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Inside Politics

Kentucky Governor Ready to Respond to Evidence in Sexual Harassment Suit; Democrats Say Congress Should Not Write Blank Check for Bush on Iraq

Aired September 20, 2002 - 16:00   ET

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

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


CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington. Kentucky's governor appears ready to respond to new evidence in a sexual harassment suit against him. Will he change story?
KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow on Capitol Hill, where some Senate Democrats are adamant that Congress should not write a blank check for the president authority to go after Iraq.

WILLIAM SCHNEIDER, SENIOR POLITICAL ANALYST: I'm Bill Schneider in Washington. It may seem as though everyone and his brother is talking about Iraq, but only one of them can earn the "Political Play of the Week."

CROWLEY: Also ahead: Homeland Security Director Tom Ridge, "on the record" about the Orange alert for terror and how long it may last.

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

CROWLEY: Thanks for joining us. Judy is off today.

Kentucky governor Paul Patton abruptly canceled his scheduled public appearances today and instead scheduled a news conference, due to begin an about an hour. He is expected to answer questions about the sexual harassment lawsuit he faces, was filed by a woman who claims they had a two year affair. Tina Conner alleges Patton used his power as governor to help her businesses during their affair and to retaliate against her when she broke off the relationship.

According to reports out today, the phone records from early 1997 through last month show more than 400 phone calls were placed from Patton's office to five telephone numbers associated with Conner's business.

WHAS TV reporter, Bob Hebert, first reported the allegations against Patton. He is in Frankfurt, Kentucky, where the governor will hold his news conference. Bob thank you again for joining us. What can you tell us about what the governor has to say?

MARK HEBERT, WHAS CORRESPONDENT: Well, Candy, first of all, it's Mark Hebert from WHAS TV in Louisville. Sorry you got the wrong information.

But what we can tell you is within the hour here Governor Paul Patton of the state of Kentucky, Democratic governor in his second term is expected to come before the TV cameras and the people of Kentucky and essentially acknowledge that he had a sexual relationship with this woman a couple of years ago. The governor is also expected to say and deny to deny that he ever used his office inappropriately.

In other words, he did not try and punish her or he didn't try to help her while that sexual relationship was going on. So, that's what we're expecting here at a 5:00 Eastern Time news conference here at the History Center in Frankfurt.

CROWLEY: Well, Mark, at this point it seems to me that this only starts the investigation since you have these phone calls. You have him apparently now going to say, OK, there was something. Are people going to take him at his word on this, or do you expect investigation?

HEBERT: No, everybody is expecting an investigation, either by the FBI, which could look to see if he traded sex for favorers for this woman or by the Ethics Commission here in Frankfurt, Kentucky, our executive branch Ethics Commission has already said that it is going to look into these allegations.

So, you're going to have at least two different investigations ongoing, I suspect, in the coming months, but I think there are two different stories here. One, did Governor Patton have a sexual liaison with this woman? He's going to apparently admit to that here in about an hour. The other question is did he use the power of his office to try and help here, then punish her after the relationship broke off? That will remain to be seen.

But again, Governor Patton is expected to deny that he did that.

CROWLEY: Mark, we've got about a minute left. How much political trouble is he in? He was a fairly popular governor. Is this something that could force him out of office early? Is this something he can ride out? Do you have a sense of that yet?

HEBERT: No, we don't.I think it's way too early to discuss that. I think that Governor Patton surely will not announce his resignation today. Nobody expects that.

He was planning to run for the U.S. Senate against Jim Cunning in Northern Kentucky in two years. Certainly that senate rune will be in jeopardy. Does it hurt other candidates, other Democratic candidates here in the state of Kentucky? Paul Patton's been out stumping for them. Does it hurt them? Certainly it'll hurt them in the November election coming up.

But as far as Paul Patton, no, we do not expect a resignation. We'll just have to see where this investigation or these investigations go down the road before deciding whether Paul Patton should be forced from office.

CROWLEY: Mark Hebert, we thank you very much from WHAS TV. Thanks a lot.

HEBERT: Thanks, Candy. Thank you.

CROWLEY: Now, the political and international debate over Iraq.

President Bush today pressed for Russian support of his tough stance against Saddam Hussein. The White House says Mr. Bush had a productive phone conversation with Russian president Vladimir Putin. He also met at the White House with the Russian defense and foreign ministers. President Bush may have a relatively easier selling job on Capitol Hill, but some senate Democrats are determined to change the language of a White House draft resolution authorizing the use of force against Iraq.

Here's our Congressional correspondent, Kate Snow.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Senator Russ Feingold wants the world to know there are some Democrats who won't go along with a White House- proposed resolution authorizing military force against Iraq. He couldn't be more direct.

SEN. RUSS FEINGOLD (D), WISCONSIN: It should be scrapped. It's a non-starter. It's really an astonishing document.

SNOW: Only a handful of Democrats are expressing such strong views, but many are concerned the language written by the White House gives the president too much leeway, one rewrite being suggested by senator Joe Lieberman, language similar to what passed back in 1991.

Before using force, the president has to tell Congress he tried to use, quote, "all appropriate diplomatic and other peaceful means to get Iraq to comply with U.N. resolutions."

A senior Democratic aide tells CNN a number of Democrats think the 1991 language is a good model. Democrats also point to part of the very last sentence, authorizing the president to use force to, quote, "restore international peace and security in the region." Many say that could mean taking action anywhere in the Persian Gulf, not just Iraq.

SEN. DICK DURBIN (D), ILLINOIS: This proposal coming from the White House makes some vague reference to the region. Does that mean the entire Middle East or what?

SNOW: White House officials say the resolution is only meant to deal with Iraq, and they're all but certain the language will be rewritten to make that clear. But those changes may not satisfy Senator Feingold. He's concerned his Democratic colleagues will quickly approve a resolution just because elections are around the corner.

FEINGOLD: I'm worried that they're so desperate to just sign off on this thing, to look like they want to get Saddam Hussein, which we all do, that we won't give it the scrutiny that is required of the United States Senate.

(END VIDEOTAPE)

SNOW: Senator Feingold went on to say this could be one of the most historic mistakes in the history of U.S. Senate if they don't reject this language, Candy.

Senator Daschle told the White House, President Bush earlier this week not to expect unanimous support from Senate Democrats. Clearly Mr. Feingold's comments point to just that. But the process has begun up here. Henry Hyde, the House International Relations Chairman, sending some of his suggestions for smaller changes to the language over to the White House. Today, Congressional leaders, Candy, hoping they could have a vote on this resolution as soon as the week after next.

CROWLEY: Kate Snow on Capitol Hill, on top of it as always. Thanks, Kate.

In a report to Congress today, the Bush administration spelled out its reasons for favoring preemptive strikes against hostile nations and terrorist groups developing weapons of mass destruction.

Let's bring in our senior analyst, Jeff Greenfield. So, Jeff, what are the reasons that are spelled out?

JEFF GREENFIELD, SENIOR ANALYST: Well, what I think you see here is the repeated assertion throughout this document that the post-Cold War world and the new threats to the U.S. require a whole new set of presumption.

They argue that the deterrents worked to contain the Soviet Union, but now, this is a quote, "deterrents based only upon the threat of retaliation is far less likely to work against leaders of rogue states, more willing to take risks, gambling with the lives of their people and their wealth of their nations". I think you can read Iraq clearly there.

And, second, as you've just mentioned, the argument for preemption. It tips its cap to the international community. And then the document says -- and this is probably the headline -- "we will not hesitate to act alone if necessary, to exercise our right to self defense by acting preemptively against such terrorists." So I think that's the key message that's spelled out in this document.

CROWLEY: So, does that last message underscore what many people feel about the president, that he's a unilateralist, a go-it-aloner?

GREENFIELD: Well, I think the document tries to make it very clear that that's not what they are saying. It certainly defines United States national interests and it does stake that we will act alone if necessary. But also stakes out a global vision.

And, I think, to appeal to the international community it lays great stress on economic as well as military security. It talks over and over about bringing, quote, "free markets and free trade to every corner of the globe."

And by the way, Candy, in that sense there is an echo, I think, of domestic politics because that view of growth -- economic freedom, lower tax rates, less regulation, skepticism about big public investments, that tracks with mainstream conservative thinking about how impoverished nations can grow and get wealthier.

CROWLEY: So, having read through the whole thing, are there are inconsistencies in policies

GREENFIELD: Well, I think in the area of free trade it just jumps out at you, because this document says, as I just mentioned -- first of all, it says that poverty can breed the kinds of discontents that lead to anti-Americanism and to terrorists, and that's why it's important to care about global poverty.

But if you look at Pakistan, probably one of the most dangerous places in the world right now. Getting out of poverty depends on growing Pakistan's textile industry.

But the United States, out of domestic politics, imposes tariffs and quotas on precisely those kinds of imports. And earlier this week, to give you another example, "The Wall Street Journal" told a story of an impoverished sugarcane grower in South Africa, where poverty comes in large measure from the barriers to international trade.

And it's rich nations that keep that kind of sugar out of their countries. So, for my money, it is quite remarkable how the free trade rhetoric, which just shoots through this document contrasts with some of what the United States actually does.

