<i>FTN</i> Transcript - June 11

Bob Schieffer, CBS
News Chief Washington Correspondent: And with a lot to cover, we begin in Kent, Connecticut, where Henry Kissinger is standing by. Here in the studio, Tom Friedman of the New York Times, also the author of the book The Lexus and the Olive Tree." Welcome to both of you.

Dr. Kissinger, what does this mean? Assad has been there for three decades, now he`s gone. What happens?

Dr. Henry Kissinger, former U.S. Secretary of State: Well, Assad had established very firm control of a country that was largely isolationist, hostile to the peace process. And in a very cautious way, he had maneuvered towards the edge of the completion of an agreement with the Israelis.

I believe that those conditions haven`t changed. There may be some hiatus while the new government establishes itself, but fundamentally I think that the decision had been made to make an agreement with Israel, and that it would go to a completion within the year, and probably maybe even within this year.

The only thing I would like to add is that for the Syrians, peace has a different connotation than it does for many of us in the West. We in the West think of peace as a change of mood and a change of attitude. The Syrians, especially the Assad-type Syrians, think of peace as a ratification of a balance of power, which will be maintained as long as the balance is what it is, but which could be abandoned if circumstances change.

Schieffer: Tom Friedman, what of the successor. We`re told that it will apparently be his 34-year-old son, who is an ophthalmologist, of all things. Can he marshal enough support inside Syria to make the kinds of deals that his father may have been prepared to make, as Dr. Kissinger suggests?

Thomas Friedman, New York Times: We don`t really don`t know that, Bob. You know, I agree with Dr. Kissinger. Assad was an important figure in the Middle East, but he was also one of the more overrated figures in Middle East history in recent years in that he really hadn`t accomplished very much, I would say for the last couple of decades. He ruled by balance of power, multiple power centers: a spy agency here, a military unit there, a political unit there.

And what the challenge for his son is now is to take over all those multiple levers of power. Syria - this is not the Brady Bunch. This is a tough, mean group of people; and it is clear Bashar is going to inherit his father`s mantle, but whether he`s going to be able to really get his hands on the controls, I think remains to be seen.

Schieffer: It is a more dangerous time for Israel, Dr. Kissinger?

Kissinger: I think it`s a more uncertain time. On the other hand, Bashar was educated in the West and he`s apt to be somewhat more understanding of the outside world. But one reason that Assad acted with such extreme caution is that he and his son represent a tiny minority o Syrian society of a wide sect, and that he had a maneuver between the various religious groups, between the army and the civilians. And the question is can Bashar, who is probably more modern, show the same skill in manipulating the various forces that his father did?

Kissinger: That will be the test. I don`t think Syria is in a condition to have a confrontation with Israel.

Schieffer: What do you think that the death of Assad, right now, what do you think the impact will be on the Israeli-Palestinian talks, which seem to be coming to a climax as well?

Kissinger: I think those are also at the verge of settlement. And Arafat always had to look over his shoulder at Assad, who was suspicious of him and who might accuse him of official sold out the Palestinians. I think it will probably speed up the Palestinian- Israeli talks. It certainly won`t hamper them.

Schieffer: Will we think - do you think, Dr. Kissinger, that his son, I think you used the word more modern if I understood it. Do you think he will be more flexible than his father was?

Kissinger: Well, first thing I have to say, somebody who chooses a career as an ophthalmologist is not somebody who by nature feels destined to great political leadership, so that already stands him as a different personality from his father who was a power man. I think, on the one hand, he is probably more attuned with Western ways of government.

Now, can he implement this in this complex society that Syria represents? That is the uncertain - that is the uncertain question. If you do it on a purely intellectual basis, I think he will be somewhat less cautious and deliberate than his father was.

Schieffer: Tom Friedman?

Friedman: You know, we now have a whole new generation of leaders in the Arab world - in Jordan, in Syria, in North Africa. How do you think they`ll be different from their fathers who you dealt with all these years?

Kissinger: Well, I think the king of Jordan has great similarities to his father. I don`t think there will be any huge difference, except there maybe somewhat greater flexibility toward the Palestinians.

The king of Morocco I think represents a sharp break from his father, who was extremely traditional and who relied on the combination of being something like the pope and the king to keep the population in awe of him. The king of Morocco is attempting to be more like a democratic president. He walks around in blue jeans. He appeals more to what used to be considered left-wing groups. And the question is, in Morocco, whether you need a king to play that role. If he can bring it off, he will modernize Morocco.

I think Syria also - Assad was a traditional ruler of Syria whose legitimacy derived from the extraordinary power he exercised and the skill with which he manipulated it. My impression is that Bashar will be driven more towards consensus. Ad, again, the question is whether in these societies that will work in the long term. It will have to be brought to this point, but there will be an interim.

