DAMON SILVERS, US FEDERATION OF LABOUR ORGANISATIONS: Well, I think it`s a little too early to tell, really. The President didn`t make clear whether he`s really going to support meaningful reform or not, despite a lot of very strong words. He carefully sidestepped whether he intends to really take on the conflicts of interest that burden our markets and have led to these collapses.

JANA WENDT: One of your organisations` principal concerns was that the people on whom we rely to give us unbiased information - that is, the analysts - that those analysts remain independent. Did the President reassure you on that score?

DAMON SILVERS: No, he did not. The key question here is Wall Street analysts - who recommend to investors, pension funds, individuals, whether or not to invest in companies - have been compromised by their ties to the investment banks that they work for. What they`re doing, instead of giving straight advice to investors, is that they`re promoting stocks that their investment banking departments are getting underwriting fees for. We have been pushing, as have a number of leading experts in this area, for severing any tie between analyst compensation and investment banking performance. The President said nice things about the notion that these people ought to be independent, but he did not endorse severing that tie.

JANA WENDT: There was, though, as you point out, some very tough talk, particularly in reference to CEOs. The President demanded that they take personal responsibility for their companies` books and that they should forfeit any money that they happened to have made on crooked deals. Is that not tough enough by your reckoning?

DAMON SILVERS: Well, it`s a fairly tough thing to say in a way, but it`s got two problems with it. The first problem is that it`s one thing to say it, it`s another thing to actually make it happen under current law. Ken Lay, you know, Kenny Boy, `Fast Style` Skilling, the cast of characters from Enron, they haven`t paid a penny back to anyone, nine months later. There`s no sign that anyone at WorldCom is going to either, under current law. So it`s one thing to say you favour doing that, but it`s quite another thing to do it. Secondly, in terms of changing the law to make it easier, once again there are bills moving through Congress that would do that. The President hasn`t said he would support them.

JANA WENDT: Well, Mr Silvers, another one of the hot issues, the executive stock options, a means by which some CEOs have managed to enrich themselves mightily while watching their companies hit the ropes. Any good news on that in the President`s speech?

DAMON SILVERS: Well, I think the President indicated what I`m sure his pollsters told him to say, which was that he thinks that it`s not right for people to walk away with all this money while their companies go down the drain, and he`s right to say that. The question is, what`s he going to do about it? There`s a bill in Congress right now, the Levin-McCain Bill, sponsored by Senator Levin and Senator McCain, it`s a bipartisan bill, that would force companies to put on their accounting statements the value of the options they`re giving their executives so everyone would know how much was being spent here. That bill`s opposed by many people in business, supported by Alan Greenspan, again silence from the President.

JANA WENDT: But the President did make a point about CEOs disclosing their compensation packages in plain English, did he not?

DAMON SILVERS: Well, he said they should disclose them in plain English, it`s true, but the CEO packages today are disclosed in fairly plain English, except for stock options, and which you can`t get a price for them. The legislation I just referred to would put a price on stock options, which is the key element here.

JANA WENDT: Mr Silvers, what is in it for the President to go soft on corporate fraud? Surely another company going up in flames, like the ones we`ve seen, will damage Mr Bush`s presidency?

DAMON SILVERS: I don`t doubt that he`s genuinely outraged by what has gone on here. It certainly hurt him. He has reason to be outraged. The problem he`s got is that major backers of his own personal political campaign and his party have a vested interest in perpetuating the conflicts of interest here - the big accounting firms, some elements of corporate America, some of the Wall Street banks - and they want him to make sure that there is no meaningful reform at the federal level here. On the other hand, his pollsters are telling him "You`ve got to stand up for the ordinary investor in this matter." So he`s trying to have it both ways in this speech. He`s trying to sound very strong, while on the details not doing anything that would in fact constrain the ability of his campaign backers to continue to make money out of conflicts of interest, and that is where he`s hanging right now. If there are more scandals and if the political situation puts him on the spot, he may, in the end, abandon the special interests that have been supporting him, but he`s trying to see if he can get away with having it both ways.

JANA WENDT: Mr Silvers, let me put to you something that the President said in his speech. He said, "The American system of enterprise has not failed us. Some dishonest individuals have failed our system." Do you think that he is right or wrong in that view?

DAMON SILVERS: I think he`s both right and wrong, in this sense - our entire economy is not broken, right? Workers work hard every day for their employers. There are honest managers, there are honest CEOs. However, he`s wrong in this sense - the problem is not a few bad people. The problem is we have deregulated our capital markets, deregulated our corporate governance, deregulated our pension system to the point where we have perverse incentives at work, perverse incentives that lead to ordinary people - not bad people, not good people, ordinary people - to (a) either do bad things, or (b) look the other way while bad things get done. One individual didn`t make Enron collapse. One individual didn`t make WorldCom collapse. It required a systemic - whole institutions to fail, multiple institutions, the entire sort of gate-keeping process that we have in our capital markets fell down in these situations. That`s what needs to be fixed.

JANA WENDT: David Silvers, thank you very much for your time tonight. Thank you.