MR. MCLAUGHLIN: Issue One: Can Bush save Wall Street?

(In videotape excerpt, Mr. McLaughlin is seen ringing the New York Stock
Exchange bell.)

That was Monday, and that was McLaughlin. And that was a 447-point
rally, the third highest in the history of the Dow.

The market opened this week with a runaway start, but it had no staying
power. Now the market may be negatively impacting on the economy at large,
some think. Consumer confidence falls; 106 in June, 97 in July. Gross
Domestic Product stalls; 5 percent first quarter this year, 1.1 percent
second quarter.

What can the Bush administration do to help the economy? Well, the
president lobbied hard for and signed the -- get this -- Public Company
Accounting Reform and Investor Protection Act of 2002. But there is more
and more talk that Mr. Bush needs to do more; not necessarily himself, but
at least a strong spokesman.

That puts the spotlight on Treasury Secretary Paul O'Neill. But O'Neill
does not measure up. Bush is resisting calls from Democrats and even some
Republicans that O'Neill should resign. In fact, instead of O'Neill being
Bush's spokesman, Bush has become O'Neill's spokesman, defending O'Neill
for travels abroad, for gaffes or for off-message remarks.

PRESIDENT GEORGE W. BUSH: (From videotape.) I say he's doing a fine
job. And when the market goes up, I -- I hope they, you know, will give
him credit.

MR. MCLAUGHLIN: Then there's the chairman of the Securities and Exchange
Commission, Harvey Pitt, his chronic credibility problem. Pitt regulates
the corporate sector -- notably the accounting industry, of late -- where
he spent his former career, counseling it and defending it before the SEC.

SENATOR JOHN MCCAIN (R-AZ): (From videotape.) If he recuses himself,
then the SEC will be absent a chairman. If he makes a decision, there will
always be a cloud of suspicion because of his previous association.

MR. MCLAUGHLIN: Why doesn't President George Bush do what CEO George Bush
would have done in the corporate sector under similar circumstances? You
don't perform; you're out.

It's not just in the corporate sector. Many presidential Cabinet officers
have served fewer than O'Neill's 20 months: Clinton's Defense secretary,
Les Aspin; Reagan's Transportation secretary, Drew Lewis, and his Interior
secretary, James Watt; Carter's Treasury secretary, Michael Blumenthal, and
his HUD secretary, Pat Harris; Nixon's Interior secretary, Walter
Hickel. Then there's Bush's own counselor, Karen Hughes. She's gone.

"For President Bush, It's Time to Let a Head (Or Maybe Two) Roll"
headlines columnist Stuart Rothenberg. "O'Neill and Pitt say they want to
help the country and the president. They ought to think how they can best
do that. If they can't figure that out, the president ought to give them a

Question: Seventy-seven percent of Americans think Wall Street is rigged
for the rich. This is a terrible number. Should Bush bring into his
Cabinet a Teddy Roosevelt-style populist, an alpha male who will restore
public confidence that the rules apply to all?

I ask you, Michael.

MR. BARONE: John, who do you have in mind, the guy that rang the bell on
the Big Board on Monday night? (Laughter.) I think the fact here is that
the idea that if you just have a couple of heads roll, the stock market's
going to go up is really kind of fanciful.

MR. MCLAUGHLIN: You think that's "simpliste"?

MR. BARONE: The market is not the economy. It's two different
things. And the other thing is that the market does not just respond to
cheerleading statements by the government.

But other things that have happened are more significant. SEC Chairman
Harvey Pitt put into effect the requirement that CEOs have to sign, under
penalty of jail time, the statements they make. Then we had, two days
later or a couple days later, the passage of the bill which Senator
Sarbanes was the chief sponsor of in the Senate, the Democratic senator
from Maryland. He said about Harvey Pitt that Pitt has a lot of competence
in the area, he knows -- like most SEC chairmen appointed by people in both
parties, has experience in the securities industry and is a person with
competence. He should try and clean it up.

Remember, the first chairman of the SEC, the person that set the culture
of the agency -- which has served the country well for nearly 70 years --
was one of the biggest rough operators on Wall Street, a man named Joseph
P. Kennedy. He did a good job of setting up that agency. It's performed
well. It's got new laws in place. And the CEOs, the players in the
market, know now that they better be honest and convince the markets
they're honest, or they're going to lose money. That's going to have a
powerful effect.