Schieffer: Doctor, we have to leave it there. I`m very sorry. When we come back, we`ll talk about campaign 2000 and the controversy over soft money ads. Thanks to both of you.

(COMMERCIAL BREAK)

Schieffer: We turn now to another of the week`s big stories, the ongoing controversy over money and politics.

We`re joined by Ed Rendell, general chairman of the Democratic National Committee, and South Carolina Republican Congressman Lindsey Graham. You`ll remember him as a backer of John McCain during the early primaries; he now supports George Bush.

Well, it was not so long ago that Al Gore challenged George Bush to not buy campaign ads with so-called soft money, the money that can be raised through a campaign loophole, which allows the parties to avoid all restrictions on who and how much can be given to campaigns. Here`s a little bit of what the vice president said.

(BEGIN VIDEO CLIP)

Vice President Al Gore: I will take the first step by requesting the Democratic National Committee not to run any issue ads paid for by soft money unless and until the Republican Party uses such money for advertising.

(END VIDEO CLIP)

Schieffer: That was then. This week the Democrats began running their first full-scale ad campaign. It`s financed in part by soft money. Ed Rendell, why did you do that?

Ed Rendell, general chairman of the Democratic National Committee: Well, if you`d let that tape run a little longer, Bob, and the e-mail itself, you would see the vice president said, Until the RNC responded themselves or using loopholes like 527.

Now we know, because Lindsey Graham and John McCain have told us, that the Bush campaign coordinates their 527s. John McCain said 10 days ago the Bush campaign should be ashamed of itself and that he was absolutely positive that they coordinated those ads. Same thing happenedÂ…

Schieffer: Well, 527, let`s start out, that is anotherÂ…

Rendell: independent groups.

Schieffer: Â…another kind of loophole where independent groups can fund campaigns.

Rendell: The Wyly brothers were the perfect example and that`s what John McCain was talking about. Fourteen days after the vice president made that statement, Shape the Debate, headed by Pete Wilson, did an ad that clearly was coordinated withÂ…

Schieffer: So you`re saying the Republicans started it, not the Democrats.

Rendell: Absolutely. Fourteen days after that statement.

Schieffer: Congressman Graham.

Rep. Lindsey Graham (R-S.C.): This week`s really not about campaign finance reform because on March 15, the day after the e-mails, one of the e-mails that they didn`t lose, the day after the e-mail he as asked by the CNN reporter, "Would you do this regardless of what the Republican party does," starting ads. And he said, oh, sure.

We have differences on campaign finance reform. I have differences with Governor Bush. They`re honestly held. They`re publicly known. The problem the vice president has this week is that on March 15 he got on national television, he looked the American people in the eye, he made a bold political statement. A few months later when the polls go down, he`s backing out. This manipulation and deception has continued for seven and a half years.

This is about honesty and trust. I can vote for somebody I disagree with politically. I can`t vote for somebody I can`t trust to tell me the truth.

Rendell: WellÂ…

Graham: Well, that`s what this week`s about.

Rendell: If you`re talking about deception though, we have to make it clear. On the same interview that the congressman`s talking about, the vice president went on to make it clear that we would not unilaterally disarm on soft money ads. And we`re not going to unilaterally disarm.

There`s only one party that wants to end soft money. That`s Al Gore and the Democrats in the Senate. John McCain does; he joined us. But George Bush doesn`t. They don`t want to end soft money. That`s the issue.

Gloria Borger, U.S. News & World Report: OK, well, we`ll let you respond to that and thenÂ…

Graham; In `93 and `94, the president - the Democrats had the presidency, the House and the Senate. They could have ended soft money then. My party doesn`t want to end soft money. It`s legal to do it. It is not about whether it`s illegal. If I was king, I would ban it with John McCain.

This about keeping your word. The problem with the vice president this week is that he`s building a house of manipulation and deception where the Social Security demagoguery, now breaking your word that I`m going to do something in politics - the FBI director has a got a memo saying you need to look at these guys because we think they cheated in `96.

And now, several months after making a promise, he is breaking his word, and people are tired of that.

Borger: Well, you two are clearly not going to agree ever on whether Al Gore broke a promise or didn`t break a promise.

Rendell: But we do agree on one thing, that George Bush doesn`t. He voted to end soft money. We`re for ending soft money. George Bush isn`t.

Borger: OK, well, explain to me, Mr. Rendell, how these ads that we`re seeing now are so-called party building ads that the Democratic National Committee is paying for. The Al Gore ad that is running does not mention the Democratic Party. It`s all about Al Gore.

Rendell: They are because the FEC, which reviewed the ads of `96 - and they were bio ads in `96, they said they were party building. Look in theÂ…

Borger: Hois that a party building ad? It`s about electing Al Gore.

