Presidential Oral Histories

Barbara Hackman Franklin Oral History, Secretary of Commerce

About this Interview

Secretary of Commerce Barbara Franklin analyzes the impact of the Cold War’s end on the world economy, the Bush Administration’s handling of the U.S. recession, and President Bush’s character and how it shaped his approach to politics, especially the 1992 campaign. She and Assistant Secretary of State Clark review trade policy with China and Russia.

Presidential Oral Histories |

Barbara Hackman Franklin Oral History, Secretary of Commerce

Transcript

Young

This is the Bush History Project interview with Secretary Barbara Franklin, whom we wish officially to welcome. Let me say for the tape record that we all understand the ground rules under which this interview is conducted and the fact that we hold everything said in this room in strict confidence. We do that in part to encourage the respondents in these interviews to speak freely and as candidly, and to promote free-ranging discussion within the group. I talked with Secretary Franklin briefly before the meeting about this, and since you are already aware of the rules, being involved in an oral history yourself, it didn’t require much discussion.

The second thing we do is to go around the room and let everyone—before the interview actually begins, and let each of us present at the table speak a few words so that the transcriber, since we don’t announce ourselves before we comment, so that transcriber can identify who is speaking and then we’ll open. Please go first.

Franklin

I’m Barbara Franklin. I’m a former Commerce Secretary, in what we are now calling Bush One.

Young

I’m Jim Young.

Riley

I’m Russell Riley, a research professor at the Miller Center.

Martin

I’m Rob Martin, a graduate student in Foreign Affairs and note-taker for this session.

Barnes

I’m Wallace Barnes, Barbara Franklin’s husband.

Womack

I’m Brantly Womack, professor of government and foreign relations at the university, and my specialty is Chinese politics.

Young

Let me say a few words now about the agenda. If you can’t see Barbara Franklin’s book, I will tell you that much to my pleasure and possibly relief, that she has a number of items to cover, some of which are not really covered in the briefing book, and that’s par for the course. We thought we might begin with how she came to join the Bush administration. The reason I am mentioning this is not because we have a strictly controlled agenda, but we do have a visit from William Clark, who will be joining us probably late mid-morning and at that point, we can turn to the China mission. It may be that the China mission won’t consume his full time here—that discussion, so there are a lot of other things pertaining to not only the foreign affairs dimension of Secretary Franklin’s work, but also the management of the department and the other issues which demand a secretary’s time within Washington, with domestic policy, with the White House, with Congress, with other departments.

So with that, I would like to ask you to start out where you think we ought to start out, that is your political history that led you to join—prior to Bush, that led you into an acquaintance with and then joining the Bush administration.

Franklin

Okay, I’d be happy to start there. That would go back to the Nixon administration, which I joined in 1971, with the mission of recruiting women for high-level jobs in government, and that was a part of a three-pronged presidential effort to advance women in government. I was the White House point person, but there were two other parts, the most significant of which was that the President sent a memo to each of his Cabinet Secretaries, agency heads, asking for action plans about advancing women in those departments. My office in the White House monitored those plans. That’s how I got to Washington, and by the way, that was a very successful effort.

It was during that time that I met the Bushes. This is the important point. He was our ambassador to the UN [United Nations], and so I met George and Barbara Bush in the course of that. I was very impressed with both of them, and we kept in touch. After that, he came back—I may be wrong on the sequence. I think he went to CIA and then became the party chair, but I may be wrong about which came first. At the time, I had left the White House and was a commissioner of Consumer Product Safety Commission. Things were pretty difficult for Republicans in Washington at that point, and I recall having a lunch or a breakfast or something with him every so often. I was one of the few still in office, so this must have been after the Ford administration. The party was trying to rebuild itself and he was the head of it. So I got to know him even better, became convinced that he really should be President. So then if we fast forward a little bit to—well, he then became Vice President of course, and we were in touch during that period too. When he began to put together what became his campaign (it wasn’t called that), when he was Vice President, I was also a part of that effort. That was Fund for America’s Future, which was a PAC [Political Action Committee], his original PAC, and then when the campaign actually got into full swing, I was a co-chair of the finance effort.

This is now—What year would this be? Eighty-six, ’87 or so, and there were several other things I did in that campaign. However, one was to chair a task force that had to do with trade, which was part of the competitiveness group . Then I ran part of the convention in 1988, the outreach part, we called it Republican coalitions, and that's was what it was. We had events that had to do with every kind of constituency from women to farmers to African-Americans to veterans. We had a lot of people there from those groups. George Bush was elected President in 1988. In ’91 I did co-chair a dinner with George Webster, who is gone now—but really, I was in fact the chair of that dinner—at a very low point. People were not feeling very good about anything or the administration at that point and we raised $1.2 million. We had a goal of $600,000 and so that was a nice a success.

President Bush was trying to appoint me to something from the very beginning of that administration. The first thing that was run by me after the election, very shortly after the election, was to head the Small Business Administration. I thought about that, but I thought I could not at that point give up everything I had put together, which was seven corporate boards and a consulting business. I really felt it really should be a Cabinet position if I were to give all that up, and so I politely declined. He then appointed me to a part-time position, that UN assignment, to be alternate representation and a public delegate at the UN general assembly, which turned out to be something that helped to shape my thinking about the world because that was when so many things happened. The Berlin Wall came down, the Soviet Union began to disintegrate, German reunification began. It was a very interesting time. Also, President Bush reappointed me to the advisory committee for trade policy and negotiations.

So that was what I was doing, and of course was still in touch with him. I think it was early in 1990 or 1991 and it would have been a Friday, in January, I believe. I got a call. I was in a board meeting. That’s how I can remember what day it was. I was in an Aetna board meeting. I got a call from John Sununu, who was the chief of staff, saying that somebody is leaving the Federal Reserve, and the President wonders whether you would like to have that seat. So I over the weekend talked to a variety of people including Wally [Barnes] and anyway, decided that that wasn’t quite what I wanted to do either. So I called the chief of staff back and said, Well, please thank the President, but no. But the next bounce did, and that was Commerce in 1991. Towards the end of that year, maybe it was November or December, I got a call from the head of presidential personnel—Connie Horner was in that job at the time—who said, You’re on the short list to become Commerce Secretary because Bob Mosbacher’s going to move to the campaign. What I didn’t know, until later, was that I was the only one on the short list.

Womack

It was a short list.

Franklin

It was a very short list, and her message was that I needed to get some political and support to the White House and give her a list of references on my boards and other places, which I did. Then you really don’t know what’s going on, because you hear nothing. Then a call came, Please come to see the President on a Saturday. It was a Saturday morning, at ten o’clock, and that would have been in December, and that's what I did. That was when he asked me whether I would—of course I had figured out what was going on by then—whether I would take this job, and he expressed to me a few of the things that were on his mind about it.

Young

Okay, and that—We would like to very much to hear about that conversation and where you go from there. But maybe dial back a moment, because you gave us a very quick rundown, to the nature of your connection. You mentioned the Competitiveness Council with Bush or his people, when he was Vice President, because if you also have to—that is also the beginning of—That's the last step for him, before becoming President.

Franklin

Well, that competitiveness thing was part of the campaign. It wasn’t what is today the Competitiveness Council. It was—I have forgotten what it was called. It was a task force or something, and John Macomber headed it, and this was a subgroup on trade, and I had a bunch of folks and we used to have meetings and we came up with a document—

Young

So this was run out of the campaign?

Franklin

Yes, but it was the substance. It was the issue part of the campaign. So in effect, I was involved in the campaign on the finance side, on the issue side, and on the political side.

Young

Who were your principal colleagues in that effort?

Franklin

On the trade stuff? They were mostly, about a half a dozen people, some of whom I have lost. There were some Washington trade lawyer types. In fact, it was probably predominantly that kind of folks.

Young

Okay. Any other people that moved into the administration in that effort?

Franklin

No, or at least not around where I was, no.

Young

Okay.

Franklin

But there were a cadre of people who were Bush friends and loyalists, and we all were getting to know each other during this period.

Young

Sure. You did some fund-raising?

Franklin

Yes, I did a lot.

Young

This was for the PAC?

Franklin

Well it was for the PAC, but then the PAC—I shouldn’t say moved over into the campaign because that wouldn’t have been appropriate. The PAC was always here, but then there was a campaign finance operation that opened up, and I was co-chair of that.

Young

Okay.

Franklin

We put together a lot of different things, a lot of events. The situation was a little different in terms of money than you’ve seen in the 1990s. In the ’90s fundraising got a little out of hand. Then it was a lot more sedate. There were rules, and we followed them to the letter. That’s George Bush though. He wanted everything followed to the letter. So that’s what we did, but we raised a lot of money. How much, I can’t remember at this point, but nothing like what we have seen in recent years.

Young

Mosbacher was also involved?

Franklin

Yes, Bob was the head of it—was the chair of the finance operation, and was quite a marvelous fundraiser. I learned a lot of things from watching Bob.

Young

Talk people out of their money?

Franklin

Oh yes, amazing.

Young

Did you travel any with Bush?

Franklin

Back then? No.

Young

Were you connected to any of the political people in the campaign appearances as he was coming up?

Franklin

I honestly don’t remember. I did not travel politically, no, and I was at some political events that he was at. At that point, I was still voting in Pennsylvania and was part of the campaign political apparatus in Pennsylvania. I had a title of some sort—vice-chair, I think—but you know, everybody had titles in those days it seemed. So, yes, I was involved at that level, but in terms of the actual campaign, those were all paid folks for the most part, unless they were folks doing the advance. They were not. So no, I was not moving around with him, but we were really in touch. I have a big stack of his handwritten notes. They really go way back in time. He’s famous for those, I’m sure you’ve heard.

Young

Yes.

Franklin

I have a lot of those. There’s some interesting history in many ways in them.

Young

He was very prolific.

Franklin

Oh yes.

Young

Because we have seen some of them at the Bush Library, and he was a terrible typist.

Franklin

Terrible typist. Made a lot of mistakes and never corrected. Well, now he does E-mail and he doesn’t correct it either, so you get this stuff. It’s just like he sat down and typed it. I mean, same thing, half sentences and—but it’s fun. That's who he is, and so if it were any different, we would wonder who was writing his stuff.

Riley

Were you a surrogate speaker at the time? Have you done a lot of speaking?

Franklin

I did some of that in 1988, but definitely did a lot in 1992.

Riley

And in ’88, would that have been mostly in Pennsylvania?

Franklin

I think it was mostly Pennsylvania and New York, because I had earlier lived in New York—places where we had connections. Wally and I were married at the time, but I was still voting in Pennsylvania. We live in Connecticut.

Young

You were voting in Connecticut?

Barnes

Yes.

Franklin

Yes. Well, he never said a word about my voting in Pennsylvania, like when are you going to change it? I had property in Pennsylvania, so it wasn’t so far fetched. But you know, over time I changed my registration because it was beginning to get a little thin, I thought. After I got out of Commerce, I changed it to Connecticut. Okay.

Young

Okay. So now the President is about to discuss with you the post—joining the administration as Secretary of Commerce. So could you tell us the nature of that conversation? What topics were covered? How he asked you?

Franklin

Well, it was just pretty straightforward, sitting in a chair in front of his desk, and he asked me to be Secretary of Commerce. He thought I could do a good job. I asked him what he was most interested in having me do. What was on his mind at that point was the economy, and it was exports and trade and specifically he mentioned the NAFTA [North American Free Trade Agreement], which was in the works. It wasn’t finished. As you may know, USTR [U.S. Trade Representative] is always the point person on those negotiations, but a lot of the people come from other departments, because USTR has a very small staff. And there were fifty—I wouldn’t have known it at that point, but I certainly did later—there were fifty Commerce people involved in that whole effort. Several of them headed the working groups that were the most difficult, like automobiles, textiles, dispute settlement, and financial services. So, Commerce folks were playing a heavy role in the negotiations, and I’m sure he knew. That was definitely on his mind. He really was concerned about exports and trade and the economy. That was the basic message. So, I got the message.

Young

So did he—was he specific? You said he was interested in these things. Did he have an agenda that he communicated to you?

Franklin

No, just that these were the areas.

Young

These were the things of importance.

Franklin

That’s right, and that Commerce was a player in all those and a leader in some of them, particularly the export piece, and so I assumed that those were my marching orders.

Young

That wouldn’t have differed very much from Bob Mosbacher’s—

Franklin

Probably not, no. I would think very similar.

Young

Because they sort of go with the turf.

Riley

Was there any mention at this time about the campaign coming up, since you are coming in during ’92?

Franklin

No, he never brought the campaign up.

Riley

Because I noted, I think in your public comments when you were down here before, that some of the lower level staffers in the campaign had assumed that your agenda in Commerce would be much more heavily campaign oriented than departmentally oriented, and I just didn’t know whether that—

Franklin

Well, we don’t know where exactly that came from. I can try to guess, but the President never mentioned it. That I can tell you. We can speculate where that originated, but somehow there was in the minds, I think, of some of those guys, well, he’s appointing a woman because she’s a woman, and she’s supposed to go and campaign. That’s really, in my view, a naïve perspective, and George Bush would not look at government that way either. Some of those guys really always had that view, for whatever reasons—I think it’s a bit sexist.

Young

Some of the press was—what is the hot story here? Well, she’s a woman. She’s, you know—so this is obviously motivated by political—you know that sort of happens, that sort of thing.

Franklin

There may have been an element of that. I don’t know, but what I am saying is that you cannot expect that department, that particular department, to be on automatic pilot. Any department, but certainly not that one, which is a conglomerate with a lot of different aspects, and there are some things that really can go wrong that could be very embarrassing to an administration. Anyway, I did my share of campaigning, beginning really shortly thereafter, but not beginning on day one, when I set foot in the place. I believe that I was correct, the way I handled that. Actually, I told the President, he and I had lunch in the White House mess shortly after I got there, and I told him what I was doing. I was in the process of getting a hold of things, and that the campaign was after me, but I was holding them off for the moment and saying, That's wrong. Do it differently. Now, whether those guys ever got the message, I don’t know. Some of them were attached—because Bob Mosbacher had gone over there—were attached to him. I was running the department differently than he was, but that's typical too. People are not the same in terms of how they manage. His style and mine were totally different, and I think some of those guys didn’t like my style particularly. I mean, you know, life is full of these things.

Young

Did you discuss appointments in the department?

Franklin

With him?

Young

Yes.

Franklin

No, and he didn’t bring it up.

Young

With anybody on the White House staff? Was Sam Skinner the chief of staff?

Franklin

Sam was by then the chief of staff. When I got there, some key jobs were open because at that stage of the administration, people tend to want to bail out. The whole place was kind of demoralized. I am not even sure Bob knew that, because he had been on his way out really for quite a while, and so things were a little worse than frankly I had thought they were. The undersecretary for international trade was on his way out, not right that moment, but he was going to go to—

Young

Was that Mike Farren?

Franklin

Yes, that was Mike Farren. He was going to go to the campaign. The congressional relations slot was also open, and those two were quite crucial. But there were some others too, and I just had to find a way to fill them, which was a bit challenging, because at that point, you’re not sure that the Senate will confirm anybody. Remember, we had the Democrats in control of the whole Congress. I did get those folks, a congressional relations person and trade development guy who was from the private sector, confirmed, not easily, but we got that done.

Young

Again, I’m going to ask you to dial back a bit. The President announced that he would nominate you the day after Christmas, at least that's what he told the press.

Franklin

That's right.

Young

You were confirmed in February.

Franklin

February.

Young

What were you doing between then? Could you start working with the department even though you weren’t yet confirmed? What was the transition? Had Bob Mosbacher become absent during that period?

Franklin

Pretty much.

Young

Was he around during—There’s a whole set of questions here and then also about your confirmation hearing, which was very good and how you were prepared for that.

Franklin

Let’s see—the transition. Well, there are clearances that have to be done. FBI—and I had not had a full field lately, only partial stuff, so that had to be done and then the ethics clearances. We in that case, jumped through hoops very quickly as I look back on it now. We had some good people working on it, but as you I am sure know, the laws and the regulations treat the nominee and the spouse as though they are one person. So what’s a conflict for me would be a conflict for him.