CROWLEY: And finally, Jeff -- and maybe we should have asked this at the beginning -- what's the point of this paper? Why do we care about it? What's it trying to do?

GREENFIELD: Well, I think one -- when the world's most powerful nation outlines its premises, the world pays attention, But there are actual reasons for this. I mean, in an international world, even more than in presidential politics, words weigh a ton.

Fifty-two years ago, Harry Truman's secretary of state, Dean Atchison gave a speech that outlined America's defense perimeter, and he didn't include Korea. And for years, possibly unfairly, critics charged that that omission may have led the Soviets and North Korea to conclude that the U.S. wouldn't act.

And historians are going to debate for years whether a dozen years ago the U.S. ambassador to Iraq maybe have unwittingly, through the choice of her words, signal to Saddam Hussein that America wouldn't act if Kuwait was subject of an Iraq invasion.

So, in this case, I think no nation and no diplomat can read this without concluding pretty clearly that the U.S. -- this administration thinks it is at a new post-Cold War era, the old rules are gone, and the U.S. will act preemptively under some circumstances, which is a break from at least the rhetoric of the Clinton administration.

CROWLEY: Thanks very much. Jeff Greenfield out of New York. We appreciate it.

In the war on terror, federal authorities are holding a former Sudanese air force pilot, who may have been planning to hijack a plane and fly it into a target in the United States. Sources say he's being held in Greensboro, North Carolina, after the FBI urged law enforcement agents to be on the lookout for a Sudanese pilot who "may represent a possible threat."

Some sources characterize the search for the man as "urgent," but others say there was no information suggesting any specific targets were threatened in the Washington area, or anywhere else in the U.S. Federal authorities also are holding several other Sudanese citizens at undisclosed locations, but it's not clear if they have any connection to the pilot.

The members of Congress heard more testimony today about intelligence failures leading up the September 11 terror attacks. A Congressional investigation found U.S. intelligence agencies missed opportunities to pursue two of the 9/11 hijackers for a year-and-a- half before the attacks. The staff director of the joint House-Senate inquiry said the CIA failed to share information with the FBI.

(BEGIN VIDEO CLIP)

ELEANOR HILL, STAFF DIRECTOR: The CIA had obtained information, identifying two of the 19 hijackers, Almihdhar and Alhaszmi as suspected terrorists carrying visas for travel to the United States as long as 18 months prior to the time they were eventually watch listed. There were numerous opportunities during the tracking of these two suspected terrorists when the CIA could have alerted the FBI and other U.S. law enforcement authorities to the probability that these individuals either were or would soon be in the United States.

(END VIDEO CLIP)

CROWLEY: We have our national security correspondent, David Ensor, here.

David, there was some concern on this committee that they shouldn't be holding these hearings at all.

DAVID ENSOR, NATIONAL SECURITY CORRESPONDENT: It got rather lively today. There was some debate about that. There were some members on the committee who were arguing that to have this kind of open hearing, but have FBI and CIA people there, talking about stuff that is most of it classified, there was the danger you go over the line and there was also the danger to the witnesses, at least that was the argument.

The counter-argument from the chairman was Americans need to know what went wrong and who's to blame, and we need to figure out how to fix it. But very strong language today from Senator Kyl, if we have that. SEN. JON KYL (D-AZ), INTELLIGENCE COMMITTEE: So, this hearing is for show. This isn't to obtain information.

Now, there's a point at which it's important for us to present the information that we've derived to the American people, but it should be when we're all done and it shouldn't be in a setting in which the witnesses are having to be very careful about what they say because they may say something that's classified.

ENSOR: Witnesses were very careful, Candy, but nonetheless there were several occasions when they said, We can't go there. We have to stop.

CROWLEY: David Ensor, thanks very much. Always a pleasure for me.

More on the terror threat. Up next, when I talk to Homeland Security Director Tom Ridge. Are law enforcement authorities on high alert mostly getting it right or jumping the gun?

Also ahead, politically correct coffee? Will voters in Berkeley, California swallow it?

Plus...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Quite frankly our mission and vision is to sometime soon become the number one giver to Republican candidates in the country.

(END VIDEO CLIP)

CROWLEY: We'll check out a controversial group that supports some Republicans and tries to punish others. This is "INSIDE POLITICS", the place for campaign news?

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

TOM RIDGE, HOMELAND SECURITY DIRECTOR: ... complaints. Serious contributions that these mayors and governor's have. These are difficult, both economic times. Difficult times as we learn to adjust to the national threat advisory system. And we are working out those challenges.

CROWLEY: Let me ask you about the Homeland Security Bill which seems to be having some difficulty getting through the Hill with agreement at the White House. I wonder if you can explain or understand why people looking at this can't understand how a homeland security bill which arguably is one of the most important things Washington ought to be doing is now hung up in a labor dispute.

RIDGE: Well, unfortunately it's bogged down on an effort by some within Congress to take away from the president the national security authority that all presidents have had since President Kennedy. And I don't believe that has been transmitted perhaps as well as we'd like across the air waves and through journalists around the country.

But the bottom line is one of the most important issues is for this president during a time of war to retain the authority to make some adjustments in the national security interest. And there's people on the hill that want to take it away ...

CROWLEY: But, governor, can I just...

RIDGE: ... and this is not the time to take it away.

CROWLEY: Can I ask you, though, is it important enough to not have a Homeland Security Bill?

RIDGE: It's absolutely critical that at a time of war the president retains all the authority that presidents have had since President Kennedy to make some adjustments within the federal workforce for those who are deployed at the borders, those who are working on homeland security.

And there's -- the president has made it very, very clear the retention of this authority, this discretion, is to give him, when circumstances merit, a tool to protect the homeland, a tool to move people around in order to get things done to maximize security for the people of this country.

And I'm still confident at the end of the day we're going to work out our differences and get a good measure to the president.

CROWLEY: Let me ask you a couple specifics about some stories that out there, first of all this Georgia who called in a tip about the three Muslim men that showed up at Shoney's. Did she do the right thing? Is that what you want citizens to do? And do you worry when you see Alligator Alley in Florida shut down, that people will get burned out on this and say we are spinning our wheels for nothing?

RIDGE: Well, I think the woman felt that she did the right thing. I don't want to second guess anybody involved there. But if for some reason the participants thought that they would lead her on or that she misinterpreted, that she heard what she thought she heard and based on her understanding of the conversation, she made -- I think she made the right decision.

As the country learns to accept the notion that we are at war, we have to be again mindful of the fact that some of these instances may occur, as difficult and troubling as they are. We work our way through it.

CROWLEY: And let me ask you about two more specific incidences.

RIDGE: Sure.

CROWLEY: The Buffalo cell. These were U.S. citizens that had been arrested. They apparently had been trained by al Qaeda. Are there more such cells around U.S. citizens people that you wouldn't ordinarily be looking at that you think pose a threat in the United States?

RIDGE: Well, we operate under the basis that al Qaeda has not only sympathizers in this country but -- and supporters. But I think it'd be foolish and fatal for us to not conclude that over the past couple years as we let several hundred million people across our borders every year there aren't the same or similar cells situated across this country.

CROWLEY: Governor Ridge, thanks so much for joining us, director of homeland security. We appreciate the time.

RIDGE: Thank you, Candy. Good to be with you.

CROWLEY: An update on the developing situation at Yasser Arafat's West Bank compound when we return. Following several Palestinian suicide attacks in Israel, Israeli troops bulldoze their way close to Arafat's headquarters. The latest on the demolition operation in the news cycle.

But first, let's turn to Bertha Coombs at the New York Stock Exchange for a market update.

BERTHA COOMBS, CNN FINANCIAL CORRESPONDENT: Hi, Candy. It was choppy session on Wall Street, with stocks looking for direction all day today. When all was said and done, the Dow Jones Industrial Average was up 43 point. But, boy, it was a volatile session, swinging from down 20 points at some points, up as much as 74 points. And we saw pretty heavy volume today because of some technical trading factors that happened.

As for the Nasdaq, the composite closed down -- closed 4 points higher, but was down for the week. Today there wasn't a huge amount of negative news, but positive news didn't really affect things very much at all. Qualcomm, a wireless technology company, had a positive announcement, but didn't sustain the momentum.

For the week all major stock indexes lost ground. The Dow fell 4 percent. The Nasdaq composite dropped 5-and-a-half percent, and Standard & Poor's 500 lost 5 percent. That's the latest from Wall Street.

More INSIDE POLITICS after the break, including Bill Schneider's political play of the week.

(COMMERCIAL BREAK)

CROWLEY: Checking the INSIDE POLITICS "News Cycle," Israeli forces have bulldozed or destroyed many of the buildings inside Yasser Arafat's West Bank compound. The latest assault targets a connecting bridge between Arafat's office and another building. Israel has demanded that Arafat turn over several wanted men believed to be part of Arafat's entourage.

Palestinian officials, meantime, tell CNN they fear Arafat's headquarters might collapse. A short time ago, a number of people were seen coming out of the buildings. It is not clear if the group included the men wanted by Israel or if they left the building for their own safety. An Israeli official says Arafat will not be harmed.

