  Because a tax increase is a tax increase is a tax increase.  It's wrong now and it's wrong then, in the President's opinion; and I dare say in the opinion of many Democrats.

Q    That's a political statement.  But what about -- as a matter how it affects the economy?

MR. FLEISCHER:  Because the President opposes raising taxes.  He thinks it's the wrong thing for the economy.  And, you know, I think really in so many ways, you know where the President stands on this.  I think the interesting question needs to be put to Senator Kennedy's fellow Democrats.  It seems that it's the Democrats in the Senate who don't know what approach they want to take on taxes.  There are some Democrats who continue to want to work with the President on a bipartisan plan to help the economy recover.

But I do think what you're seeing here is a real yearning by the Democratic leadership, as announced by Senator Kennedy today, to raise taxes on our country.  We've been down that road before with Democrats.  They always say that these are tax cuts only on the wealthy, but it's always the middle class that gets soaked.

Q    Let me follow up on that.  Will you concede Senator Kennedy the point that this tax plan was drafted at a time when the economy was booming, in 1999?

MR. FLEISCHER:  The tax plan was drafted --

Q    The tax plan was proposed when the economy was booming.

MR. FLEISCHER:  Well, let's walk through the history of the tax plan.  The President, in 1999, announced his support for across-the-board tax cuts for marriage penalty relief for elimination of the death tax, for example.  The President announced that at the time for the following reasons.  One, he thought it was important to let people keep more of their own money.  Two, he thought that it was less money that was sent to Washington, the less money Washington would have to waste on spending programs that were not effective.  And, thirdly, the President said at that time it was an insurance policy against a future economic downturn.

Flash forward to 2001, when the President was elected, he of course proposed it to the Congress.  And the recession began in March.  The tax cut wasn't even signed into law until May.  And that's, again, where I think many Democrats have said that the explanation that several Democrats have offered that the tax cut caused the recession just doesn't hold water.

Q    How was the economy doing in 1999 when he proposed it?

MR. FLEISCHER:  The economy was strong.

Q    Ari, does the President believe that companies that violate OSHA and environmental restrictions -- regulations should be rewarded?

MR. FLEISCHER:  I'm not sure what you're driving at, Helen.

Q    I'm driving at the fact that the President has killed this Clinton plan to not give new government contracts to companies that violate OSHA and environmental regulations.

MR. FLEISCHER:  I think that's an over-reading of the administration's actions focused -- because the administration's actions focused on setting a standard by which all actions would be reviewed and that it was called a black-listing or black-balling companies.  But just as if a union, for example, were to engage in one act that was questionable, does that mean that union should be denied everything that the government has to offer?  The answer would be no.  People need to be held liable and responsible for acts of wrongdoing and corrective measures need to be taken.  But does that mean that they should have a government-wide ban on the receipt of all funds from the government and all accounts?  I think that would be just as unwise to do to unions as it would be to business.

Q    -- clear-cut violations and may have been proved, they should get a new government contract?

MR. FLEISCHER:  Again, the standard that the White House put in effect was that each individual instance will be examined and the appropriate action should be taken, based on the merits of what was found in that case.

Q    Ari, the Argentine banking system is teetering on the verge of collapse.  What specifically is the administration -- either through the Treasury Department or the White House -- doing to stop the hemorrhaging?

MR. FLEISCHER:  Well, Terry, as you know, the position of the Treasury Department and the President's directions to the Treasury on this is to work closely with Argentina, as Argentina develops a plan for sustainable economic growth.  And the United States will continue to work with Argentina in development of that plan.

It's important for Argentina to take the necessary steps, in terms of economic reform and internal actions that will create an environment for sustainable economic growth.

Q    So there needs to be improvements in the workings of the Argentine market, as far as the administration is concerned?

MR. FLEISCHER:  Well, and I think you can talk to Treasury to determine exactly what specifics they are talking to Argentina about, but the President has made clear that he will remain helpful and the United States government wants to help through the International Monetary fund; but, first, it's important for Argentina to take the necessary steps to achieve sustainable growth.