I got a waiver from the President so that Wally could do something business wise. He was not the CEO of the company anymore. He was chairman of the board, so that was not so crucial, but he's a big stockholder and head of the family kind of thing. To sell would have been a hardship. That was the rule, to sell the stock, because we both did sell a whole lot of everything else, literally, except the Barnes Group stock. Barnes is a thinly traded stock also, so to have had to sell that really would be a hardship. I went to the President, and he, who is the only one who can do this, granted a waiver so that Wally did not have to sell his stock and so that he could do a few other business things. He was on a few corporate boards at that point, which he was allowed to keep. I gave up my seven corporate boards. He gave up other things too, like a chairman of a joint venture with a Japanese company, so that we would have a clean slate. But we did that quickly and that was not easy, I would have to say. I do think our government needs to rethink some of this clearance process because it’s way, way out of date.

So all of that had to get done. Then I started having meetings with different people in the department. I did not go over there and sit there. Now, Bob was gone. He took that trip with the President to Asia, but he was not in the department, and so the acting head was the deputy secretary.

Young

What was his name?

Franklin

Rock Schnabel. I used my Washington office for these meetings and had the folks from Commerce come in there. Again, I was just playing it really straight. It was a little bit anxious at that point in an administration. You’re not entirely sure what happens with the U.S. Senate, and some of those Senators were not pleased with the President. The economy was not very good, but I would have played straight anyway, because I’m Pennsylvania Dutch and that's my upbringing. I really was just very, very careful. So I met a bunch of people in the department, but not in their habitat. It was in my office, and that was how I was preparing myself for a confirmation hearing. Craig Helsing was the congressional relations person who said, Okay, I’ll help to get you confirmed and then I’m out of here, which is why that job was empty afterward. He had another job actually lined up at the time. We started to put together meeting dates with the relevant Senators on the Congress committee, and saw a good many of them. Fritz Hollings was the chairman of the committee at the time, and Jack Danforth from Missouri was the ranking minority member. I got along extremely well with both of them and that’s still true today.

Young

Had you known them before?

Franklin

No, well maybe in passing, but not really. Fritz Hollings, even though a Democrat, had been the Governor of his state and I think he truly believed that someone in an executive position ought to be able to have his or her own team, and ought to be able to make decisions. So he was not going to get in the way of that. Now, what I did say to him the first time we had a conversation was that we were going to have to agree to disagree about trade and textiles, because he had a different point of view on those things than my boss, the President. I have to be where my President is and so that’s what we did. He and I never discussed any of those things and we got along quite famously, actually. He was very helpful, and the same would be said of Jack Danforth. He’s quite a splendid guy. There were a variety of others.

The one that never did see me was Jay Rockefeller, who had some problem, which we couldn’t figure out, and so somebody, maybe it was Sam Skinner, brokered a phone call. That phone call arrived in the dead of winter. It would have been February. I was brushing my teeth. It was 10:30, 11:00 at night. I was in Connecticut, brushing my teeth in my nightshirt and I heard Wally answer the phone and say, Why yes Senator, she's right here, and so I went to another room, took the phone, slightly shivering in my nightshirt, thinking, What is going on here? and had a conversation of about forty minutes with Senator Rockefeller. It seemed that his problems were with Bush and with the policies of the administration. However, he also allowed as how he didn’t think I was tough enough for the job, and said, I’m going to have to vote against you when the committee acts. Which is what he did. However, I had strong support from the committee and a lot of encouragement. And we’ll now jump to the floor and then we can come back here.

When the actual debate and vote took place on the floor, I believe Rockefeller left actually, before the vote, but he did speak against the nomination on the floor and did have some of the verbiage that he had used on the phone. Besides criticizing the President, he wasn’t sure I was tough enough. However, by that time, we had my supporters alerted to this tack that he was going to take, and Arlen Specter was the one who delivered the most masterful rejoinder to that, saying things like, Just because she’s petite, feminine— and he had a string of adjectives, That doesn’t mean she isn’t also tough. And that just took care of that problem, and as I said, Senator Rockefeller left. I want to throw one other thing in here about Senator Rockefeller, which is a real fast-forward to the day before we were leaving office. He asked to come to see me in the secretary’s office. This is a little unusual. He came, a very tall man, sat on what was really too small a chair and said, I was wrong about you, and I came to apologize.

Now you asked another question here, having to do with, well, first it was preparation for the hearing, which I—

Young

Yes.

Franklin

I did myself, pretty much.

Young

Did anybody from the White House staff work in prepping you?

Franklin

No, I probably was in touch with the congressional people. Craig was—but no, no, they did not.

Young

But the congressional affairs person, in Commerce.

Franklin

Yes, he did, and the folks from Commerce who were coming to see me. There were briefing books and there was that kind of material geared toward confirmation hearings. Some of it was way too much. You know, it was the old fire hose approach. You get more than you need and so you have to distill it yourself, which is what I did. I felt reasonably well prepared when I went to the hearing, and it was a pretty good hearing, I felt—Rockefeller asked some leading, mildly hostile questions, but that was par for the course. I guess the funniest thing about that I am reminded of once in a while, is that one of them, and I don’t remember who, asked me what kind of car I drove, and expecting me to say—

Barnes

A Mercedes.

Riley

You probably remember who. Don’t you?

Franklin

Yes, expecting that it was going to be a foreign car, and when I said it was a, whatever the year was, a 1988 Chevy Cavalier, the room broke up.

Barnes

The whole room broke up. The press were laughing.

Young

I’m not going to ask you if that was part of your preparation.

Franklin

Actually, it was not.

Young

I said I wouldn’t ask.

Barnes

The reality is that that happened because she's married to a cheap Connecticut Yankee.

Franklin

The other part of that is that the Barnes Group only—well, for a long time, sold components to car makers, but only American. That's started to change. I mean the whole world is now different. And so Wally would never have had anything other than an American car. I wasn’t big on cars anyway, but that took care of that.

Now, there’s one thing that I probably ought to add here. Because of the waiver, and because he was keeping the Barnes Group stock and I had some that I was then allowed to keep under the same waiver, it meant that I had to be recused in terms of my decision making on certain things that Barnes Group made, notably springs for automobiles. There are some other metal parts, but the automobile parts was clearly the biggest. That caught the attention of John Dingell, who was the chairman of the Commerce committee in the House, and I began to get letters—this only happened maybe once, maybe twice. His staff was very adept at writing these with a lot of different questions in them, wondering in effect how you can be Commerce secretary if you are recused on anything having to do with automobiles. Well, I decided that something had to be done here, and so I went up to see John, I took with me springs. I took a suspension spring and some valve springs, and we sat, just the two of us in his office and I put them on the coffee table, and I said, That's what my recusal is about. It’s not automobiles. It’s these. That was the end of the letters. It was the end of any of what’s called Dingellesque behavior. He and I became good friends too, and still are.

Young

Did he keep the springs?

Franklin

No, I think I took them back to Wally.

Barnes

The Connecticut Yankee.

Franklin

Well, John was big on automobiles. That’s his constituency. Now where were we, here? We’re losing ourselves.

Young

So you sailed through. You get off on a very good foot with Congress and with one of your chief committees—

Riley

Can I stop and ask one question?

Young

Sure.

Riley

That is about Arlen Specter’s role in all this. I—

Franklin

Oh, Pennsylvania.

Riley

Exactly, and my question was whether indeed it is common for—in a Cabinet appointment position like this for the home state Senator to shepherd.

Franklin

Yes, I should have mentioned that. At my confirmation hearing, I had seated with me Arlen, Chris Dodd. See, we had both states. I voted in Pennsylvania, but I had this home in Connecticut, and that’s why Chris was there. Joe Lieberman was in the chair as I recall, and—

Barnes

The New Jersey—

Franklin

Yes, what’s his name?

Barnes

Lautenberg.

Franklin

Frank Lautenberg, on whose board I had served, also came, and so I had—let’s see, I guess that was it. So, I had an array of folks there with me including a couple of Democrats. But Arlen really was the lead and he took the lead in that debate on the Senate floor.

Riley

You had known him previously?

Franklin

Yes.

Riley

Harris Wofford, I guess, was the other Senator?

Franklin

He was there and I don’t think he ever came by. He was not in the way. He wasn’t opposed or anything. He just wasn’t there.

Riley

He would have been in office less than a year.

Franklin

He was there, yes. He had just—well, let me think. When would he have been elected? He hadn’t been there very long. I had gone to see him. He was very gracious man, but I don’t think he ever showed up that day.

Barnes

Chris Dodd is an old friend of ours from Connecticut. I ran against his father in 1954 for a congressional seat, so Chris and I—and he'd known Barbara as well, in fact, for years.

Franklin

Yes. The same with Joe Lieberman too, by the way. I had known him for some years. But the chair doesn’t debate. The chair is the chair. Joe was in the chair that day.

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Franklin

Entrepreneurial. Trying to communicate with them was interesting, because we just couldn’t figure out what they were doing. The insurance one in particular had me stymied, because I knew something about insurance, and I couldn’t figure out what it was he was selling. But he was very charismatic.

Clark

These were supposed to be both private companies. That's why we were meeting with them, but the insurance guy was getting all of his money from government. They had taken shares in it or something. It was strange.

Franklin

That was part of what we were there to do.

Womack

Deng Xiaoping had been there early in the year, a major turn in Chinese domestic policy, which may have something to do with Li Peng not being very talkative in the meeting because he lost on that.

Franklin

Maybe, maybe. Maybe he just didn’t have a whole lot to say about it. I think he might have been a little nonplussed.

Clark

He was a little nonplussed, but he said some interesting things that we really hadn’t expected. He talked about the state sector, and said that we know this is a problem and we’re going to get at it. We’re going to give them two years to get their act together and then we will let them go under, if they go under. That never happened, but he was saying what the U.S. business community really wanted to hear.

Franklin

Well, it wanted to hear, which was maybe why he was saying it.

Clark

Oh, I’m sure that’s why he was saying it. He was well briefed on it, but he sounded very convincing. It’s just that the follow through wasn’t there. But he was clearly scripted to address the concerns of U.S. business at the same time we were addressing his concerns about not having enough business. So it was—psychologically it was interesting.

Franklin

I would agree with that. It was interesting. But after all, we had come there doing something that China wanted, maybe that caused him to be a little more restrained. I don’t know. We’ll never know. He's just not a very likable character, no matter how you slice it.

Clark

There is that.

Franklin

Not very—

Clark

We met in a—we didn’t meet him in the Great Hall of the People. We met him in a little—it almost looked like a temple. I remember we walked through the gate and they had this room set up that was rather chilly as I recall.

Franklin

It was chilly.

Clark

In fact, it was cold.

Womack

It was in contrast to make him seem warm.

Franklin

I would think so—

Clark

I don’t think so. Beijing with all the granite and marble and what have you in that climate and no central heating tends to be cold.

Franklin

Now Li Lanqing who was the head of that ministry, has moved up and is—

Clark

He’s a good guy.

Franklin

He is a good guy. He’s vice premier now. I generally see him, certainly try to when I go to China and always delight in telling him that I helped him get promoted.

Clark

He was one of the most cooperative that we—

Franklin

He was. He was easy to work with. He always says that too, that you and I always got along well together, and we did. He is a pretty practical fellow, very pragmatic guy, and some of those people who were there in that meeting on the Chinese side, and I believe they had more people there than we did.

Clark

Always.

Franklin

Always. They are still around in the MOFTEC ministry and so they keep turning up, which is interesting. Some of them turn up here in the embassy, and in fact the guy who is now here as the chief commercial person was there back then. So they—we just keep circling around each other but it is interesting and they all do remember this trip.

Clark

It was an important trip. It is interesting because Li and Qian Qichen, they’re both vice premiers both from Shanghai. They’re business people, at least that's the theory.

Franklin

Yes, I think that does make a difference.

Young

Could you say the second name over again for the tape?

Clark

Qian Qichen. He was foreign minister at the time. He’s vice premier.

Franklin

Now. In fact he was here a few weeks ago. He's at the top of the rank of vice premiers or deputy premier and was here. He had a meeting with President Bush, I think concerned now about Taiwan once again and what we are going to sell. He's about as smooth an article as I have ever seen, Bill, don’t you think? In any diplomatic—

Clark

He’s very good and he does things that most Chinese won’t do. I went to a—we had a meeting. Who was it? APEC I guess. The secretary didn’t go to it. We sent an undersecretary and I needed to see Qian Qichen on something. Well, I was assistant Secretary of State. That isn’t all that high, and yet I requested a meeting from the Chinese—I said I really do need to talk to him, and you know, he came out. We had a nice chat, and a number of Chinese would have said, Absolutely not, but he, he's flexible. He let me know who was the foreign minister and who was not, but that was okay. I was well aware of that fact.

Franklin

No, he's really very good. They’ve got some very good people. We’re getting off the subject here now, but some very good younger diplomats.

Riley

There was no Defense Department representation in this?

Franklin

No.

Clark

No.

Riley

That was taken care of in your earlier trip?

Clark

That was taken care of in the earlier trip and it was just one four-star general, in uniform, which was a stipulation of his going on the trip, and that snapped a few heads in Beijing.

Franklin

One of the things that the Chinese were concerned about and continue to be is export controls for sensitive technology. There is one other piece here, that probably ought to be mentioned that occurred before we left for Beijing in December. It had to do with the selling of a supercomputer of not the most high power to the Chinese weather service. I was carrying the freight on that. That is in a sensitive technology category, and needed the blessing of the interagency group—I’ve forgotten what that group is called. Anyway, we had a meeting that was supposed to be a secret meeting to discuss this matter in the situation room in the White House, maybe a week before we were leaving. That very morning, there appeared on the front page, as I recall, the bottom right-hand side of the Washington Post, an article that talked about this computer and the secret meeting and obviously whoever leaked that story did not think the sale was a very good idea. So we never knew—

Clark

I still can’t remember the name of the agency, I used to call it Sisyphus, because it seemed liked the labor of, but—

Franklin

Well it was–

Clark

CIPIUS [Control of Intellectual Property of the United States].

Franklin

Well, it had on it—Let’s see. Well, there was Commerce, obviously State, Defense—

Clark

It was headed by the President’s scientific advisor.

Franklin

It was security. The one I’m thinking of was with the National Security Advisor presiding.

Clark

Oh, that's a different one.

Franklin

There were several of these. Energy, arms control, disarmament, CIA sat there, but didn’t have a vote. As I said, I was the one making the case for the sale, saying we have more controls over this thing, twenty-four-hour monitoring too, than we have ever had over anything, and besides it’s not that powerful. But the concern was that they could use it for military purposes. The vote was three to two in favor of the sale. The three were State, Eagleburger was there if I recall right, Commerce, I voted that way of course, and Energy. Defense—Colin was there. Colin Powell was representing Defense. He was against it and so was whoever was from arms control. CIA wasn’t for it either, but he didn’t have a vote. Gates was there. Who was arms control? How we forget. Anyway, because the thing had been blown sky high in the press and the meeting was known and who was going to be there, the security advisor, who wasn’t voting either, decided that we ought to just carry this to the President. Let him decide, and that’s what he did, so I could not take this with me, this outcome, because there was no outcome.

The President did decide to sell the supercomputer, literally as we were going out of office, a few days before that, and it never got delivered until much into the future. It sat there. I think it was when Clinton was meeting with Jiang, at the following fall’s APEC meeting, perhaps, I believe that he told Jiang we were going to finally deliver this thing. It didn’t get delivered until some time later.

Clark

With these issues, particularly on supercomputers, in fact I did the same thing in India. We had sold the Indian weather service the Cray, and they wanted another one for their joint scientific office down in Bangalore, and we said, Okay, but we’re going to change all the ground rules, and they said, No, no, we already agreed to the ground rules on computers. There were people in the U.S. that were concerned the new computer would be used for military purposes, particularly for nuclear purposes. Obviously we didn’t affect nuclear development because we never sold them the computer. By the time we got around to saying to the Indians, Okay, we’ll sell it to you, they said, No, we put together a parallel computer that will do just about what we want. We don’t need your Cray, which is why Cray is in trouble, but that’s a different story. But these things always happen. You know the supercomputers got wrapped around the axel every time they came up.

Franklin

Yes, and you wonder—this was a Cray, this Chinese sale. You always wondered how everything managed to get out into the public domain at precisely the right time.

Young

From the opposition I—.

Franklin

Yes, but it came from inside of government.

Clark

This is government by a leak.

Franklin

Yes, government by leak. Whether it goes through the agency [CIA] or whether it was through—sometimes they would do it through the Hill. There was one particular reporter who was known for this. When his stories came up, we knew where that came from. They were world class at doing this, and this was just a sample.

Clark

It’s an art form.

Franklin

It’s an art form.

Womack

China policy seems to be particular vulnerable to that.

Franklin

Because there is not consensus.

Clark

Yes, much more so than with a lot of Japan policy. One, there aren’t as many secret things going on, and two, we kind of like the Japanese a little bit better, you don’t get the emotions.

