This NOW investigation with US NEWS & WORLD REPORT examines the government’s actions to limit access to information about issues from toxic pollutants to airline and auto safety — leaving them hidden from public scrutiny. The broadcast looks at how, in an era in which homeland security is imperative, government transparency has been diminished, leaving the public — and democracy — at risk.
Pulitzer prize-winning writer Dorothy Rabinowitz’s work has spanned a wide range of topics. She currently serves as editorial board member, political writer and culture critic for THE WALL STREET JOURNAL. Rabinowitz has also freelanced for COMMENTARY, HARPER’S, and NEW YORK magazine, and is the author of NO CRUELER TYRANNIES: ACCUSATION, FALSE WITNESS, AND OTHER TERRORS OF OUR TIMES. She joins Bill Moyers to talk about bias in the media and what’s in the news.
Then, Moyers talks to New York Attorney General, Eliot Spitzer, a man on the frontlines of the widening US mutual fund industry probe. Recently, Spitzer’s office has been investigating and bringing charges against several Wall Street companies and individuals for trade abuses and irregularities, calling his findings a “cesspool.” Spitzer discusses everything from his crusade for corporate reform to states’ efforts to combat attempts to weaken the Clean Air Act. You can access the original Web page for this program at the archived NOW with Bill Moyers website.
MOYERS: Welcome to NOW. Everywhere you look today, or try to look, our right to know is under assault.
In the name of fighting terrorists, the government is pulling a veil of secrecy around itself. Information that used to be readily accessible is now kept out of sight.
To cover this story, NOW is collaborating with US NEWS AND WORLD REPORT. Their five-month investigation finds that although the government regularly cites 9/11 as the basis for secrecy, the true reasons, in many cases, have nothing to do with the War on Terror. The US NEWS AND WORLD REPORT story will appear in the magazine that goes on sale Monday. Our story is reported by NOW’s David Brancaccio and producer Peter Meryash.
BRANCACCIO: Floyd County in southwestern Virginia. The perfect spot to paint a Blue Ridge Mountain landscape — or to run a new natural gas pipeline.
When Greenbrier Pipeline Company announced plans to cut through this area with a 30-inch, high-pressure gas pipe, many residents were upset.
JOSEPH MCCORMICK: This was just not the right thing for this county, to have a huge trench, and a pipeline that was going right near one of their schools, and right through their community, and right across the Blue Ridge Parkway.
BRANCACCIO: Joseph McCormick had just recently moved to the community and wanted to help. He believed he could bring everyone together. All he needed to get started was some basic information.
Mccormick’s question was simple: which specific property owners would end up with pipeline cutting through their land?
MCCORMICK: I went to FERC, the Federal Energy Regulatory Commission, to ask for a route. A more specific route. The reason why we had to go to FERC, is because we had asked the companies to provide it, and we were not getting any response. We weren’t getting maps.
BRANCACCIO: Word began to circulate about which land owners might be affected. Gini Cooper is another resident of Floyd County.
GINI COOPER: Someone called me and said I needed to attend this meeting that was being held by some other land owners and found out it was going directly across my house. They would basically strip a 100-foot wide row of trees, not to mention the safety issues.
BRANCACCIO: Cooper and McCormick have reason to be concerned about pipeline safety.
In New Mexico three years ago, 12 members of a family on a camping trip were burned to death when a natural gas pipeline exploded, leaving a crater 86 feet long and 20 feet deep.
At least 213 people have been killed and 837 injured in more than two thousand natural gas pipeline incidents in the United States in the past 10 years.
When Gini Cooper tried to get information about the pipeline running through her property, she filed what’s known as a FOIA request, a legal procedure under the Freedom of Information Act designed to safeguard the public’s right-to-know.
COOPER: The companies don’t like to give the landowner list out because people will organize. So then I called FERC and they wouldn’t give it to me either so I did a FOIA request because they’re a federal agency and I thought I might be able to get it from them. Finally I got a sheaf of paper it was about 78, 80 pages long of the landowner list. However all of the private names had been blacked out and if you held it to the light you couldn’t see through it either.
BRANCACCIO: You tried.
COOPER: Yeah I did. (LAUGHTER)
BRANCACCIO: So, during this crucial period, when you’re trying to raise consciousness about this pipeline coming through people’s communities, what you need is that key. The map. And you’re saying is, they wouldn’t give you the map, why?
MCCORMICK: Because of national security. Now, this was two months after 9/11. This was in, I believe, October or November of 2001. Policies, had changed. Where information that previously was available to the public — it was something that all, anybody could access — was now considered secret.
BRANCACCIO: But McCormick says that defies logic.
MCCORMICK: It’s not as though once you have the pipeline, you can really keep it a secret. It’s just not that type of thing. It’s so obvious. Common sense says that once it’s built, then you have essentially — it looks almost like a highway. It’s a 75- to 100-foot-wide tract of land that has been excavated, and then is also marked. And every landowner, and every member of the community, everybody knows where it is. And it’s miles and miles long.
BRANCACCIO: So this notion that sorry, we can’t give you the details of the key map because of national security concerns, strikes you as what?
MCCORMICK: It strikes me as not the full story.
BRANCACCIO: This from a fairly button-downed guy. A former captain with the army rangers who once ran for Congress as a conservative Republican. He thinks reasonable public access to government information is crucial to democracy.
MCCORMICK: But what we were finding is this was having the effect of defeating our opportunity to organize people, to get people involved. And when we couldn’t get an exact route, the momentum, the groups actually that were forming, essentially disbanded.