A day after two fans attacked the Kansas City Royals first base coach during a major league baseball game, a father and son are in custody, charged with aggravated battery. They are seen here striking coach Tom Gamboa from behind. A little while ago, Gamboa talked about the incident.

(BEGIN VIDEO CLIP)

TOM GAMBOA, FIRST BASE COACH, KANSAS CITY ROYALS: And I was asked before coming into this room by the last media person, well, is there anything you could have done with your hands that could have been misconstrued as a gesture? I'm not the third base coach here. Richie gives the signs. I'm a first base coach. My job is to the pitchers' moves, help our runners. And I got total focus and passion for the game. I don't have time to see what's going on in the stands.

(END VIDEO CLIP)

CROWLEY: Also this hour, we have this video just coming in to CNN. A line of severe storms is moving across Indiana, destroying homes and causing numerous injuries. Early reports say a number of trailer homes and cars have been damaged, as well as an unknown number of houses and an apartment building. Some of the affected counties include Posey County in Southwestern Indiana, Monroe and Knox counties as well. We are told that the National Guard has been requested in Morgan County. This is severe storms that have been moving across the state, moving late this afternoon into Southwestern Indiana, causing damage to both homes and businesses as they move across the state.

Those were currently live pictures that you were seeing of some of the damages in Indiana.

OK, back now to politics, one of your all's favorite subjects.

We have Mindy Tucker, communications director for the Republican National Committee; Jen Palmieri, press secretary for the Democratic National Committee, our balanced women.

(LAUGHTER)

CROWLEY: OK, one of your favorite subjects. I want to show you the latest CNN poll. George Bush's popularity now up to 70 percent, so it is on the rise again.

Jennifer, what does that mean for the midyear?

JENNIFER PALMIERI, DNC PRESS SECRETARY: Well, I think what it means is that George Bush's communications staff did a really good job in New York last week.

They had two high-profile back-to-back speeches in New York around 9/11. And I think that is to be expected. But as far as how it relates to the midterms, I have got two words, which is, "So what?" I hate to disappoint Mindy's good friend Karl Rove, but these elections are not now and never have been about George Bush. They have been about one thing, which is the economy, and about Democratic issues, which is people being concerned about unemployment, the rising cost of health care, etcetera.

So I don't think it is going to have any sort of impact. And we did have a poll out today, a Pew poll, that showed Democrats up by two in the generics. So we feel real good about it.

CROWLEY: Mindy, I think that was a compliment, right? It's because you all have done such a great job.

PALMIERI: They have. They have a done good job. It doesn't matter, but they've done a good job.

(CROSSTALK)

MINDY TUCKER, RNC COMMUNICATIONS DIRECTOR: I would disagree with one thing. She says it is about the economy and some of these other issues. I want to take that a step further. It is actually about leadership.

The reason the president's numbers are so high is because of leadership. He's showing leadership on a really tough issue. And he's shown leadership on a ton of other tough issues. What we're not seeing from the Democrats is leadership. We have got Tom Daschle in the Senate. He's got one of his own members holding up the entire homeland security bill at a time when we couldn't need it more.

And we have got other important issues that will help the economy, like a prescription drug benefit for seniors, energy security, things like that that are being held up in the Senate as well. And we're not seeing the leadership out of the Democrats to move some of these important bills forward. And I think that is really what this election could be about and should be about: people looking at their leaders, their leaders in power, the leaders that want to be in power, and saying, who is going to go into Washington and make progress and not focus on politics?

CROWLEY: Let me just move this just a little step further, which is, you say you want to talk about domestic issues. We know Democrats do. You say, "Hey, fine, we'll engage on those." How much, though, is this Iraq conversation, this national Iraq conversation affecting some of the races out there? I'm thinking in particular maybe Wellstone in Minnesota, those who voted against the last Persian Gulf War.

PALMIERI: I think voters are definitely concerned about Iraq. There's not a lot of evidence -- in fact, there's no national evidence that it is playing a role in the campaigns.

People continue to say, through your own polling, through this network's polling, that the economy, by double digits, 20 points, is more important. I think that it's sort of -- the wind has kind of gone out of the sails on that. I don't think it is going to be an issue politically for the campaigns.

CROWLEY: Mindy, you get the last 30 seconds. Big issue, little issue, no issue?

TUCKER: It can't be a political issue.

Anybody that comes into this and says, "OK, how many votes are we going to get out of this?" shouldn't be a part of the process. Are the votes important? Absolutely. Should people know how their representatives are voting on this important issue? Absolutely. Should they factor that into their decision in November? Of course they should. But should this be a political issue, where parties conjure up how many numbers they are going to get out of it? Absolutely not.

PALMIERI: I wish all Republicans were as good as Mindy on this.

CROWLEY: A little bipartisan note to end this.

PALMIERI: Unfortunately, I don't think everyone in the White House agrees with Mindy here.

CROWLEY: Jen Palmieri, DNC, Mindy Tucker, RNC, thank you all for coming. Appreciate it.

This programming note: CNN will have an exclusive interview with Defense Secretary Donald Rumsfeld tomorrow at noon Eastern.

Is this a banner year for women running for governor? We'll have the "Inside Buzz" next.

(COMMERCIAL BREAK)

CROWLEY: Joining us now on INSIDE POLITICS: Amy Walter, one of our CNN political analysts.

Let's analyze the women in the governor's race. It seems to be a lot of them. Or are they just stronger-than-usual female candidates?

AMY WALTER, CNN POLITICAL ANALYST: I think we're seeing a large number of women candidates running for governor. It is a very interesting new threshold here that women are conquering on the political scene.

Ten years ago was the much-ballyhooed year of the woman. We saw a lot of women elected to Congress. This year, we are seeing lot of women who have a very serious chance of being elected governor. But I think at least six or seven of them have a very serious chance of being elected. And that would be an all-time high.

CROWLEY: But not all of them are shoe-ins.

WALTER: Not all of them are shoe-ins.

CROWLEY: I live in Maryland, and so obviously I'm watching the Kathleen Kennedy Townsend race. What is happening there?

WALTER: Well, you would think, looking at the numbers -- this is a state that Gore carried by 17 points. It's a very Democratic state. You haven't had a Republican governor here since Spiro Agnew. But Kathleen Kennedy Townsend is in a dead heat with her Republican challenger, Bob Ehrlich, who is a congressman from Baltimore.

The problem is -- there are a number of problems, not just one. She's following in the footsteps of a pretty unpopular governor, Parris Glendening. But she also some of her own problems. And I think that's what's become really apparent in this race. She is somebody who is very well-known. She's has, obviously, a very famous last name. But she's not been able to translate that very well.

The way she projects herself is a little tentative. People can sense that. And so she has the Kennedy name without sort of the Kennedy charisma or the ability to really project herself well.

CROWLEY: Are races any different now with women in them, or has it become so commonplace that no one votes for a woman simply because she's a woman?

WALTER: What I think is really interesting about all these races is that almost every single one of these women have been elected in their own right to some other office. We have a number of attorney generals or other statewide elected officials, lieutenant governors, for example.

So these are not women who have been just suddenly plucked out of obscurity. They've been working their way through the process. And now they're at the pinnacle.

CROWLEY: CNN political analyst Amy Walter, thanks very much.

WALTER: Sure.

CROWLEY: Checking the headlines now in "Campaign News Daily": The Texas Democratic Party is footing the bill for a new ad backing Ron Kirk in his Senate race against Republican John Cornyn. The ad promotes Kirk as a candidate who reaches beyond party lines. It includes several people identified as Republicans and independents, who explain why they are voting for Kirk.

A new poll gives Republican John Sununu the lead over Democrat Jeanne Shaheen in the New Hampshire Senate race. An American Research Group survey finds Sununu has a nine-point edge among registered voters: 47 percent to 38.

Actor and NRA leader Charlton Heston joined Republican Bob Riley at several stops today around Alabama. Heston was the star attraction at this breakfast fund-raiser in Mobile. It is the first campaign event Heston has attended since he was diagnosed with symptoms consistent with Alzheimer's disease. Congressman Riley is running for governor against incumbent Democrat Don Siegelman.

The minds and money behind the Club For Growth straight ahead on INSIDE POLITICS.

(COMMERCIAL BREAK)

CROWLEY: A relative newcomer among the major political interest groups is flexing its muscle this election season.

CNN's Brooks Jackson takes a looks at the founders and the philosophy behind the Club for Growth.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): It has only a handful of staff members, but it has lots of money and big ambitions.

STEPHEN MOORE, PRESIDENT, CLUB FOR GROWTH: We've got a guy full- time who spends his time just collecting all the checks, bundling them together, putting them in a Federal Express package, and sending them to these candidates. Quite frankly, our mission and our vision is to, sometime soon, become the No. 1 giver to Republican candidates in the country.

JACKSON: They are one of the biggest now. The Club for Growth says it has funneled more than $2 million to GOP candidates already this year, large amounts, but only to a select few who pass muster as strict free-market conservatives.

RICHARD GILDER, CHAIRMAN, CLUB FOR GROWTH: We want smaller government, lower taxes, therefore.

