Shelby, Pelosi Discuss War on Terror
WOLF BLITZER, HOST: It's noon in Washington, 9:00 a.m. in Los Angeles, 8:00 p.m. in Baghdad and 8:30 p.m. in Kabul. Wherever you're watching from around the world, thanks for joining us for LATE EDITION. We'll talk with those two top U.S. lawmakers about what's next in the war against terrorism in just a few minutes, but first, a news alert.</s>BLITZER: And joining us now are two top members of the U.S. Senate and House Intelligence Committees: In his home state of Alabama, the top Republican on the Senate Intelligence Committee, the vice chairman, Richard Shelby. And in her home state of California, the ranking Democrat on the House Intelligence Committee, and the highest ranking woman in the U.S. Congress, Nancy Pelosi.</s>BLITZER: Senator Shelby, Congresswoman Pelosi, welcome, both of you, back to</s>LATE EDITION. SEN. RICHARD SHELBY (R), ALABAMA: Thank you.</s>BLITZER: Senator Shelby, how worried -- we will get to Iraq, we'll get to other issues involving the Intelligence Committee in just few moments, but how worried are you as a Republican that these corporate scandals could hurt your efforts to win in not necessarily your personal effort, but Republicans' efforts in the House and the Senate in the fall elections?</s>SHELBY: Well, Wolf, obviously, it could be an issue. And we don't know where it would fall yet, on the Democrat or Republican side or no side. But I do believe that the president needs to get in front of the issue. I think he's going to do that. And the way he can do that is come out for the toughest legislation, the toughest penalties, criminal and civil, that we can do to bring hope and responsibility back to our capital markets. There are a lot of people, Wolf, that just don't trust the capital markets today, and for good reason.</s>BLITZER: Is it time for him to find a new head of the Securities and Exchange Commission?</s>SHELBY: I'd leave that up to him. You know, Harvey Pitt, who is the chairman, is a very able person. He's been on every side of the issue. He was in private practice before then. He knows the issues. And the question is, will he lead rather than follow? If he leads, if he gets in front of the issues, that's one thing. He knows where to go. And I hope he will. We'll know within a few days.</s>BLITZER: Congresswoman Pelosi, as you know, a lot of Democrats out there are salivating. They think that this is going to be a huge political bonanza in the fall elections in the House and the Senate. But a lot of these scandals were brewing well during the Clinton administration. It didn't just all start when President Bush came to the White House.</s>REP. NANCY PELOSI (D), CALIFORNIA: Well, I think that the record will show, Wolf, that the Republican Congress was the enabler of some of these activities to go forward. The Republican Congress resisted the suggestions and recommendations of the then-head of the SEC, Arthur Levitt. I think that it is -- that Pitt should not be in that job. He is a person who represented the association of accounting firms before he came into the head of the SEC. So I think that even now, the bipartisan bill passed by the committee, the Banking Committee, in the Democratic Senate was not supported by Senator Gramm, an important figure on the Republican side when it comes to financial institutions. We have to remember the impact that this has had on individual investors throughout the country. People have lost their pensions, their retirement, the prospects for their children's education and their children's future. The American people need answers. Sure, jail terms that the president has recommended, criminal penalties, are an important signal. But that's about after the cat -- after the event has already taken place. What do we do to make things right for these people who have lost their pensions? Nothing.</s>BLITZER: Well, specifically...</s>PELOSI: We have to change the law so that it does not happen again. And yes, I do think that, while we cannot all business with the same brush, and we don't want to do anything that would contribute to losing confidence in the markets, that we can go forward in a very, I hope, bipartisan and sensible way to not only punish those for what they have done, but to make sure it doesn't happen again, and to put people at the SEC in whom we can have confidence, not a former employee of the accounting firms.</s>BLITZER: In addition to firing Harvey Pitt as chairman of the SEC, Congresswoman Pelosi, what else specifically do you want to hear from the president when he delivers this speech on Tuesday?</s>PELOSI: I would like the president to support the bipartisan bill that was passed out of the Banking Committee a few weeks ago with all but four, including Senator Gramm of Texas, who, by the way, whose wife was on the auditing committee of Enron Corporation. Republicans are very tied to this. And again, as I say, we're not painting all -- I don't want the president to paint all business with this brush. I want his speech, as I would want the Democrats and Republicans to work together, to increase confidence in the markets so that the value of people's retirement and the hopes and aspirations for their children from their savings is worth something. But I think that criminal penalties is interesting, but it's not the only answer.</s>SHELBY: Wolf, let me just add one thing. Since I'm the number- two Republican on the Senate Banking Committee, the majority, as Congresswoman Pelosi pointed out, the majority of the Republican Senators supported the bill authored by Senator Sarbanes. We moved it to the floor. And I believe that that is a strong bill. He's going in the right direction. And I believe we can improve it and make it even stronger.</s>BLITZER: Well, what else do you want to do, Senator Shelby, to make it even stronger?</s>SHELBY: Well, I think you've got to have individual responsibility everywhere we can get it. We need to close every loophole that we can imagine there. This is a very complicated piece of legislation. We've got our staffs, our lawyers looking at it. But not to weaken it, but to make it strong. I agree with the congresswoman from California. It's very, very important that we bring credibility, which is integrity, to our capital markets. And we're going to have to do this by strengthening, in a big way, our accounting profession and also the analysts that make these comments about various stocks. A lot of people have been hurt, and a lot more people will be hurt if we fail to do our job.