Q    The reason I ask is, when Enron was going down, the administration did nothing, despite please from Enron, and that is now being defended by the Secretary of the Treasury and the chief economic advisor as essentially showing how capitalism works, the genius of capitalism.  Is that what's happening with Argentina as far as the administration is concerned?

MR. FLEISCHER:  I don't think you can make really valid comparisons between domestic actions with a company and international relations that have a whole different set of issues and more complications, including issues of contagion, for example.  Our obligation is to work through the International Monetary Fund wherever we believe that it is in the interest of the nation we are working with, as well as a careful examination of what internal procedures a different nation has put into place.

I understand the philosophical approach people take to it,  but I think it's a little overly simplified and simply painted, when it's much more complicated to compare one nation's relations with a sovereign nation as opposed to a domestic issue with a company.

Q    Ari, there are calls today that for SEC Chief Harvey Pitts to recuse himself in the Enron investigations, given the fact that he also has a history with the failed corporation, as well.  Do you think that's something that the White House would get behind?  Is that something that you folks support?

MR. FLEISCHER:  You know, again, I think the SEC, first of all, is an independent agency, and the President has appointed Harvey Pitt to the post at the SEC.  Having said that, the President has full faith and confidence that Mr. Pitt, as well as all members of his administration, will do the right things for the right reasons and will comply with all ethics provisions.

But I do want to make one point, though, about the general approach which has been raised in this issue, and I would refer you to the SEC for the specifics of Mr. Pitt.  I think they have information they would provide to you.  But I do want to say that if the suggestion is it is somehow unwise or improper to put somebody who has a background in accounting at the Securities and Exchange Commission because that could raise the possibility of the appearance of a suggestion of a perception of a conflict of interest, the logical conclusion would be that you need to appoint a farmer to head the Security Exchange Commission, or that you need to appoint an accountant to head the Department of Interior.

One of the strengths of the government is people come from a background in which they have expertise that then they apply in a way that represents the best policy to protect the nation.  And I don't think it should surprise anybody to see that the Securities and Exchange Commission is led by somebody who has expertise that comes from being -- having spent a career in the relevant working field.

Q    That's a very good point, but that wasn't the inference here.

MR. FLEISCHER:  Ken, go ahead, follow up.

Q    What I was basically saying is because he has a connection to a corporation that's being investigated, not whether he's qualified to have the job he has, but because he has the position --

MR. FLEISCHER:  The point is the same -- the connection to a corporation.  And, again, no suggestion of wrongdoing.  It's just, again, the suggestion that because somebody, somehow, worked in a background, worked in a field in which they developed expertise working for a corporation that is connected somehow suggests wrongdoing of that person.

Now there are recusal rules, there are recusal procedures.  They will be followed by all government officials as appropriate.  They make those determinations based on the facts at hand.  But I wanted to address the broader issue, because I think there is a risk that many people get tarred with something that is not accurate, wise or helpful to the nation because they come from a certain field of expertise.

Q    Can I have one more?

MR. FLEISCHER:  You've had two.

Q    I know.

MR. FLEISCHER:  Let's just move it around the room.  We'll come back.

Q    Ari, regarding the alleged shoe bomber, Richard Reed, can you confirm that additional federal charges will be brought against him today and what those charges --

MR. FLEISCHER:  If that were to be the case, the Department of Justice would be the appropriate place to make such an announcement.

Q    You can't confirm if --

MR. FLEISCHER:  I would urge you to talk to the Department of Justice.

Q    Can you give us, though, before that, which we expect to be today, a broad sense of what the government believes his motives were to be and his ties to Osama bin Laden's al Qaeda group?

MR. FLEISCHER:  That would come from the Department of Justice, not the White House first.

Q    Ari, last week you said there's nobody here that I'm aware of that it was brought to my attention about contacts -- who Secretary Evans and Secretary O'Neill told.  We've since learned that Mitch Daniels had gotten a call from Mr. Lay and that Secretary Evans --

MR. FLEISCHER:  That's correct.

Q    -- told Andy Card.

MR. FLEISCHER:  That's correct.

Q    What did Andy Card do with that information?

MR. FLEISCHER:  Andy said thank you to Secretary Evans and left it at that.

