Paul O'Neil: Accurate Storyteller or Disgruntled Employee?

This is a partial transcript from Hannity & Colmes, January 12, 2003, that has been edited for clarity.

SEAN HANNITY, CO-HOST: In the new book "Price of Loyalty," former Treasury Secretary Paul O'Neill speaks out about his time in the Bush administration. O'Neill alleges that the Bush team started to lay down groundwork for an Iraqi invasion just days after the president took office in 2001.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, FORMER SECRETARY OF THE TREASURY: From the very beginning, there was a conviction that Saddam Hussein was a bad person and that he needed to go.

(END VIDEO CLIP)

HANNITY: Today the Treasury Department launched an investigation into whether a classified document was shown during the "60 Minutes" broadcast.

In the book O'Neill also claims that during cabinet meetings Bush was so disengaged that he was like, "a blind man in a room full of deaf people."

Is this new tell-all book an accurate account of what went on in the first years of a Bush administration, or are these the rantings of a disgruntled employee?

Joining us now, former labor secretary under President Clinton, Robert Reich, and also, former Virginia governor and former RNC chairman, James Gilmore.

Bob, you've got to admit on the surface here, there is a possibility that we have a disgruntled employee problem here, as he was unceremoniously removed from his position? Correct?

ROBERT REICH, FORMER LABOR SECRETARY: Of course it's possible he's disgruntled, but this is a man who was president of Alcoa -- CEO of Alcoa Aluminum.

HANNITY: Of course, you want to believe him.

REICH: He's somebody -- He's made money in his life. He has all the fame, all the -- it's not as if he has an ulterior motive here. I think that Paul O'Neill...

HANNITY: He was angry. Let me give you a quote.

REICH: ... he was let go for saying what he believes. Simply said what he believed.

HANNITY: But he was fired. He's obviously very bitter, very angry. So when people are angry and bitter, and they want to get back at people because he was embarrassed for having been fired, he may want to lash out in such a way.

REICH: But that's entirely possible. Every single person who has ever said anything critical of an administration they've served in -- you know, you can always find if you want an ulterior motive, Sean. But the fact of the matter is, don't deny and don't obscure what he actually said. He said...

HANNITY: But you have to take it with a grain of salt, though.

REICH: He said that getting rid of Saddam Hussein was the goal from day one. And this is an administration, remember, that said during the 2000 election it is not going to intervene; it is not going to go to regime change.

HANNITY: But is there a difference -- and let me throw them to Jim Gilmore here -- is there a difference between laying down the groundwork for an invasion or just knowing the dangers going in?

Bill Clinton just bombed them two years earlier, because he was such a threat, as he described, the nuclear, biological and chemical threat. Did they just see the dangers and is that what O'Neill is misinterpreting?

JIM GILMORE, FORMER VIRGINIA GOVERNOR: Well, I think that's right, Sean.

I mean, it's not rocket science that Saddam Hussein was a dangerous individual. He'd made war on his neighbors. He'd invaded another country. The United States had to go to great risks over this guy.

And I mean, the fact of the matter is that it was clear that this was a problem.

But after the 9/11 attack, then it became very, very clear that something had to be done. And that if we were going to have stability in the Middle East, if we were going to have a safer situation in the Middle East, you couldn't have a dangerous person like that in charge of one of the major countries of the Middle East.

ALAN COLMES, CO-HOST: Governor, it's Alan Colmes. Good to have you on the show.

REICH: Can I just quote exactly what O'Neill said? He said it was all about finding a way to do it, getting rid of Saddam Hussein. "Go find me a way to do this."

That's what the president said, according to O'Neill. This was not about laying the foundation. This is about doing it.

Now, you may, Sean, you may find -- you may feel that Saddam Hussein should have been got rid of, regardless of the weapons of mass destruction, regardless of 9/11.

HANNITY: I don't believe it.

REICH: But here is an administration that, according to O'Neill, was absolutely dedicated to getting rid of Saddam Hussein.

HANNITY: I don't believe it.

COLMES: Here's the real issue -- Let me go to Governor Gilmore on this. The real issue here -- and I've not heard the White House deny any of the allegations. The issue is whether or not what Secretary O'Neill was saying, Governor Gilmore, is true.