BRANCACCIO: With the community unable to organize effective opposition, the government approved the pipeline plan. And things changed with that supposedly sensitive information about the pipeline’s route.
What kind of government secret could it be if these days, you can come into this local branch of the library here in Floyd, Virginia, and get a hold of this map, containing the precise route of the pipeline?
CHRISTOPHER SCHMITT: More and more secrecy is moving from an abstract concept to something that actually affects the daily lives of ordinary Americans.
BRANCACCIO: Christopher Schmitt is an investigative reporter at US NEWS AND WORLD REPORT. What happened to the citizens of Floyd County is just one example Schmitt and his editor Edward Pound have found in their five-month investigation into government secrecy.
SCHMITT: I don’t think it’s an exaggeration to say that this shroud of secrecy is descending across the federal government. When you talk to people who see these things and watch these things and do business with the federal government, they’ll tell you that the federal government is now the most closed that it’s been in a long time.
BRANCACCIO: So, pipeline — example one.
Example two — airline safety. The public used to be able to learn about government enforcement actions against airlines, pilots or mechanics who screw up. No more. The Federal Aviation Administration has now made that information secret.
Or example three — consumer safety. The US NEWS investigation shows the Consumer Product Safety Commission has increasingly been denying public requests for information about product safety and recall activity.
SCHMITT: Even the people who classify things will tell you that things are too secret.
It becomes a political thing. It becomes a bureaucratic thing. It becomes a status thing. It becomes something other than actually trying to serve the intended purpose of the secrecy. No one would say that some secrecy isn’t necessary. It always a matter of where the line is. And many would tell you now that the line has moved far too far.
BRANCACCIO: I suppose, though, a citizen who really wanted to get tough and get a hold of that information could possibly convince a court to order the government to disclose certain bits of information.
SCHMITT: Not actually. This administration has made a new national pastime out of fighting in the courts — battles to keep information secret.
In fact, there’s one agency, the Department of Homeland Security, which actually issued regulations which say that in certain circumstances if a court orders them to release information their employees are instructed to ignore the court order.
BRANCACCIO: One nonprofit group in Washington is leading the charge to make government more transparent and open to the public. It’s called the Information Trust. It’s headed by Scott Armstrong, an investigative journalist who’s covered Washington for three decades. He says he’s never seen secrecy at this level.
ARMSTRONG: The political actors in the administration, those who have a political reason to use 9/11, or to use homeland security issues have tried to sweep in a lot of information that the professionals that long-term career people don’t consider to be sensitive.
BRANCACCIO: Armstrong is most alarmed by a whole new category of secrecy — homeland security information that’s not classified, but is considered “sensitive” by the government.
Remember when former California Governor Gray Davis warned citizens that the Golden Gate Bridge was a possible terrorist target? Well, under a new law, revealing that kind of information could have landed Governor Davis in legal trouble, says Armstrong.
That’s because the law requires people in possession of what the government considers sensitive information to sign a non-disclosure agreement. And if they reveal any of the information to the public, they could go to jail.
Armstrong says the law’s effect could be sweeping.
ARMSTRONG: This is a horrifyingly large amount of information. And so, it is virtually uncontrollable. Once it starts, once the federal government puts something into the system, then all the other players that have signed nondisclosure agreements in responding to it, are responding within this secret system. They’re obliged to.
BRANCACCIO: Armstrong estimates as many as 4 million people could be covered by the law: state and local officials, as well as “first responders” in emergencies — firefighters, police, medical personnel.
ARMSTRONG: Almost all doctors, ultimately, will be required to sign such an agreement. Nurses. Hospital personnel. People involved in the communicable disease field, will not be able to talk about the very basic things that communities need reassurance on. Do we have enough vaccine, or treatments, or antidotes for Anthrax, or for some other disease, or for some biological— some chemical threat.
SCHMITT: One fellow who we talked about put it this way. Everybody sooner or later will have their Freedom of Information moment. One day you will look out your backyard and you will see a surveyor in your yard. And you will go out and you’ll say, “What are you doing?” And they will tell you, “Oh, a highway’s coming through here.” And all of a sudden you care a lot about government information and you want to know everything about that highway and where it’s going and how close to your house and how many cars and whatnot.
BRANCACCIO: So you go online, you pick up the phone, you try to find out about that highway. What’s gonna happen?
SCHMITT: That’s what you used to do. But increasingly you can’t go online because government agencies are taking things off-line. Increasingly, you can’t go to government offices because a lot of that stuff is being taken away. And so whether it’s highway or a chemical facility or whatever, all of us will have some sort of public information or government secrecy moment.
BRANCACCIO: And sometimes that secrecy moment has nothing to do with national security and everything to do with health and well-being.
Case in point: cleaning up toxic pollution.
When citizens want to know which companies are dumping toxic chemicals in their neighborhoods, they can turn to a database at the Environmental Protection Agency.
SCHMITT: There’s been pressure in those communities as a result. And literally billions of tons of toxics have been eliminated from the environment because of public pressure.
BRANCACCIO: But now, this kind of success may be in jeopardy. New legislation backed by the Bush administration could keep this important information secret from the public.
These days, secrecy in Washington is standard operating procedure. When we called over to the Department of Homeland Security just to ask for their address, the receptionist wouldn’t tell us, saying, “Our physical location is something I am not obligated to give.”
SCHMITT: We had one agency we saw had declined documents on what I’ve taken to calling the “Pester and Annoy Standard.”