Q    He did nothing?

MR. FLEISCHER:  That's correct.

Q    Isn't that odd that he wouldn't tell the President that two Cabinet officers and the Chief of Staff would not inform the President of the United States that an appeal is being made for government help or a bailout?

MR. FLEISCHER:  Helen, as you can imagine, Cabinet secretaries, the Chief of Staff receive information on all kinds of issues about all kinds of topics, and they make a determination about what they think needs to be brought up to the President's level.

I think particularly in the case where a determination was made, as you know, from the Secretaries talking to each other that no action was taken, there was nothing to report.  Those are the determinations that Cabinet Secretaries and Chiefs of Staff are paid to make, to use their judgment about what they feel they need to advise the President about.

And Secretary Evans and Secretary O'Neill have answered that question, themselves, repeatedly on I don't even know how many shows by this point and they've given their reasons why they took the action they did, and saw no reason to inform the President.

Q    Is there some order from the President, only tell me what you think is important to me?

MR. FLEISCHER:  No, it's at the discretion of the Cabinet members, of course.

We're going to keep moving it around here.  We'll come back up.

Q    Is there an informal review underway at the White House and at various agencies, to see if any other individuals talked to Enron executives to make sure it is reported and out there and made public?  Is there any informal review underway?

MR. FLEISCHER:  Kelly, I think there are three major issues with Enron that the White House is looking at.  One is the question of criminal wrongdoing.  And the President is deeply concerned about criminal wrongdoing that has been alleged to have taken place in this case, by Enron or anybody else.  And that is being pursued vigorously by the Department of Justice, and they will pursue it as they see fit and the President wants that to be pursued.

Secondly, it is vital that the government review the policies that could have allowed this to happen in the first place.  The President has directed his Secretary of Treasury, his Secretary of Commerce and the Secretary of Labor to begin a policy review to see what can be done to protect other people's pensions in other companies and to review accounting procedures, so that accounting firms cannot be in a position where this takes place again.

Those are the two areas that the President is focused on:  a criminal investigation to get at the bottom of what wrongdoing was done; and a policy review to protect people's pensions.

Now, if you're asking is the White House engaged in any effort to determine whether or not any contact was made with anybody at Enron for any reason, I suggest to you that there is no hint there of any wrongdoing.  If you have any information, any evidence you would like to bring forward about potential wrongdoing, we will do our best to track it down for you.

But other than that, I liken it to a fishing expedition -- such a broad request, that we will be helpful to provide information about any allegations of wrongdoing.  To date, nobody has made any allegations of wrongdoing or has even any suggestions of them.

Q    Ari, on a different subject, has the President been involved or the administration been involved in any effort to persuade American allies not to ship weapons, missiles, whatever, to either India or Pakistan --

MR. FLEISCHER:  I'll have to check on that, David.

Q    On the Philippines, how far is the United States willing to go to help in their fight against Abu Sayyef?

MR. FLEISCHER:  Well, as part of the war against terrorism, the President is very concerned about combatting terrorism wherever it may exist.  There is a terrorism problem in the Philippines, as is well known, and the President wants to be helpful to the Philippine government in combatting terrorism there.  And so the United States has sent a team of advisors to the Philippines to be helpful to the government there in fighting terrorism, and --

Q    -- mission?

MR. FLEISCHER:  I'm sorry?

Q    Is this an open-ended mission?

MR. FLEISCHER:  They will be there so long as the mission is required.  And the Department of Defense and the Department of State did consult with the Congress in the process of doing this.

Q    I have two questions, Ari.  The first one has to do with the criticism that is out there by some civil rights and human rights groups on the way the Taliban prisoners of al Qaeda are being treated in Cuba, as far as lodging.  Some are complaining that the fact that their beards were shaved off.  What do you say to that?

MR. FLEISCHER:  The President is very satisfied with the treatment that the detainees are being given, that it is humane, it is respectful, and the President is satisfied at all levels with the actions that the Department of Defense has taken in the treatment of these people.  These are very dangerous people.  These people have been known to engage in -- in a prison uprising that have cost a lot of lives.

