Ari & I: July 30, 2002

Russell Mokhiber: Two questions.

On Adelphia, individuals were charged criminally, but the company was only charged in a civil fraud case by the SEC. Why wasn't the company charged with a criminal charge, as the individuals were?

Ari Fleischer: Any decisions made about prosecutions I would refer you to the [Justice Department] -- they are not White House matters.

Mokhiber: Okay, but although I do remember last week that you made a big announcement here on those matters.

Fleischer: That's correct. I noted the arrests, but I referred people to the Justice Department for details about those specific charges.

Mokhiber: Second question on the bankruptcy [bill], most of the consumer groups are opposed to it. They say that it creates a double standard, that corporations that get into trouble because of crimes, like WorldCom, run to court declare bankruptcy without any trouble. This law would create hurdles for individuals to do the same. Why is the President going to sign this law that creates this double standard?

Fleischer: This has been an issue that the Congress has debated and heard many of those same questions themselves and they arrived at what Congress thought, and the President agrees, is a helpful compromise that protects the rights of individuals, that is consumer related, but at the same time it makes certain that people who go bankrupt can't walk away without any of their debts. This is a classic balancing question of how to make certain that people who go bankrupt pay for their debts and to do so in a way that doesn't give people an incentive to have their debts forgiven. The law is creating more incentives for people to go bankrupt.

Mokhiber: But corporations are going bankrupt without -- and there are no hurdles for them created by this law.

Fleischer: I think the laws also covers corporations and their obligations to repay their debt -- that's part of the law that's on the books today too.