Womack

Not if they’re stagnating.

Clark

Well, now that they’re not ten feet tall it’s a little easier. Now you’re worried about the other side of it because the second largest economy can pull us down with them too.

Franklin

Oh yes, we worry about a—

Clark

Having just got back from a trip there—yes, it’s a concern.

Franklin

I had checked a couple of years later after I knew that computer had been delivered, when I was in China, as to how it was working. Apparently there had been no issues or anything about it or the diversion of its use, and it was working just fine for the weather service.

Young

What were the issues that the Chinese were—the people you met with in China—were particularly interested in? Did they bring up some issues? Did you get a sense of what their agenda was in this meeting, or were they just listening?

Franklin

Oh no, they never just listen. Export controls are always a concern.

Clark

I think there was a little discussion of MFN.

Franklin

Well, right.

Clark

You know, why do you have to do this every year? Why do you do that? That annoyed them. Before we change the name of it to International Treatment of whatever the Hell we were going to call it. This was one of the neatest shifts I’ve ever seen. I mean, that was an overnight change.

Franklin

I know it.

Clark

And now since the WTO thing hasn’t gone we’re going to have to vote on it again, and I notice several of the people covering it now, the press, have been calling it MFN again, which is interesting.

Franklin

That’s not supposed to happen. We’ll have another—

Clark

But that, that was one of—I mean—but basically it was, for me—I was quite surprised that the Chinese focus really was on we want to do more business with you, how do we get around a lot of these things that are blocking what we are doing. On some issues we could be encouraging and on others you’re going to have to live with.

Franklin

We talked about some of the usual things, tariff barriers and you know as I said, intellectual property. Non-tariff barriers. But my recollection, and it’s an interesting question, it wasn’t as though the Chinese had a whole litany of things that they were really concerned about. We were there delivering something to them. I think that restrained them a little.

Clark

Well, it’s funny, but I think their strategy on the trip was probably the mirror image of ours. We wanted to reestablish business relations, and they wanted them reestablished, so the focus on both sides was really the same. They made sure there were enough things on the table that would make a nice package to take home, I mean you never have a tribute mission to China that doesn’t take back more than it brought. So the atmosphere was—having been there earlier—I was surprised.

Young

But there wasn’t agreement, let’s make this work in advance, and here’s what we do to make it work, it just happened?

Franklin

No, no. But I don’t think that gets said anyway.

Young

Why?

Franklin

That’s just what happened. There was pretty much consensus. It was quite collegial. I was prepared for something far worse. I really was. I was prepared for belligerence and whatever on their side—

Clark

Well, you’d seen my trip report, and a little hectoring might have come up.

Franklin

It did not happen anywhere along the line. Li Lanqing isn’t quite the hectoring type, but he could have done more than he did and Li Peng certainly could have. So I think that’s right. They wanted to make it work too.

Young

There weren’t any surprises on your agenda for them either?

Clark

No.

Franklin

No, no. No surprises on either side. We just had to do it.

Clark

The medium was the message.

Riley

Could I go all the way back to the front end of this and ask a follow up question, and that is who typically would you expect to do the interagency coordination so that you don’t have the problems. Would that come the National Security Advisor?

Clark

Yes. Well, let me answer from my perspective on—the whole thing came out of a decision that was made in the White House and then we were informed about it. Right? So therefore, the response was to the White House. This was your decision. Here’s how we plan to cope with it. It’s not the typical way things work. I mean, normally you would expect prior coordination, there was never an interagency meeting called on this sale of the F-16s for example. The White House wanted a report so that they could say they had a report from the State Department on consequences, pro and con. But we never called a D committee together, which is the deputies. As far as I am aware, none of that was done on this sale. So it was outside of normal bureaucratic track and it stayed there the whole way.

Franklin

That would be the best explanation of all. It’s outside the bureaucratic track and it never got back into it.

Clark

That’s the only explanation I can come up with, because had it been in the normal flow of things, you would have talked—I would have sent a note over to the White House saying what we thought we could do. We would have called a committee together and endlessly debated it.

Riley

Which would have had a representation from Commerce.

Clark

Oh yes. If were talking about Commerce’s stuff.

Franklin

It would have been interagency, yes, but that never happened.

Clark

There was never an interagency meeting on anything.

Riley

Do you know what the paper flow was on your memos making these suggestions?

Clark

Yes, they went to Scowcroft and the President.

Riley

Okay. So it was basically the National Security Advisor’s office that didn’t elect, for whatever reason to—

Clark

I’m not even sure that Jackson got into it. Karl Jackson was the Asian guy on the National Security Council, because it was done at a fairly high level.

Franklin

Maybe that was part of the problem too. It just kind of stayed up here. It never got into what is the tip of the interagency process, which is down here a little lower.

Clark

It was all based on, okay, you made a decision. Now here’s how we have to handle it. That wasn’t our decision. It wasn’t—Commerce wasn’t asked about the F-16. The Defense Department might have been, but not much and they would have been in favor anyway because it broadened the production bases, supposedly bringing the price down a little bit. But no, this was atypical.

Riley

It was more of an oops case, than someone hiding because they thought it was—

Clark

Not oops. It was a conscious decision, and it was okay, you’ve made that decision. Now, here’s what we need to do to lessen the pain on the other side, if you will. Which is going to be—they’re going to have the same problem again if we decide to sell—I don’t think we’ll sell the Aegis destroyers, but we’re going to sell a higher-level destroyer so they can train on it. You’re going to have to go and talk to the Chinese about it because they are not going to be happy.

Franklin

As an aside, I had lunch with Don Evans last week, the Commerce Secretary. I told him about this. I said, Don’t let this happen to you. What happened to me shouldn’t happen to you. The surprise aspect of it I mean.

Clark

Okay. I’ll go back to what I’ve said. It was a most important trip. The press can say what they want, but for government-to-government relations, it was almost critical at that point in time that we did it.

Franklin

I think it was.

Riley

I think it’s a fascinating case on various levels, one a policy level, but those of us who are students of the presidency trying to figure out who was doing what where at the time.

Clark

Well, it validated Tip O’Neil. You know, all politics are local.

Young

[indecipherable due to laughter] the locale doesn’t it?

Clark

It all comes out of Texas.

Franklin

It all comes out—that’s right.

Young

How did you decide to take business representatives with you, and how did you decide which ones to take?

Franklin

Well, we decided to take a few, and then again, it came off this list of people who were in line or who wanted something, or had something in the works. That's where it came from. This was put together so fast that we didn’t have a number in mind. Maybe we should not have—no I take that back. I think we should have taken some. We were shooting for CEOs, couldn’t get CEOs. We got too late or they didn’t—

Clark

Too late really, most of them—

Franklin

One guy had a board meeting, I do remember his own board was meeting that day, and you can’t get a CEO in two weeks or three weeks notice. But Ingersoll-Rand sent the guy who was—he was fairly highly placed. So was the guy from Foster Wheeler, who was a vice chairman. But that's how it was done. We literally went down the list and asked—

Young

People wanting contracts.

Franklin

Right.

Clark

Or wanting to do business.

Franklin

Or wanting to do something, and there was at least one small-business person—we were talking lots about this—

Young

Well, that was going to be the next question. Where were the small businesses?

Franklin

Yes, I see him, Richard Chen from the southern part of Virginia. I see him on occasion, and there may have been one other, but there were—

Clark

There was a guy that was out in California.

Franklin

Guy from California?

Clark

He was in the chip business.

Franklin

Oh yes, there was another guy with a smaller—and the guy from satellite, Hughes.

Clark

Hughes. That's who I’m thinking about.

Franklin

Okay, he wasn’t small. Hughes, now belonging to General Motors, satellite company. Who was the other? I don’t know. We’re missing one.

Riley

Did you have to get White House clearance for the people on the list?

Franklin

I don’t think we did that, no. They knew what we were doing. Everybody knew what we doing inside there. Too many people shouldn’t have known what we were doing. But I know the national security apparatus knew.

Clark

State knew.

Franklin

State knew. There was nobody from Treasury with us.

Clark

We didn’t have Treasury things on the agenda.

Franklin

Yes, so we didn’t—I was just thinking of the economic players, so it was basically Commerce and then somebody from the trade reps office, but not from Treasury or any other place, just State. This was not—because I did check this at the time—was not an unreasonable delegation.

Clark

No.

Franklin

They were saying that there were too many people. This was sort of, in fact this was smaller in terms of the delegation that have usually been sent for JCCT.

Clark

It was just the timing, at the end of the administration. It was an easy target and so people saw the timing and didn’t see the significance of it.

Franklin

Didn’t want to, and of course Clinton had said some rather strong things about China criticizing Bush, about coddling dictators or whatever that was.

Clark

You remember when the Clinton administration came in and I was still the assistant secretary. The first thing they did was to put down an ultimatum to China, either you will cut down on the trade imbalance or we will not redo MFN. I told them at the time, I said, this is not the way to deal with the Chinese folks, and by the end of the year that they had given the Chinese, the Chinese hadn’t done anything and sure enough we renewed MFN. I mean this type of ultimatum was not something we were going to do. I said don’t point your gun unless you are going to shoot somebody. We weren’t going to shoot.

Franklin

Then they did it again on human rights the year after that. MFN conditioned on several human rights points. Then, the administration just backed off. The Chinese thought they had won on that, because they told me so.

Clark

It’s the wrong lesson to teach the Chinese, if you hang tough, the Americans will go away.

Womack

Although Clinton, when he backed off in 1994, I thought that his public statement at that time was very good.

Clark

Yes.

Womack

He didn’t just back off. He changed the policy.

Franklin

I know, but they thought he backed off.

Womack

Oh, well, in a sense he did that. In a sense his policy—the tracks were going to leave him stuck in the middle.

Clark

He ran out of tracks.

Womack

Because there is a May deadline on that stuff.

Franklin

But the Chinese really did not see it. They viewed it as they had won and we don’t have to do anything else.

Riley

Had Ron Brown been named your successor by the time this trip happened?

Franklin

No. I don’t think so.

Riley

Okay. So you didn’t have anybody that you would have, as a matter of course, been coordinating with or thinking about coordinating with in terms of transitions?

Franklin

No, this was December. No, no, although I had a couple of conversations with him as I said, after he had been named. That was January.

Riley

We obviously can come back to that later, but I didn’t know whether that was, whether the element of transition played in terms of—

Clark

The Clinton administration was, if you remember, rather slow in naming their people, and I don’t think Brown was even named at that point.

Franklin

No, I don’t think so either. I think it was only afterwards. This has been, this trip has been a mystery in some ways, hasn’t it? I am proud of having done it. It was important. The Chinese recognize it. It’s just that there is still confusion here about it.

Clark

I still think it was one of the best things we did with China, modestly. But it really helped to get relations back on track. I ran a task force for Tiananmen too, so I’m on both ends of this one. I think we made a point with Tiananmen, and we discovered a very graceful to back it down without really saying we are backing it down, and pushed a couple of policies very well forward. So this was one of the better diplomatic dances that we did.

Young

The publicity you got for this was not helpful. It distorted.

Franklin

It created a veil of confusion about what really had gone on. The frustration of course is that when you are going out of office, you really can’t—you can’t explain it. Had we stayed—

Young

Then you sound defensive.

Clark

Nobody asked.

Franklin

Nobody cared anyway. I did do some defending of the trip when I came back. I got on with Brian Lamb at C-SPAN, an open Q&A and a few other things, but we never really could reverse the image of it. Had we stayed in office, I think it would have become clearer. It would have gone away, but we were going out of office and nobody was, as you say, nobody asked. Nobody cared.

Clark

Then the new administration picked a fight with China anyways.

Franklin

Yes, and they weren’t going to clarify the whole thing, so—

Clark

I always wondered what the Chinese thought about all the press coverage on the trip. I have never asked anybody about that. I should at some point.

Young

The boondoggle story?

Clark

Well, yes, because they knew what it was all about, this is—

Womack

Mysterious America.

Clark

Mysterious America. Well, they know the danger of a free press.

Franklin

Yes, that’s probably right. Well, they knew it was controversial. I had made that point a couple of times to my friends there, that I took heat for doing this.

Young

But the negative publicity had no effect on the outcome.

Franklin

No, no. That was all over here.

Young

It was noise. It was noise, but it had no—

Clark

The Chinese paint it as a very successful trip. That posture added to the noise here a little bit. Those that didn’t like China at that point felt that the Chinese were playing with us. Why are we being nice to the Chinese?

Young

Was this the only, other than the call from Jesse Helms saying he thought a nice lady like you shouldn’t be going to those awful people. Did you get any other flak from—

Franklin

From the Hill? No, I did not.

Young

From anybody on the far right on this issue?

Franklin

I did not, or on the Democrat side.

Young

How do you account for that?

Franklin

I don’t know. They were gone.

Young

Maybe this was the beginning of backing off of Tiananmen.

Clark

Well, that's true but, I would argue—I mean with the exception of Senator Helms—that most people were about ready to shift. This was not done in a vacuum. Business groups had been working the Hill, too. This was convenient and—that’s too glib—but this was the culmination. There was a lot effort to explore how we can undo the sanction. Well you can’t just get up one day and say, Well, we’ve decided human rights don’t count anymore. We’re going to do away with the sanctions. But there was an awful lot of support for what we were doing, despite what the press thought.

Franklin

That may be true. There was just not a lot of noise from anyplace. I do remember having some business folks in my office afterwards who were delighted. I mean this was [Maurice] Hank Greenberg, AIG [American International Group] and Dex Baker who was then the chairman of NAM [National Association of Manufacturers] and whoever was chairing the Round Table. A group of them was sitting around my round table and talking about this, and they were delighted. As were others, but the press was otherwise. I have to also say that the people covering the boondoggle story were not business press. This was political press, so they really had no particular interest in understanding the business ramifications.

Clark

Business is filthy lucre.

Franklin

Anyway, that’s right.

Young

Did you take press people with you?

Franklin

No.

Clark

No, which in hindsight, maybe we should have.

Franklin

Well we asked a few to go, in my recollection, who did not for whatever reasons, or their companies wouldn’t pay for it, because we were not—I guess we weren’t paying for everything. I don’t know. I don’t remember. I would have to go back and ask. Tim Hauser probably remembers this. He’s still there at Commerce. He's got a great institutional memory. At the time—one decision was that he not go. I guess it was Duesterberg who went in his place. If he had gone, one of those other people at a higher level would not have. We were concerned about the GATT Round, which was still being pushed forward by USTR and we were not sure what was going to come out of there. That was the best of our experts on that, and so that’s why he stayed home, in case something popped out that we wanted to be able to react to from the Commerce perspective. There were a lot of little things like that going on. That was in part because nobody quite trusted what USTR might come up with. So there was a lot of under the table sort of interagency tugging and pulling.

Young

There was no really high dramatic event here that would sic the press on what is the real meaning of this mission or stories of that kind and then it was just a boondoggle story.

Franklin

It was a boondoggle story.

Clark

It was a trip after the election. Anytime you do a trip after the election, it’s a boondoggle.

Franklin

And we had lost, you know. It’s far worse when you lose.

Young

That really helped, right?

Franklin

You know, earlier, we had talked about at Commerce having a trade mission go to Japan after the election. They came to me with that in September, and I was entertaining the idea, but then after the election I said, No, we’re not going out of the country. We’ll get criticized. Well, little did I know.

Clark

Right on.

Franklin

Well, I was right about that. So we never got to Japan. Only to China. Anything else that we have missed on this or that you want to—

Young

This can’t be the whole story. We’ve got a little bit more time.

Franklin

On the China piece?

Young

This was your first such mission abroad?

Franklin

Yes.

Clark

First and last.

Franklin

First and last, yes. Well, earlier—I was there nearly a year, but there wasn’t time for trade missions. There wasn’t time because I was campaigning as well as running that department. So this was it. However, I had made a couple trips to Europe. One included a few business people, but it wasn’t the scale of a trade mission.

Clark

Well, you can say you got one trade mission.

Franklin

One trade mission, yes. Don Evans asked me that last week. Were you doing trade missions? I said, One, there was one.

Young

If you hadn’t had the benefit of Bill Clark, his institutional memory and his previous involvement in this, do you think it would have been much tougher?

Franklin

Well, yes.

Young

You wouldn’t have managed the head shake.

Franklin

Well, we needed Clark to be part of this operation, since he had set these wheels in motion, even though I didn’t understand the degree of the wheels.

Clark

We talked about why it was important to go.

Franklin

We did, the importance of it. I just didn’t—all this background hadn’t really gotten fit together and it was a bit of a surprise.