These are, as Secretary Rumsfeld said, among some of the worst of the worst of the al Qaeda with whom we have fought.  But the President is satisfied that they are being treated as Americans would want people to be treated.

Q    Excuse me, can I get my second question?

MR. FLEISCHER:  Go ahead, you get a second question.

Q    On Terry's question about Argentina, and the President going to speak tonight on the future of the Americas.  One of the criticisms that's being felt down there -- countries like Argentina and other countries went through the decade of the 90's putting in a lot of reforms to the IMF and the U.S. government and the World Bank were sponsoring, and in most of the cases, the people aren't any better off.  In some cases, they're worse off.  Will the President address that in his issue in his speech today?

MR. FLEISCHER:  Well, you will hear his remarks tonight, and as I indicated, I'm going to do my best to try to get you an advance text because of the hour of the speech, and so you will see what the President is saying.  But, you know, in many places in South America and Central and Latin America, reforms were put in place similarly, which have led to tremendous growth in those countries and in those economies.  They were the right reforms taken for the right reasons.

Each nation has different reasons.  Some were successful with those reforms.  Argentina, of course, has had a longstanding struggle with keeping its economy strong.  So there are unique issues that focus on Argentina that also are relevant here.

Q    Getting back to your response to Kelly's question, will the administration respond to subpoenas and requests from congressional investigators for all contacts between administration officials and Enron and Arthur Andersen, as related to financial problems at Enron?

MR. FLEISCHER:  I think that depends entirely on something that is just pure conjecture and speculation about -- on something that has not happened and that is unknown.  So I don't know how to answer a question like that.

Q    They have let it be known that they're going to request all contacts between the administration -- any administration officials and Enron regarding the financial --

MR. FLEISCHER:  The administration has received no such request from the Congress.

Q    Ari, back on the tax cut issue, Terry McAuliffe last night said it's not fiscally sound to have a tax cut in the midst of war and recession.  And President Bush, himself, just a couple of weeks ago said that we would be running -- would have running deficits and about the budget may not balance this year.  What are your thoughts about the fact that people are saying this is not fiscally sound and we're in the midst of a crisis and there's no cushion, and you're looking at taking this money out?

MR. FLEISCHER:  I think that the call today to raise taxes and the statement made by the leaders of the Democratic Party as a reminder of the big difference between the two parties.  The Republican Party and some group of Democrats want to work to lower taxes because they believe it's the right thing to do to let people keep their money and because it will create growth.

There is another group of Democrats that really is represented by the Democratic leadership who, in all times, good and bad, looks to raise taxes on the American people.  Today is another reminder of that.

Q    Wait a minute, let's talk about it being fiscally sound, though -- taking money, giving people money when you're trying to fight a war which is going to cost millions and maybe billions of dollars, then you also have a recession where people are losing their jobs.  How can you talk about giving people money when you need money?

MR. FLEISCHER:  No one is giving people money.  The President wants to let people keep the money that they make because it's theirs.  Senator Kennedy today proposed taking away people's money.  And that's the difference between the two parties.

Q    On Haiti, on January 1st, President Aristide accused the United States of economic terrorism for withholding an American Development Bank loan.  Our ambassador apparently walked out of that meeting.  What's the administration's position now on the Aristide government?  And does the President also have a position on the harassment of journalists by that same government?

MR. FLEISCHER:  That's the first I have heard on the premise of that question, so let me take that and report back to you.

Q    I was going to ask you an Afghanistan question, but I'll wait until tomorrow.  Back to this -- I want to make sure I understood the Enron question.  You're saying that the President is interested -- the government is pursuing the Justice Department investigation and that, this broader thing of how to make sure that this doesn't happen before.  But that in the White House there is no effort being made to gather together the contacts?

I want to make sure I understand that, because that's a rather novel way of managing a crisis and I want to make sure.  Nobody is interested in who called Enron in this White House or in the government, and getting together those people, what did you tell them, so that you don't know?  But that if we find out about one of these calls, you'll --

MR. FLEISCHER:  Again, if you have any suggestion -- and no one has -- of any wrongdoing, I urge you, bring it forward, present it, ask it to me, ask of me on the record, ask it to be on background, ask it to me wherever you like, and we will do our best to track it down and find out.