BRANCACCIO: How’s that work?
SCHMITT: And that is, they said that they would — among the reasons that they would not provide information that someone wanted was that if they provided it then the people getting it would somehow be able to pester and annoy the government officials.
BRANCACCIO: That’s an acceptable excuse?
SCHMITT: No, it’s not. That is not — it doesn’t appear anywhere in the law. The same folks also said that another reason that they would decline to provide the information was that if people got it, who knows what other questions they might ask based on what they learned.
BRANCACCIO: Usually, the public never learns whether these denials are reasonable. But sometimes the public gets a glimpse behind this veil of secrecy.
When the Department of Justice put out a report on its hiring and promotion of minorities, almost half of the report was electronically blacked out.
But an enterprising journalist was able to restore what the Justice Department had deleted.
And what he found under those blackouts was not sensitive, but embarrassing information that was critical of the Justice Department’s own record on diversity.
One conclusion the Justice Department thought too sensitive to be revealed: “—minorities are significantly more likely than whites to cite stereotyping, harassment and racial tension as characteristics of the work climate.”
But again, it’s not always about embarrassment. Secrecy can also cost lives.
KHOU-TV ANCHOR: Tonight, we have an 11 News investigation revolving around tire trouble.
BRANCACCIO: Remember that awful story about Firestone tires coming apart while on the road? Three years ago, Houston TV station KHOU first focused public attention on the problem. In their broadcast, they interviewed Cynthia Jackson.
ANNA WERNER [on KHOU]: But as Jackson drove back north, something went horribly wrong.
CYNTHIA JACKSON [on KHOU]: As I went to change lanes, I heard a “pop.”
BRANCACCIO: Jackson, a school choir director, had both of her legs amputated and lost her husband when a Firestone tire on her Ford Explorer came apart and the vehicle rolled-over back in 1997.
Jackson was just one victim. According to the Department of Transportation, more than 270 people died and 800 were injured in accidents in which faulty Firestone tires played a role.
But it wasn’t until a flood of news reports that Firestone and Ford acted.
GARY CRIGGER: Bridgestone-Firestone is taking the extraordinary step of announcing a voluntary recall.
BRANCACCIO: It turns out, Firestone and Ford had known about the danger but kept the information hidden from the public.
And the federal Transportation Department had received some early warnings, such as this one from a state farm insurance analyst who had reported a spike in accidents. Yet the government took no action.
Congress reacted by creating an early warning system to catch problems sooner and to save lives.
Passed in 2000, the Tread Act required the auto industry to provide the government with information such as consumer complaints to manufacturers, warranty claims, and field reports from dealers.
One of the tread law’s advocates has been Joan Claybrook, former head of the National Highway Traffic Safety Administration, and now the president of Public Citizen, a consumer advocacy organization.
JOAN CLAYBROOK: The intent is to have an open, available source of information so consumers can not only contribute to it but can be saved by it too. So, they can look at it and determine whether or not there’s a problem. And also, so the government can be monitored by the public to make sure that if there is a real problem here, they’re going to act.
BRANCACCIO: The public’s right to know, says Claybrook, is one of the law’s cornerstones. But now the Department of Transportation has decided to keep that crucial safety information secret from the public.
CLAYBROOK: This is a double check system that was created by the Congress to work, work for consumers, work for oversight of the government. And now it’s being destroyed by the Bush administration keeping everything secret for no good reason.
BRANCACCIO: No good reason, perhaps, but Claybrook believes there is an explanation.
CLAYBROOK: Because the auto companies objected to it. And the auto companies have huge sway in the Bush administration, not only with their financial contributions. But a former lobbyist is the Chief of Staff to the President.
BRANCACCIO: Andrew Card, President Bush’s Chief of Staff is a former lobbyist for General Motors.
The auto companies say this is about protecting information that could help their competitors but Claybrook contends it’s really about keeping damaging information secret.
CLAYBROOK: This is a matter of life and death. This is not something that is just esoteric and a potential issue of interest. This is real death and injury. And the impact on American families is huge.
MOYERS: We just saw how government secrets affect us. Well, corporate secrets affect us, too.
Take the emerging scandal in the mutual fund industry: after hours trading, secret deals for fat cats, pumped up fees. We were kept in the dark until Eliot Spitzer stepped into the fray.
Every one of the 50 states has an attorney general but only New York has Eliot Spitzer. Or perhaps it should be said, only Eliot Spitzer has New York, the financial and media center of America. With his investigations of unscrupulous investment firms and mutual funds ripping off small investors, Spitzer finds himself in the hot glare of the media spotlight from Wall Street to Main Street.
It was Spitzer whose investigation led to that $1.4 billion settlement with some of the nation’s largest investment firms, Merrill Lynch and Citigroup, among them. To the charge that analysts misled investors in their stock recommendations, the firms admitted no wrongdoing but agreed to reform the practice.
SPITZER [Dec. 20, 2002]: We can not permit analysts to have their compensation be contingent upon investment banking revenues, or their success at bringing in investment banking business.
MOYERS: And it’s also Spitzer who’s taking the lead investigating corrupt trading practices in the $7 trillion mutual fund industry. As Spitzer recently told Congress:
SPITZER [Nov. 4, 2003]: This is no longer the case of one or two improper actors or bad apples somehow sullying the entire crate. It’s beginning to appear as though the entire crate is rotten.
MOYERS: Spitzer’s investigations have raised questions about the whereabouts of the Securities and Exchange Commission, supposedly the public’s watchdog over Wall Street.