JACKSON: The club's founders made fortunes on Wall Street. Chairman Richard Gilder still runs a boutique stock brokerage in Manhattan. And Thomas "Dusty" Rhodes was once a partner in the Wall Street firm of Goldman Sachs. This is his summer compound on Nantucket Island. Cutting taxes is their passion.

THOMAS "DUSTY" RHODES, CO-CHAIRMAN, CLUB FOR GROWTH: We don't talk to candidates about issues such as abortion or any of those kinds of issues.

JACKSON: The club is controversial because it not only supports Republicans it likes; it tries to punish those it does not.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Wayne Gilchrest: shockingly liberal

(END VIDEO CLIP)

JACKSON: Wayne Gilchrest represents Maryland's scenic Eastern Shore. The club spent $125,000 on ads attacking him and funneled nearly $200,000 in donations to his primary opponent. Club officials said Gilchrest voted for too many spending bills, making him what they call a RINO: Republican in name only.

REP. WAYNE GILCHREST (R), MARYLAND: What they don't understand is, if they say they are Reagan Republicans, Ronald Reagan had a big tent. And if you were a registered Republican, you were one of the members of the Republican Party.

BILL SIMON (R), CALIFORNIA GUBERNATORIAL CANDIDATE: How are you? JACKSON: More to the club's liking is Republican candidate Bill Simon: more than $200,000 bundled to him so far. More tax cuts would make the club's founders even richer than they are now, but they say self-interest is not what motivates them.

GILDER: Of course, most of us are already rich. So cutting taxes from here, is that going to help us much? It will. But we believe it will help the country much more.

RHODES: I'm a trickle-down guy. And tax cuts are not just going to help me. Tax cuts are going to help everybody.

JACKSON: They see politics the way they see business: markets, customers.

RHODES: Our customers are voters and our marketers are politicians running for public office.

GILDER: You know, Procter & Gamble will tell you, if you advertise a poor product, you are not going to get anywhere.

JACKSON: The club's record is mixed. It says seven candidates have won of the 11 it backed this year.

RHODES: We have -- you know, we win some. We lose some. And it's almost as if you look at an investment portfolio.

JACKSON: But Gilchrest survived their attack easily and says their tactics hurt Republicans.

GILCHREST: We spent all our money in the primary. So they effectively are beginning the process of diminishing -- they are fully engaged in the process of diminishing the Republican majority in the House of Representatives.

JACKSON: The club expects to bundle and spend a total of around $6 million in this election and says the total will continue growing in the next election, despite the McCain-Feingold campaign finance law that takes effect in November.

MOORE: In fact, because it limits the amount of money that can go to the parties, we think we can gather in a lot of that money ourselves.

JACKSON: Big soft-money donors can still pay the heavy costs of recruiting small donors. And hard-money donation limits will double, allowing individuals to give $2,000 per candidate, potentially doubling the amount the club can bundle.

(on camera): So if you thought the influence of rich donors was on the way out here in Washington, the Club for Growth may make you think again.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE) CROWLEY: How about a change of subject? Bill Schneider will play along in the "Political Play of the Week."

But up next:

(BEGIN VIDEO CLIP)

SHIRLEY DEAN, MAYOR, BERKELEY, CALIFORNIA: I just can't believe that anybody is going to get sentenced to six months in jail for not brewing up the right kind of coffee.

(END VIDEO CLIP)

CROWLEY: The brewing controversy on the ballot in Berkeley.

(COMMERCIAL BREAK)

CROWLEY: Welcome back to INSIDE POLITICS.

We have this for you just happening. The White House now says that it will go along with an independent commission to look into intelligence in the pre-9/11 era. That had been something suggested on Capitol Hill. We are told that the White House changed its position because of lobbying by family members of some of the victims of 9/11.

The White House noted its reversal in a letter from the White House congressional liaison to House Speaker Dennis Hastert. The House Democratic leader, Dick Gephardt, says he is encouraged by the White House change of heart.

Now, political correctness is nothing new in California, but voters in Berkeley are being asked to take it to a new level. On the ballot in November: a measure that could force the city council to become coffee cops.

CNN's Rusty Dornin explains.

(BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): Berkeley, California, home of free speech and some say freedom of thought. But how about the freedom to choose your cup of joe? Attorney Rick Young thinks Berkeleyites should be drinking a more socially or at least environmentally responsible cup of coffee. So he launched a petition drive. And in November, voters will decide the correctness of their caffeine.

(on camera): What is it that you're asking?

RICK YOUNG, ATTORNEY: For all brewed coffee that's sold in the city of Berkeley would be one of three types. It would be either fair trade, or shade grown, or organic.

DORNIN (voice-over): Fair trade coffees are certified that workers are paid a fair wage. Shade grown and organic coffees are more environmentally sensitive. Concepts that sound great to many folks here, like Mayor Shirley Dean. But the practicality of a restrictive law, Dean says, is troubling.

DEAN: I just can't believe that anybody is going to get sentenced to six months in jail for not brewing up the right kind of coffee.

DORNIN: Across from U.C. Berkeley Cafe Strata has offered fair trade organic coffee as an option for five years. But owner Daryl Ross says making it mandatory is unfair to customers and shop owners alike. Besides, he says, who's going to bust the brewers?

DARYL ROSS, OWNER, CAFE STRATA: Who's going to enforce this law? Are there going to be coffee police that are coming into the cafe and, you know, telling people, you know, checking their coffee and telling people that it's the wrong type of coffee?

DORNIN: The right kind, say some coffee drinkers, should be the only kind.

UNIDENTIFIED FEMALE: As Americans, we can afford two cents more cup so that farmers aren't exploited, so their workers aren't exploited. So they can have a living wage.

DORNIN: But for other Berkeley residents, it's another eye roller.

UNIDENTIFIED MALE: City Council should not impose a law on a set of coffee shops that are famous for selling, you know, good cheap coffee, and make them sell a certain kind of coffee just because it's politically correct. This happens in Berkeley all the time.

DORNIN: Coffee chain Starbucks and Peets offer fair trade coffee on the menu, but when it comes to a coffee law, they won't comment. A spokesperson for one chain said, "In Berkeley, it's a caffeine induced argument they can't expect to win."

Rusty Dornin, CNN, Berkeley, California.

(END VIDEOTAPE)

CROWLEY: Just ahead: Bill Schneider's "Political Play of the Week."

INSIDE POLITICS is back in a moment.

(COMMERCIAL BREAK)

CROWLEY: Our Bill Schneider is here with a look at the political benefits of changing the subject -- Bill.

SCHNEIDER: Well, you know how cynics say that the White House is trying to change the subject from the economy to Iraq in order to win the election? Well, you know what? It's been tried in another country.

And it may be working, not the way the White House would like, but the way that earns the "Political Play of the Week."

(BEGIN VIDEOTAPE)

(voice-over): German Chancellor Gerhard Schroeder had a problem: the economy. He got elected in 1998 on a promise to bring down unemployment. He didn't. So when the campaign started this summer, Schroeder's party was running behind the conservative opposition, led by Edmund Stoiber.

Suddenly, the Iraq issue emerged and Schroeder found a way to turn the campaign around: a firm and unconditional "nein" to German participation in any strike against Iraq.

GERHARD SCHROEDER, GERMAN CHANCELLOR (through translator): Under my leadership, Germany will not participate in military action.

SCHNEIDER: Schroeder's defiant opposition to attacking Iraq electrified the campaign and seemed to turn his party's fortunes around: from nine points behind in early August, to a tie in early September, to a narrow lead in the latest polls.

Schroeder's no-war message struck a deep chord with German voters. Anti-American? Anti-Bush? Most likely anti-war.

CRAIG KENNEDY, PRESIDENT, GERMAN MARSHALL FUND: It is also really a reflection of a very deep-seated resistance to the use of military power within the German electorate.

SCHNEIDER: A member of his Cabinet created an uproar this week when she said -- quote -- "Bush wants to divert attention from his domestic problems. It's a classic method. It's one that Hitler used." The truth is, it is one that Schroeder used. It made him sound decisive, while his opponents sounded evasive.

EDMUND STOIBER, CANDIDATE FOR GERMAN CHANCELLOR (through translator): I do not want to go on a national path without agreement with the other Europeans.

SCHNEIDER: Remember the devastating floods that hit Central Europe last month? They also enabled Chancellor Schroeder to embellish his image.

KENNEDY: Schroeder has an amazing ability to look and act like a leader, and especially in a time of crisis. And he did that to an extraordinary extent during the floods.

SCHNEIDER: Schroeder has made this a horse race, too close to call. He seized opportunities to revive his campaign: first the floods, then Iraq.

We'll know Sunday whether he wins or loses, but we know now that it was the "Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: If Stoiber wins, the message will be "the economy, stupid." If Schroeder is reelected, the message will be, "Iraq trumps economy," something the White House might like to see happen in domestic politics, but not in other countries -- Candy.

CROWLEY: And we have to run. That's it for INSIDE POLITICS. "WOLF BLITZER REPORTS" is next.