MR. MCLAUGHLIN: It may be -- of course, the market is not the economy,
but it may be that the market is landing its punch. The unemployment rate
is 5.9 percent flat, but a lot of economists predict it's going to cross
the 6 (percent) threshold and reach 6.5 percent by the fall. Also, factory
goods orders sank in June.

So Eleanor, what do you think about the proposition that he ought to have
a strong spokesman?

MS. CLIFT: Well, I think the economic team, others in addition to the two
you singled out, are not up to the caliber of the national security
team. Most people in the country haven't heard of them. And to the extent
they have heard of them, they don't have any confidence in them. But I
don't think there's going to be any change until after the election. I
think you will see a new economic team put in place. But you can't simply
fire Mr. Pitt, and I don't think he deserves to be fired. I think he is
now, as Michael points out, taking some tough steps, and he may acquit
himself well.

And you can't improve the economy by cheerleading. What we need is
investor confidence, and you can't make speeches and hold summits, like the
president's going to have in August, and tell investors to be
confident. You need more transparency so we know what these corporations
are doing, and you need people going to jail with handcuffs. And we're
beginning to see that.

MR. MCLAUGHLIN: The problem with the continuation of Pitt in that job is
that the chairman of the SEC, which is what he is, will populate the
oversight review board that has just been brought into existence. So the
ongoing chronic credibility problem does not stop now, but will continue
with all appointments.

MR. BLANKLEY: Well, I mean, I've called for both Pitt and O'Neill to be

MR. MCLAUGHLIN: And the president has not heeded your call.

MR. BLANKLEY: Hasn't acted yet. O'Neill, by the way, not because he's
not giving appropriate hortatory encouragement to the market, but because
he -- brilliant man that he is -- is unfit to be secretary of the Treasury
because he speaks bluntly; he's managed to do real damage to the Brazilian
economy by his casual statements about Swiss bank accounts.

And so he's just not the right man for that job. He's the right man for a
lot of jobs. Pitt, I think, does not have credibility, and the longer he's
there, the longer the problem. And I think part of -- his appointment
issues you talk about is also valid. I think he just needs to be gone.

MR. MCLAUGHLIN: They are supposed to be lightning rods, and a lightning
rod will absorb voltage and steer it away from some target that is
vulnerable and important, you know? Now they've absorbed all the voltage
they can, have they not? Does he not need new lightning rods?

MR. O'DONNELL: But they're also supposed to know something, and Harvey
Pitt knows as much as anyone does about the securities industry. And Paul
O'Neill -- look, the guy ran Alcoa, okay? The thing -- Alcoa went -- the
stock price went up 800 percent while he was running Alcoa.

MR. BARONE: With no funny accounting.

MR. O'DONNELL: And he made sure that his compensation package was below
the industry median. He has come up with some very good ideas about
controlling these avaricious businessmen who are running these
corporations. He should be listened to more. He should not be let go. He
knows his stuff.

MR. MCLAUGHLIN: So you want retention of both.

MR. O'DONNELL: I would retain both. Look, we have a rich history in this
country of people coming from one side of a particular world and being the
best for then policing it. You have plenty of defense trial lawyers in
this country who become great prosecutors and vice versa. If you know what
they're up to, as Harvey Pitt should -- he'd be very good at policing it.


MS. CLIFT: I think there's a battle in the Republican Party between the
Reagan wing and the Teddy Roosevelt wing, and I think it's time for Teddy
to rise again, because the case of public protections is very strong. And
in a way, Harvey Pitt represents that transition. He came in arguing for a
kinder, gentler SEC. Now he's talking like a tough cop. So -- and Paul
O'Neill, also -- after Enron collapsed, he --

MR. BLANKLEY: Wait, wait -- let me --

MS. CLIFT: Wait a second!

MR. BLANKLEY: No, no --

MS. CLIFT: Paul O'Neill said after Enron --

MR. BLANKLEY: Hold on. She's got the wrong Roosevelt!

MS. CLIFT: Let me finish my sentence.

MR. MCLAUGHLIN: Wait a minute. Let her finish!