But if you're asking -- if you're asking if the White House is chronicling any contact with anybody in this administration and anybody at Enron over anything, I think that's such a broad request that it's characterized as a fishing expedition.  But that's exactly what the question is.

Q    I'm not talking about any -- I'm talking about when the company was in trouble, calls they made or did not make to the White House or the senior staff or the Cabinet.  You're telling me you don't even want to know those calls that might have been made?

MR. FLEISCHER:  Calls about what?

Q    Help or anything.  I don't -- I can't --

MR. FLEISCHER:  See, again, there you go, you're asking me are we doing something that you can't even define.  You're saying to me, are you engaged in a -- hold it, hold it -- you're asking me are you engaged in a -- I'm getting there.

You're asking me, are you gathering information about any contact with Enron about what?  Ask the question.

Q    -- financial position.

Q    Communication.

MR. FLEISCHER:  Exactly, any communication.

Q    But that's in --

Q    Wait, wait, can we follow up?

MR. FLEISCHER:  Go ahead, Russell.

Q    I have a couple Harvey Pitt questions.  Harvey Pitt is here at the White House, apparently now with Richard Grasso, head of the New York Stock Exchange and leaders of the securities industry for a 1:00 p.m. meeting.  What is that about?

MR. FLEISCHER:  That's a bill signing.  That's a signing of legislation that passed by unanimous consent in the Senate, and I think 414 votes in the House, dealing with fees that are collected.

Q    Two follow ups.  One, is the President concerned that his buddies at Enron are going to jail?

MR. FLEISCHER:  The President thinks that it is vital for the Department of Justice to pursue this wherever it goes, to whoever it goes and to do whatever it takes to investigate any criminal wrongdoing.

If, as a result of that, anybody ends up with a prison sentence, that is the American system of justice and that is proper and that is the way it should work.  And that is what the President wants to see pursued.  That and the policy reviews is what this administration is dedicated to.

Q    One more.  Harvey Pitt, he was a defense attorney for Arthur Andersen, before he came to the SEC.  Arthur Andersen is accused of destroying documents, they've admitted destroying documents in this matter.

Now, Harvey Pitt wrote in a law review article in 1994, on destruction of documents, this, "each company should have a system of determining the retention and destruction of documents.  Ask executives and employees to imagine all of their documents in the hands of a zealous regulator or on the front page of the New York Times.  Obviously, once a subpoena has been issued or is about to be issued, any existing destruction policy should be brought to an immediate halt."

He seems to be saying there -- and this is what white collar defense attorneys advise their clients -- destroy incriminating documents right up until the time a subpoena arrives.

Are you concerned that Harvey Pitt, as a defense attorney, gave the green light to clients like Arthur Andersen to do exactly what they did?

MR. FLEISCHER:  The President is very concerned about the allegations of destruction of documents at Arthur Andersen.  And that is, again, why this is being investigated.  And I think what you'll find, too -- and I urge you to talk to the Securities and Exchange Commission, they will be happy to explain to you what is happening there with the ethics rules and how the enforcement unit of the Securities and Exchange Commission conducts its investigations.

Q    I'll try to state this carefully so you don't have to restate the question, you can just give me a "yes" or "no" if you can.  Is the White House determining whether or not administration officials or White House aids have received any calls from Enron since the summer of 2001?

MR. FLEISCHER:  On any topic, on anything?

Q    That's my question, have they received --

MR. FLEISCHER:  On any topic, on anything?

Q    Have they received any calls, are you guys determining whether or not White House officials or administration officials have received calls from Enron since the summer of 2001?

MR. FLEISCHER:  Again, the standard the White House has put in place is that if you have any suggestion of any wrongdoing, as opposed to such a broad, open-ended question --

Q    I'm asking whether or not you guys are determining whether these calls were made.  I'm not asking you --

MR. FLEISCHER:  "These" calls meaning which calls?

Q    I'm asking you whether or not, yes or no --

MR. FLEISCHER:  You said, "these calls."  Describe the calls.