I'm Candy Crowley.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Harassment Suit; Democrats Say Congress Should Not Write Blank Check for Bush on Iraq>


Aired September 20, 2002 - 16:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington. Kentucky's governor appears ready to respond to new evidence in a sexual harassment suit against him. Will he change story?
KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: I'm Kate Snow on Capitol Hill, where some Senate Democrats are adamant that Congress should not write a blank check for the president authority to go after Iraq.

WILLIAM SCHNEIDER, SENIOR POLITICAL ANALYST: I'm Bill Schneider in Washington. It may seem as though everyone and his brother is talking about Iraq, but only one of them can earn the "Political Play of the Week."

CROWLEY: Also ahead: Homeland Security Director Tom Ridge, "on the record" about the Orange alert for terror and how long it may last.

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

CROWLEY: Thanks for joining us. Judy is off today.

Kentucky governor Paul Patton abruptly canceled his scheduled public appearances today and instead scheduled a news conference, due to begin an about an hour. He is expected to answer questions about the sexual harassment lawsuit he faces, was filed by a woman who claims they had a two year affair. Tina Conner alleges Patton used his power as governor to help her businesses during their affair and to retaliate against her when she broke off the relationship.

According to reports out today, the phone records from early 1997 through last month show more than 400 phone calls were placed from Patton's office to five telephone numbers associated with Conner's business.

WHAS TV reporter, Bob Hebert, first reported the allegations against Patton. He is in Frankfurt, Kentucky, where the governor will hold his news conference. Bob thank you again for joining us. What can you tell us about what the governor has to say?

MARK HEBERT, WHAS CORRESPONDENT: Well, Candy, first of all, it's Mark Hebert from WHAS TV in Louisville. Sorry you got the wrong information.

But what we can tell you is within the hour here Governor Paul Patton of the state of Kentucky, Democratic governor in his second term is expected to come before the TV cameras and the people of Kentucky and essentially acknowledge that he had a sexual relationship with this woman a couple of years ago. The governor is also expected to say and deny to deny that he ever used his office inappropriately.

In other words, he did not try and punish her or he didn't try to help her while that sexual relationship was going on. So, that's what we're expecting here at a 5:00 Eastern Time news conference here at the History Center in Frankfurt.

CROWLEY: Well, Mark, at this point it seems to me that this only starts the investigation since you have these phone calls. You have him apparently now going to say, OK, there was something. Are people going to take him at his word on this, or do you expect investigation?

HEBERT: No, everybody is expecting an investigation, either by the FBI, which could look to see if he traded sex for favorers for this woman or by the Ethics Commission here in Frankfurt, Kentucky, our executive branch Ethics Commission has already said that it is going to look into these allegations.

So, you're going to have at least two different investigations ongoing, I suspect, in the coming months, but I think there are two different stories here. One, did Governor Patton have a sexual liaison with this woman? He's going to apparently admit to that here in about an hour. The other question is did he use the power of his office to try and help here, then punish her after the relationship broke off? That will remain to be seen.

But again, Governor Patton is expected to deny that he did that.

CROWLEY: Mark, we've got about a minute left. How much political trouble is he in? He was a fairly popular governor. Is this something that could force him out of office early? Is this something he can ride out? Do you have a sense of that yet?

HEBERT: No, we don't.I think it's way too early to discuss that. I think that Governor Patton surely will not announce his resignation today. Nobody expects that.

He was planning to run for the U.S. Senate against Jim Cunning in Northern Kentucky in two years. Certainly that senate rune will be in jeopardy. Does it hurt other candidates, other Democratic candidates here in the state of Kentucky? Paul Patton's been out stumping for them. Does it hurt them? Certainly it'll hurt them in the November election coming up.

But as far as Paul Patton, no, we do not expect a resignation. We'll just have to see where this investigation or these investigations go down the road before deciding whether Paul Patton should be forced from office.

CROWLEY: Mark Hebert, we thank you very much from WHAS TV. Thanks a lot.

HEBERT: Thanks, Candy. Thank you.

CROWLEY: Now, the political and international debate over Iraq.

President Bush today pressed for Russian support of his tough stance against Saddam Hussein. The White House says Mr. Bush had a productive phone conversation with Russian president Vladimir Putin. He also met at the White House with the Russian defense and foreign ministers. President Bush may have a relatively easier selling job on Capitol Hill, but some senate Democrats are determined to change the language of a White House draft resolution authorizing the use of force against Iraq.

Here's our Congressional correspondent, Kate Snow.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Senator Russ Feingold wants the world to know there are some Democrats who won't go along with a White House- proposed resolution authorizing military force against Iraq. He couldn't be more direct.

SEN. RUSS FEINGOLD (D), WISCONSIN: It should be scrapped. It's a non-starter. It's really an astonishing document.

SNOW: Only a handful of Democrats are expressing such strong views, but many are concerned the language written by the White House gives the president too much leeway, one rewrite being suggested by senator Joe Lieberman, language similar to what passed back in 1991.

Before using force, the president has to tell Congress he tried to use, quote, "all appropriate diplomatic and other peaceful means to get Iraq to comply with U.N. resolutions."

A senior Democratic aide tells CNN a number of Democrats think the 1991 language is a good model. Democrats also point to part of the very last sentence, authorizing the president to use force to, quote, "restore international peace and security in the region." Many say that could mean taking action anywhere in the Persian Gulf, not just Iraq.

SEN. DICK DURBIN (D), ILLINOIS: This proposal coming from the White House makes some vague reference to the region. Does that mean the entire Middle East or what?

SNOW: White House officials say the resolution is only meant to deal with Iraq, and they're all but certain the language will be rewritten to make that clear. But those changes may not satisfy Senator Feingold. He's concerned his Democratic colleagues will quickly approve a resolution just because elections are around the corner.

FEINGOLD: I'm worried that they're so desperate to just sign off on this thing, to look like they want to get Saddam Hussein, which we all do, that we won't give it the scrutiny that is required of the United States Senate.

(END VIDEOTAPE)

SNOW: Senator Feingold went on to say this could be one of the most historic mistakes in the history of U.S. Senate if they don't reject this language, Candy.

Senator Daschle told the White House, President Bush earlier this week not to expect unanimous support from Senate Democrats. Clearly Mr. Feingold's comments point to just that. But the process has begun up here. Henry Hyde, the House International Relations Chairman, sending some of his suggestions for smaller changes to the language over to the White House. Today, Congressional leaders, Candy, hoping they could have a vote on this resolution as soon as the week after next.

CROWLEY: Kate Snow on Capitol Hill, on top of it as always. Thanks, Kate.

In a report to Congress today, the Bush administration spelled out its reasons for favoring preemptive strikes against hostile nations and terrorist groups developing weapons of mass destruction.

Let's bring in our senior analyst, Jeff Greenfield. So, Jeff, what are the reasons that are spelled out?

JEFF GREENFIELD, SENIOR ANALYST: Well, what I think you see here is the repeated assertion throughout this document that the post-Cold War world and the new threats to the U.S. require a whole new set of presumption.

They argue that the deterrents worked to contain the Soviet Union, but now, this is a quote, "deterrents based only upon the threat of retaliation is far less likely to work against leaders of rogue states, more willing to take risks, gambling with the lives of their people and their wealth of their nations". I think you can read Iraq clearly there.

And, second, as you've just mentioned, the argument for preemption. It tips its cap to the international community. And then the document says -- and this is probably the headline -- "we will not hesitate to act alone if necessary, to exercise our right to self defense by acting preemptively against such terrorists." So I think that's the key message that's spelled out in this document.

CROWLEY: So, does that last message underscore what many people feel about the president, that he's a unilateralist, a go-it-aloner?

GREENFIELD: Well, I think the document tries to make it very clear that that's not what they are saying. It certainly defines United States national interests and it does stake that we will act alone if necessary. But also stakes out a global vision.

And, I think, to appeal to the international community it lays great stress on economic as well as military security. It talks over and over about bringing, quote, "free markets and free trade to every corner of the globe."

And by the way, Candy, in that sense there is an echo, I think, of domestic politics because that view of growth -- economic freedom, lower tax rates, less regulation, skepticism about big public investments, that tracks with mainstream conservative thinking about how impoverished nations can grow and get wealthier.

CROWLEY: So, having read through the whole thing, are there are inconsistencies in policies

GREENFIELD: Well, I think in the area of free trade it just jumps out at you, because this document says, as I just mentioned -- first of all, it says that poverty can breed the kinds of discontents that lead to anti-Americanism and to terrorists, and that's why it's important to care about global poverty.

But if you look at Pakistan, probably one of the most dangerous places in the world right now. Getting out of poverty depends on growing Pakistan's textile industry.

But the United States, out of domestic politics, imposes tariffs and quotas on precisely those kinds of imports. And earlier this week, to give you another example, "The Wall Street Journal" told a story of an impoverished sugarcane grower in South Africa, where poverty comes in large measure from the barriers to international trade.

And it's rich nations that keep that kind of sugar out of their countries. So, for my money, it is quite remarkable how the free trade rhetoric, which just shoots through this document contrasts with some of what the United States actually does.