Young

So the trip was a surprise, but there weren’t any other big surprises?

Franklin

No, and we needed the State Department. Some of this was really State Department’s business that we were doing.

Clark

We had a good guy in Beijing at the time, Stape Roy, who is one of the best we have.

Franklin

Stape Roy, yes.

Clark

He's now with Kissinger and Associates.

Franklin

He was very good. It was good also that he was there as opposed to somebody else. So between the two of them, that was—

Clark

We had both been deputy assistant secretaries together in ’88.

Franklin

He spoke Chinese. He speaks Chinese, and actually grew up in China, part of his boyhood was there. We just wanted to get the whole thing told about this trip in way that made sense. It’s in bits and pieces now, which is what I think you found when you were looking.

Martin

Oh, very much.

Clark

If you look at it just as a trade mission, it makes absolutely no sense, other than as a boondoggle, alright. If you look at it in terms of national interest, it makes all the sense in the world. So, it’s not a boondoggle, but you have to meld the two together, and the press never got past first base.

Franklin

Never did.

Womack

I think it’s hard for the American public to appreciate the importance of something as a sort of diplomatic ritual, you know, and the reestablishment of foreign relations at a certain level. It establishes a framework that little things can occur in, and we’re always looking for the deliverables rather than what structure, what expectations have been established.

Clark

I would argue that had we not done this—the ritual—what I think were the missteps of the Clinton administration would have had a much more negative impact than it turned out they did.

Womack

Right. It wasn’t just a time delay. It would have been a potential for a crisis, you know, the Harry Wu type of crisis to occur much earlier.

Franklin

I think that's right, I haven’t focused on that piece, but that's true. It would have been far worse, and it took that administration quite a while to get itself together on this.

Riley

I think the other thing though, is the prominence in the public memory of the events at Tiananmen.

Clark

Yes.

Franklin

Yes.

Clark

Well, every time somebody talked about China, you got the little guy standing in front of the tank.

Franklin

Well, and remember that earlier—was it two years before this? After Tiananmen, the President had sent Eagleburger and Scowcroft and there was—

Womack

Secretly.

Clark

Secretly.

Franklin

Secretly.

Clark

Some secret.

Franklin

Except that got out and the toasting with champagne did not go over real well with the American public. There’s still a lot of discord about China. There still is and—

Young

It’s certainly apparent right now.

Franklin

It’s apparent. In some ways, the politics have gotten even more complex than they were then with all these other things that have happened in between: the illegal campaign contributions, the stealing of nuclear secrets supposedly out of labs, you know, you can go on and on. Now this latest, the airplane episode.

Young

Well, this is a surprise that wasn’t on the program.

Clark

You bet.

Franklin

The bombing of the embassy was a bad one.

Clark

Yes. Not only the bombing of the embassy but managing to hit the intelligence section of it. People give us a lot of credit for being that good, right? I don’t believe it for a minute.

Franklin

I don’t either, but the Chinese, as you know, they think we did it on purpose.

Womack

When you go over there you can say, If you knew the Americans like we know the Americans you’d know that’s not possible.

Clark

Well, no, but it’s quite true that people think that we can see, you know, every time Saddam goes to the bathroom, but we can’t. He’s dug so deep below the ground most of the time you never see him. But that doesn’t mean people don’t think we can, and we are getting closer and closer to using—as we did in the plane incident—to using satellite photography in real time. We are going and saying look, here is our plane on the ground. If you go back five years, it would have taken six months to clear that through the interagency process.

Franklin

Well, it’s going to be a rocky road for a while. There are just things that we see differently. I have maintained too, as part of the result of what we created here in terms of an economic bond, that the economic side of this relationship is what is the bedrock of it now. That wasn’t where it all began in ’72, but that's true now. So we have all these other differences, but what keeps the thing going now is the economic side.

Clark

The Chinese never really understood why we got so upset about Tiananmen, What did you want us to do? Let the rebels take over Beijing? As a government they just said, What, what? We’re just controlling our people. It took us a while to back down gracefully, not back down, but say, Okay, enough already of the punishment. Let’s get back. We’re grown up now, and we did that. This time around the Chinese have been the ones that have acted badly and they’ve got everybody all stirred up, very much the way in the states everybody was all stirred up on Tiananmen. We’ll see how gracefully they can get off of this one. The Congress is not thrilled with holding people for eleven days. Nobody from the U.S. side died, they lost a pilot, but still, it causes people to back off and take a look at it.

Franklin

This what will happen and we’ve got June 3rd coming up, and time for Congress to debate and it’s not going to be pretty, I suspect. I think it’s going to be okay, but it’s not going to be pretty and that is not helpful.

Young

You were saying a moment ago that the economics are the bedrock that makes it go. That can get derailed, can’t it?

Franklin

Well, it can get set back. It can get chipped away at, but it can’t get totally derailed now. I think it’s gone too far. We have too much to protect in terms of investment there. They are sending one hundred billion dollars worth of exports here. Trade deficit is now eighty-three billion or whatever last year. If we began to cut back on that—

Clark

Bigger than the Japanese, but nobody seems notice.

Womack

You’re happy to say.

Franklin

That's right. Well, I bet they will during this upcoming debate, but if we started to restrict access, I think that would hurt them and their growth rate, and they know it. At least the people here at this embassy know it, so I think they’ll try not to go over the cliff and push us too far. But that assumes rationality on all sides, and people aren’t always rational.

Clark

No, but if you look at the times we’ve imposed import bans, we’ve always disadvantaged someone in the United States. If someone wasn’t making money on it in the United States, goods wouldn’t be coming in. So there’s no nice way of doing this. You can ban stuffed animals, and the Chinese make most of them, then you’re the Grinch that stole Christmas. You can ban chips. That’s fine, but somebody is making something that needs those chips, so he's going to go out of business if he can’t buy them. There is no neat way of imposing sanctions. We’ve tried to set up these lists.

Franklin

There is no neat way to do it.

Clark

But this is not anything to do with what we’re talking about.

Womack

I think there is a framework in which the economics is the sort of bread and butter of the relationship, but also when you think about the foreseeable and the unforeseeable future from either side, the idea of a hostile relationship, or a relationship that is broken, and what the consequences of that would be. You know, for the United States you think of China’s increasing role in Asia, and what would this do, and how would the Japanese like that, you know, not much. What would that do to Korea, and what—how would Southeast Asia react even, and on the Chinese side, to the new Soviet Union, of the worlds only superpower, certainly isn’t very attractive. There are certainly reasons why business as usual is a good thing.

Clark

I served in India too, we didn’t have a good economic relationship with India so all political issues went right at the bone, there was no buffer. You didn’t have American business going in saying please don’t do that, let’s balance this off. It’s very apparent when you are looking at the different sides, how important it is that you have a balanced relationship. You don’t necessarily have to have a security relationship, and so to have China as a strategic partner is stretching the envelope; but if you’ve got political relations and economic relations, you’ve got a lot better chance of being able to nuance it than you do if you’ve just got one side.

Franklin

That’s well put. That's right.

Young

So in that respect, again it’s a big plus, the mission.

Franklin

It was a big plus.

Clark

We sound a little self-serving, but only because we believe it.

Franklin

Yes, and I believe it now more strongly than when we did it.

Clark

I’ve been working on her.

Womack

Little emails every week.

Franklin

No, I thought it was important when we did it too, or I wouldn’t have done it. I thought it was the right thing. But now when you see the results of it, I think then it becomes crystal clear to anybody who cares to look at it.

Young

That must be one of the most satisfying things you were involved in.

Franklin

Actually, it probably was the most important single thing I did at the Commerce Department. There were some other things that were important, but I think this was the biggie.

Clark

I would say very important for national security and diplomatic relations. It simply was.

Young

It’s about time for lunch.

Franklin

I think so.

Young

On that note.

Riley

Maybe we should’ve telephoned Larry Eagleburger to get his take on this too.

Clark

He’s got a house down here, doesn’t he?

Franklin

He disappeared during this time when we were trying to find White House cover or whatever, State Department cover. We couldn’t find him.

Clark

He was off somewhere.

Franklin

He was in Europe or he was, I don’t know, but we tried. I tried. Couldn’t find him. Someday I am going to ask him, Where were you?

Young

Well, we’ll try to arrange that.

Franklin

Or did you just turn the phone off.

Clark

I’m should ask Larry about that too.

Franklin

But he really did disappear. Remember? I think we all tried to find him.

Clark

Oh, yes, yes.

Franklin

Nowhere to be found.

Riley

I can’t imagine him disappearing, that’s—

[LUNCH BREAK]
Franklin

(Continuing) mentioned you would be taking some pictures.

Young

I didn’t, but we do. That's for the record.

Franklin

Okay, that's fine.

Young

Just to show all the faces here so we can match them with the voices and have a photographic record.

Womack

Do we have to speak as the pictures are taken?

Young

No, it’s not that kind of camera.

Riley

You do have to hold your name—(inaudible, too many speaking at once.)

Young

No, this is not for the press. This is for the records of the project. This is just done while we are going, so we can continue.

Clark

Well, you should look appropriately serious.

Young

Oh, we have a lot of people guffawing.

Franklin

We do?

Young

Yes, because sometimes jokes sometimes happen.

Franklin

Let’s see. Now, have we totally finished China. I think we have. We didn’t recite exactly what happened with these figures, however I have a table that shows what has occurred with trade. This is a partial investment figure. I think the U.S. has turned out to be, after Hong Kong, which is the largest investor, and they were counting Taiwan separately. I’m not sure what’s going on, but anyway, the U.S. is right in there after that.

Clark

Some of the figures from Hong Kong are actually mainland Chinese money that goes to Hong Kong and then comes back through as foreign investment under better conditions.

Franklin

That’s right.

Womack

I have heard estimates as high as one-third.

Franklin

Which brings up something else that probably should be thrown into the China discussion, and this did come up on our trip. We have difference in the terms of the statistics we use when we are looking at trade balances. We knew that going in, of course, their figures are always less, in part because of this Hong Kong thing, what belongs where and what went through where to be counted and so on. We did set up a little working party on that back here in ’92, and I think sent it to APEC, which had a working party about statistics. I don’t think it ever went anywhere. I think the disagreement we had then is the same disagreement we have today about statistics.

Womack

Nick Lardy did something on this issue. He is a China economist at Brookings now.

Franklin

Yes, I know.

Womack

And he broke down the two arguments and then he made sort of a compromise proposal of what should be inside, very reasonable and even got written up in the press I think. But then nothing ever happened.

Franklin

Nothing’s happened. We’re still on different sides of that. Probably always will be.

Clark

Part of the problem is you can’t set up separate systems just for one country. You’re either going to do your statistics one way or the other way. You can’t disaggregate them. The Chinese want only value added on exports. You can’t do that.

Womack

Yes, there’re two issues: value added and Hong Kong.

Franklin

And the Hong Kong in and out problem, which was always a little bit of a mumbo jumbo. We looked at that in quite a lot of detail. I think it is fair to say that in terms of investment, something like over eighty percent of the investment from the U.S. that is either contracted or in, may even be higher now, came after 1992. It’s a very high figure.

Young

Okay.

Franklin

Okay, China. Another place that we could go is Russia, and there was quite a bit of activity with Russia. If you remember what was going on at the time, Yeltsin was in place, and there was great hope that Russia would somehow make it and become more of a democracy and become a capitalist country. George Bush felt quite strongly that he wanted to help the process, and so there were a variety of things that were done. I will go through my list here. Something, however, that predated my being at the department, was the uranium dumping situation. Some businesses in Russia were dumping uranium below market prices and the companies involved here and their unions petitioned the Commerce Department, as they do under the relevant statutes, and a proceeding was started to see whether this was true or false and then to determine the outcome. That was simply in process when I walked into the Secretary’s office.

The Russians were not very happy about this, and one of the early visitors I had was the atomic minister, who’s name I am blocking right this minute, but it will come to me, and he was pretty much of a thug. He was a really tough hombre and we had a little internal discourse on that, and he looked then like a Russian apparatchik. Fast forward a little bit, he came back some months later, and threatened me actually, and now he was decked out in Gucci shoes and a Rolex watch. The agency [CIA] has had a very extensive dossier on this guy. He’s been a survivor though. Last time I looked, he was still somewhere.

Anyway, a little backdrop about uranium. Yeltsin was coming here for a state visit in June of ’92, and bringing with him a group of business people, so called, seventy or so of them. They were really folks who had been into Russia’s central economic planning. They were apparatchiks and they were now crossing over and becoming business people. So one of my missions coming from the President was to have a U.S.-Russia business summit, and get our business people together with theirs, in the hope of promoting more business activity. So during the state visit, several things occurred, and that’s what I will go through. The summit was one, and we did that, brought together, at the Marriott Hotel—I remember where it was—about two hundred of our business people with these folks. We had a grand open session with simultaneous translations. I hosted it. The two Presidents kicked it off, and oh, I need to tell you something before I—Excuse me, I’m getting out of order. I need to tell you something before I get to that. So, let me start—

My notes are right, and I didn’t follow them. Let me back up. We had, the day before that, the bilateral meetings in the Cabinet room on economic matters. This was fundamentally an economic summit as opposed to the usual security stuff that we’d been through during the cold war. So, the situation was the usual in that room. We are on one side of the table and the Russians are on the other. Yeltsin was doing a fair amount of talking. He's very, or was then, a very forceful, dynamic human being. He's a little different today I’m afraid, but he was then. He diverted, we thought, from his talking points. We thought we knew what his talking points said, and we knew he didn’t like this uranium thing. But he seem to have gotten off track a little and he brought it up and just looked across at the President and said that, I want to you to tell her to get rid of this proceeding. Just get rid of it.

So then President Bush launched into a lengthy explanation about our laws, our dumping laws and so on, and it was going really nowhere, and he was exhausting himself. I was sitting to his right, and then he said, I’m sure Secretary Franklin has something to say. Before I could say anything, Yeltsin did something that looked like this, looked menacingly across the table at me and said something rather emphatically in Russian. We were getting very quick translations, and the translation came very quickly and it was, Who are you to play God? First you tell us we should export, and then you tell us we can’t. Then I tried to explain the legal reasons and this was going absolutely nowhere. The most bemused person on the other side of the table was Gaidar, Yegor Gaidar. He, I think, probably understood both sides. Anyway he had this sort of half grin on his face. He was acting prime minister at the time, sort of looking across at me, and Yeltsin being very sober.

We never really got that solved. I was not successful, I think Jim Baker got into it a little bit, but Yeltsin was hearing none of this. That was, for me, the high point of that whole meeting. We went on to talk about some other business and economic-related things and building capitalism and so on. Well, okay, the next day was this business summit—

Young

After the uranium incident?

Franklin

After this dialogue in the bilateral, yes. We had the business summit starting first thing in the morning, and as I said, both Presidents spoke. Yeltsin in his comments to the business summit turned around at one point, and looked at me and said, She won’t let us do anything. He was replaying the scene from the day before, the audience got a great chuckle out of it, I could have, you know, wanted to disappear through the floor at that point. Very emphatic man and actually George Bush introduced him and then he spoke also. Then we divided the business people up into various groups by sector. There was aerospace, and there was machinery and so on, matching them up with our folks. It was one of those days that took off. Everybody was having such a wonderful time, even these warmed over apparatchiks who had turned into business people overnight. At the conclusion of it, we had a big reception and it was just palpable, the energy. It was really quite thrilling. So we thought, well okay, there’s really some hope.

The other thing that had happened prior to the business summit was that the economics minister and I had had our own set of bilateral meetings and had, I think this is in the notes, not quite characterized right. We renamed what had been a joint commission on U.S.-Russia something, similar to the China one. We renamed it the U.S.-Russia Business Development Committee, thinking we had to just change the name. We are changing the whole paradigm here so that was the new name. The name has stuck. It’s still there. Anyway we set up under that aegis a whole bunch of working groups on all kinds of things, from how you convert defense establishments to profit making ones to contract law, just a series of those, and we got those working groups going. We signed some other joint agreements, and then there were some business deals, also signed in our presence between the two, some new contracts and so on.

In the statistics part of Commerce, we created business—a net, internet thing, so that you could—that's still there, too—you can dial in and get all kinds of information. So all of that seemed to go very well. Pyotr Aven was my counterpart. He has subsequently become an oligarch. He’s the president of Alfa Bank. He has become very prosperous, indeed. Now let’s see, what have I—oh, the next uranium bounce, which was, I’m fuzzy about the timing, and I was trying to look through my calendar and figure out exactly when this was, but I think it was after the bilateral, when Victor Mikhailov came back now in his Gucci shoes, their atomic minister. Again, we were sitting in the Secretary’s conference room in a bilateral situation and he asked me to fire the negotiator. I need to tell you that—

Clark

Yours or his?