Q    -- yes or not, is the administration determining who in this administration got calls from Enron in the last six or 10 months.

MR. FLEISCHER:  About any -- now it's six or 10 months.

Q    Since he summer of 2001.

MR. FLEISCHER:  About any topic or anything?  Again, the administration is interested, if anybody has any evidence of wrongdoing --

Q    I'm asking yes or no --

MR. FLEISCHER:  I think you've heard the answer.

Q    No, no, I haven't.  I want to know if the White House cares enough about this to investigate?

MR. FLEISCHER:  The White House views this as a matter of a criminal investigation and a policy review.  And if somebody has a suggestion that something was wrong, it will be investigated and reviewed.  But other than that, that is such a broad question about any topic, any conversation about anything.

What you're saying is, communication in itself, that all communication in itself needs to be brought under scrutiny.

Q    It's a simple "yes" or "no."

Q    With all due respect, the question couldn't be narrower.  It's "yes" or "no," are you investigating who received these calls?  You either are or you aren't.  I'm not asking you --

MR. FLEISCHER:  Wrongdoing should be investigated.  Communication -- I want to again remind everybody here -- communication --

Q    So the answer is "no"?

Q    Why won't you say "yes" or "no"?

MR. FLEISCHER:  Because it is not being handled in the way that I think you all are looking for it to be handled, because you're trying to make comparisons to previous administrations.  That is not the White House approach.

Q    -- different way.  I understand your point of, we're not going to engage in a fishing expedition.  But look at it this way.  Are you guys doing a review, not of any calls about anything, but checking with different agencies, just like Evans and O'Neill got calls, just like Robert Rubin made calls, did anybody else here get calls about Enron's financial problems?  Is that specific question being inquired so you have the information?

MR. FLEISCHER:  I think all the agencies are aware, as a result of the questions that they've gotten from the press, as well as conversations that we've had with the agencies, that if there are any questions that the press is asking about those contacts, they should look into it and see if they can't answer reporters' questions.

And what you have seen is, all those questions have been answered by each agency as those questions are put to them.

Q    Except this one.  You --

MR. FLEISCHER:  Go ahead, Ron.  Let's stay with it.

Q    Except this agency, the White House will not say who in this White House received calls from Enron since 2000 -- you won't even tell us whether or not you're asking White House aides.  And you certainly won't tell us what White House aides, if any, have received these calls.

MR. FLEISCHER:  Again, because you're asking, again, the question that is so broad, has there been any connection or conversation with anybody at the White House about Enron, about anything, anything at all.  That's what you're asking the White House to see if it is investigating.  And I'm telling you, and I'm answering the question by telling you that the White House is going to focus on this again on a criminal matter, on a policy matter.

But the communication, in and of itself, there is nothing wrong with it.  It would not surprise me at all if there have been conversations with people at Enron throughout the government.  It wouldn't surprise me if former Clinton administration officials talked to the White House.  It wouldn't surprise me if people at Enron.

The point is, no one but no one has made any allegation or suggestion of wrong doing.  And by asking the White House, are you chronicling something, you're suggesting that there should be something to chronicle, because there might be wrongdoing.

Q    You're putting that inference yourself, for the record.  None of us here suggested that.

Q    If it was relevant to disclose the calls that Rubin made, the calls that Lay made to Evans and O'Neill, and if it was relevant for the Treasury Department to continue to find out, as they did, that Under Secretary Fisher received a call from Rubin subsequent to the Lay calls, why does it become a fishing expedition to find out if Lay or any other Enron officer made telephone calls or any contact with other administration officials on the specific point of Enron's financial problems and what if anything could be done about it?  Because we know, because you've told us, that Don Evans was asked for help.  He was asked for help by Ken Lay, and the administration said, no.

MR. FLEISCHER:  In response to that much narrower, more specific question, the administration is being helpful to reporters who ask questions about, was there a conversation with anybody in the administration and Enron about the financial condition of Enron?  That is entirely different.

What I have always said on that, and I say again today, is you have heard about all the conversations that I have been made aware of, that I'm aware of.  And we will continue to provide you that information about questions, did anybody at Enron reach out to anybody at the White House about Enron's financial condition.  But if they're asking, again, was there any conversation with anybody at the White House and Enron about anything else, that is such a broad question, and there is no inference of wrong doing.