CROWLEY: And finally, Jeff -- and maybe we should have asked this at the beginning -- what's the point of this paper? Why do we care about it? What's it trying to do?

GREENFIELD: Well, I think one -- when the world's most powerful nation outlines its premises, the world pays attention, But there are actual reasons for this. I mean, in an international world, even more than in presidential politics, words weigh a ton.

Fifty-two years ago, Harry Truman's secretary of state, Dean Atchison gave a speech that outlined America's defense perimeter, and he didn't include Korea. And for years, possibly unfairly, critics charged that that omission may have led the Soviets and North Korea to conclude that the U.S. wouldn't act.

And historians are going to debate for years whether a dozen years ago the U.S. ambassador to Iraq maybe have unwittingly, through the choice of her words, signal to Saddam Hussein that America wouldn't act if Kuwait was subject of an Iraq invasion.

So, in this case, I think no nation and no diplomat can read this without concluding pretty clearly that the U.S. -- this administration thinks it is at a new post-Cold War era, the old rules are gone, and the U.S. will act preemptively under some circumstances, which is a break from at least the rhetoric of the Clinton administration.

CROWLEY: Thanks very much. Jeff Greenfield out of New York. We appreciate it.

In the war on terror, federal authorities are holding a former Sudanese air force pilot, who may have been planning to hijack a plane and fly it into a target in the United States. Sources say he's being held in Greensboro, North Carolina, after the FBI urged law enforcement agents to be on the lookout for a Sudanese pilot who "may represent a possible threat."

Some sources characterize the search for the man as "urgent," but others say there was no information suggesting any specific targets were threatened in the Washington area, or anywhere else in the U.S. Federal authorities also are holding several other Sudanese citizens at undisclosed locations, but it's not clear if they have any connection to the pilot.

The members of Congress heard more testimony today about intelligence failures leading up the September 11 terror attacks. A Congressional investigation found U.S. intelligence agencies missed opportunities to pursue two of the 9/11 hijackers for a year-and-a- half before the attacks. The staff director of the joint House-Senate inquiry said the CIA failed to share information with the FBI.

(BEGIN VIDEO CLIP)

ELEANOR HILL, STAFF DIRECTOR: The CIA had obtained information, identifying two of the 19 hijackers, Almihdhar and Alhaszmi as suspected terrorists carrying visas for travel to the United States as long as 18 months prior to the time they were eventually watch listed. There were numerous opportunities during the tracking of these two suspected terrorists when the CIA could have alerted the FBI and other U.S. law enforcement authorities to the probability that these individuals either were or would soon be in the United States.

(END VIDEO CLIP)

CROWLEY: We have our national security correspondent, David Ensor, here.

David, there was some concern on this committee that they shouldn't be holding these hearings at all.

DAVID ENSOR, NATIONAL SECURITY CORRESPONDENT: It got rather lively today. There was some debate about that. There were some members on the committee who were arguing that to have this kind of open hearing, but have FBI and CIA people there, talking about stuff that is most of it classified, there was the danger you go over the line and there was also the danger to the witnesses, at least that was the argument.

The counter-argument from the chairman was Americans need to know what went wrong and who's to blame, and we need to figure out how to fix it. But very strong language today from Senator Kyl, if we have that. SEN. JON KYL (D-AZ), INTELLIGENCE COMMITTEE: So, this hearing is for show. This isn't to obtain information.

Now, there's a point at which it's important for us to present the information that we've derived to the American people, but it should be when we're all done and it shouldn't be in a setting in which the witnesses are having to be very careful about what they say because they may say something that's classified.

ENSOR: Witnesses were very careful, Candy, but nonetheless there were several occasions when they said, We can't go there. We have to stop.

CROWLEY: David Ensor, thanks very much. Always a pleasure for me.

More on the terror threat. Up next, when I talk to Homeland Security Director Tom Ridge. Are law enforcement authorities on high alert mostly getting it right or jumping the gun?

Also ahead, politically correct coffee? Will voters in Berkeley, California swallow it?

Plus...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Quite frankly our mission and vision is to sometime soon become the number one giver to Republican candidates in the country.

(END VIDEO CLIP)

CROWLEY: We'll check out a controversial group that supports some Republicans and tries to punish others. This is "INSIDE POLITICS", the place for campaign news?

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

TOM RIDGE, HOMELAND SECURITY DIRECTOR: ... complaints. Serious contributions that these mayors and governor's have. These are difficult, both economic times. Difficult times as we learn to adjust to the national threat advisory system. And we are working out those challenges.

CROWLEY: Let me ask you about the Homeland Security Bill which seems to be having some difficulty getting through the Hill with agreement at the White House. I wonder if you can explain or understand why people looking at this can't understand how a homeland security bill which arguably is one of the most important things Washington ought to be doing is now hung up in a labor dispute.

RIDGE: Well, unfortunately it's bogged down on an effort by some within Congress to take away from the president the national security authority that all presidents have had since President Kennedy. And I don't believe that has been transmitted perhaps as well as we'd like across the air waves and through journalists around the country.

But the bottom line is one of the most important issues is for this president during a time of war to retain the authority to make some adjustments in the national security interest. And there's people on the hill that want to take it away ...

CROWLEY: But, governor, can I just...

RIDGE: ... and this is not the time to take it away.

CROWLEY: Can I ask you, though, is it important enough to not have a Homeland Security Bill?

RIDGE: It's absolutely critical that at a time of war the president retains all the authority that presidents have had since President Kennedy to make some adjustments within the federal workforce for those who are deployed at the borders, those who are working on homeland security.

And there's -- the president has made it very, very clear the retention of this authority, this discretion, is to give him, when circumstances merit, a tool to protect the homeland, a tool to move people around in order to get things done to maximize security for the people of this country.

And I'm still confident at the end of the day we're going to work out our differences and get a good measure to the president.

CROWLEY: Let me ask you a couple specifics about some stories that out there, first of all this Georgia who called in a tip about the three Muslim men that showed up at Shoney's. Did she do the right thing? Is that what you want citizens to do? And do you worry when you see Alligator Alley in Florida shut down, that people will get burned out on this and say we are spinning our wheels for nothing?

RIDGE: Well, I think the woman felt that she did the right thing. I don't want to second guess anybody involved there. But if for some reason the participants thought that they would lead her on or that she misinterpreted, that she heard what she thought she heard and based on her understanding of the conversation, she made -- I think she made the right decision.

As the country learns to accept the notion that we are at war, we have to be again mindful of the fact that some of these instances may occur, as difficult and troubling as they are. We work our way through it.

CROWLEY: And let me ask you about two more specific incidences.

RIDGE: Sure.

CROWLEY: The Buffalo cell. These were U.S. citizens that had been arrested. They apparently had been trained by al Qaeda. Are there more such cells around U.S. citizens people that you wouldn't ordinarily be looking at that you think pose a threat in the United States?

RIDGE: Well, we operate under the basis that al Qaeda has not only sympathizers in this country but -- and supporters. But I think it'd be foolish and fatal for us to not conclude that over the past couple years as we let several hundred million people across our borders every year there aren't the same or similar cells situated across this country.

CROWLEY: Governor Ridge, thanks so much for joining us, director of homeland security. We appreciate the time.

RIDGE: Thank you, Candy. Good to be with you.

CROWLEY: An update on the developing situation at Yasser Arafat's West Bank compound when we return. Following several Palestinian suicide attacks in Israel, Israeli troops bulldoze their way close to Arafat's headquarters. The latest on the demolition operation in the news cycle.

But first, let's turn to Bertha Coombs at the New York Stock Exchange for a market update.

BERTHA COOMBS, CNN FINANCIAL CORRESPONDENT: Hi, Candy. It was choppy session on Wall Street, with stocks looking for direction all day today. When all was said and done, the Dow Jones Industrial Average was up 43 point. But, boy, it was a volatile session, swinging from down 20 points at some points, up as much as 74 points. And we saw pretty heavy volume today because of some technical trading factors that happened.

As for the Nasdaq, the composite closed down -- closed 4 points higher, but was down for the week. Today there wasn't a huge amount of negative news, but positive news didn't really affect things very much at all. Qualcomm, a wireless technology company, had a positive announcement, but didn't sustain the momentum.

For the week all major stock indexes lost ground. The Dow fell 4 percent. The Nasdaq composite dropped 5-and-a-half percent, and Standard & Poor's 500 lost 5 percent. That's the latest from Wall Street.

More INSIDE POLITICS after the break, including Bill Schneider's political play of the week.

(COMMERCIAL BREAK)

CROWLEY: Checking the INSIDE POLITICS "News Cycle," Israeli forces have bulldozed or destroyed many of the buildings inside Yasser Arafat's West Bank compound. The latest assault targets a connecting bridge between Arafat's office and another building. Israel has demanded that Arafat turn over several wanted men believed to be part of Arafat's entourage.

Palestinian officials, meantime, tell CNN they fear Arafat's headquarters might collapse. A short time ago, a number of people were seen coming out of the buildings. It is not clear if the group included the men wanted by Israel or if they left the building for their own safety. An Israeli official says Arafat will not be harmed.