Rendell: Look, argue with the FEC. This is why we should change the entire system. There should be no soft money ads. And again, Lindsay and John McCain are in a minority in their party. George Bush doesn`t back them. We want to end soft money. If we ended soft money, we wouldn`t have this abuse.

Borger: Can you understand, congressman, why the public thinks that there is a disconnect here? Here the two of you are sitting saying we should end soft money ads, on the other hand you`re raising record amounts of money and both parties now have soft money ads on the air.

Graham: Here`s what making the public really skeptical. We can have a debate of about soft money. If I was king, I would ban soft money. My party doesn`t agree with me, neither does the Democratic Party.

But here`s what`s OK in politics. It`s okay for me and Governor Bush to have a disagreement. He would ban corporations giving soft money, unions giving soft money. We have a disagreement on individuals giving soft money.

Here`s what`s killing politics. The vice president - they use John McCain`s name all the time - got on TV on March 15 right after the primary and he made a bold statement. I will direct the DNC not to use soft money even if the Republicans continue to, because I`m going to be different. Three months later he is backing up, breaking his word. That`s what kills politics.

Schieffer: You`ve got 30 seconds to respond.

Rendell: The congressman continually - he talks about the vice president being deceptive. He is giving you part of that interview. If you - the March 15 interview. The vice president went on to say, having said that, he wasn`t going to have us unilaterally disarm.

In the end, you`re right it is absurd for to us to be using all this soft money. But we want to end it. They don`t.

Schieffer: OK. And on that point we leave it for now. We`ll be back in a minute to talk about the other major story of the week: the ruling against Microsoft. Thank you, gentlemen.

(COMMERCIAL BREAK)

Schieffer: Well, you all know by now of the Microsoft decision. The judge says it should be split into two companies. With us the deputy attorney general Joel Klein, who was one of the lead men on the side of the government in that case, Microsoft adviser Rick Rule.

Microsoft says they`re going to appeal. Do you think they have a chance?

Joel Klein, Deputy Attorney General: Well, I`m confident about the governments position on appeal. You know, the case is based on a two-year set of proceedings, 78 days at trial, thousands of pages of documents. I think the judge has put together a record that will withstand scrutiny.

Schieffer: A lot of people, including myself, don`t really understand the legal ins and outs of this case. But just tell me this, hw is this is going to affect consumers?

Klein: Oh, I think where its major impact will be is on consumer choice and consumer opportunity. You know, you think of this industry, Bob. There`s so much change going on. On the other hand, Microsoft`s monopoly has been permanent for more than a decade, and that has really affected lots of opportunity, lots of options. Consumers will get new products. They`ll get new innovation. You`ll see desktop computing change in dramatic ways. So, I think the maximum impact over time is going to be on creating a raft of innovation that will give consumers far more choice, far more opportunity.
Schieffer: What about cost?

Klein: I think cost is going to go down. Competition always drives cost down.

Schieffer: The judge last week urged both sides "swallow their own reluctance and compromise and settle the case out of court." Would you be willing to do that?

Klein: I would. I`ve always believed, I still believe that in a case like this, the best resolution is to settle, to have Microsoft live within the law and to have them go forward and do their business. But what`s critical to us, Bob, is Microsoft`s got to come to terms with the fact that there are serious competitor problems here. They violated law in a major way. They proposed a remedy that was so trivial, so inconsequential, so cosmetic and if that`s their view, then we can never settle. But if they want to engage seriously, I`d welcome the opportunity.

Schieffer; Well, that`s the next question I was going to ask you. What would Microsoft have to do to get this settled without (OFF-MIKE) court.

Klein: Well, I think they`d have to engage very seriously. They`d have to come to grips with what I think is the nature of the competitive harm, the injury to consumers going forward as well as the harm they`ve already created and of course the terms of that is something that would have to negotiated between us and Microsoft.

Schieffer: What about the argument that the split would create two monopolies in the place of one?

Klein: No, I actually don`t think that`s accurate. What it would do is it would create two companies that have the most powerful pieces of software to go at each other. The reason Microsoft gobbled up the browser and didn`t let Netscape get to market is a browser would have been a truly powerful piece of software that could have made a run at Microsoft.

Right now with the browser gone, Microsoft has the only two remaining powerhouse pieces of software on the desktop: the Office Suite and the operating system. They go at each other, you`re going to see good things happen for consumers.

Schieffer: Well, let`s get the other side of it now, Mr. Rule. In his decision, and I`m going to quote here, the judge said that, "Microsoft as it is presently organized and led is unwilling to accept the notio that it broke the law or exceed to an order amending its conduct."

Was Microsoft, do you think, punished for its attitude or arrogance, if you will?