MS. CLIFT: When Paul O'Neill said after Enron collapsed that it was the
genius of capitalism, companies come and go --

MR. BLANKLEY: Look, she's got the wrong Roosevelt.

MR. MCLAUGHLIN: Hold on a sec!

MS. CLIFT: -- and he's haunted by those statements. He's got to
transition to something -- (inaudible).

MR. MCLAUGHLIN: Okay, let me ask you this: If you were trying to replace
him -- I know you want to make a strong point, but I want to ask you
something: As your far-darting eye gazes across the horizon of Republican
eligibles to become secretary of the Treasury that would be a populist like
Teddy Roosevelt and would be like a John Connolly, let us say, with some
flourish and political skill -- who is there? Who is there that --

(Cross talk.)

MR. MCLAUGHLIN: Where do you find somebody? Who is there?

MR. BLANKLEY: Let me -- let me make a point. Eleanor had the wrong
Roosevelt. It's not Teddy Roosevelt they want; it's Franklin
Roosevelt. That's the danger: We're going to overly regulate. Teddy
Roosevelt had a more modest view of the government than his cousin Franklin.

MS. CLIFT: I'll settle for Teddy. (Laughs.)

MR. BLANKLEY: But my view is that this is a good time for the president
to bring in a respected Democrat-affiliated secretary of the Treasury to
make this --

MR. O'DONNELL: Give us a name. Someone give us a name about who should
be Treasury secretary.

MS. CLIFT: Bob Rubin!

(Cross talk.)

MR. MCLAUGHLIN: We need -- (inaudible) -- who has the outward
manifestations --

MR. O'DONNELL: A name!

(Cross talk.)

MR. BLANKLEY: Felix Rohatyn.

MS. CLIFT: Bob Rubin.

MR. O'DONNELL: Felix Rohatyn. That's great. Well --

MR. MCLAUGHLIN: Somebody who has the outward manifestation of leadership;
that's what he needs!

MR. O'DONNELL: And you think Felix Rohatyn has that?

MR. MCLAUGHLIN: Well, the person --

MR. BLANKLEY: He's an established Democrat. I think --

MR. O'DONNELL: He's never talked to a crowd of more than 100.

MR. MCLAUGHLIN: The person who could do it best is
Cheney. Unfortunately, Cheney right now is ineligible. Correct?

MS. CLIFT: Oh, no. (Laughs.) Yes.

MR. O'DONNELL: Correct.

MR. BLANKLEY: Well, he could resign from his job and take this job.

MR. MCLAUGHLIN: All right, let's move on. Let's move on.

MR. BARONE: Beyond this idle speculation, yes, John.

MR. BLANKLEY: (Laughs.)

MR. MCLAUGHLIN: Here's a little more, by the way, about the public
accounting board -- just been brought into existence, discussed last
week. It does not have the power of subpoena, as was stated then. But it
does have the -- because that power resides with government agencies -- the
SEC, the judiciary, the Congress. But the board does have the equivalent,
almost; that is, the power to exact compliance by withholding a license or
withdrawing it from an accounting firm.

Also, regarding fines, the board may impose a maximum of a $15 million
fine on a firm and a $750,000 fine on an individual accountant. That's by
way of clarification.

Question: Will both O'Neill and Pitt stay, or will either be out before
the election November 5th, three months from now?

MR. BARONE: I think Harvey Pitt's nominees to this board will be very
closely scrutinized. I think both will stay.

MS. CLIFT: The president really can't fire Pitt. He's an independent
operator. He's got a term. He stays. I think Paul O'Neill may leave
after the election sometime next year.

MR. MCLAUGHLIN: How would Bush best manage that switch? How about during
this vacation time in Crawford, he begins bringing in and dominating the
press with possible candidates for that job? Would that be a good
political idea?

MS. CLIFT: That -- that is not --

MR. MCLAUGHLIN: You don't like that?

MS. CLIFT: That's not the Bush family style. That would be bad manners.

MR. MCLAUGHLIN: What would you think about that as the way of managing a
switch if one were to happen?

MR. BLANKLEY: A switch?

MR. MCLAUGHLIN: A switch. That is, moving O'Neill out and Candidate X in.

MR. BLANKLEY: My hunch is, given President Bush's strong sense of
loyalty, he won't -- he won't do it this soon or that way. I would think
it would be a clean break, probably next year.