And as Spitzer and other state law enforcers have pressed their investigations, there’s a movement in Washington to undermine their authority.
The little known office of the Comptroller of the Currency has quietly proposed new federal rules that could make it harder for states to regulate banks and stock brokers.
This week Spitzer fired back threatening to sue the federal regulator if it tries to dilute the state’s power to protect consumers.
Eliot Spitzer joins us now. Welcome.
SPITZER: It’s always great to be here. Thank you.
MOYERS: What exactly is the Comptroller of the Currency proposing to do that has your dander up?
SPITZER: Well, let me just also make clear it’s not just my dander. This is a wonderful coalition of— bipartisan coalition of all 50 Attorney’s General across the nation that signed the letter objecting to what the OCC wants to do. They want to limit our jurisdiction so we will not be able to prosecute predatory lending cases against any nationally chartered bank or any subsidiary of a nationally chartered bank. Predatory lending being that invidious form of lending that really damages usually lower income and minority borrowers in a way that is illegal according to state laws and local laws. And they’re saying, “You can’t prosecute those cases.”
MOYERS: I looked at the Federal Register where they post these proposed new rules. If I understand it correctly, I mean, it suggests that they could wipe out state’s civil and criminal laws covering lending, deposit taking, credit cards, checking accounts, escrow accounts and quote “all other powers authorized by federal law.”
SPITZER: The breadth of what the OCC is trying to do is remarkable. And what they’re doing is changing over 100 years of settled law. We, being the states, have been the primary enforcers of consumer protection in the banking arena for— since the formation of our national banking system.
MOYERS: So, what would be the practical effects of this?
SPITZER: Consumers would lose an enormous range of protections. I’ll give you one example. The $500 million settlement we entered with Household Finance last year. A major litigation and settlement that resulted in $500 million going back to low income individuals changed the practices of one of the major lenders in the nation. Those sorts of cases would not be within our purview any longer.
MOYERS: The Comptroller’s office says, “Look, this is much ado about nothing. Just a bunch of Democrats sort of stirring some trouble up in a Republican administration.” Because look, it’s a mess out there. They say, “There are 50 states with 50 different sets of laws. Some of them less stringent, some of them not. We’re just trying to do a little house cleaning here.”
SPITZER: Two points in response to that. First, let me get rid of the notion that this is a partisan issue. That it’s just Democrats who are pushing back against the Republican administration. Diana Taylor, who is the Superintendent of State Banking here in New York appointed by Governor Pataki, a Republican, is on board with us. She gave a speech last week agreeing entirely with what we are saying, criticizing the OCC. This is not a partisan issue.
In addition to which the banks have existed within that patchwork and framework for 100 years. The OCC has never bought predatory lending cases and if they preempt us nobody will be there to protect the consumers.
MOYERS: So, help us understand this. I mean, the Comptroller’s office traditionally, all the way back to when I was in Washington, this job essentially is to just audit the banks for safety and soundness. But here they are putting themselves on the side of national banks seemingly at odds with strong provisions at the state level and consumer practices. What’s happening?
SPITZER: You’re exactly right. The OCC is designed in its primary function is to ensure the financial security of the banks. And they have left historically to the states issues of consumer protection and enforcing the laws of the sort we’re talking about. Now they’re reaching in and saying, “You can’t do — you being the states — what you have traditionally done.”
It’s part of a larger effort. And I don’t want to weave a conspiracy. But I think that there is a larger effort afoot to limit the capacity of reasonably aggressive and proactive state prosecutors who are actually protecting investors and consumers and those who don’t like what we’re doing — primarily financial service institutions — have been going to Washington time and time again saying, “Don’t let them bring these actions preemptively, to use the legal term.” Kick them off the playing field, put handcuffs on the cops who are doing this.
MOYERS: Something is going on here because the see-saw is moving again because when Massachusetts ruled recently in favor of gay marriage, Washington started asking for — calling for national standards on marriage. In the new bill that just has been passed to try to protect us against excessive spam there’s a little provision in there which says that you, at the state level, cannot pass laws on spam protection stronger than Washington.
SPITZER: That’s right. There has been historically this huge tradition, 200 years of debate between state and federal powers that goes back to the Federalist Papers, the Articles of Confederation. All the way back. But the odd thing is Bill that dating to the days of President Reagan, the more conservative world view had been give power back to the states.
Now, suddenly it appears they’ve changed their tune and they’re trying to say, “No, we don’t like it. We don’t like what we’re seeing when states get active in exercising that power.” They want to suddenly change their argument and say, “Limit state power. We don’t want state prosecution. State enforcement of the law. Bring all the power back to Washington.”
MOYERS: How do you explain that the big financial interests have so much influence in Washington?
SPITZER: I don’t want to suggest there’s outright bribery and quid pro quo. But there is a culture of internalization I think in Washington, those who spend so much time with the lobbyists begin to believe them. And if anybody had looked at what was going on within the mutual fund industry over the past years they would have seen precisely the sorts of scandals that we are now revealing. It didn’t take a great deal of investigation.
MOYERS: Where was the Securities and Exchange Commission? I know you keep saying, “I have to work with them, I have to work with them, we’re collaborating.” But the fact of the matter is before you came along, the SEC’s bark and bite have disappeared. And James Cramer wrote a very powerful piece in NEW YORK MAGAZINE last week in which you said, “The federal financial watchdog group, SEC, is supposed to look out for the little guy. But as the recent mutual scandals proved it’s coddling the rich.” And he goes on to blast the SEC for, you know, in effect selling out the little investor at the expense of the big guy.