Franklin

Ours. It was Alan Dunn who was assistant secretary for import administration. They were not getting along well. The Russians were being very, very difficult as you can probably imagine—seemingly not understanding our laws or anything else. It was a very crisp, We want you to fire your negotiator. We don’t want to deal with him, and if you don’t, I can’t predict what’s going to happen. It was a threat, and I thought that—Preston Moore, who was in that meeting got red in the face—I thought that he was going to explode. So I just told Victor that he was going to have to deal with my negotiator and that was that. That was the end of the meeting. So we got out of there before Preston was about to throw this guy out. This was really pretty testy, and in the process of the negotiations with Sean Dunn and his people, there were threats. There were threats that came on people’s home answering machines and so on—

Womack

You mean personal threats.

Franklin

Yes.

Womack

Not, if you do this, we’ll do that.

Franklin

That's right. I don’t know if you could know where that was coming from, but it was from the Russian side clearly. They were not an easy bunch of folks to deal with. I always felt that Yeltsin had this decree mentality, you will just get rid of this, and some of these other folks were just acting out some of that same line. This particular atomic minister was really quite corrupt, which, as I said, we knew. This was fun and games with the Russians.

Let me see what I have missed. Oh, at the same time, in order to carry out what I thought the President—well it was what he wanted done, with regard to Russia. He also felt that the Congress was pretty much out of the loop. We needed some education here about what the possibilities of a new Russia would be. So I began having breakfasts in the Secretary’s office, bringing some of the business folks that we knew about who were doing business in Russia or trying to and had experience together with members of Congress. There’re some very interesting cases. There wasn’t a lot of business going on, but people were trying very hard at that point. One man who was in my office for one of those breakfasts got shot later there. Why, we don’t know exactly, but not while I was in office. That happened afterwards.

But anyway, we would have a Senator and House member or maybe two and some of the business people and we would sit around the round table in the Secretary’s office, and have breakfast and just talk about Russia. To go back to something I said earlier, at one of those breakfasts I had, one of the early ones, because actually the breakfasts started before this summitry, I had Don Riegle, then the chairman of the banking committee, a Democrat from Michigan. It was when I was trying to get Jim Jameson confirmed for the trade development job in ITA that I called Riegle. They were confirming nobody. They weren’t even holding hearings. I called him and I said, I really need this guy and could we have the hearing? He never answered me, but the hearing got set up. I have always wondered whether it was my charm, or whether it was because I had him to breakfast in the Secretary’s office earlier on Russia. I don’t know, but it got done. Let’s see what else about Russia?

Riley

Did the idea for these breakfasts—

Franklin

That was our idea. At that point, I had an acting congressional relations guy who turned out to be trouble later on. Did something that got me crosswise with Pete Domenici and he did it without telling me, and I had to go apologize. That was not so cool. No, it was his idea actually, he said, Why don’t we have breakfasts? and then one thing led to another. So that was our initiative and it was useful, I think.

Young

You must have been getting considerably stormier weather or storm signals from the capitol on the Russia relationship than you were on the China one. I mean it was only Jesse Helms that—to invite, to have your congressional relations person—I’m reading this in—suggest that there be a series of breakfasts to bring in people from the Hill.

Franklin

Well, it wasn’t because of any storm. It was because nobody knew anything about Russia, the new Russia, the new economically oriented—

Young

So it was educational, not responsive?

Franklin

No, it wasn’t—if anything, we were responding to what the President wanted done. The idea came out of one of those brainstorming sessions that I had every so often in the office, again around this round table, or it could have been one of our early morning staff meetings. That What else can we do? sort of question, and then this idea came bubbling up and we started to do it. We had a bunch of them.

Young

This is basically education.

Franklin

Yes, and, I mean it helped build relationships between us and the Hill, too. It was useful on a lot of levels, but it was educational.

Riley

Did you have the White House congressional liaison people involved in this at all?

Franklin

No, they weren’t involved in it. This was just us.

Riley

Okay.

Womack

This was like the high tide of optimism about—in your relationship.

Franklin

It was. It was and the possibility of what Russia could become, because everybody knew about the resources and Yeltsin was very grateful to George Bush for being there when—Let’s see. The coup attempt would have been in ’91, late summer—

Womack

August.

Franklin

August, and the—what the coup plotters forgot to do was to cut the international phone lines. Do you remember? They cut the internal ones, forgot the international ones and so those inside who were on the right side of this were able to contact us and a lot of folks around the world. That made a big difference. Yeltsin was very grateful. He kept bringing that up during the course of some of these meetings. The other thing I did neglect here, the morning of the business summit, we had a meeting at Blair House. It was a small meeting, at which I took eight or ten of the top business leaders who had assembled for this summit. Coincidentally, they had also anted up the money for it. We didn’t have this in the budget and we had finance this thing somehow. We had people like the Chairman of NAM, the head of the Business Round Table, the New York Stock Exchange head. We met with Yeltsin and some of his colleagues around a breakfast table which was also a rather interesting exchange of views. Bob Strauss was the ambassador then, and he was hovering about. Yeltsin was after breakfast and then after our business summit going to the Hill to speak to a joint session of Congress. I think Strauss was concerned that he was going to slip upstairs and have a little drink of something. Bob was going to make sure that that did not happen, and I think it did not.

Young

Or fix that it was out of his bottle.

Franklin

Right. So it was, as you put it, it was a very optimistic time about the possibility of the new Russia, and Yeltsin was wonderfully received on Capitol Hill. It was a tumultuous reception and then, of course he left and our working groups kept going. We were sending people back and forth to Russia and some Russians were coming here. I’m talking about government people now, and some of our business people were consulting us. I remember personally trying to help Bill Marriott get a hotel site in Moscow. I don’t think it ever worked out the way he wanted it to, but they did finally get something. So there was a lot of that kind of activity going on. It was important at the time. It’s just too bad that Russia couldn’t deliver on what we thought was the promise of Russia. The uranium dispute eventually got settled too.

Young

As I am just hearing the accounts and comparing in my mind how it went with the China opening, which was a different story, and the Russian, it seems to me there’s—though the atmosphere was very optimistic, there was a lot of contention involved here, quite straightforward conflict that doesn’t seem to have characterized many of the meetings with the Chinese, except for the lecturing.

Franklin

I’m not with you. Conflict?

Young

Well, you were just—you were talking about threats.

Franklin

Well, that was only one. That was the atomic minister. This guy was freelancing, I believe.

Young

Okay. So that was an unusual—

Franklin

Pyotr Aven was never like that. Now you have to—Pyotr Aven—

Young

Yeltsin. Accusing you of playing God.

Franklin

Well, Yeltsin was Yeltsin. But on the other hand, he was the force of democracy there, even though he was out of the old school with a decree mentality, but really quite a powerful man. The atomic minister was out of the old school, which is why I raised my eyebrow that he somehow managed to survive, I think, even now. But these young guys, Gaidar was probably not yet forty. Pyotr Aven was even younger. They were the new reformers. They were the intelligentsia behind reform, and that even continued for a while after they got sacked or out office or whenever and after [Antoly] Chubias went through the whole privatization thing and this is now some years afterwards. That was different, so in a way, in Russia there were a couple of camps, there were the old turkeys and there were—

Young

The apparatchiks.

Womack

The young Turks and the old turkeys.

Franklin

Yes, but there was this new group of reformers and that’s another reason we had a lot of hope. They were saying the right things. They seemed to have the right ideas, led by Gaidar. He was really the guiding light of the whole thing. But it just—there have been a lot of ups and downs since then.

Womack

A lot of downs.

Franklin

A lot of downs, and now we’re not entirely sure what we’ve got.

Womack

I just got an interesting idea. If you took the U.S. trade investment statistics with China and the Russian statistics and reversed them, then it would look the optimism was—the suspicions are well founded.

Franklin

Yes. But the—puny trade, I mean compared with China and they just have been very slow to do things like fix the tax code, make the place much friendlier to foreign investment. They need it but they don’t—it’s internal.

Womack

They have outflow almost equal to Chinese inflow.

Franklin

Yes, and people were hiding their money. I mean all the oligarchs had money in all kinds of other places, and corruption was rampant. You only hope that they get it together someday. But yes, as I look back on that, there is a real contrast here in terms of what has happened. We also were hopeful I believe, because they were moving toward democracy in Russia and of course this regime is not a democracy. In fact, I heard somebody, like Jean Kirkpatrick say, and it’s not that long ago, that Russia is going to outstrip China economically—it was during one of the MFN things—in five years. Anybody who knew about the internal situation would say, I don’t think so. I don’t see that happening, and it’s too bad.

Young

At the time, in the context of the time, I’d like you to weigh in on this also, was the rosier scenario that optimism really focused on Russia, that's—we’re very optimistic about that, and more realism concerning China? I mean, as you dealt with China, and you had this mission to China, and you chaired this business council and you’ve got two very different kinds of countries in many ways, dealing with them, and did you consider China a tougher nut in the atmosphere of the times than Russia? More challenging? Less challenging? Were you as optimistic?

Franklin

Not sure I thought about it in those terms at all. The Russians and the Chinese are very different.

Young

Right.

Franklin

Culturally different and so I am not sure I was ever thinking about the comparisons. I can’t really answer the question. The Chinese, I think, can be very tough at negotiating, but I have generally found that once they make a deal, they are more apt to keep it than some others. They are big relationship people too. Once you have a bond of a relationship, that becomes important. The Japanese are like that as well. The Russians, I don’t know. They seem more western to us, which I am not sure is accurate. This is going to be a dreadful thing to say, but there is a lot of sexism in that culture, the Russian culture, more blatant sexism than I have found in the Chinese culture, for example. I have always felt that one reason Victor was threatening me was sexist, besides his general surly approach to what he was doing.

Clark

In a funny way, I think the Tiananmen really let people know that Glasnost and Perestroika may be alright for the Russians, but there wasn’t going to be any political change in China. There was going to be economic progress—it was a fairly realistic approach for the Chinese. To assume that they were going to change and become great democrats—they would tell you they already are, within the party—would be foolish.

Franklin

Yes, they use the word and you wonder.

Clark

But nobody expected that to change. But the Russians, and I wasn’t directly involved with them, but you get it from the side, there was a big hope that you were going to get both economic reform and political reform.

Young

And simultaneously.

Womack

The big bang.

Clark

Yes.

Franklin

That's right.

Clark

You got a big bang, but it didn’t work quite that way.

Womack

Like a firecracker.

Clark

Yes, the economy got ripped off and handed over to the oligarchs and on the other side it’s hard to call Russia a democracy.

Franklin

Even today.

Womack

It has to work first.

Clark

Yes.

Franklin

It has to work. Maybe it’s really impossible to do those two things at the same time.

Clark

The Chinese always thought so.

Franklin

Yes, well, that's in part where they are coming from. But they want to keep their—

Clark

They thought the Russians were just about as stupid as you could get. So far, they’re right.

Franklin

So far they are right, yes.

Barnes

The difference in commercial instincts.

Franklin

Well, thank you. That’s a very good point. The Chinese, I don’t know where it comes from, born with it, through generations, but when you turn them loose, they are very entrepreneurial.

Clark

That and they have something the Russians don’t have. They have a rich diaspora. Look at Asia, not Japan, not Korea, but the rest of Asia. The people that control the economy are the Chinese. So they were taking expertise back into China, where the Russians were more or less trying to invent it and didn’t have a clue. I think that’s a big part of it too, that the leadership worried about it, but then they found out that the Chinese are Chinese and they weren’t going to get into politics. They just wanted to do business.

Franklin

They just wanted to do business and they are really good at it.

Young

Maybe the political stability, there was a different, very different situation there. Russia was a dismembering and dismembered country. China was still whole.

Clark

Well, even under the old dynasties—you know, the sun is warm, the ground is good, and the emperor is far away. As long as you paid your taxes, they left you alone. The communist regime finally got that straight. At first you had the individual plots—

Young

Yes.

Clark

Then you had the free farm goods markets. I think they took it little steps at a time, but you can literally watch the face of Beijing change in terms of people smiling and being more relaxed as these things took place.

Womack

The national economy never was as organized as the Russians had it even—

Clark

Which is a good thing.

Franklin

Which is a good thing.

Clark

Have you ever looked at one of these production plans?

Womack

Yes.

Clark

Didn’t know what they were making. Didn’t know where they were selling it. Didn’t care as long as the check was in the mail.

Franklin

Yes, it is very bureaucratized as a society, more so, I think, than in China.

Young

More centralized.

Franklin

All those years of not the right incentives. The younger people had entrepreneurial instincts in Russia, the kids, and it turns out that some of the oligarchs did too. But it had to be unleashed. I think the Chinese as a people just have a much greater—

Womack

Wang Gungwu, who is the leader for the Institute for Asian Studies in Singapore and one of my favorite people on Chinese culture in general, says that the Chinese have a small business mentality and that is their strength and their curse. They can’t beyond the family business mentality.

Clark

Look at Taiwan.

Womack

Yes, or the overseas Chinese in Southeast Asia. They get these mega families, but you don’t get corporations. It reminds me of sort of a business community rather than a civil society type of situation.

Franklin

Interesting. That’s an interesting point.

Young

So what about Japan?

Clark

Same thing really. It’s just not the family. It was before the war, and I was struck by this fact afterward. The United States bought the Mitsui family compound in downtown Tokyo in 1952 for not much money. It’s eleven and a half acres in downtown Tokyo, so it’s worth a little bit more now. I was at a dinner with one of the senior Mitsui & Company vice presidents, and I said, I’m living on the old Mitsui compound. I would love to have panoramic pictures so I could see what it looked like when the Mitsuis lived there. His response was, I’ll ask the Baron. Well, Baron Mitsui hasn’t been a Baron for a long time, but he is the head of the Mitsui family. The Vice President asked him and I got two albums, one for the ambassador and one for me. Pictures of the old Mitsui compound, unfortunately no panoramic shot.

Franklin

But.

Clark

But it started out as family but then it became a corporation—you have to go back to the old time before Meiji where you had the daimyo and all its retainers none of them owned any land. All land belonged to the daimyo and the farmers farmed it. The Samurai after 1603 were really a bureaucratic class and they were loyal to their lord. If you weren’t, you were a rounin, a masterless Samurai, a terrible thing to be. It’s still the same way. Part of Japan’s problem in reform is company loyalty. It’s almost—It becomes a family. You more or less get adopted into the company and it takes care of you for life, and you work very hard for it. Now that system is breaking down. I think the family structure is starting to break down and Chinese companies can’t sustain it either. It’s stifling after a while. It gets too big and that’s what the Japanese are going through now. There are an awful lot of similarities there. It’s just not bloodline family.

Young

There are some similarities, but some contrasts. Russia, the new Russia —

Franklin

Well, Russia is in big—

Young

The new China and the new Japan, and China looks pretty good, doesn’t it?

Womack

Familia in Russian economic terms means that the group that sort of protects itself against the state—

Clark

Like cosa nostra.

Womack

Yes, Right. Exactly.

Franklin

There is one other piece to the Russia story, an aside piece. The Soviet Union was breaking up, had broken up by then and we had all these new states. The idea came out of a G7 meeting, I think, but at least it was the U.S., Germany and Japan, the three decided and this maybe started before I got there, that we ought to help the new states besides Russia. So my counterpart in Germany had a conference. It was one of the first things I went to actually, outside the country early—I had been in office maybe a month—in Muenster in Germany. It was May of ’92. We had, I think, the G7 or maybe it was more European, but there were some Japanese folk there I think, and representatives of the new states, as many of them that we could get there. The idea was to try help them make the transition from the state-planned economy to more capitalism and more democracy. That process is still carried on, I’m told. I checked on it last week.

The first one was in Muenster and I think the second one was in Japan and whether there was one here I don’t know, but at least there was a bigger effort other than just focused on Russia. That's my point here, to try to help those other states. I do remember talking with one of these reformers, name I can’t tell you right now, who was in a key Russian post. The Russians were there, and he was telling me that we have got to get rid of this military equipment, and the only way to get rid of it is to export it. They needed the hard currency. The U.S. was in the position that we didn’t want export of those things and I just remember our not having a very sound meeting of the minds. There was no other way for them to get rid of that stuff. One of the great dilemmas of the time. In fact, the whole defense conversion dilemma—how to change factories. They didn’t have a clue. We at Commerce sent people to try to help with that also.