MR. MCLAUGHLIN: You know, right now, with the economy being central on
people's minds, the president has to think seriously about retaining the
House and not being able to get -- take over the Senate. That's a big
powerful consideration, is it not?

MR. BLANKLEY: He needs to think more seriously probably than the White
Houses typically do think about congressional situations.

MR. MCLAUGHLIN: Well, maybe he needs the punch. Maybe he needs a double
punch. She says you can't ease out Pitt. But maybe he needs to do
something beyond what he's doing now.

MR. BLANKLEY: I think he does. I mean, you were asking me before what he
will do. What I think he should do is get rid of both of them and then be
off around the country for the next month having the public see him every
day pounding away, enforcing against corporate corruption, and rallying the

MR. MCLAUGHLIN: You know, I'm amazed that you don't relate this to the
president's party and his own fortunes with regard to this coming
November. And seeing that, with your political skills --

MR. O'DONNELL: Are you kidding me? Do you think there's a single vote
out there on the matter of firing the Treasury secretary --

MR. MCLAUGHLIN: No, but I --

MR. O'DONNELL: -- that he could pick up one vote, John?

MR. MCLAUGHLIN: I'm talking about the successor that was described in
this program by me just a few minutes ago, with the manifestations of
leadership visible and persuasive.

MR. O'DONNELL: We don't have that person. And Paul --

MR. MCLAUGHLIN: Who doesn't? Who's the "we?"

MR. O'DONNELL: There is no name. We don't have one.

MR. MCLAUGHLIN: On the American scene?

MR. O'DONNELL: Yeah. Name him.

MS. CLIFT: You want to --

MR. MCLAUGHLIN: Well, I haven't thought about it --

MR. O'DONNELL: He comes up with a Democrat who was rejected for the
position by the Clinton administration.

MR. MCLAUGHLIN: Oh, I know. I know.

MS. CLIFT: How about --

MR. BLANKLEY: That's always a good qualification if --

MR. MCLAUGHLIN: The answer to the question is, by Labor Day weekend,
there will be one less from the coop.


MR. MCLAUGHLIN: There will be one less.

MR. O'DONNELL: They'll both be there.

MR. MCLAUGHLIN: But as to who the one will be who will go, that's a
second prediction.

MS. CLIFT: Try next year.

MR. MCLAUGHLIN: Notice: Labor Day weekend, a full half-hour of
McLaughlin Y-2-0 moments. Join the Group on memory lane Labor Day weekend.

When we come back, how do we grade this Congress this year, A to F?


MR. MCLAUGHLIN: Issue two: Making the grade?

PRESIDENT OF THE SENATE: (From videotape.) Without objection, the Senate
is in adjournment.

MR. MCLAUGHLIN: The 107th Congress has left town for August, returning
September 3rd. Accomplishments this year? Four watershed legislative

One. TPA, trade promotion authority, at last -- a.k.a. fast track: allows
President Bush to present trade pacts to Congress subject only to a
straight up-or-down, yea-or-nay vote; no Congressional amendments. Passed
this week.

Two. Corporate governance reform, notably corporate accounting: penalizes
companies for falsifying financial reports and establishes an independent
board to oversee the accounting profession.

Three. Campaign finance reform: bans soft-money contributions from
individuals, labor unions, corporations.

Four. Farm bill: gives U.S. farmers $180 billion in subsidies over 10
years. It requires that meat be labeled with the name of the country of
its origin. Livestock-owners love this provision. Eat U.S. meat.

Question: Which of these legislative feats will do most to uplift the
economy. Before you answer, I want to remember to thank publicly Dick
Grasso for his expansive and exceptional hospitality to myself and my wife
and my party last Monday.

Eleanor, go ahead.

MS. CLIFT: Well, I think the Congress gets an A for the sheer number of
bills that were passed. In terms of the impact on the economy, where they
get a D is that awful tax bill they passed last year, which -- where the
Congress was complicit with the White House in pumping up budget surpluses
to provide cover for a tax cut that we can't afford and that we're going to
be digging out from under for the next 10 years.

MR. BLANKLEY: Oh, we've heard this before.

MR. MCLAUGHLIN: Which was the best?

MS. CLIFT: They get a D on that.