I think the first question was answered because there was a suggestion that it could have been something the government knew that it could have taken action on.

Q    Are you at all being proactive, then?  Rather than us just bringing it to you, are you just trying to find out, hey, everybody in the room at the White House, if you got a call from somebody at Enron who wanted help, or who was advising of their financial situation, would you let us know, so that if the question comes up, we might be responsive?

MR. FLEISCHER:  I think many of you know, because you asked this question last week, and you were given the answer, the press office does have routine conference calls with all the agencies, every day, to go over any item that is in the news.  And it's been made plain to the agencies that these are questions that reporters are asking.  And if they ask you the question, do your best, figure it out, tell people.

Which is exactly what you've seen happen here, whenever something like that was reported, just as you point out, with Secretary Rubin, as well as the calls that were made to Secretary Evans and Secretary O'Neill, they told you.

Q    So the answer is yes or no, that the White House is asking aides and other officials in the White House whether they had specific conversations with Enron, about their financial condition?

MR. FLEISCHER:  As I mentioned, on the calls with the Cabinet officials, on the narrower question you asked, the answer is yes, of course.

Q    Using David's nice, tight definition, have you provided us with all the contacts that you're aware of?


Q    If I can narrow this issue just slightly, the key argument that Enron appears to have been making of the Treasury was that their own bankruptcy or collapse, if it happened, could cause a systemic effect throughout the financial system, the way Long Term Capital Management did in '98.  When that happened in '98, it was a very hot subject for the President and his immediate aides.

Are you telling us that neither the President nor any of his senior aides, to your knowledge, in this building, not the Treasury, were made aware of Enron's concern or stated concern that their own troubles would lead to a broader systemic risk for the American financial system?

MR. FLEISCHER:  Sure.  Just as Secretary Fisher of the Department of the Treasury took a look at that and came to the conclusion at Treasury that there was nothing systemic.  That conclusion was shared by White House officials also, who took a look at whether or not there could be any broader market-wide implications to Enron's bankruptcy and reach the same conclusion.

Q    I'm sorry, I don't think we knew that before.  Which White House officials looked at that?

MR. FLEISCHER:  The economic team had conversations with themselves to explore this -- not in reaction to any phone calls they had with Enron officials.  But as they took a look at what was publicly known at the time with the collapse of Enron, they asked the very logical question:  could this have a broader impact on the economy.

Q    And did they know that Peter Fisher was examining the same question because of concerns by Enron?

MR. FLEISCHER:  Not because of concerns with any phone call with Enron, but because they thought it in itself was a meritorious question that's -- absolutely, I think, if the economic team at the White House, having seen what was happening to Enron, reading about it in the papers every day, did not ask the question, does this have an impact, really, on the economy, they wouldn't have been doing their jobs.

Q    Which official was it?

MR. FLEISCHER:  It was Larry Lindsey and his economic team.

Q    Larry used to be a consultant at Enron, so he was familiar with the company and its operations.

MR. FLEISCHER:  I think it's fair to say that the entire economic team understood about the importance of looking into whether Enron's collapse could have broader implications, and they came to the same conclusion that the Under Secretary of Treasury did.

Q    They took a broad look at this, but they were not aware that Enron had made this case across the street at the Treasury?

MR. FLEISCHER:  Again, I would have to check to see if they -- about that Enron made the case across the street?

Q    Yes.  When Enron called, what started Peter Fisher down the line was Ken Lay and then some other Enron officials saying it would be a systemic risk out here --

MR. FLEISCHER:  Not that anybody has made me aware of.  They took a look at it because of the obvious implications it could have had for the broader economy.

We'll come back.

Q    Let me follow that, Ari.

MR. FLEISCHER:  Go ahead.

Q    If I may go back to India and Pakistan, these days very high-level visits are taken to and from India.  One, Defense Minister of India will be here tomorrow -- whether he's meeting with the President or not, I do not know.  But Secretary Powell is in India and Pakistan.  Now whether Secretary Powell is carrying any special message from the President and asking India or Pakistan to move their forces because they are aiming at each other.  And while lots of wars are still there, and if Defense Minister meets with the President tomorrow, if the President going to ask him to move the forces from the border?