Riley

While you are dealing with these problems, what kinds of consultations are you engaged in with the other departments in Washington, Defense, State, maybe Energy?

Franklin

Well, on something like Muenster for an example, other departments knew about it, State would have known what was going on. I assume DOD, but we weren’t really engaged with other departments. This was a Commerce thing. I don’t remember that USTR was into that either particularly. It was really us. I should back up to make a related point. We were talking this morning about the nature of that department, which is a conglomerate. There is a distinction to be made. There were certain things that go on that the Secretary has, through statute, discretionary power to make a decision and that’s that. Fish is one of them. We haven’t gotten to fish here yet, but that is an area where there is no interagency discussion about fish, the coastal fishery management. But when you get to these other things such as we were talking this morning, the China situation, the supercomputer or whatever, this is interagency material. The trade stuff is as well, interagency, but you need to make the distinctions between where Commerce has sole authority vs. those issues belonging in the interagency process.

Young

Practically all the overseas and foreign stuff involves at least other agencies, does it not? You have done—earlier in your talk today, you had talked about when you were at the UN and what you saw, all these new nations appearing. It’s sort of a new world coming or something, and that began to come home to you in terms of your own agenda and your own policies in Commerce—

Franklin

It helped to form my thinking about globalization.

Young

Helped your thinking—to globalization.

Franklin

How we needed to get with the program. Free opportunity.

Young

Now you have just brought up other new countries. China’s not in that sense one of the new countries. The Ukraine, for example.

Franklin

Uzbekistan, Kazakhstan.

Young

How did that figure on your agenda?

Franklin

That was part of it too. When you start to look at numbers of countries in the world, and the new ones that had just been created. After World War II, we had maybe fifty countries in the world. Okay, by the time we got to my being in office, and at the time I was at the UN, I think there were one hundred and eighty. We were nearing two hundred, and some of them were these new countries that had been the Soviet Union, or the Eastern European countries that were now back being countries again. So all of a sudden you look around and you see, if you are sitting in a Commerce Secretary’s chair, you see new markets. That's what you see, and then you want to help your businesses get to those markets, export, invest, do whatever, for the good of not only those countries but for us back here for two things—economic growth, because I do believe trade is one of the foundations of that, and job creation. Job creation, at the time this was going on, was a real issue because people were frightened about their jobs. We were in a recession.

Young

Trade means loss of jobs to a lot of people, politically.

Franklin

Some, I don’t know that it was that profound then, but it was the recession. There was just a lot of anxiety, so when you talk about creating jobs and here’s a way. We can export more. We can create jobs. I think it’s true. Even though there is dislocation with trade, fundamentally it’s true.

Young

Getting back to what the world looks like, markets, from the chair of the Commerce Secretary, and I’m taking a mental trip around the world. I’m looking at the market prospects trying to see it through your eyes. China is obviously is way up there.

Franklin

Well, China obviously—

Young

Is very important.

Franklin

Russia was in those days.

Young

Russia in terms of demographics and things. Japan is important for different reasons, perhaps.

Clark

Japan was a potential market because it was rich, not because of a lot of people. Still, we even have India moving ahead.

Franklin

India, that's right, and then all these other, you know—

Young

Ukraine, Kazakhstan, Armenia.

Franklin

I had the President, Mr. President of Ukraine, in to see me. We had a Blair House meeting with business people when he came. Albania.

Young

I think that [Ukraine] was the first to be recognized, wasn’t it?

Franklin

Yes. The President of Albania came.

Clark

It’s the first time they’ve [Ukraine] been independent since the 1300s.

Franklin

Is that right, Ukraine?

Clark

They went back to prehistory.

Franklin

They were all coming. These new countries were making their pilgrimage to Washington to get connected not only with the President, but with the business-y parts of it. They were all coming to see me.

Young

Less could be done. I mean, that was in an earlier stage of developing markets, wasn’t it? Or their markets weren’t as important. Trying to get a sense of the priorities from your point of view. China was way up there. So was Russia.

Franklin

China less so at the moment, until we made this trip, just because of the situation that came out of Tiananmen in ’89. But these other markets—

Young

Yes, but you had all these—

Franklin

Yes, there they all were, and these folks were coming. I mean the President of Albania was the one that really shocked me. He was a dentist and also a business guy. How do we get investment? They were looking for investment from the U.S., and of course we were looking to do business.

Clark

And there were real political overtones there.

Franklin

There were political, exactly, we were trying to reinforce their new regimes, their new democracies, and so on.

Riley

That—which gets back to my question, through the lens, lenses of your office this looks like markets, but you’re exactly, you’ve got other offices involved.

Franklin

We’re connected.

Riley

That was my question about the extent to which the various offices were in consultation with one another about how far they can go or whether there are restrictions or limits or even intelligence gathering as to whether the people that they are meeting with are the right people or the wrong people.

Franklin

Well, I think that got done interagency-wise down the line. I didn’t get directly into that but it was done. Because it—

Clark

It would have been coordinated, but the meeting in Muenster was Germany, Japan and the U.S., and we knew about those.

Franklin

I don’t think there were State Department folks. There may be embassy people, but not—

Clark

There would have been embassy people and they do the reporting on it.

Franklin

Yes, but you knew about it, sure, because it did have diplomatic importance, no question about it. But I think he got into a scandal and got out of government much later, Moelleman, the host in Germany.

Young

Then there’s Canada, NAFTA, that whole horizon too, which intersects with foreign things—foreign policy.

Franklin

Well, it all does. It all does if it’s external.

Young

Right.

Franklin

Typically, unless something was askew, the coordinating took place down the line on the assistant secretary level, deputy—

Clark

Yes, assistant secretary level.

Franklin

Yes, that’s crucial. As an aside, one of the difficulties the current administration is having and I think they’re doing splendidly, is that a lot of those people are not there, so it’s hard to interagency anything if you haven’t got the people in place. But that's where it got done, so by the time I would get into it, that had been done unless there was something that was left over.

Clark

Or unless there was something that you needed to make a decision on.

Franklin

Yes. That was routine. I guess I wasn’t being clear about that. There was some tension in the system, depending, as we talked about before, depending on the issue, like the sale of the supercomputers. Defense didn’t like that. I should back track here again. I had written a paper about this in the early ’80s when I was first on the ACTPN [Advisory Committee for Trade Policy and Negotiations], which is plugged into USTR. The thesis was that since World War II in the conduct of international relations, usually State and Defense had the upper hand, because we had a Cold War going on. They used Commerce, as we said before, as a tool. But the concern even then among some of us was that someday this is going to be over and then the economic side ought to have parity with State, with Defense and diplomacy, rather than to be subordinate. The typical foreign policy—well I should ask you about academia—mentality is the diplomacy and Defense are paramount and economic issues are a subset. My argument has been that that's wrong today. That’s Cold War thinking and it’s wrong. There ought to be parity. Too much of global politics is being driven by economic matters. I know that not everybody agrees with me.

Clark

Well, part of the problem is the structure of Commerce. The State Department is doing foreign policy and the Defense Department is doing defense, by the nature of things, looking overseas at enemies. Commerce is basically working inside the United States. I mean if you look at the number of people involved inside the United States, the external side we have split up. Commerce has part of it. USTR has another part of it. You worked very well with business, but a lot of business people, you know, would come in, they couldn’t find their way around Commerce. There are a lot of halls in that building. (laughs).

Franklin

It all looks alike, too. I have to tell you. It’s a big rectangle with all these—

Clark

I used to suggest that what we needed was a USTRO, you know like JETRO, Japanese External Trade Organization. We needed something like that. They’ve got twenty-seven offices in Japan. You want to do business overseas? There’s an office you go to. They help you do it. It was very hard. I mean Commerce has regional offices, but they were—only a small part of it is for export. Most of it domestic, and so it’s always been a mixed blend with Commerce. It’s hard to do—

Franklin

Well, I pushed this because of the time we were in because that's what the President wanted done. I think though since then, foreign commercial service attachments in the embassies have grown. The one in China is now very big. Japan may be still the largest one, to facilitate business back and forth, but I think, to your point, though, Commerce is a conglomerate and that's what is the confusion sometimes.

Clark

That's a strength, and a weakness.

Franklin

Yes, what does it do? NOAA has, as we said before, is sixty percent of the budget. I am told by Fritz Hollings that the reason that happened in the ’70s was because that’s the way Nixon wanted it. NOAA was created as an agency along with some of the other ones back then, EPA and so on, and it was a question of where to put NOAA, if it were not going to be independent. One school of thought was that it should go to the Interior Department because some of what it does matches Interior, this fish thing for one. But it was Nixon’s call, and he didn’t care for Wally Hickel, who was his Interior Secretary, and he liked Maurice Stans who was his Commerce Secretary and trusted him. So it went to Commerce.

Clark

Besides, you had the aquarium in the basement.

Franklin

Besides the aquarium

Womack

I’ve been to that aquarium.

Clark

I’m sorry.

Franklin

Well, that's right. It all fit together.

Young

All kinds of fish were seen.

Franklin

Some strange things.

Womack

Piranhas down there.

Clark

When you want a friendly face in Washington, you went down to the Commerce Department and looked at the piranhas.

Franklin

Oh dear. Okay, where were we?

Clark

But we digress.

Young

The weather service was in Commerce?

Franklin

The weather service is part of NOAA. That's correct, along with a fleet of ships, the satellites, the fish—

Young

The oceans.

Franklin

The aircraft, yes. I mean, you can almost have a little Army and Navy there at NOAA if you really worked at it.

Young

Pulled together a lot of separate things.

Franklin

I think it is confusion. It’s a confusion in the minds of a lot of people in this country because they don’t know what it—

Womack

You mentioned academics. In academics you have International Political Economy, which studies various types of trade and, you know, relations of trade, but it’s not very concentrated on U.S. policy. It’s just like the way the economic currents move. It’s not so policy relevant, though sometimes it can get that way on specific policies. Like Leonard Schoppa here who has done a lot on U.S.-Japan relationships.

Franklin

Some of this is shifting. I was pleased for example that Colin Powell took as strong a position as he did against unilateral sanctions in his hearings. Because sanctions were always used as a tool. That's not the only one. Sometimes trade laws are used, but sanctions would be used when we didn’t want to send the military somewhere but where we were mad and wanted to make a point.

Womack

A cheap shot.

Riley

Were there instances of sanctions being imposed on your watch?

Franklin

No, well, I can’t think of any right offhand.

Womack

Just ongoing.

Riley

Ongoing ones.

Franklin

But I’m just saying that's the reflex action and it’s true of our Congress too. But now with a more globalized world and the economic side being more important to everybody, maybe that we’d also—

Young

Well, there’s also something else that's happening in the light of, speaking of academia—that's beginning to happen, and that is the whole distinction between what’s foreign and what’s domestic. That’s a false—

Clark

Try and find something that's all domestic.

Franklin

Hard to do anymore isn’t?

Clark

Can’t do it.

Young

Yes, and there's a lot of foreign that's also domestic, NAFTA. In particular when you move into the economic areas this the case. But in a sense, the artificial division between what is foreign policy and what is domestic policy, is, in terms of the way these things are studied, is beginning to break down.

Franklin

That's a very good thing.

Womack

That’s slowly the reality.

Franklin

But that's a good thing.

Young

Back in reality, you know, you’ve still got these departmentalizations, so I want to get back to your observation that it’s a strength and a weakness to have not just a conglomerate department, but a department that does inside work, and has policies that impact heavily the U.S. internal work. Is that a drag or is that the wave of the future, to have foreign economic—

Clark

I’ll give you an outside view. You get conflicted interests. If you are talking about steel, you are looking at world trade in steel, but you are basically responsible to your domestic steel industry. Those are the guys you work with more closely. So you don’t want to do something that's going to hurt them. That’s one of the things—trying to get Japan to change policy—is MITI [Ministry of Trade and Industry] works with the domestic guys and so they are really reluctant to do something that is going to hurt their constituency. That's why outside foreign pressure is important. We don’t get much of that. Not that we pay attention to it when we do. But, you know, with the State Department, nobody likes us here, so it’s easy to go overseas. One of the weaknesses of State Department is, it doesn’t have domestic constituency. One of the strengths of the State Department is, it doesn’t have a domestic constituency, and the reverse is true of Commerce.

Franklin

Yes, Commerce has a constituency, and I was very conscious of that constituency.

Young

And that's a drag?

Franklin

No, I don’t think it’s a drag. Well, he's saying it works both ways, but I was conscious of what I was supposed to be looking out for, and for whom I was advocating when I was in the policy process. It was for the interests of American business, crystal clear to me. This is where sometimes we would get at odds, interagency-wise with USTR, who were supposed to be honest brokers in terms of pulling all interests together. We would often scratch our heads and wonder if they really were. And that's not just in our time in office. I think this is the way that works, and there are times when we felt that they would forget our constituency. Probably the Agriculture people felt the same way. So there was a lot of tugging and pulling in—.

Womack

So your feeling is that USTR in general is more international and less domestically, more sort of externally—

Franklin

No, they just want to deal. They just want to get a deal. To me the downside of that mentality is that they will go off and negotiate something in the closet, nobody knowing exactly what was going on, and then they will come back and say, Well, here’s the deal. We may not have liked some part of it or we maybe thought we gave them a different set of inputs initially. They come back and say, Well here it is. It’s the best we could get. You’ve got to take it.

Womack

Yes, and can’t second-guess them on that?

Franklin

Well, it’s hard. It’s hard to do it.

Young

You can guess.

Clark

But that is one of the reasons we don’t have fast tracking right now, because it was getting too fast, and the Congress said, Whoa, wait a minute. But you can’t do trade negotiation without fast tracking, I mean this is one of the—

Young

Well the special trade representative was historically established—I think I’m right about this, as the President’s surrogate when he was given that delegation by Congress.

Clark

It was a buffer between the President and Congress.

Young

Well, it can be that too, but yes, as so many of these people are—

Franklin

In the executive office of the President.

Young

Yes, but it didn’t start out as a departmental concept or a mission concept.

Franklin

It’s not. It’s not a department. That’s one of the other little rubs in it.

Clark

By law, though, it’s Cabinet level, the head of it. That happened when Bill Eberle was in it. I was around for a long time. The Congress mandated that this be a Cabinet-level office.

Young

Correct.

Clark

But the President didn’t want it to be. That’s what I mean. It wasn’t supposed to get up to the Cabinet, the USTR was supposed to handle it before it got to the Cabinet.

Franklin

And then the other thing we talked about before, the other rub here is that because it’s a small staff in the Executive Office of the President. It borrows folks from all kinds of other places to get anything done and then never gives any credit back to those who have helped. A case in point was NAFTA, and Commerce, where fifty Commerce people were very important to that whole negotiation, and you would never have known that afterwards.

Clark

Yes, because you’ve still got the pressure and there was a big discussion as to whether [Robert] Zoellick would be in the Cabinet or not. So there are still those who would like to put it back down a notch where it can take a lot of flak from Congress. On the other hand, Congress sees USTR as sort of a spokesman for the Congress and it wants its spokesman right in the Cabinet.

Franklin

Well, the ACTPN anyway, has to report to Congress. I think it is every two years, so Congress has a hook in there. The other thing that's a confounding, confusing thing with regard to USTR and ITA and Commerce is that their jurisdictional oversight on the Hill comes from different committees, so you have a fragmentation before you even start. It is Ways and Means that has oversight on USTR in the House and the Finance Committee on the Senate side. For the Commerce Department—it’s Commerce committees in both houses. That means to me that we will never get this together the way I would like to see it. I would like to see a department of international commerce and trade or something like that, and pull together all of those pieces in our government that have to do with commerce and trade. And right now it’s fragmented. There are maybe twenty agencies that have some role in it. Put it together in some way that makes a little more sense. It will never happen because of the Hill. They will not allow USTR to be put with anything else.

Young

Wouldn’t the State Department be quite jealous of designating an international mission to another agency?

Clark

We always are, every time it happens, sure.

Franklin

Probably. That’s another reason it won’t happen.

Young

But has it been departmentalized.

Clark

Yes, but when I was—years ago I was an officer in charge of special trade activities, which was dirty tricks kind of, to be exact. I was a player in it, but I wasn’t in control of it. We did a lot of the research on it, but when we went to meetings, I was always outranked either by USTR or Commerce.