MR. BLANKLEY: Well, the best bill, obviously, was the trade -- the fast
track. It was the only bill that's probably positively useful. I think
the agricultural bill was a disgrace. It was election-year pandering to
agribusiness. The campaign finance reform was an infringement on First
Amendment rights and will probably be found substantially unconstitutional.

MR. MCLAUGHLIN: I kind of like that farm bill. I think anything that
puts a smile on a farmer's face pleases me, because they're usually such

MR. O'DONNELL: Well, you cannot like the farm bill and like the
fast-track trade authority, because those are in opposition to each
other. One is to make the the American economy more efficient and the
world more efficient, the trade bill --

MR. MCLAUGHLIN: Well, the farm bill, it's stretched over 10 years.

MR. O'DONNELL: The farm bill is this joke of subsidies that makes us less
efficient every day.

MR. BARONE: Well, the farm bill is not quite as bad as it could have
been. It -- (laughter).

MR. O'DONNELL: Yeah, it could --

MR. MCLAUGHLIN: Thank you, Michael.

MR. BARONE: It's a dud. It particularly increases subsidy to cotton
farmers, the home district of Larry Combest in West Texas. The House Ag
chairman is from a cotton-growing area. This is a disaster. It hurts
people in the Third World.

But thank goodness they passed trade promotion authority.

MR. MCLAUGHLIN: What about --

MR. BARONE: Looking in the -- (inaudible). This has the possibility of
getting us free trade agreements and also opening up and allowing some of
the Third World countries to sell things here that they've produced. It's --


MR. BLANKLEY: The president has called for negotiating with the EU on
getting down agricultural subsidies. So he's actually using the new
free-trade deal to try to bring down our agricultural --

MR. BARONE: Their subsidies are worse than ours.


MS. CLIFT: Well, free trade --

MR. MCLAUGHLIN: Okay. We've got to move.

Okay. Grade the Incompletes.

Congress stays in session from September 3 until October 4 -- that's one
month -- then adjourns for the year to campaign for the November 5
election. Some of the unfinished business that may be taken up during that
one-month period, September 3 to October 4:

One, Homeland Security, President Bush's new Cabinet-level department that
oversees and responds to domestic terror threats. Passed only by the
House. That may be back.

Two, energy, the updating of our national energy policy. The Senate wants
to triple the amount of ethanol added to gasoline, and create a White House
Office on Global Climate Change, and require utilities to use renewable
resources. And if the House gets its way, drilling in ANWR, Alaska's
Arctic National Wildlife Refuge, will be permitted. In conference right
now and frozen for weeks.

Three, prescription drug benefit. Assists Medicare recipients in buying
prescription drugs. The House version alone was passed in June.

Four, generic drugs. Bring low-cost generic drugs to the market earlier,
a measure seen as unfair by brand-name-drug makers who pay billions on
research and years on development and licensing. Senate passed only.

Also left unfinished is legislation overhauling bankruptcy law; voter
machine, et cetera, reform; and a terrorism insurance bill that gives
government money to insurers to help them pay claims stemming from terror

Question: Name a major bill that Congress may pass when it comes back
after a one-month period after Labor Day -- for a one-month period.


MR. O'DONNELL: The prescription drug benefit does have a chance.

MR. MCLAUGHLIN: You think it will have a chance?


MR. MCLAUGHLIN: You think that they're going to catch the devil when they
go home for not doing anything on it?

MR. O'DONNELL: Yes, they are. Yes, they are.

MR. MCLAUGHLIN: The unfortunate thing is, there's no health
measure. There's no patients' bill of rights. There's nothing in there.

MR. BLANKLEY: Well, I -- I always hesitate to disagree with you on Senate
matters. I think that there will not be a prescription-drug bill
passed. I think they will pass homeland security.

MR. MCLAUGHLIN: Regardless of the heat they get.

MR. BLANKLEY: Yeah, I think ultimately it's in the Democrats' interest to
have an issue rather than a bill that Republicans agree on taking up --

MR. MCLAUGHLIN: I know. I know. But can they afford to play a political
game? And they've got a tripartisan bill in front of them that is manageable.

(Cross talk.)

