Paul O'Neill, Treasury Secretary of the United States

This is a partial transcript from Your World with Neil Cavuto, July 9, 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: The scene: last week, the president meeting with some key economic advisers on how to react to this corporate crisis mess. Among the attendees, the Treasury Secretary of the United States, Paul O'Neill. In typical, blunt O'Neill fashion, the secretary telling the president this story: A kid caught with half a pound of marijuana gets more jail time than a corporate executive. That's not square. The president shoots back. You're absolutely right.

Today, the commander-in-chief making it very clear how absolutely wrong corporate greed has become. And with us now, the man who put it all in perspective for him and now for us, Treasury Secretary Paul O'Neill. Mr. Secretary, thanks for coming.

PAUL O'NEILL, TREASURY SECRETARY: Glad to be here. Thanks.

CAVUTO: What do you make of Democrats' charges, sir, that this doesn't go far enough?

O'NEILL: Well, I honestly think the importance of the American economic system is so overwhelming to our standing as a society and our position in the world, I can't understand how anybody can think that closing up loopholes, sending wrongdoers to jail, by getting money back from people who shouldn't have gotten it, that shouldn't be a partisan issue. It should be an issue of how do we improve the basis for our economy to continue to lead the world.

So, I'm a little staggered by the idea that people want to choose up sides, whether they are Republicans or Democrats, and argue about what we should do. We should do what is necessary on a principled basis that makes our system better.

CAVUTO: I think what they are saying, sir, is that there should be more federal oversight, that there should be something akin to what Paul Sarbanes in the Senate wants to see, an oversight board, federally sponsored, looking over the accounting industry. What do you say?

O'NEILL: Well, I think that there's one issue that we think has some importance in the Sarbanes bill. And the reason we have some concern about the provision is because it would leave an ambiguity about whether the Securities and Exchange Commission or this newly formed organization would have enforcement powers over that, as to say, chasing powers for people who have done wrong. And we think ambiguity in the laws are not a very good idea.

And I have to tell you one thing that I find very interesting, again, about all of this. You know, people keep asking me about the Sarbanes bill. No one who has asked about it, I think, has ever read it and has any idea what is in it. It's just become another convenient shorthand for people who don't know anything about the issue to say this is a Democrat/Republican issue, and either you're for the Democrats or you're for the Republicans. It's just an absurdity, Neil.

CAVUTO: But let me ask you this, Secretary. Is there a feeling here that we're going to see more crooks, more bums, before this is all over or are we through the worst of it?

O'NEILL: Well, I think we're going to know pretty soon. But the action that's been taken by Harvey Pitt at the SEC, requiring companies in their next filing after the middle of August to for the CEOs and CFOs to personally attest to the voracity of the statements for the last year. If there are any more birds in the tree, they are going to fall out after that filing because I don't think any CEO is going to knowingly certify that last year's results are not true unless they have been assured by everyone and anyone that it is all true.

CAVUTO: Yes, but you know what it was like running one of the largest companies in the planet in your Aluminum Company of America days.

O'NEILL: I do.

CAVUTO: Now, you know that you can't be on top of every little detail. And you're a fairly detail-oriented guy, but there are going to be a lot of CEOs, sir, who are going to come back and say, you know, Mr. O'Neill, you've got to be kidding.

O'NEILL: I don't agree with you. I think it is the duty and responsibility of people who want to have leadership positions and be CEOs that they know everything that's material in their company. Now, it is true in a big operation, you can have someone who breaks the value system of the company and takes the $10,000 bribe for a purchase order contract. And it is true that there's no way a CEO can be all seeing and all knowing about that stuff. But I tell you what, any CEO who says they didn't know about a billion dollar transaction, thank you very much, and...

CAVUTO: You're not buying it. You're not buying it?

O'NEILL: Nobody should buy that. Nobody should buy it.

CAVUTO: So, let me ask you about a corporation now. You have been saying and you've been a big believer in our economy turning around, which it clearly is. You've also been a big believer that most of the companies out there are sound companies. Most of the CEOs out there are good CEOs.

Yet, there is this prevailing negative view among many Americans that's not the case. How do you tell them otherwise?

O'NEILL: Well, you know, one thing that occurred to me that might be a useful process is for people around America to organize some thank you days for the leaders of businesses in their own communities, and the corporate operating plants that are in their own communities as a way of giving some attention to the fact that, you know, if it wasn't for the people who are creating jobs out there and paying payrolls and inventing new products, the whole society would really be in a terrible position.

And I think, you know, we, in some ways, maybe it's not possible to overdo the reactions of the abuses, but it would certainly seem appropriate for me for there to be a thank you to the people who have done the right things, who I think are in a huge, vast majority.

CAVUTO: Well, what about the people who say that at least this guy is not doing the right thing, Harvey Pitt at the SEC? There have been calls by John McCain and Tom Daschle who say he should step down. What say you?

O'NEILL: Well, I think Harvey is doing a very respectable job. He's been there not quite a year. This mess really emerged before he got his name on the office door.

CAVUTO: All right.

O'NEILL: The president asked him in March to take 10 specific actions, most of which he has done. And in some ways, he's taken more aggressive action than was asked of him. So I think Harvey is doing an incredible job. You know, some people have said, well, he's had to recuse himself for a year because of his former affiliations.

You know, the implication of that is, well, we don't want anyone, for God's sake, who knows what they are doing, and if they have had any involvement with these issues of accounting and how the laws work, we shouldn't have them. We should basically get someone who doesn't know anything. And then we can be sure they don't have any conflicts of interest. I think the whole thing is a lot of trash.

CAVUTO: All right. Mr. Secretary, thank you very much.

O'NEILL: My pleasure.

CAVUTO: The treasury secretary of the United States, Paul O'Neill.

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