Franklin

Well—and this was mentioned in the write up trade promotion coordinating committee, TPCC—that was formed to try to pull together all the different departments and agencies which had something to do with exporting and trade. We did have a few meetings. I am not sure what’s going on today, whether that still exists or not. But there was a need for coordination because every so often we would find ourselves trampling over each other. It was better if we at least knew what the boundaries were and where we were all headed. So we pushed that. Commerce was the lead, which is I think what you’re saying too. Commerce tended to have the lead in these things. ExIm [Export Import] bank was always a big player, but there were lots of other folks at the table. It’s a dilemma we will not solve.

Womack

Were there any countries that were especially clever in finding the nooks and crannies and contradictions.

Franklin

Oh yes.

Womack

Who were your favorites, if you happen to have a little list?

Franklin

Well, the Japanese were quite skillful at it.

Womack

Until the late ’80s.

Franklin

Oh no, after that.

Clark

I think the best were Taiwanese.

Womack

Yes.

Franklin

Taiwan was very good.

Clark

They worked the Hill like a Stradivarius. I mean they played. They came up right.

Franklin

And spent a lot of money.

Womack

Yes, still do.

Franklin

What I was thinking, with respect to Japan, their diplomats were very good at on the one hand, if we were leaning on them economically too hard, they would go around the back to the National Security Advisor or to State and say, Oh, goodness, get Commerce to back off for security reasons, or whatever. In other words, they would try to drive a wedge.

Womack

Yes, that was exactly what I was aiming for.

Franklin

Oh, they were good at that. I think maybe still are. The Chinese—

Clark

I was never that convinced that it worked that well. I mean, I never had any Japanese come to me and say, You know that the Commerce Department was leaning on us and we’ve got these security interests. There were other ways of doing it. Say you’ve got a dust up over chips or something. In fact for all of their practice they’re still fairly inept.

Franklin

Well, I didn’t say they were perfect.

Clark

No, I mean they come to the right conclusions and then don’t believe it themselves quite often, and so they do something else, which is wrong. But they have very good experts on the U.S..

Franklin

Oh, they do.

Clark

But then right at the last minute, they sort of, we don’t understand it, and then they tend to back off.

Womack

And U.S. gaiatsu in Japan, the [indecipherable] does work sometimes.

Clark

It works sometimes, but sometimes it works only because they want it to work. If they don’t want the gaiatsu to work, you might as well shut up, and if they wanted it—I mean a lot of the things are in their own interests. But they can’t do it domestically. We’re talking about having your own domestic constituency, you don’t want to do anything to hurt them, but if you can say the devil made me do it, the devil being the United States in this case, you’re home free. Do you mind if I do a quick anecdote. I know this is not the thing. We were doing textiles with the Japanese and we had a guy from—our head negotiator was sort of a loose cannon but, he kept coming to Japan, and I said, Who’s keeping an eye on him, and nobody was. I said, Yes we are. I’ll do it, and so I followed him around, and he was meeting with his counterpart in MITI. He never went to MITI. The MITI guy never came to the embassy. They met in hotel rooms, coffee shops and what have you. They decided what they wanted to do and where they were going to come out, and they said, Ok, and so this guy said, Well, let’s have the meeting in Washington? The MITI guy said, I can’t do that. If I go to Washington and make this deal, it’s going to look like I capitulated in the capital of the opposition. He then says, I can’t do it in Tokyo because we’ve got—I’ll have all the industry people all over me. Finally he says, We have to go to Hawaii. Our guy said, I can’t go to Hawaii. Communications aren’t good. It’s terrible. They ended up agreeing to go to Hawaii. Then our guy said, It would take about three days, right? He said, No, it’s going to take a week.

Womack

So this is what the secret negotiations were.

Clark

No, no, but listen to this. It’s not that he wanted to play on the sand. He said, It’s got to be a week, he says, because we’ll do two days of negotiations and then I’m going to have to break off and go back to Tokyo for instructions. Then I’ll come back and we’ll conclude it on the last day. This was total kabuki. I mean they had already cut the deal, but for his reasons, he needed to do it in this manner and that's the way it ran. They came out with the agreement that they had in October.

Franklin

Interesting. Who was on the other side? Was that Commerce or was it USTR?

Clark

I can’t remember who was on the other side, some political appointee on our side.

Franklin

I don’t know who that is.

Clark

It goes way back. He was friends with Strom Thurmond.

Franklin

That’s way back.

Young

Textiles.

Clark

Textiles, you betcha.

Franklin

Oh yes.

Young

Gotcha.

Clark

I can’t remember who it was. It was a good guy from MITI, but I can’t remember who was the counselor for textiles. I’ll think of it. He was long out of business by the time we got there.

Womack

Now basically this is a happy story. This is doing it right in a sense.

Clark

Yes, and this is how you do it with the Japanese. Anyone that thinks that you are going to do it at the table is nuts. You do it out in the corridors, and then you come to the table and have the fight and then you come out where you came out in the corridors.

Franklin

It’s theater. We should talk a little about Japan.

Clark

Sorry.

Franklin

No, that's a good segue into—when I got there, there was a prevailing view in the Commerce Department, mostly I guess because of the undersecretary for trade. He was a managed trade guy, wasn’t he? Mike Farren, which put him crosswise with some of the folks at USTR, and actually, I’m a free trader too, so we had some strange conversations. He then went off to the campaign, which was probably the right—

Young

Decision.

Franklin

Yes, but I think it would be fair to say that in going back to the discussion about the campaign and why, you know, why was I worrying about the department rather than campaigning every minute. I would not have been on his Most Favorite Nation list, I think would be fair, and I think he even told people I pushed him out of Commerce, which wasn’t entirely true. The campaign was after him when I got there and I really didn’t want him just to disappear right then.

Womack

But you threw the going away party for him.

Franklin

Well, it became apparent that he and I were in a little different place on some of this, which I had not seen. It’s interesting, because I had interacted there and with him earlier, but I had not seen it. The other thing that happened, which is a little-known story, is that he went with us on the OECD [Organization for Economic Cooperation and Development] delegation. I led an OECD delegation to Paris, one of those spring ministerial meetings and the U.S. ambassador had a dinner at which Mike didn’t show up. He had brought a girlfriend with him to Paris, unbeknownst to me, and he didn’t show up for dinner. He was otherwise occupied. That did not sit real well, but he was already on his way off to the campaign.

Riley

Was he one of Mosbacher’s people, or—

Franklin

Yes. Well, I guess. Actually he went back farther, though. He’d been there with Baldridge too. Wally knew him from that time. These strange little nuances. So—

Young

You became the task force person and headed some task force, did you appoint him to anything?

Franklin

Well, I read that in here. I didn’t remember having done it.

Riley

Do you stand by that one Rob? It may be just because of where he was sitting. He was the undersecretary of ITA.

Young

Right.

Franklin

Really a talented guy. I don’t—there was just some philosophic difference here.

Young

I just wondered if the task force was a farewell gift or something.

Franklin

No, no, no, no. As I said, I don’t remember it.

Martin

Someone’s writing about it anyway.

Young

A lot of these are from the press, and we can’t vouch for their accuracy.

Franklin

Yes, we agree.

Womack

So the managed trade thing would be especially important for Japan policy anyway, and also Europe.

Franklin

Well, but we were not into managed trade. Bush is a free trader too. I’m not sure how that evolved that way, but it’s—

Clark

We’ve always been conflicted on that with the Japanese. We tell we want to be free traders, but then we go to them and say we want to cut a deal on how much they are going to send to us. You can’t have it both ways, either they’re going to manage the trade or they’re not. We didn’t want to put in sanctions, so we’ve always wanted a voluntary agreement.

Franklin

We had one of those, the automobile thing was still in effect when I got there, VER, [Voluntary Export Restraint] and that was again theater. We made an agreement and the ambassador’s duty was to come and tell me what it was, how many vehicles we are going to send into your country this year, and my job was to say thank you very much. We appreciate what you are doing and—

Barnes

Run?

Franklin

Yes, see ya. That was—

Clark

Actually what came out of that was more Japanese investment in the United States and automotive—

Franklin

Actually it did, in the end.

Barnes

That was the result.

Clark

Toyota has a higher local content now in the United States than GM.

Franklin

The Japanese, well, they did, creating joint ventures with the likes of Barnes Group. You know, there were a lot of things that flowed from that—

Barnes

It drove all kinds of investments and a lot of them in Kentucky.

Franklin

Kentucky worked hard on that I think. Let me think what else.

Womack

Could I ask her a couple of questions?

Franklin

Go ahead.

Womack

On the Mike Farren thing, your policy difference with, was—you said it was on managed trade.

Franklin

Yes, but it never really raised itself because he went off to the campaign, but I am saying that the difference existed before I got there. USTR was in a different philosophic place. In fact the trade rep spoke to me on more than one occasion about that guy.

Womack

Uh-huh. That he's a problem.

Franklin

Not pleased, yes.

Womack

She wanted her negotiator changed.

Franklin

Well, there was a lot of gaming going on underground, and when he left some of it stopped. But the person who was doing it on the USTR side didn’t stop, so we still had games going on. This is not to criticize anybody, I think this goes on all the time. It’s just part of—

Clark

Part of the turf battle.

Franklin

It goes on—part of what?

Clark

Turf battle.

Franklin

Yes. It just goes on underground and back and forth and to go back, one of my reasons for wanting to put some of these activities together was to get rid of this fragmentation which results in turf battles. But as I said, I think that's a pipe dream that's never going to happen. We had in the fall of ’92 (October), an export—what did we call it? I don’t think you have it in here, we had an export symposium, the U.S.-Japan Business Council played a role in that. We had small business included in it and the whole purpose was—and actually we had some Japanese there with us too—was to try to help American businesses know better how to penetrate the Japanese market. This is presuming that we could get into certain aspects of it, but there were always rules of the game. That was a pretty successful meeting.

Clark

One of the things that came out of that for small business was getting the Japan Development Bank to change its policy so that it was really trying to facilitate inward flow, inward investment, from U.S. small and medium-sized companies, as opposed to helping the export side of the house. That worked for a while until the recession and now they’re sort of flailing around.

Franklin

Interesting.

Clark

But that happened at that time too.

Franklin

The trade deficit was an issue and we were trying to work for more opening in that market. USTR was in that attack and so was Commerce, with not as much success in the market opening as we would have liked. But you know, you have to keep at it. Let me just see what else I have on my list here. Well, just an anecdote, which, Bill, you may have heard about oatmeal. I think I’ve told you about it.

Young

Oatmeal diplomacy?

Clark

Better than a baseball bat.

Franklin

It’s one of my favorite ones, because—

Young

Tell it.

Franklin

This is about Kozo Watanabe, who was then the MITI minister and my counterpart and is today the deputy speaker of the Diet. Generally I like to see him when I am in Japan. At a bilateral breakfast meeting in the secretary’s office, they, the Japanese had ordered Egg McMuffin. Everybody had ordered Egg McMuffin on their side. We didn’t know whether it was because they really liked Egg McMuffin or because they thought that's what Americans ate. Anyway, I ordered my usual bowl of oatmeal, and Watanabe admired my oatmeal. This was the first time we had ever met, and he said it reminded him of when the GI’s came and how kind they were after the war. I thought this was pretty diplomatic, and then he ordered a bowl of oatmeal. He said that there was a Japanese saying that people who ate the same food would begin to think alike and would be friends forever. Well, we had some difficulty in that meeting, semiconductors were one of the things I remember as we were going down our talking points. That one everybody got very uptight about, because the U.S. was not happy about Japan’s not keeping to the agreement. Actually that agreement did produce some progress, and that agreement went back to the eighties, but—Am I remembering right? I think the Reagan—but we were having some difficulties at the time, and there were a few other things. So every time one of—

Clark

It eventually fell apart.

Franklin

But we would say well, you know, have more oatmeal, and he, in fact, ordered a second bowl of oatmeal. So that became the tension breaker, Well, keep eating. Eat more oatmeal. So when he left to return to Japan, I sent him a Commerce ice bucket with a bag of oatmeal and a Japanese flag and an American flag and a note that said, We may need this in the future. Keep eating when you go home. So every time I have seen him since then, up until the present day, the first thing he talks about is oatmeal. So we had something that kept things from getting too cantankerous, and it was useful from that perspective. It’s a little silly perhaps, but it was useful.

Clark

No, it’s very important in Japanese negotiation. Something that is a little silly, quite frankly, because then you are both relaxing, then you are talking straight.

Franklin

Yes. And he was relatively easier to talk to than some of the others that I have dealt with.

Clark

You know, his son is in Washington.

Franklin

Yes, I know at SAIS [School of Advanced International Studies], isn’t he?

Clark

No, CSIS [Center for Strategic and International Studies].

Franklin

Not at SAIS, CSIS.

Clark

I put him there.

Franklin

That's right. You were there. He (Watanabe) told me at one point, this was a couple of years ago, he never thought he was going to have a grandchild born in the U.S. I think he was about to have a grandchild born in the U.S.. That confounded him slightly.

Clark

He also has to figure out how to get his son back to get him primed to take his seat when he decides to return. His son doesn’t really want to do that.

Franklin

He wants to stay here. Interesting. Well, he's okay. I like him, I like Watanabe and he's relatively easy to work with. So anyway—Anything more about Japan? Do you remember anything from that era that—

Clark

No, we were—There wasn’t that much going on in Japan at the time, I mean, to be concerned about. The size of the trade imbalance, but it was always with us and it was then too.

Franklin

It was then, oh yes. That was—

Womack

I have a question about that. You know, the trade imbalance—that’s the way the issues seemed to be talked about, was the trade imbalance, and then the trade imbalance got worse with China, you know, the overall U.S. trade imbalance got worse in the 90s. Was it the trade imbalance with Japan or the fact that Japanese—imports from Japan were threatening specific American industries, because most of the Chinese imports don’t threaten industries to the extent that they have a domestic impact, it’s mutual interest impact of the importers. With Japan it seems like there is much more of a head-to-head conflict on the trade content.

Clark

It would be nice to say it’s one or the other, and you can’t do that. It’s handy, the Japanese were threatening, but the core industry in the United States is automobiles. All the other stuff is nice, but the core industry—and that's where the Japanese were hitting us. Stuffed animals, you know, we’re not making them anyway. We get them from China. Okay, we get them from Korea. That’s okay, even Taiwan. I don’t care. We’re not making them so that's not much of a threat. But the argument is, Let’s look at the size of the trade imbalance. OK, but it doesn’t come up with China. It doesn’t come up because, as you said, we’re not being threatened. The Congress is what goes after Japan. Why? Because the people they depend on for votes and other support are after them. That's not true with China.

Womack

You’re either rich or organized or both.

Clark

Yes, and if you don’t have the internal pressure on it, it’s not going to be an issue. So far the Chinese don’t have that, and there is still a great deal of interest in investing in China, even though a lot of people aren’t making money there. Now the Japanese market is opening up and you’re getting a lot of investment there, and so that will be part of a buffer.

Womack

With high-cost labor in Japan, there will always be a greater tendency for a direct competition.

Clark

Oh yes, but there is also a greater pressure for the Japanese to go off shore for a new venture.

Franklin

Or someday to even import workers.

Clark

They’ve just changed, the new world—They’ve just changed immigration laws to allow 5,000 more Indians in because they need software guys.

Franklin

Yes, they need software—I think they are going to be forced to, over a period of time, do more of this.

Clark

Well you know, they already do—they have already made room for what they call the three Ks in Japanese, which in English is dirty, dangerous and degrading. That's three Ds for us, but it’s all Ks in Japanese. They’re floaters, but you bring single people in, you bring workers in without their families, after a set time they go away. You don’t allow a lot of families. As soon as you do that, then you have a resident alien population. To the Japanese anyone who’s not Japanese is strange.

Franklin

Is strange, and we know. We know that. I guess that's all I have about Japan. We could switch to the NAFTA situation, Canada.

Womack

Should we take a break first?

Franklin

Why don’t we take a break now and then start fresh with NAFTA.

Clark

Yes. I’m good.

Franklin

There was a trade agreement, free trade agreement with Canada. I believe that was 1988. Quite a successful agreement in terms of trade, really expanding trade between the two countries after that. So the idea for NAFTA came from—and it’s not clear whether [Carlos] Salinas came and sold it. I think he did, but it was easily bought on our side. President Bush had a feeling for the hemisphere and for Mexico. Salinas wanted this very badly. I think they (the Mexicans) probably would have agreed to almost anything, but this turned out to be, I think, quite an excellent agreement, and perhaps a model for some of the things that either came later or should have come later. The process was already underway when I got there. It was one of the things the President told me specifically he was interested in having a conclusion reached on, and of course a conclusion was reached, I would put that in June or so of ’92. As I have mentioned now a couple of times, there were fifty Commerce people who were participants in that and they headed the teams—the working parties that dealt with automobiles, which was a thorny issue, particularly with Mexicans and with our people; textiles, always a thorny issue; financial services. Also, the dispute settlement working group which was also a very thorny one as it turned out, particularly the dumping aspects.