SPITZER: Let me begin with— you rightly said I’ve tried to couch my critique in somewhat softer language because I don’t want to pick a fight with my colleagues. I do have to work with them. I have been at various times very critical of them. But we try to work together, as it is our duty to do so.
Having said that, let me give you this take on it. I think that the SEC was somewhat akin to a World War I army. It was the — it’s big, it is bureaucratic and so it has dug its trenches and it moves forward one foot at a time. In the financial services industry that we have seen emerging over the last few years with new forms, new capitalizations, dynamics, new — many millions of additional investors coming into the market posing different regulatory issues we needed somebody who was more nimble, more creative, more attuned to the new sorts of issues that were threatening the integrity of the marketplace. And I think they marched forward accepting the status quo of the two readily. They needed to be — and I in this context have said the fact that we only have 15 lawyers pursuing these issues.
MOYERS: In your office.
SPITZER: In my office. They have close to a thousand I think. It’s actually helped us because it has forced us to be more creative and more analytical and make tough triage decisions what cases will really be worthwhile.
MOYERS: There was a fascinating story in THE WALL STREET JOURNAL this week explaining how insiders, relatively mid-career people had actually blown the whistle, had come to your office. One of them had left a message on the answering machine which didn’t get answered for a few days.
But when your lawyers got back to her she spilled the beans. You need those people, don’t you, from inside the industry?
SPITZER: It is critically important. What somebody like that did — and she has gone public with the name but, Noreen Harrington and she is somebody whom the American public owes an enormous debt. Ninety five million mutual fund investors owe her more than they’ll ever know. Noreen came to us, laid out a litany of frauds that were being committed within the mutual fund sector.
It was so amazing that at first we said this can’t be true. Everything she said has been proven out. The late trading, the timing, the fee structures. Every piece of these relationships that she alleged has been revealed now to the public. It is a remarkable story of small investors being taken advantage of to pad the pockets of larger investors and the very wealthy who played by an entirely different set of rules.
MOYERS: What do you think motivates her?
SPITZER: I think that she was motivated by a genuine sense of outrage at what she saw. She had always played by the rules. She had been taught to do that. And what she saw bothered her.
Now, having said that motivation is never a question I worry about. I’ve dealt with informants throughout my prosecutorial life.
If what they tell us is true they may be motivated by desire to get revenge. Or as with Noreen maybe motivated by a desire to do what is right. But credibility is more important to me than motivation.
MOYERS: Three years ago it was the corporate scandal — Enron, WorldCom, others. Last year it was the investment analyst scandals. This year it’s mutual funds. Is there something rotten at the core of our system?
SPITZER: I don’t want it to be quite so dramatic and I also hope we’ve turned a corner. But here’s two theories that I’ll throw out to you. One, it was Pat Moynihan’s theory of defining deviancy down. Pat Moynihan, one of the great thinkers we’ve had in our government, in the 200 years we’ve been a democracy who talked about it in terms of street crime and but nonetheless saw this pattern of tolerance for impropriety over time that ultimately debased the standards we lived by.
And I think that’s part of what happened in the corporate context. The second notion is that there is a sense of hubris that overtook the CEO’s and the leadership in the private sector in particular. The nineties were so good. Everybody was doing so well. Folks began to believe they were beyond the ordinary rules that we’re supposed to live by and the reach of the law. You know, it was Tom Wolfe’s great story BONFIRE OF THE VANITIES of Sherman McCoy, the master of the universe who’s above it all, finds out he isn’t.
MOYERS: But something had also happened to the watchdog.
SPITZER: Oh, yeah.
MOYERS: The little guy cannot do this himself — herself. And the watchdogs, the regulatory agencies just simply looked the other way.
SPITZER: They grew lax to say the least. They grew too comfortable and internalized the values of those who came and lobbied with them everyday. So that you know, look, Harvey Pitt when he took over at the SEC talked about a kindler and gentler SEC. Well, I don’t want a kindler, gentler SEC. I want an SEC that has sharp teeth and knows when to bite.
MOYERS: But your critics say that if you bite that hard and if you gnarl, you know, show those teeth you will wind up taking the risk out of capitalism and we’ll have a stagnant economy as a result.
SPITZER: Let me tell you something. One of the CEO’s at one of the major investment banks — I don’t want to name him — wrote an Op-Ed in the WALL STREET JOURNAL that I disagreed with vehemently. He said, “You guys are trying to regulate out risk.” Couldn’t be more wrong. We love risk. I’m the guy who loves the marketplace. But the marketplace —
MOYERS: You’ve been a big investor yourself.
SPITZER: Absolutely. And my family has — is — my dad who began with nothing succeeded because he worked his tail off and he did well in the market, in real estate, where he took risks. Of course we love risk.
But fraud and risk are totally different things. The marketplace succeeds when the rules of integrity, disclosure and fair dealing are enforced. It’s Teddy Roosevelt versus the Plutocrats. Teddy Roosevelt believed in the marketplace and ensuring competition. What some of these folks want to do is ensure that those at the top remain at the top without ever facing competition.
MOYERS: Can you really bring them to heal unless a lot of them go to jail? I mean, I’ve been puzzled by your settlement with Wall Street because I mean, they did have to wrongdoing and not one of them went to jail and there’s a story in THE NEW YORK TIMES this week about a federal judge sentenced five former executives of the Health South Corporation for their involvement in a sweeping $2.7 billion accounting fraud. But only one of them is going to jail.