Rick Rule, Microsoft advisor: Well, the interesting thing is this is a civil case, this isn`t a criminal case. You`re not - this isn`t about punishment. And I - you know, it`s important for people to keep in mind, we`re sort of at half-time. We`re going to get to the Court of Appeals. It`s not going to be a visceral exercise, it`s going to be an analytical exercise.

And I think in the cold light that the Court of Appeals will look at this case, they`ll recognize that, yes, there was a lot of heat here but there really is no antitrust violation.

And I do think it`s interesting that the judge, in justifying the remedy, doesn`t talk about the cost to consumers, doesn`t talk about the impact on the industry. But instead, he cites things outside the record, that happened outside the courtroom to justify it. That is inappropriate. He`s even been quoted as saying, Microsoft deserved no due process. And again, I think that`s a very serious question.

Schieffer: Well, we heard what Mr. Klein just said, he said it`s going to have a favorable impact on consumers, that costs will go down, they`ll have a lot more choices.

Rule: Well, again, I think most experts would agree, obviously we may disagree, that yes there`s going to be an adverse affect on consumers. One of the difficulties with the government`s case was they really couldn`t point out what the harm to consumers was. The closest they came was to say that there wasn`t as much money going into the industry, there wasn`t as much innovation. People avoided investments that competed with Microsoft.

Well, look at Linux. Look at thin client, so-called, network devices. There are two great stories in The Washington Post today about how those technologies are taking off. They`re competitive.

The question here is - the industry is undergoing a tremendous amount of change because of the Internet. Microsoft contributed to that. The question is, is Microsoft going to be allowed to contribute to the future paradigm shift, continue to bring innovation to consumers, or is it going to be put on the sideline by the government to basically futz around with last year`s problems and not really bring good benefits to consumers, watching prices go up. That`s not good for consumers.

Schieffer: Do you think that there`s any way this could be settled out of court?

Rule: Well, you know from my perspective, I`m sure - I know both sides have some interest because I hear Joel say that. I know Microsoft has an interest. But from my perspective, what the government has to do is actually listen and try to understand the consequences of the things they`re proposing.

I don`t think they understand the technology well enough - that`s understandable, they`re lawyers. But I think hey ought to take the time to understand, listen to what Microsoft has said about the consequences. And then, I think, there really ought to be a way to resolve this.

But Microsoft has tried every time. The government has come back with something that`s not good for Microsoft, not good for consumers, not good for the government enforcers who`d have to basically administer the decree.

Schieffer: Let me go quickly to Mr. Klein. I`ll give you 30 seconds to respond and then I`ll come back to you.

Klein: Sure. Well, I think, you know, there`s always we don`t understand the technology. You know, common sense is common sense. Right after this case was over, Bill Gates puts out a memo says let`s take our Palm computing device, make it run better with our products, disadvantage our competitors. You don`t need to be a rocket scientist to know that kind of stuff is not playing by the rules. It`s not fair game. That`s what this is all about.

Rule: Well, the unfortunate thing about that episode, for example. If the government had asked and taken the time to understand what Microsoft was saying is their Palm device has capabilities that others don`t. We ought to take advantage of that, provide it to consumers. That`s what this case is really all about. Do consumers get more? Or do we protect competitors? I think we protect consumers.

Schieffer: OK. We have to end it there. Two very good lawyers here on Face The Nation this morning. I`ll be back in a minute with a final word.

(COMMERCIAL BREAK)

Schieffer: Finally today, two nice things happened last week. The first one involved a United Airlines flight bound from Washington to California. About halfway there, the pilot learned that a passenger`s dog had been mistakenly placed in the plane`s unheated forward cargo hold where he was certain to freeze. The pilot notified the passenger, a man named Mike Bell. Told him he couldn`t be sure he could save the dog, but would do his best, then flipped on the intercom and told the passengers he was going to make an emergency stop in Denver, "for the best interest of the dog."

Well, here`s the remarkable part of this story. In this day of impatience and road rage, not one passenger complained about the delay and everyone cheered when the little dog was finally brought out of the cargo hold, wrapped in a blanket and placed in the seat next to his owner for the rest of the ride. That`s how people used to act when we thought of each other as neighbors.

But more remarkable is what happened in a courtroom in Washington`s Virginia suburbs this week. A deaf couple, who had miscalculated their disability benefits were hauled into Judge Donald P. McDonough`s court by a landlord who wanted them evicted because they`d fallen $250 behind their rent. When Judge McDonough realized there was no other way out, he whipped out $250 in cash and said, "I`ll ay it. Case dismissed." Another neighborly act to say the least.

Who knows? The way things are going, maybe it`s the beginning of some kind of trend.

Well, that`s our report. We`ll see you next Sunday right here on Face The Nation.

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