A day after two fans attacked the Kansas City Royals first base coach during a major league baseball game, a father and son are in custody, charged with aggravated battery. They are seen here striking coach Tom Gamboa from behind. A little while ago, Gamboa talked about the incident.

(BEGIN VIDEO CLIP)

TOM GAMBOA, FIRST BASE COACH, KANSAS CITY ROYALS: And I was asked before coming into this room by the last media person, well, is there anything you could have done with your hands that could have been misconstrued as a gesture? I'm not the third base coach here. Richie gives the signs. I'm a first base coach. My job is to the pitchers' moves, help our runners. And I got total focus and passion for the game. I don't have time to see what's going on in the stands.

(END VIDEO CLIP)

CROWLEY: Also this hour, we have this video just coming in to CNN. A line of severe storms is moving across Indiana, destroying homes and causing numerous injuries. Early reports say a number of trailer homes and cars have been damaged, as well as an unknown number of houses and an apartment building. Some of the affected counties include Posey County in Southwestern Indiana, Monroe and Knox counties as well. We are told that the National Guard has been requested in Morgan County. This is severe storms that have been moving across the state, moving late this afternoon into Southwestern Indiana, causing damage to both homes and businesses as they move across the state.

Those were currently live pictures that you were seeing of some of the damages in Indiana.

OK, back now to politics, one of your all's favorite subjects.

We have Mindy Tucker, communications director for the Republican National Committee; Jen Palmieri, press secretary for the Democratic National Committee, our balanced women.

(LAUGHTER)

CROWLEY: OK, one of your favorite subjects. I want to show you the latest CNN poll. George Bush's popularity now up to 70 percent, so it is on the rise again.

Jennifer, what does that mean for the midyear?

JENNIFER PALMIERI, DNC PRESS SECRETARY: Well, I think what it means is that George Bush's communications staff did a really good job in New York last week.

They had two high-profile back-to-back speeches in New York around 9/11. And I think that is to be expected. But as far as how it relates to the midterms, I have got two words, which is, "So what?" I hate to disappoint Mindy's good friend Karl Rove, but these elections are not now and never have been about George Bush. They have been about one thing, which is the economy, and about Democratic issues, which is people being concerned about unemployment, the rising cost of health care, etcetera.

So I don't think it is going to have any sort of impact. And we did have a poll out today, a Pew poll, that showed Democrats up by two in the generics. So we feel real good about it.

CROWLEY: Mindy, I think that was a compliment, right? It's because you all have done such a great job.

PALMIERI: They have. They have a done good job. It doesn't matter, but they've done a good job.

(CROSSTALK)

MINDY TUCKER, RNC COMMUNICATIONS DIRECTOR: I would disagree with one thing. She says it is about the economy and some of these other issues. I want to take that a step further. It is actually about leadership.

The reason the president's numbers are so high is because of leadership. He's showing leadership on a really tough issue. And he's shown leadership on a ton of other tough issues. What we're not seeing from the Democrats is leadership. We have got Tom Daschle in the Senate. He's got one of his own members holding up the entire homeland security bill at a time when we couldn't need it more.

And we have got other important issues that will help the economy, like a prescription drug benefit for seniors, energy security, things like that that are being held up in the Senate as well. And we're not seeing the leadership out of the Democrats to move some of these important bills forward. And I think that is really what this election could be about and should be about: people looking at their leaders, their leaders in power, the leaders that want to be in power, and saying, who is going to go into Washington and make progress and not focus on politics?

CROWLEY: Let me just move this just a little step further, which is, you say you want to talk about domestic issues. We know Democrats do. You say, "Hey, fine, we'll engage on those." How much, though, is this Iraq conversation, this national Iraq conversation affecting some of the races out there? I'm thinking in particular maybe Wellstone in Minnesota, those who voted against the last Persian Gulf War.

PALMIERI: I think voters are definitely concerned about Iraq. There's not a lot of evidence -- in fact, there's no national evidence that it is playing a role in the campaigns.

People continue to say, through your own polling, through this network's polling, that the economy, by double digits, 20 points, is more important. I think that it's sort of -- the wind has kind of gone out of the sails on that. I don't think it is going to be an issue politically for the campaigns.

CROWLEY: Mindy, you get the last 30 seconds. Big issue, little issue, no issue?

TUCKER: It can't be a political issue.

Anybody that comes into this and says, "OK, how many votes are we going to get out of this?" shouldn't be a part of the process. Are the votes important? Absolutely. Should people know how their representatives are voting on this important issue? Absolutely. Should they factor that into their decision in November? Of course they should. But should this be a political issue, where parties conjure up how many numbers they are going to get out of it? Absolutely not.

PALMIERI: I wish all Republicans were as good as Mindy on this.

CROWLEY: A little bipartisan note to end this.

PALMIERI: Unfortunately, I don't think everyone in the White House agrees with Mindy here.

CROWLEY: Jen Palmieri, DNC, Mindy Tucker, RNC, thank you all for coming. Appreciate it.

This programming note: CNN will have an exclusive interview with Defense Secretary Donald Rumsfeld tomorrow at noon Eastern.

Is this a banner year for women running for governor? We'll have the "Inside Buzz" next.

(COMMERCIAL BREAK)

CROWLEY: Joining us now on INSIDE POLITICS: Amy Walter, one of our CNN political analysts.

Let's analyze the women in the governor's race. It seems to be a lot of them. Or are they just stronger-than-usual female candidates?

AMY WALTER, CNN POLITICAL ANALYST: I think we're seeing a large number of women candidates running for governor. It is a very interesting new threshold here that women are conquering on the political scene.

Ten years ago was the much-ballyhooed year of the woman. We saw a lot of women elected to Congress. This year, we are seeing lot of women who have a very serious chance of being elected governor. But I think at least six or seven of them have a very serious chance of being elected. And that would be an all-time high.

CROWLEY: But not all of them are shoe-ins.

WALTER: Not all of them are shoe-ins.

CROWLEY: I live in Maryland, and so obviously I'm watching the Kathleen Kennedy Townsend race. What is happening there?

WALTER: Well, you would think, looking at the numbers -- this is a state that Gore carried by 17 points. It's a very Democratic state. You haven't had a Republican governor here since Spiro Agnew. But Kathleen Kennedy Townsend is in a dead heat with her Republican challenger, Bob Ehrlich, who is a congressman from Baltimore.

The problem is -- there are a number of problems, not just one. She's following in the footsteps of a pretty unpopular governor, Parris Glendening. But she also some of her own problems. And I think that's what's become really apparent in this race. She is somebody who is very well-known. She's has, obviously, a very famous last name. But she's not been able to translate that very well.

The way she projects herself is a little tentative. People can sense that. And so she has the Kennedy name without sort of the Kennedy charisma or the ability to really project herself well.

CROWLEY: Are races any different now with women in them, or has it become so commonplace that no one votes for a woman simply because she's a woman?

WALTER: What I think is really interesting about all these races is that almost every single one of these women have been elected in their own right to some other office. We have a number of attorney generals or other statewide elected officials, lieutenant governors, for example.

So these are not women who have been just suddenly plucked out of obscurity. They've been working their way through the process. And now they're at the pinnacle.

CROWLEY: CNN political analyst Amy Walter, thanks very much.

WALTER: Sure.

CROWLEY: Checking the headlines now in "Campaign News Daily": The Texas Democratic Party is footing the bill for a new ad backing Ron Kirk in his Senate race against Republican John Cornyn. The ad promotes Kirk as a candidate who reaches beyond party lines. It includes several people identified as Republicans and independents, who explain why they are voting for Kirk.

A new poll gives Republican John Sununu the lead over Democrat Jeanne Shaheen in the New Hampshire Senate race. An American Research Group survey finds Sununu has a nine-point edge among registered voters: 47 percent to 38.

Actor and NRA leader Charlton Heston joined Republican Bob Riley at several stops today around Alabama. Heston was the star attraction at this breakfast fund-raiser in Mobile. It is the first campaign event Heston has attended since he was diagnosed with symptoms consistent with Alzheimer's disease. Congressman Riley is running for governor against incumbent Democrat Don Siegelman.

The minds and money behind the Club For Growth straight ahead on INSIDE POLITICS.

(COMMERCIAL BREAK)

CROWLEY: A relative newcomer among the major political interest groups is flexing its muscle this election season.

CNN's Brooks Jackson takes a looks at the founders and the philosophy behind the Club for Growth.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice-over): It has only a handful of staff members, but it has lots of money and big ambitions.

STEPHEN MOORE, PRESIDENT, CLUB FOR GROWTH: We've got a guy full- time who spends his time just collecting all the checks, bundling them together, putting them in a Federal Express package, and sending them to these candidates. Quite frankly, our mission and our vision is to, sometime soon, become the No. 1 giver to Republican candidates in the country.

JACKSON: They are one of the biggest now. The Club for Growth says it has funneled more than $2 million to GOP candidates already this year, large amounts, but only to a select few who pass muster as strict free-market conservatives.

RICHARD GILDER, CHAIRMAN, CLUB FOR GROWTH: We want smaller government, lower taxes, therefore.