SPITZER: Let me tell you about a change that has occurred. Last year, and this is a subtlety that I’ve obviously heard the skepticism, why didn’t somebody go to jail last year out of the research scandal.
MOYERS: If they were caught selling drugs on the streets of Harlem they’d go to jail.
MOYERS: Now they’re not going to jail.
SPITZER: Here’s what we — what I thought and here’s why we’re acting the way we are. Last year we changed the entire rules of the game. The rules were corrupt. The analyst on the street by in large were playing by a set of corrupt rules but rules that had been accepted by the regulators. And so we had to change the rules. And you couldn’t look at an analyst and say to ’em, well, you violated the new rules but you were playing by the old rules but we’re gonna send you to jail for violating the new rules.
We changed the rules, that was the most important thing we could do. This year in the mutual fund scandals the rules are right, and people broke them, and people are going to jail. We have a slew of criminal cases that have been brought, a slew of guilty pleas, other pending criminal cases. And we are going to ask for jail time in every one of them. So I agree with you. It will not change until people go to jail.
MOYERS: You have been in the litigious mood lately. I mean, you and several other attorney generals have actually — are threatening to sue the administration over environmental regulation. What’s behind that?
SPITZER: Well, first you’re right we have been litigious. I don’t like to think of myself that way. But frankly when folks do something wrong that is the enforcement mechanism we have. In the environmental context what the Bush White House has done and its EPA have done is something I’ve never seen a federal agency do, which is to basically give wrongdoers a get-out-of-jail free card.
There are cases where EPA determined certain utility companies violated the Clean Air Act. The utilities were sending up emissions into the atmosphere in violation of the Clean Air Act causing asthma, degradation of our environment, acid rain, injurious up and down the east coast which is why every state along the east coast from New Jersey north has agreed with us. Republicans and Democrats alike, has nothing to do with partisanship. And yet the Bush White House said never mind, we’re not going to pursue these cases.
You can’t do that. Where people broke the law you have to prosecute them. So what I have said, and my colleagues have joined me, we will pick up those cases. We began this in September of 1999. We began these Clean Air Act cases to ensure the integrity of the statute law enforcement and our environment.
MOYERS: You’re asking for tougher measures than Washington wants to impose, right.
MOYERS: I mean, it is —
SPITZER: But also just trying to enforce the law that’s been there parenthetically since the days that President Nixon. President Nixon signed this bill and agreed with us on this matter.
MOYERS: It is a strange and brave new world when liberal Democrats and liberal Republicans are advocating states rights and the conservatives who control Washington are advocating stringent —
SPITZER: It is —
MOYERS: — federal —
SPITZER: I don’t use the word states’ rights. Because I still think there’s a tinge to that phrase that evokes memories that I think are not the one’s we want to evoke. I think there needs to be an appropriate balance between the states and the federal government. But where there are voids, where you withdraw from your appropriate function and cede the turf to us, we have no choice but to jump into that void to bring the enforcement actions that are needed to protect the public, whether it’s the integrity of the stock market or our environment.
MOYERS: Elliot Spitzer, the Attorney General of New York, thank you for being on NOW.
SPITZER: Thank you so much.
MOYERS: A giant in the world of journalism passed away Wednesday. Robert Bartley was the man who shaped the editorial page of the WALL STREET JOURNAL for thirty years. He was one of my first guests on now last year— arguing, as always, for the importance of the free market.
One of his closest colleagues was Dorothy Rabinowitz, a columnist and member of the JOURNAL’s editorial board and, like Bob Bartley, the winner of a Pulitzer Prize. Welcome to NOW.
RABINOWITZ: Thank you.
MOYERS: And my condolences to all of you who worked with Bob Bartley. How long were you his associate?
RABINOWITZ: Going on 14 years now. And I thought just yesterday that there was a very good reason that I entered those doors everyday for 14 years, and I am not joking about this, this is by no means an exaggeration, with a high heart. A slightly higher heart than you’re normally accustomed to walking into your place of business, and largely due to him. It was that crackling voice.
MOYERS: What was it about him that made him so effective an editor? And he was — I didn’t agree with much of what he said. But he was a very effective editor. You knew what that page was about.
RABINOWITZ: Yes, he cared about certain principles. He didn’t talk much about them. But he feared no one. And his principles are very powerful. When I began writing about false cases of prosecution he understood very quickly. He was a man driven by a moral consciousness. And also by a great belief in the great good sense of the American people. And put those two together.
MOYERS: What intrigued me about him was that he supported Lyndon Johnson in 1964 —
MOYERS: —and yet came to believe that liberalism was the toxic dark force of American politics.
RABINOWITZ: Well, yes. I think we — his history and mine were the same there. I think that what he was talking about was the distortion of truth. Honesty was a core ingredient in his values.
And I think that the things that happened in the wake of the 1960s — I would say these splinter groups — that you see now in the universities, the victimization roles, the self-appointed extreme multiculturalism, all of those things — I think distorted the idea of what America was and meant.
MOYERS: How so?
RABINOWITZ: Well, the notion that you could enter a university. And I hope I don’t misspeak — you know, misrepresent him. But I know you could enter a university and be immediately divided into gays, gender groups, all sorts of ethnic groups. Rather than, you know, seeing one’s self as part of the American institution of learning. These things, I think, this is a kind of foolishness to him that was also quite poisonous. And all of us share this view.