MS. CLIFT: The problem -- the problem --

MR. BARONE: Lott made the point that the Republican House passed a
prescription-drug benefit; the Democratic Senate couldn't. So they're --
the Democrats are not in as advantageous a position as they hoped to be.

MR. MCLAUGHLIN: Is the generic-drug bill going to anywhere?

MR. BARONE: I think probably not. Homeland security I think will pass.

MR. MCLAUGHLIN: Do you want to take note that one of the big failures of
this Congress is the slowness with which they've addressed judicial
confirmations? You could speak to that.

MS. CLIFT: No. No. (Laughs.)

MR. MCLAUGHLIN: Don't you want to complain about that? Do you want to
grieve over it?

MR. BARONE: I'll complain about it!

MR. MCLAUGHLIN: No grief from you?

Oh, you like the idea! You'd stiff Bush every chance that you could get.

MR. BARONE: No. Look, look.

MR. MCLAUGHLIN: After all, they did that to Clinton -- the Republicans.

MS. CLIFT: There's some payback.

MR. O'DONNELL: It's a pretty standard game going on there. And Daschle's
Senate --

MR. BARONE: It's getting worse.

MR. O'DONNELL: -- they've been fairly responsible.

MS. CLIFT: Right.

MR. MCLAUGHLIN: We have no time. I want one grade for the Congress since
the beginning of the year. That excludes the USA Patriot Act, and it
include -- excludes the education bill.

What do you give?

MR. BARONE: I'll give 'em a B.


MS. CLIFT: I'm sorry. A for activity, but failing grades on the economy,
which is the major issue.

MR. BLANKLEY: D for overactivity.


MR. O'DONNELL: I'd give them an A -- because I always do.

MS. CLIFT: (Laughs.)

MR. MCLAUGHLIN: You're very close. The answer is an A minus. These --
some of these are watershed bills. We'll be right back with predictions.


MR. MCLAUGHLIN: Predictions: Mr. Barone.

MR. BARONE: I think the House is going to address the problem of how to
fill vacancies if there's a catastrophic loss of life of House members or
disability in this session.

MR. MCLAUGHLIN: I notice you're having a little difficulty with your
speech. What's that due to?

MR. BARONE: No, it's -- I'm not having -- I'm just trying to use all
those technical phrases, John -- get them as accurate as I can. (Laughter.)


MS. CLIFT: Congress will pass terrorism insurance when they come back,
and the energy bill will never get out of conference. And it shouldn't;
it's just a handout to the oil and gas industry.

MR. MCLAUGHLIN: Do you have a different view on the energy bill?

MR. BLANKLEY: Yeah, I think the energy bill will come out of conference --


MR. BLANKLEY: Well, it's not clear whether it'll be with or without
ANWR. But they will one way --

MR. MCLAUGHLIN: They can't pass it with ANWR, but they can't pass it
without it.

MR. BLANKLEY: They can't pass it without it; they might and probably
won't be able to pass it with it.


MR. O'DONNELL: If the bill allowing pilots to have guns in the cockpit
makes it to the president's desk, he WILL reverse himself and sign it.

MR. MCLAUGHLIN: Well, he's certainly not going to veto the pilots' bill.

MR. O'DONNELL: Well, he's opposed to it so far.

MR. MCLAUGHLIN: I think -- with you, I think that the energy bill -- it
ought to make it -- on merits. It's an important bill, is it not?

MR. BLANKLEY: It produces some new energy. That's useful.

MS. CLIFT: Which we don't really need right now, but --

MR. BLANKLEY: We don't need energy?

MS. CLIFT: I -- no.

MR. MCLAUGHLIN: It emphasizes alternate energy, too, does it not?

I predict the Olympic scandals will reach into Olympic officialdom and,
beyond that, international government officialdom.

Next week: The European Union versus the United States. EU versus U.S.!




MR. MCLAUGHLIN: Issue three: Mafia Olympics.

From the very start, this year's Salt Lake City Winter Olympics were
scandal-scarred. Before the competition even began in February, federal
prosecutors indicted several U.S. citizens, charging them with bribery and
corruption of International Olympic Committee officials responsible for
choosing which city would host the Olympics. Then came the actual Olympics
and the judging of the Olympic ice-skating pairs competition. To a global
TV audience numbering in the hundreds of millions, it was apparent that
something was rotten in the Olympics. This week, federal prosecutors
confirmed the corruption and announced a new Olympic-related arrest, a
shadowy Uzbek gunrunner and mafia chieftain named Alimzhan Tokhtakhounov,
now in custody in Italy. He's awaiting extradition to the United States.