MR. FLEISCHER:  Well, I'm not going to comment on specifically, exactly what the topics of conversation are.  Secretary Powell will be able to address that himself after his meetings.  But the Secretary is there at the direction of the President because of the ongoing concern about the tensions between India and Pakistan.

There have been some very helpful developments in the last several days, including President Musharraf's speech.  And as you know, the President praised President Musharraf for what he viewed as a courageous speech.  But the region does remain tense.  It remains an issue of vital priority and importance to the administration, hence the Secretary's presence in the region.

Q    When the President spoke with both leaders in India and Pakistan, whether he asked them to -- not only that tensions are high, but to move their forces, and not to aim or not to go to war?

MR. FLEISCHER:  I would refer you to the statement that was made on the President's calls, right after he made them.

Q    Let me understand when the national economic team was assessing the implications of an Enron collapse.  Was this occurring about the same time that Ken Lay was talking to two of the President's Cabinet officers, including its former campaign chair?  And was the President at all consulted or made aware that the economic team was considering this?

MR. FLEISCHER:  I'd have to check to see if they informed the President about anything they found.  But, again, I think it's logical, natural.  You should expect the economic team -- you would hope the economic team is taking a look at the broader implications when the 7th largest company in the United States unexpectedly collapses in a way that surprised your business pages, as well as people here.

Q    Are we talking about October here?  Before that?

MR. FLEISCHER:   Going to have to take a look at the exact time line.

Q    -- though, whether or not this assessment was going on at the same time that Enron was contacting people -- supervising some of the folks dealing with the assessment, whether or not they told their superiors they were undertaking the assessment and whether the superiors, the President's Cabinet, told him?

MR. FLEISCHER:  I know you've heard Larry Lindsey say that he had no conversation with people at Enron during that period of time.  So he did it in his capacity, and wisely so, as an economic advisor who would be charged with exploring whether or not the bankruptcy at the 7th largest company could have broader implication.  It's just as --

Q    -- as the President's Treasury Secretary who did have contact with Enron at the same time.

MR. FLEISCHER:  And are you alleging something, or are you --

Q    I would say that if he's looking into this, wouldn't he have told the Treasury Secretary?  Wouldn't the Treasury Secretary have told him, Enron's called, and there are some problems?

MR. FLEISCHER:  Well, now, you're asking a question about whether or not there was any contact in the administration to discuss whether Enron's collapse would have broader implications on the economy.  Your point is?

Q    The people involved in that would have talked to each other.  Yes?

MR. FLEISCHER:  They may have.  So what?

Q    Did Larry Lindsey have any contact --

Q    Why didn't they --

Q    How is that discussion held --

MR. FLEISCHER:  On the broader implications about whether Enron's collapse has implications for the economy, I think if the administration didn't look at that, you would be asking, why wouldn't you look at that.  Of course, they should look at that, and they did.

Q    And how is that study undertaken, how is that conversation held without somebody saying, well, the chair called me the other day, the chairman of the company called me the other day and said, it would have broader implications for these reasons.

MR. FLEISCHER:  Well, again, I can only report to you that they looked at it.  You know that Secretary O'Neill and Secretary Evans told you who they talked to about it.  And, again, if they didn't take a look at it, I think you would be asking questions why didn't they.  I think -- I really don't have anything more to offer it, so --

Q    Did Larry Lindsey talk to Ken Lay or anybody at Enron?

MR. FLEISCHER:  No, Larry was asked that, show on Fox News Sunday a few weeks ago and he said no.

Q    Ari, can you get back to us on the time frame?  You had mentioned earlier that --

MR. FLEISCHER:  Yes, I will.  Sure.

Q    Ari, can I just clarify exactly what you were saying to David, is that Peter Fisher didn't talk to Larry Lindsey about his call about LTC --

MR. FLEISCHER:  I said not that I've been made aware of.  I'll find out.

Q         Thank you.

END                              1:30 P.M.  EST

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