JACKSON: The club's founders made fortunes on Wall Street. Chairman Richard Gilder still runs a boutique stock brokerage in Manhattan. And Thomas "Dusty" Rhodes was once a partner in the Wall Street firm of Goldman Sachs. This is his summer compound on Nantucket Island. Cutting taxes is their passion.

THOMAS "DUSTY" RHODES, CO-CHAIRMAN, CLUB FOR GROWTH: We don't talk to candidates about issues such as abortion or any of those kinds of issues.

JACKSON: The club is controversial because it not only supports Republicans it likes; it tries to punish those it does not.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Wayne Gilchrest: shockingly liberal

(END VIDEO CLIP)

JACKSON: Wayne Gilchrest represents Maryland's scenic Eastern Shore. The club spent $125,000 on ads attacking him and funneled nearly $200,000 in donations to his primary opponent. Club officials said Gilchrest voted for too many spending bills, making him what they call a RINO: Republican in name only.

REP. WAYNE GILCHREST (R), MARYLAND: What they don't understand is, if they say they are Reagan Republicans, Ronald Reagan had a big tent. And if you were a registered Republican, you were one of the members of the Republican Party.

BILL SIMON (R), CALIFORNIA GUBERNATORIAL CANDIDATE: How are you? JACKSON: More to the club's liking is Republican candidate Bill Simon: more than $200,000 bundled to him so far. More tax cuts would make the club's founders even richer than they are now, but they say self-interest is not what motivates them.

GILDER: Of course, most of us are already rich. So cutting taxes from here, is that going to help us much? It will. But we believe it will help the country much more.

RHODES: I'm a trickle-down guy. And tax cuts are not just going to help me. Tax cuts are going to help everybody.

JACKSON: They see politics the way they see business: markets, customers.

RHODES: Our customers are voters and our marketers are politicians running for public office.

GILDER: You know, Procter & Gamble will tell you, if you advertise a poor product, you are not going to get anywhere.

JACKSON: The club's record is mixed. It says seven candidates have won of the 11 it backed this year.

RHODES: We have -- you know, we win some. We lose some. And it's almost as if you look at an investment portfolio.

JACKSON: But Gilchrest survived their attack easily and says their tactics hurt Republicans.

GILCHREST: We spent all our money in the primary. So they effectively are beginning the process of diminishing -- they are fully engaged in the process of diminishing the Republican majority in the House of Representatives.

JACKSON: The club expects to bundle and spend a total of around $6 million in this election and says the total will continue growing in the next election, despite the McCain-Feingold campaign finance law that takes effect in November.

MOORE: In fact, because it limits the amount of money that can go to the parties, we think we can gather in a lot of that money ourselves.

JACKSON: Big soft-money donors can still pay the heavy costs of recruiting small donors. And hard-money donation limits will double, allowing individuals to give $2,000 per candidate, potentially doubling the amount the club can bundle.

(on camera): So if you thought the influence of rich donors was on the way out here in Washington, the Club for Growth may make you think again.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE) CROWLEY: How about a change of subject? Bill Schneider will play along in the "Political Play of the Week."

But up next:

(BEGIN VIDEO CLIP)

SHIRLEY DEAN, MAYOR, BERKELEY, CALIFORNIA: I just can't believe that anybody is going to get sentenced to six months in jail for not brewing up the right kind of coffee.

(END VIDEO CLIP)

CROWLEY: The brewing controversy on the ballot in Berkeley.

(COMMERCIAL BREAK)

CROWLEY: Welcome back to INSIDE POLITICS.

We have this for you just happening. The White House now says that it will go along with an independent commission to look into intelligence in the pre-9/11 era. That had been something suggested on Capitol Hill. We are told that the White House changed its position because of lobbying by family members of some of the victims of 9/11.

The White House noted its reversal in a letter from the White House congressional liaison to House Speaker Dennis Hastert. The House Democratic leader, Dick Gephardt, says he is encouraged by the White House change of heart.

Now, political correctness is nothing new in California, but voters in Berkeley are being asked to take it to a new level. On the ballot in November: a measure that could force the city council to become coffee cops.

CNN's Rusty Dornin explains.

(BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): Berkeley, California, home of free speech and some say freedom of thought. But how about the freedom to choose your cup of joe? Attorney Rick Young thinks Berkeleyites should be drinking a more socially or at least environmentally responsible cup of coffee. So he launched a petition drive. And in November, voters will decide the correctness of their caffeine.

(on camera): What is it that you're asking?

RICK YOUNG, ATTORNEY: For all brewed coffee that's sold in the city of Berkeley would be one of three types. It would be either fair trade, or shade grown, or organic.

DORNIN (voice-over): Fair trade coffees are certified that workers are paid a fair wage. Shade grown and organic coffees are more environmentally sensitive. Concepts that sound great to many folks here, like Mayor Shirley Dean. But the practicality of a restrictive law, Dean says, is troubling.

DEAN: I just can't believe that anybody is going to get sentenced to six months in jail for not brewing up the right kind of coffee.

DORNIN: Across from U.C. Berkeley Cafe Strata has offered fair trade organic coffee as an option for five years. But owner Daryl Ross says making it mandatory is unfair to customers and shop owners alike. Besides, he says, who's going to bust the brewers?

DARYL ROSS, OWNER, CAFE STRATA: Who's going to enforce this law? Are there going to be coffee police that are coming into the cafe and, you know, telling people, you know, checking their coffee and telling people that it's the wrong type of coffee?

DORNIN: The right kind, say some coffee drinkers, should be the only kind.

UNIDENTIFIED FEMALE: As Americans, we can afford two cents more cup so that farmers aren't exploited, so their workers aren't exploited. So they can have a living wage.

DORNIN: But for other Berkeley residents, it's another eye roller.

UNIDENTIFIED MALE: City Council should not impose a law on a set of coffee shops that are famous for selling, you know, good cheap coffee, and make them sell a certain kind of coffee just because it's politically correct. This happens in Berkeley all the time.

DORNIN: Coffee chain Starbucks and Peets offer fair trade coffee on the menu, but when it comes to a coffee law, they won't comment. A spokesperson for one chain said, "In Berkeley, it's a caffeine induced argument they can't expect to win."

Rusty Dornin, CNN, Berkeley, California.

(END VIDEOTAPE)

CROWLEY: Just ahead: Bill Schneider's "Political Play of the Week."

INSIDE POLITICS is back in a moment.

(COMMERCIAL BREAK)

CROWLEY: Our Bill Schneider is here with a look at the political benefits of changing the subject -- Bill.

SCHNEIDER: Well, you know how cynics say that the White House is trying to change the subject from the economy to Iraq in order to win the election? Well, you know what? It's been tried in another country.

And it may be working, not the way the White House would like, but the way that earns the "Political Play of the Week."

(BEGIN VIDEOTAPE)

(voice-over): German Chancellor Gerhard Schroeder had a problem: the economy. He got elected in 1998 on a promise to bring down unemployment. He didn't. So when the campaign started this summer, Schroeder's party was running behind the conservative opposition, led by Edmund Stoiber.

Suddenly, the Iraq issue emerged and Schroeder found a way to turn the campaign around: a firm and unconditional "nein" to German participation in any strike against Iraq.

GERHARD SCHROEDER, GERMAN CHANCELLOR (through translator): Under my leadership, Germany will not participate in military action.

SCHNEIDER: Schroeder's defiant opposition to attacking Iraq electrified the campaign and seemed to turn his party's fortunes around: from nine points behind in early August, to a tie in early September, to a narrow lead in the latest polls.

Schroeder's no-war message struck a deep chord with German voters. Anti-American? Anti-Bush? Most likely anti-war.

CRAIG KENNEDY, PRESIDENT, GERMAN MARSHALL FUND: It is also really a reflection of a very deep-seated resistance to the use of military power within the German electorate.

SCHNEIDER: A member of his Cabinet created an uproar this week when she said -- quote -- "Bush wants to divert attention from his domestic problems. It's a classic method. It's one that Hitler used." The truth is, it is one that Schroeder used. It made him sound decisive, while his opponents sounded evasive.

EDMUND STOIBER, CANDIDATE FOR GERMAN CHANCELLOR (through translator): I do not want to go on a national path without agreement with the other Europeans.

SCHNEIDER: Remember the devastating floods that hit Central Europe last month? They also enabled Chancellor Schroeder to embellish his image.

KENNEDY: Schroeder has an amazing ability to look and act like a leader, and especially in a time of crisis. And he did that to an extraordinary extent during the floods.

SCHNEIDER: Schroeder has made this a horse race, too close to call. He seized opportunities to revive his campaign: first the floods, then Iraq.

We'll know Sunday whether he wins or loses, but we know now that it was the "Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: If Stoiber wins, the message will be "the economy, stupid." If Schroeder is reelected, the message will be, "Iraq trumps economy," something the White House might like to see happen in domestic politics, but not in other countries -- Candy.

CROWLEY: And we have to run. That's it for INSIDE POLITICS. "WOLF BLITZER REPORTS" is next.

I'm Candy Crowley.

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Harassment Suit; Democrats Say Congress Should Not Write Blank Check for Bush on Iraq>