MOYERS: What do you think is the essence of conservatism today?
RABINOWITZ: It’s faith. And what it is, is faith in ourselves. Now that may sound a bit abstract. But when you think of who we are — I voted just as you know many other people did for Lyndon Johnson, as Bob Bartley did and all the rest. In a nutshell, I would say that we are the liberals of the 1950s. It’s been said before.
We have people who believed in the country that we were and in the sanity of the American people. You look back over our history, our history; a history that saw human slavery, a history that overcame so many injustices but confronted them and became better.
And it’s that sense of who we are as a nation, as opposed to it’s two minutes to midnight for American democracy crowd.
MOYERS: One of the reasons I admire you, as you know, is that you’re willing to take on your own ideological kinfolk. I mean, you wrote that powerful review recently in the WALL STREET JOURNAL taking apart Ann Coulter for her book suggesting — saying that Democrats are the party of treason. How was that received in your conservative circles?
RABINOWITZ: Well, in my conservative circles, I spoke with a voice of everyone. Everyone shared the view. There are certain lines in our culture that you don’t cross. McCarthy is one of those lines.
I certainly grew up in the age of McCarthy. I remembered it. But in the world of which I work, at the JOURNAL, everybody understood that a man who had so savaged the rights of others and thrown innocents into a kind of, you know, bleak hell, even though we’re the sort of people who laugh at all the stories about the Hollywood blacklist. And we certainly believe that there were Communists in Hollywood, et cetera, et cetera. And Bob Bartley certainly had the same loathing for Senator McCarthy that I did. And I think it’s a great mistake to connect Ann Coulter with the kind of thing that we do or think. I mean —
MOYERS: What — explain that to me.
RABINOWITZ: I don’t mean to demonize her because she says many things that are true and many things that one agrees with. But there are certain things that you cannot in your extremist…. Being a commentator and being a commentator on television now, you know, the brassy kind of extremists, pushes you into extremes of — and I think in a kind of cynical way, saying things that you think are perfectly okay. But they’re not. And one of them is to say that Senator McCarthy was a great hero. Which, of course, he was not. He was one of the worst things that happened to the struggle anti-Communism in America. And the wake in which he left was devastating.
MOYERS: You spend most of your time and most of your space on cultural affairs, books and movies television. But are you thinking— are you beginning to think about politics ’04? About the Presidential and Congressional races coming up?
RABINOWITZ: Bill, I think of nothing but. And in this regard I’m afraid I have to say that there’s a kind of egocentricity in all of us. And I keep thinking if this is going on in my heart it’s going on in a lot of other hearts too.
MOYERS: What’s going on in your heart?
RABINOWITZ: Well, I think — I keep looking for some intelligent, serious commentary on the Presidential nomination races which are not boring to people contrary to popular rumor. People care about these things and watch them. Unfortunately, the debate process is the kind of thing that doesn’t allow for this kind — it’s just a large joke.
But I remember about three months ago walking down the streets of Greenwich Village. And I saw a woman with a big kind of button. And I thought I knew what that button was going to be. And it was. I said, “That’s Howard Dean.”
And her eyes grew saucer wide. And she said, “He’s going to save us.” And I knew from the number of those little buttons around that Howard Dean was going to be the candidate. I certainly think that’s going to be the case and I can see why.
RABINOWITZ: Look at him physically for one thing. He’s got this jut-jawed face. He’s got sort of the right posture. It’s an absurd posture, that sleeves rolled up. But it works for mysterious reasons. All the mysterious reasons that we’re — then there are the real reasons that you can put your finger on. Which are, he does not back down. He speaks clearly. He speaks absurdly and offensively. But he seems to be able to take himself past the problems.
For example, the worst thing he has said and the one I think that will cause him trouble is to insinuate that George Bush was warned by the Saudis that 9/11 was coming. And when confronted with it by the press, seriously several times, “Well,” Dr. Dean said, “I didn’t. I, of course, don’t believe it myself.” “But why did you say it, Dr. Dean?” “I said it because that’s out there.”
Well, that doesn’t make sense. But in the great wash of commentary in the media it gets lost. He introduced it. It’s a piece of Orwellian, you know, gibbering of the worst kind. But that’s part of him. The other part of him is a self-belief. Self-belief is notoriously absent in any convincing way from any of the other candidates.
MOYERS: What do you mean self-belief?
RABINOWITZ: He is a very confident fellow. And confidence in a very, I mean, real confidence as opposed to postured confidence. Real confidence is very engaging. It’s not luster. Mr. Clark, General Clark, forgive me, has a kind of, what do I call it? Irascible bluster about him.
MOYERS: Are we gonna get an endorsement of Howard Dean from the WALL STREET JOURNAL?
RABINOWITZ: I think everybody understood this. I mean, my colleagues understood this about Dean. Was, we’re talking about the persona, not the thought. I mean, he is conceivably, you know, the worst person in terms of values that I can think of.
MOYERS: How do you mean?
RABINOWITZ: His views, which I don’t forget, that oh, I guess it’s a good idea that we remove Saddam Hussein. Which I don’t forget he said and he’s changed his mind several times. I guess it’s a good idea is not — he’s changed his mind but not in ways that you can finger him.
He handles himself as a manager of his own campaign very well. These things matter. If you look at the other candidates I think you see nothing approaching this. I think you see the, you know, the tragedy of Senator Kerry who walks around looking tragic. No. He looks like, you know, what shall I call it?