JAMES COMEY (federal prosecutor): (From videotape.) That long arm of
Russian organized crime reached across the globe this past February and
into Salt Lake City with a pair of fixes for the Winter Olympics.

MR. MCLAUGHLIN: Reportedly, Tokhtakhounov conspired to rig the Olympic
competitions. He saw to it that a Russian pair would win the Gold Medal in
figure-skating and a French pair would win the gold in ice-dancing. His
payoff? A French visa. Tokhtakhounov wanted the French government to
renew his France visa so that he could return to France. Judges on both
sides were corrupted.

Question: Can the Olympic Games be described today properly as big
business, huge money, unbelievable stakes; therefore, cheating,
double-dealing and villainy? Is that a good description, would you say,
Tony Blankley?

MR. BLANKLEY: Well, I think that the level of corruption there is about
what you'd expect when those elements are in play in human --

MR. MCLAUGHLIN: There's huge money, isn't there? There's advertising
money, promotional money, TV time.

MR. BLANKLEY: Big sports is big money, and I don't think you have any
more corruption there than you have in other zones of such activity, for

MR. O'DONNELL: It's like Wall Street, for example --

MS. CLIFT: Right.

MR. O'DONNELL: The Rhode Island legislature.

MR. BARONE: You know, your description, those adjectives fit both the
Olympics and Wall Street, and all the human incentives are there to go for
the money, sure.

MR. MCLAUGHLIN: Do you think what they need is a Sarbanes-Oxley
treatment? Is that what they need?

MR. O'DONNELL: No. They're beyond governance. It's impossible.

MR. MCLAUGHLIN: You believe it is corrupt.

MR. O'DONNELL: It's impossible to reform with the financial incentives
that exist. The best you can do is try to police them on the
steroids. Everything else is --

MR. MCLAUGHLIN: Don't you think that money must have changed hands --


MR. MCLAUGHLIN: -- at the level of government?

MR. O'DONNELL: No, probably not. Probably not at the level of government.

MR. MCLAUGHLIN: You know, the attorney has not -- the U.S. Attorney has
not yet reached into officialdom of the Olympics.

(Cross talk.)

MR. MCLAUGHLIN: Yes, Eleanor?

MS. CLIFT: I'm not surprised at the corruption, but what I'm surprised at
is the mafia or the mobsters getting involved in fixing ice-dancing. I
mean, would Tony Soprano get involved in fixing ice-dancing? They're
supposed to fix fights and maybe the bidding on football.

MR. BARONE: Look. The other thing that's absolutely incredible, John, is
the notion that the French government could have somehow been involved in a
bribe or corrupt behavior. I mean, I would be shocked -- shocked! -- to
find that the French government behaved in that way.

MR. MCLAUGHLIN: You mean there's a history of that.

MR. BARONE: Well -- give you a Gaullic shrug.

MR. MCLAUGHLIN: You know, the Russians -- there was a great deal of
chest-thumping that they were robbed, and even Putin got in the
act. Don't you think that looks now a little bit lame, and not only
that, it's a little bit laughable?

MR. BLANKLEY: Well, I mean, it was lame and laughable at the time. I
think we --

MR. O'DONNELL: Except in Russia. Except in Russia, where it played
pretty well.

MR. BLANKLEY: Well, yeah. I mean, look. Olympics has become a great
nationalism fact force, and it's -- (inaudible) -- (sports force ?).

MR. MCLAUGHLIN: We all agree that the Olympics, the International Olympic
Committee should overhaul its rules, it should professionalize the
judges. That goes with without saying, does it not?

MR. O'DONNELL: They should go do whatever they want to do and everyone
should just remain suspicious of them.

MR. BARONE: John, as a general proposition, people should be honest, but
the fact is that a lot of this stuff is entertainment, and like the payola
scandal 45 years ago, if people want to tell you the record has sold more
than it has and you go and buy it, you're the one that's been a sucker, then.

MS. CLIFT: Mitt Romney may well get elected governor on the strength of
his performance in Salt --