</s>BLITZER: So you basically want to see people go to jail, not just necessarily pay a fine but actually go to jail and serve some hard time?</s>SHELBY: Absolutely, Wolf. I think you have to have accountability. Let me tell you what, people could steal more money from these companies, from the people, from the investors, from the pension holders that have invested than the Mafia could ever steal in hundreds of years probably. They can do it in less time than you can blink an eye.</s>PELOSI: Wolf, if I may add something to that.</s>BLITZER: Go ahead.</s>PELOSI: I would like to say that, when we go forward with this, we all have to express our confidence in the markets. We want people to invest. We want small investors to continue to invest. But in order for them to do that, they need transparency and they need integrity. People say to me, well, they didn't complain when their stocks were going up. But what was the reality of that? It wasn't even real. So whatever we do and whatever the president recommends, I hope he will associate himself with the bill, as Senator Shelby has supported in the Banking Committee, but also demand transparency and integrity, so the markets will be invested in and people can take their risks up or down, be entrepreneurs but know that they are being dealt with honestly and with integrity and with transparency. These men -- these people have to sign their own -- the managers have to sign their own annual reports, so they have associated themselves directly with the figures and facts that are in them, if they are, indeed, facts.</s>SHELBY: Wolf, the key to all this is integrity and honesty in the market. That will drive confidence in the market. Lack of confidence, lack of integrity go hand in hand. We need the integrity.</s>BLITZER: As you know, Senator Shelby, the markets have collapsed to the tune of $6 trillion over the past couple years. That means a lot of average investors out there, you know, people all over the country, a lot of your constituents, have lost a huge chunk of their retirement funds, of their portfolios.</s>SHELBY: Absolutely.</s>BLITZER: And there are a lot of angry people right now in the United States.</s>SHELBY: And they should be angry because of this -- the dishonesty and misleading accounting statements. They should be. And we have the responsibility, Wolf, in the Congress to do something about it, and I think we're going to do it. We have to do it.</s>BLITZER: All right. Let's move on now. Congresswoman Pelosi, I want to refer to a front-page banner headline, a top headline in the New York Times today, that reads, "U.S. To Vaccinate 500,000 Workers Against Smallpox" is their lead story. Is this a good idea, to move beyond the 10,000 to 15,000 health care workers, the first responders originally discussed, to move on to hundreds of thousands of health care workers, first responders around the United States?</s>PELOSI: Well, first, let me say that -- getting back to your other issue, the issue of the downturn and the collapse of the stock market is not unrelated to the issue of terrorism. I think the uncertainty that exists now, plus the warnings from time to time, have also contributed to that collapse. And that's why we have to get to a place, and indeed, we have an obligation to the families affected by September 11, to get to a place where we diminish the risk to the American people of terrorism and the impact -- recognizing the impact that it has in every aspect of our lives, whether it's personal or economic or, in this case, from a health standpoint. I'll be interested to see the facts behind the decision, the justification, when we go back to Washington -- I'm going in a few minutes -- but when we go back to work tomorrow to that, because that's a very large number of people to vaccinate. And as you know, there are some risks involved. I hope that we're not doing this for symbolic reasons but that there is a real justification for it.</s>SHELBY: I think it's most unfortunate that we have to be at this place. I would have hoped that anyone that had possession of a smallpox vaccine -- and as you know, there's supposed to be only one or two or three or four left in the world -- that that would not be a threat to the American people or the people -- any people in the world.</s>BLITZER: We're going to take a quick break, but before we do, Senator Shelby, I want to let you weigh in on this New York Times story today, as well. A couple of weeks ago on this program, Dr. Julie Gerberding was a guest. Since then, she's been asked to become the head, the new head of the Centers for Disease Control and Prevention. I want you to listen to what she said. She seemed to suggest, on this program a couple of weeks ago, that they were moving, potentially, in this direction. Listen to this.</s>DR. JULIE GERBERDING, CENTERS FOR DISEASE CONTROL AND PREVENTION: I think that one of the things that Secretary Thompson will be looking at is, how do we phase in a program of immunization? We're already immunizing people working with the virus in the laboratory situation, and we're talking now about immunizing the people who are at highest risk of coming into the very first cases, should we have an attack.</s>BLITZER: I guess the question to you, Senator -- you're the vice chairman of the Intelligence Committee in the Senate -- how realistic, God forbid, is this potential of terrorists using smallpox against Americans?</s>SHELBY: I think you cannot rule that out, Wolf. We've talked about this before. It's always a chance. You know, we thought -- we've been fighting the anthrax, trying to find out who was responsible for the anthrax. Well, anthrax is very important. It's deadly, but nothing compared to what smallpox would be. So, our authorities are working in the right direction. The question is, who do we immunize, and how fast, and do we have the serum to do it?</s>BLITZER: What are the answers?</s>SHELBY: Well, we're getting there, but that will have to be made -- you know, there are 280 million people, more or less, in this country. Where do we start? And I think there have to be some priorities. I don't think we should panic, but we should be moving in this same direction that the new director-to-be of the Centers for Disease Control spoke of and knows a lot about.</s>BLITZER: All right. Senator, Congresswoman, we're going to take a quick break. We have a lot more ground to cover on the war on terrorism. Our conversation, including your phone calls, will continue when LATE EDITION returns. Stay with us.