Rep. Maxine Waters, D-Calif.Rep. Jim Leach, R-Iowa

This is a partial transcript from Your World with Neil Cavuto, July 8, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: There was a time when Bernie Ebbers was treated as a rock star.

Little more than a few years ago, when his WorldCom stock was the rage, and Bernie was the roar, everyone wanted to talk to him. And Bernie obliged.

Today, everyone wanted to talk to him. And Bernie didn't oblige.

The former WorldCom boss decided to take the Fifth and not talk to congressmen who wanted to know how his company fell so hard, so fast, and maybe, so illegally.

Now to some of the questioners there today, Iowa Republican Jim Leach; and Maxine Waters, the Democratic congresswoman from the state of California. Welcome to you both. Thank you for coming.


REP. JIM LEACH, R-IOWA: Thank you.

CAVUTO: Congresswoman, I would like to begin with you. What did you think of what you heard?

WATERS: Well, I'm a bit frustrated and more than concerned about WorldCom and many of the other corporations who evidently have been gaining the system. We didn't get very much out of WorldCom here today. We are frustrated with Arthur Andersen, who appears to have been the auditor, on too many of these failed corporations. And for them not to recognize that there was no $3.9 billion capital outlay that was charged in that — in that account, is just not to be understood.

We also are concerned about Mr. Grubman, the analyst who seemed to dance around some of the questions here today with, I don't quite recall, I'm not quite sure. We believe that there is conflict of interest there. And we have a long way to go in trying to uncover what really took place at WorldCom, and who is to blame. And we do believe that there has been fraud committed and that someone should pay a price. And these are crimes that should be punished and somebody should have to go to jail.

CAVUTO: Congressman Leach, if indeed these are crimes that, in the highest sense of the word, should these people go not only to jail, but not to a country club-type jail?

LEACH: Well, first, it is always wrong for a legislative body to define something as criminal until a court has acted. But my own personal view is that there is a lot here that a court is going to have to review, and that we are going to have to, in this country, get as serious about white-collar crime as we are street crime. In fact, white-collar crime is more serious because it goes to the heart of our system itself. And so, we are going to have to be very firm with crimes that occur in the white-collar arena. And that is going to be up to judicial system to take hold of.

CAVUTO: Maybe not right away, Congresswoman Waters, as you know, the president, among many other things he's considering for his big speech on this subject tomorrow, is real crime time for real crimes. And maybe not just sort of at some country club prison, but something closer akin to Attica. What do you make of that?

WATERS: Well, the proof of the pudding is in the eating. And I want to see if the president, after he does his sound bites, I want to see how much work he is going put in to trying to change the laws so that we can get a handle on these corporations in America. He is a corporate man. He comes out of that culture. These are his friends. And I want not just words and not just a campaign speech, and not just protection against the next election. I want some real action.

CAVUTO: But, Congresswoman, could I ask you this?


CAVUTO: I mean, a lot of the excesses that are being addressed here, ma'am, occurred when a different fellow was sitting in the Oval Office. I mean, could one fairly infer here that there is a pox on both parties' houses?

WATERS: We have to all accept some responsibility, this president because he is now the president, with the opportunity to use the power of the White House since these corporate misdeeds are being unveiled now. He has to take responsibility for leadership.

CAVUTO: All right.

WATERS: And so, I think that we all bear some blame in this. And Democrats and Republicans alike are going to have to work very hard in a bipartisan way to correct these ills. The American people are not going to stand for it and I don't blame them.

CAVUTO: Congressman, one question to you finally. I mean, there is a move afoot as well to set up some sort of a superaccounting advisory board that would be another layer, I guess, of supervision for the industry. Are you for that?

LEACH: I'm for all sorts of new layers. I think you need a corporate integrity commission. I think you need a greater accountability in the accounting profession. I think you need a lot more moral clarity to these issues. CEO salaries have to be reviewed. CEO circumstances, where they are putting their interests ahead of the shareholder interests, have to be reviewed. Accounting rules that say that two minus three is plus one, have to be reviewed. And we need to do all of this in a combination way if we are going to resurrect any kind of confidence in the market.

CAVUTO: All right. Congressman Leach, final word on the subject, Congresswoman Waters, I appreciate having you here as well. Thank you very much.

WATERS: You are welcome.

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