Is there merit -- whether or not you like O'Neill or whether he's a disgruntled employee -- is there merit to the things he's saying here?

GILMORE: No, there's not merit because of the way that you're interpreting what Paul O'Neill said.

Paul O'Neill merely said that this was a dangerous guy, and the Bush administration understood that. At least they had the benefit of being able to foresee that this was a dangerous situation.

But after that attack at 9/11, it was clear that something decisive had to be done. Decisive action had to be taken, or this country and all of our allies were going to be at risk for a long time.

COLMES: But...

GILMORE: At that point he began to move ahead.

COLMES: But what he does here is he produces memos. And that's one of the issues here is whether or not the classified information got revealed, which I know you can't comment on -- ongoing investigation.

But there was one secret memo alleged here that said the plan for post-Saddam Iraq, discussing peacekeeping troops, war crimes tribunals and divvying up the oil well within days after President Bush took office, long before September 11, in writing.

GILMORE: Yes, but the fact of the matter is this is describing an option. Governors do this, presidents do this. They begin to lay the groundwork for what might need to be done as you begin to prepare for all contingencies up the road.

But once again, it was only after the 9/11 attack that the trigger got pulled, that it became clear that the motion had to be made, that things had to be moving ahead.

But governors make these decisions all the time.

REICH: With due respect, Governor, I think that's absolutely wrong. According to what O'Neill said, this, from the day one of this administration, they were out to get Saddam Hussein.

HANNITY: Hang on.

REICH: Now, remember, here, put this into context, put this in context, this is an administration that, during the election, had said no regime change.

HANNITY: That's if you believe him.

COLMES: Secretary Reich, let me go to this on the issue of, if you're in the cabinet and you have a strong disagreement with the president on policy and the direction that he's going in, in your area, as O'Neill did about tax cuts, did he have an obligation to resign? Or should he have stayed in and argued with the president?

REICH: Alan, that's always a tough call. I think some members of cabinets do stay in, because they think they can do more good inside arguing their case. Some do resign.

But in O'Neill's case, I think that he felt, presumably, that he could do more good by fighting against what he saw as larger and larger deficits.

There's an interesting passage in his book where he says that he talked to Dick Cheney, Vice President Cheney, and he said, "What do you think? You know, we're going down the road of huge deficits, and it's irresponsible."

And Cheney said, according to O'Neill, "Deficits don't matter."

Well, that is certainly consistent with what the policies of the Bush administration have been.

COLMES: Governor Gilmore, we've heard that, you know -- criticized by saying he should have resigned. He didn't agree. Isn't give-and-take part of what should happen in a presidency, among all the various advisers to the president?

GILMORE: Sure. But also, the cabinet officials have a duty to carry out that president's policies. It's the president that sets the direction and sets the course.

And Republicans have been concerned about the pocketbooks of working men and women for years and years and years. That's been a basic tenant of Republican politics and of Republican policy.

And by the way, look what's happened here. We're now back on the upswing. The tax cuts did work. They have, in fact, made for a rising economy. And as a result of that we're going to see greater revenue, and we're going to see more money coming back into the pots by...

REICH: I wish I could agree with you. I wish could I agree with you, but that's absolutely false. We're seeing no -- can I just say, we're seeing no job growth at all. We had 1,000 new jobs in December.

HANNITY: The greatest quarter of growth in 20 years, Rob. Twenty years.

(CROSSTALK)

GILMORE: Wait a minute. Wait a minute. Robert Reich is mixing apples and oranges.

REICH: Can I say something? We have -- job growth is the essence of the recovery. If you have companies that are doing better and better and profits that are higher and higher, if you don't have job growth, you don't have anything. You're not going to sustain it.

HANNITY: Rob, the most growth in 20 years means nothing to you?

REICH: This is the -- This is the ...

GILMORE: Can I get in a word here?

REICH: This is the poorest recovery -- yes, go ahead.

HANNITY: Fifteen seconds.

GILMORE: If I could get a word in. What you were saying was that there were deficits, and what you were saying was that that was because of a bad economy.

We are now seeing the economy coming out. People are, in fact, getting jobs. Things are getting better. Revenue is back on the upswing, and as a result, the deficits are going to go down.

COLMES: We'll give you the last word here, governor. We're just out of time.

Secretary Reich, thank you.

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