I often think he should play a Polish Count, you know, somewhere. But all of these things matter to people. These are visceral responses. And a strong candidate who says extreme things which Howard Dean does.
MOYERS: He was in Vermont, a centrist governor.
RABINOWITZ: Yes. Well, yes. He has turned himself into something else. You know, there’s nothing like — do I have to tell you there’s nothing like wanting to be President of the United States? I mean, we are the only country in the world where 13-year-old boys are fingered by their teachers as saying, “He’s Presidential material.” The very notion of being elevated to the Presidency is such a heady thing to people. So I understand that Howard Dean will do anything to be President as, indeed, will all the other candidates.
MOYERS: Including George W. Bush, right?
RABINOWITZ: Well, yes. Well, it depends on how much you show of this, of course, you know? And I think that what Howard Dean has done is avoided high posturing. When you listen to Kerry, you listen to someone who’s describing a nation in such devastated despair that you cannot believe it. No sane citizen looking around at the United States of America can connect it with this tragic spectacle going on. Howard Dean avoids that. Howard Dean just goes issue after issue.
MOYERS: What should this television you spend so much time watching do with the election next year? I mean you looked horrified a moment ago when my partner and wife, Judith Moyers, said, “Well, we didn’t think we would cover the horse race next year.”
RABINOWITZ: Oh, I am horrified at that, because it — a complete absence of sustained serious commentary. It’s a very different matter, sustained serious commentary, from passing on chatter about who’s up, who’s down yesterday and today. That’s not the point.
And you want people to sit around discussing character after character in this play, because the outcome is very serious and also because it’s our grand tableau. American’s every four-year tableau. There’s no other country whose elections are being watched so closely, and it is not because we are the most powerful nation in the world. It is because no one puts on this kind of show over such a long period of time.
MOYERS: You called it a play, a drama.
RABINOWITZ: It is a drama. It is a drama. It is a drama to see an entire life cast on this shot. And I look at them and I said, “What are they gonna do after when it’s all over?”
You know there’s a terrible picture I had up on my refrigerator for a long time after Jimmy Carter lost the White House. And it was a picture of Roslyn Carter. It was a picture of such shattering pain afterwards that she could not conceal, and no one should have asked her to. This prize, the White House, is the race for it tells us so much about our national character, and it is also a very good way of airing who we are. It’s a huge national conversation.
You didn’t know so many people were so angry and they’ve been made so angry at George Bush. You never saw this level of passion over these things.
Dennis Kucinich, I watched him the other night. He’d obviously studied rhetoric so he repeated everything three times. “We are going to change America. We are going to change America. We’re going to change America.” And his voice would drop, and it was all very learned. It was like something from the 19th century. And all of the rest of that —
MOYERS: You like this show.
RABINOWITZ: Oh —
MOYERS: I mean you like this drama —
RABINOWITZ: — but this is a really — because I’ll tell you, not every show has such immense importance. So when you get this kind of huge entertainment and serious importance, you’ve got something worth watching.
MOYERS: Well, come back in 2004 and let’s keep an eye on the drama as it unfolds.
RABINOWITZ: Let’s do it.
MOYERS: Dorothy Rabinowitz from THE WALL STREET JOURNAL, thank you for joining us on NOW.
RABINOWITZ: Thanks very much.
MOYERS: If you were watching two weeks ago you may remember my interview with the former baseball star, Jim Bouton. I talked to him about his recent book, FOUL BALL, based on the diary he kept while engaged in a dispute over a baseball park in the town of Pittsfield, Massachussetts, near his home.
I enthusiastically recommended the book as did the TODAY show. Some other broadcasters, including Keith Olberman and Susan Stamberg, also endorsed the book. But some of the people Jim Bouton criticized in the book and in our interview reacted very strongly to the charges he made against them on the air and to the online column I wrote independently of the broadcast.
They say I was wrong to describe the book as an investigative report when indeed it is Jim Bouton’s diary, and they’re right. They object to my saying the story was about greed, corruption, and abusive power, when it turns out to be a far more complex story than those strong words warrant. So I’ll strike that description, and leave it to you to make up your own mind once you read the book and the letters we’ve posted at pbs.org.
They also object to my saying that Jim Bouton, who wrote one of the great books about baseball thirty years ago, was “back, telling the truth again.” Well, what I should have said is that he was telling the truth as he saw it. Many years ago I asked a correspondent in Vietnam, “Who’s telling the truth out there?” And he answered: “Everyone sees what’s happening through the lens of their own experience.”
That, of course, is why a man writes a book, to tell us his version of things. But one man’s strike can be another man’s ball, so I invited the people who had protested what was said in the Bouton interview to come on this broadcast and give us their version. Then you could make the call. They have declined, and I regret that; equal time seems to me to be fair play.
Nonetheless, I want you to know that we have been able only to confirm that six million dollars in public funds were part of the plan to construct that new stadium in Pittsfield, not the 18 and 1/2 million dollars you heard Bouton mention in the interview.
Furthermore, the local paper, THE BERKSHIRE EAGLE, itself agreed to contribute two million dollars towards a civic effort to build that new stadium. In return, the paper would have naming rights. The property bought with some of the EAGLE’s money turns out to have been polluted. While the paper had not told the public about it, the owners say they had arranged to cover the cost of the environmental cleanup as part of their donation.
In this story, there are chapters still being written. That’s it for NOW. Let us know what you think at pbs.org. I’m Bill Moyers.
This transcript was entered on April 21, 2015.