So a lot of time from the Commerce Department, this is my point, was spent on the NAFTA situation. It turned out very well in terms of results if you look at what has happened since. Trade has skyrocketed among those three countries so that Canada is our largest trading partner and Mexico is now number two. Japan used to be. It’s now Mexico. We run big deficits or relatively so with both countries, but really a lot of two-way trade and more and more integration. Getting NAFTA through the Congress was interesting, to say the least because we went out of office and then it was on the plate of the Clinton administration. There were constituencies, labor and environment, which were not happy about some aspects of the agreement. And there ensued the side agreements, if you remember, that were negotiated on those two things. Then we had to get the thing through the Congress, and a lot of us who had something to do with the NAFTA pitched in and we did a whole bunch of things. I got Commerce secretaries to sign a letter. We found John Connor, who was then ninety-something. Nobody knew where he was and we found him in the course of trying to get him to sign the letter. He goes back to LBJ [Lyndon B. Johnson]. He was on the Cape somewhere. I did some media stuff. We all talked to people on the Hill, at least a number of us did. We couldn’t have gotten the thing through without some Republican votes and Clinton. The Clinton administration did its part. Bill Daley, if you remember, was the one he brought in to marshal political support, which is something he is pretty good at doing.

So anyway, that's a success, I think, by any measure, coming out of the Bush administration. The thing that is ongoing though, that was an idea expressed by President Bush and actually earlier by Reagan, was called free enterprise—enterprise—I’m sorry. I’m getting FTAA [Free Trade Area of the Americas] mixed up here. It was called Enterprise of the Americas. Meaning we’re bringing the whole hemisphere into a free trade agreement. Reagan had mentioned it. That was Bush’s name for it and that was hanging out there. Now, perhaps x-number of years later, almost ten years later, we have the Free Trade Area of the Americas, which looks as though in the summit that's going to take place this weekend in Quebec it will get pushed off the dime. That process started in earnest in ’94 at the Miami summit, which Clinton hosted. This is the heads of state of all the democracies. I would exclude Cuba. They put a target date for this FTAA at 2005 and set up their working groups. Frankly not much of anything has happened. The Clinton administration dropped the ball on it after that. The working groups were meandering along. At least they were still there, but now it looks like this is going to take off. There’s going to be a schedule. So finally this idea will hopefully come to fruition.

Now, Chile. One of the other things that did happen when I was in office was that Chile—[Patricio] Aylwin, the then President came to Washington for a state visit and did want Chile to be connected to the NAFTA. He was promised by Bush that once we got NAFTA through the Congress, Chile would be next in line. And they said, Wow, isn’t that great. Well, guess what? It still has not happened and there were various other false starts after that, but again the Clinton administration, for whatever its reasons, didn’t do it. Except just before they began to go out of office, they picked it up again, and so there are negotiations ongoing as we speak. So I assume something is going to happen, whether that's plugged into NAFTA, I doubt. Whether it’s just a bilateral free trade area, that’s not clear. Anyway, so some of these things now are beginning to move again in this administration. I'm one who happens to think the hemisphere is important and that we should pay a little more attention than we have. We are going to have an interesting time with our friends at Mercosur, particularly Brazil, who, because the U.S. ducked over the last decade have picked up the leadership role. So we’ll have to tiptoe over that and get all straightened away to reposition the U.S. leadership role. But I think that can done.

So anyway, that's—let me see, what else about Latin America? There wasn’t so much going on south of the border except this, really, that got into my attention span when I was in office. Although I must say there was a parade of Latin commerce and trade ministers that came by, in fact they all were coming by and the reason was, We want to be part of NAFTA too. After Chile, everybody had gotten that message. I felt that the NAFTA ignited some real hope in the hemisphere and some real optimism, which then was allowed to recede. Of course there have been some ups and downs in some of those countries since. The other thing we always said at the time that the Enterprise for the Americas would do was to strengthen the democracies that were there. Because it would strengthen our trade ties, therefore, the democracies would be strengthened also. If you believe as I believe that democracies in free markets and trade go together and mutually reinforce each other. I made speeches to that effect, and so did some others.

Now, this trade issue though, the NAFTA. When I was out campaigning, there were places I went where I was told, Do not bring this up. Maine was one of those places. There were some places in the Midwest. It was real—

Young

Michigan.

Franklin

Michigan yes, was one of those. Wisconsin. Anyway, the concern was trade was going to hurt us, was going to lose jobs, cause dislocation, and people were already worried because there was this recessionary—well it was a recession by technical definition going on, and there was a lot of anxiety. So when the Governor of Maine tells you, Go ahead with your stump speech, but don’t mention the NAFTA around here, I said, Okay. It was Jock McKernan. I remember it well. Okay, I won’t. I wanted to. I had a message on the campaign trail that worked. That had to do with exports, new markets, new opportunities. We have a competitive edge. We really ought to go for it. That was fundamentally the message. It was working. I could tell it was working by the reaction of people. Now, that's without mentioning the import side. You see, that was stressing the export side, but I really believed it and I still do. I could never get the President to talk like that, or to talk about the benefits of this kind of activity for some reason, don’t know why, whether he was not entirely comfortable, or what. But I knew the message was working, because I was seeing it working.

Young

Why not?

Franklin

Well, I don’t know for sure, but he was a little reluctant, I think, to talk about the economy, and I think some of the folks sitting around him in the White House didn’t—

Young

This was before the campaign or during the campaign?

Franklin

I’m talking about during the campaign. During the campaign. And by then, you see, we were coming out of the recession actually, but nobody felt like we were coming out of the recession. Nobody believed it, and when that quarter—I think you picked that up in here, the third quarter GDP came out and it was whatever it was, 2.7 or something percent, I was accused of cooking the books to make it look better politically. As a Commerce Secretary, you really cannot get at that process. It’s very professional. There's a lockup. Nobody goes in and out. Now of course anybody who is doing this work is affected by the external environment anyway, in subtle ways. But these are professional people and they are working with concrete data, except where they have to make estimates. Some of the trade stuff requires that hey do have to make estimates.

Well, it turned out that the real figure, when it was revised what, six, eight weeks later was 3.2 percent in terms of GDP growth. So, we were out of the recession, but nobody thought so and by then the message of change that had been put forth so forcefully by Clinton had taken hold. That was the ballgame in terms of the election.

Young

We’ll have a whole set of questions about the economy and the beliefs and the strategy for dealing with it.

Franklin

Okay.

Womack

Can I ask a question about the people in Maine? They must have been reacting to the bilateral agreement with Canada, right?

Franklin

No, I think they were just afraid. In some places there was a fairly strong union sentiment. That's where you found the opposition, at least the most vocal opposition was where there were strong unions, Michigan being one of those, but New England’s got it’s share of—

Young

Well, Gephardt’s—Missouri, but he speaks a lot from the—

Franklin

Yes, well, he does. I didn’t happen to campaign around there.

Womack

Actually the reason the I was interested in Maine is that there you have an economy which would have a much more direct and proportionately larger impact from Canada than probably any other American state economy, and since the Canadian bilateral free trade area had been established for four or five years by then, then you know, it had, you know, the general opinion of that. I would assume that Maine wouldn’t be that worried about Mexico.

Franklin

Well, you may be right. I don’t know the answer. Just trade in general. I got some mean and nasty questioning in some of these places about the NAFTA and about trade agreements in general.

Womack

In Maine, it could just be sort of an anti-Canadian sentiment.

Clark

I think your unemployment figures were very high in Maine at that time. It doesn’t necessarily have anything to do with NAFTA or free trade.

Franklin

It could have been that simple, fear of jobs and that trade will cause dislocation. It was very clear to me then as it still is today, we don’t have a consensus about the benefit of free trade in this country. I think we once maybe did, but now we don’t. The fact that there are now more constituencies in the mix of concern about what’s happening with trade agreements is just complicating things. We have labor and environment and now we’ve got some religious organizations and some consumer organizations—

Womack

Human rights.

Franklin

Anarchists.

Riley

Even some Republicans right, because Buchanan’s challenge was already mounted by the time you assumed Commerce?

Clark

Ross Perot was in there too.

Franklin

It was really Ross. It was Ross Perot in ’92. Buchanan—well he was, but he wasn’t so prominent. It was Perot and the giant sucking sound.

Barnes

The giant sucking sound.

Franklin

Jobs going to Mexico and Perot had some problem with Bush. Something that was personal. I remember the President in one Cabinet meeting sitting like this, way down in his chair, saying, I don’t know what it is Ross has against me, but he's got something. There was just some edge to it that was personal.

Young

They—I understand they had been friends at one time or another, so there was some business parting of the ways and then there was something about MIAs when Bush was at CIA. There was a lot of history there.

Franklin

I don’t know, yes, I have heard some of this and I don’t know what the real story about that was. There's something else that’s disappeared.

Young

Could you say a little bit more about the campaign in support of NAFTA?

Franklin

It was a highly organized campaign.

Young

Right, so I would like to know just how it was organized. You got all the Commerce Secretaries to sign on.

Franklin

I did that, but then there were all the Secretaries of State and all of the whatever, Treasury Secretaries and the Presidents, and Bill was mentioning CSIS—

Clark

David Abshire at CSIS was involved in that letter, which was—

Franklin

There was all of that done. There was a business coalition that was—Lets see, whoever was heading the Business Round Table at the time, and then he had to be replaced. It was a guy who headed Kodak, Eastman Kodak, and he lost his job there and then somebody else—

Young

Olson?

Franklin

Was it Larry Bossidy? Somebody like that was the one who was the spearhead on the business side. I think it was Bossidy, and there was an incredible business coalition put together with all kind of game plans—

Young

This was a big campaign.

Franklin

Oh yes, serious stuff, and money spent on advertising and—

Young

I’d like to take a look at what the scope of that campaign was, but also particularly your part in it, the Commerce part. Was this coordinated out of the White House? Was there a special group formed?

Franklin

Well, remember, we were out of office. Yes, I think the White House clearly had—This is the Clinton White House, but Ron Brown had a spearheading role and that’s where Bill Daley was brought in, who was a private citizen, to work the Hill, which he did quite well. Really all aspects of it were covered. What I did was to mobilize the support of not only the Commerce Secretaries, but some other of these business-y groups that I was interacting with, small, medium and large, and did some speaking, appeared at a few press conferences. There was one press conference on the Hill that I think maybe Ron Brown orchestrated. There were just a lot of things like this.

Young

Did you do any Congressional base touching, arm-twisting?

Franklin

Yes I did. I was not lobbying, but yes, educating, talking. Yes, I did, and others of us did, who had something to do with that agreement, even though we were out of office, because they needed, as we said, they needed the Republicans. Back on this consensus, or lack thereof, on trade. We have some, over here on the far right of the political spectrum who have trouble with trade agreements, but I think the bulk of the opposition is coming from the other side of the aisle—

Riley

I think so too.

Franklin

Those constituencies, particularly labor, and they threw some money at this, too. There was heavy lobbying on both sides. The environmentalists weren’t quite so prominent. They’re better organized now, but labor was very well organized.

Clark

Didn’t you end up with more Republican votes for it than Democrats?.

Franklin

Yes. We ended up with more Republican votes for it, than Democrat. The Democrats—I don't know, bare minimum. I can’t remember the numbers now. Gephardt was not on the right side.

Womack

Fritz Hollings was the last one on board.

Franklin

I'm not sure Fritz ever got—

Womack

I think he did.

Franklin

You think he did? I don’t remember where Fritz was, and I never discussed that with him. I did have the folks at Commerce who had worked on NAFTA in the Secretary’s office for a wine and cheese. I did that from time to time as a way to involve the troops. A lot of them had never been in the Secretary’s office to begin with, so—

Clark

And it’s a nice office.

Franklin

And it’s—Oh it’s a fabulous office.

Barnes

Best office in town.

Franklin

Best one.

Barnes

You bet.

Franklin

So we’d just gather in there and have, you know, have a little libation and some talk and as a way to say thank you to them for a good piece of work. That was again though, part of my style of working. That’s part of participatory, as opposed to command and control. You didn’t hear this part of the management stuff, Bill. I did not do command and control. People said it couldn’t be done the other way and they’re wrong. It can be done. Now, what else?

Riley

Was there any of this going on before the change of administrations? I can't remember when the clock started running, when we were in the position of actually trying to sell this to Congress. I guess Congress must have been in session during the end of the election year, so—

Franklin

Let’s see. It was ’94 when the thing went into effect, so it must have been ’94 that we were doing this, because they had to do the side agreements before that. That took a little while, so I'm fuzzy on exactly when.

Riley

Clearly after you had left office. It wasn’t anytime when you were at Commerce when this was on your plate.

Franklin

Not the Congressional side, no. The selling, no. That was afterwards.

There were some stresses and strains with the Europe, our friends in Europe, that probably ought to be mentioned. Some things never change. That sort of stuff is still going on. I am looking for my notes. We were in the throes of the GATT round, and in some ways we were getting close to a conclusion, but that never happened. One stumbling block was subsidies. Particularly agriculture subsidies and it makes me just want to roll my eyes. Some of these things, as I said, just don’t go away. One of the famous ones was over oilseeds and USTR was on the point on this. They were trying to get the Europeans to back off. This was agriculture again, and I'm trying to remember the exact sequence. Either we had retaliated once, because they had not done what they were supposed to do, and we were considering retaliating again or we were considering retaliation for the first time. USTR made up a retaliation list, which is typically what happens. We will retaliate against products they send here if they don’t do what they are supposed to. Now, typically when you do that, the retaliation list should be similar products. In other words, if you are in the agriculture sector, then you pick agricultural products on which we would retaliate. Well, this retaliation list—and now I think we are into the fall of ’92—had things on it like helicopters and other industrial sector—

Young

The agriculture retaliation?

Franklin

We were retaliating, or thinking of it, over oilseeds. What they were doing at USTR was expanding the list from agriculture—

Womack

Very down stream.

Franklin

I would say so—to machinery kinds of things.

Clark

The helicopters waving in the breeze.

Franklin

Like cornstalks or something. The helicopters were the ones that created the most heartburn on our side, but there were some other manufactured goods. We thought this was not appropriate and would simply make the controversy worse, if the retaliation list got out. I think we were right in that judgment, so I went around this track twice to the President, to get this list changed. The first time he said, Okay, you’re right. We’ll stick to agriculture. This typically wouldn’t go to the President either unless there was some difference of opinion. Clayton Yeutter was in the economic policy or whatever he was called, sort of economics czar spot in the White House. This went through Clayton and I never knew whether he commented on it one way or the other. I sure lobbied him pretty hard to make sure he was going to not get in our way. Well, lo and behold it came back and it was fine, and then somehow the list got changed back again. All of a sudden the helicopters were back on the list. I thought I was in the wrong room. So I went back around again to the President and we got back to the agricultural list and then it stuck. I'm only telling you this to illustrate some of what goes on under the table, behind the scenes, interagency process, and memos somehow appear, and then they change and then they appear again.

Young

That’s a nice little case illustration of things that go on all the time in many areas. How did you get in to see the President? You were appealing?

Franklin

I did it in writing. Did it in writing. That was a far more persuasive action.

Young

Was this on one of your personal communications to him, or through the Cabinet Secretary?

Franklin

No, it was to the President. It was a memo, but it went through Clayton because he was doing economic stuff.

Young

So Sam Skinner, who was chief of staff, didn’t see it.

Franklin

Sam was not in this loop. Sam was not in certain loops.

Young

Okay. I just wanted—

Franklin

As it turned out—No, Sam to my knowledge was not. Maybe he saw the memo. I don’t know that, but he was not in this loop. Meanwhile, you see, I think USTR was lobbying the other way. So it was one of those things. I do think we were right, and if I had not been so convinced of it I may not have wanted to make such a federal case out of it.

Womack

The second time, you couldn’t—You tried going to USTR and saying, Hey, you switched the list, and they still wanted to stick to the second list?

Franklin

Yes, well we did that interagency.

Womack

Yes, and you still had to go back to the President.

Franklin

I don’t know how that happened. I don’t know how come it ended up back—that’s the kind of thing you just can't always find the trail.

Womack

The fourth dimension.

Franklin

Yes, anyway. It got settled. Then USTR did come up with an agreement on oilseeds that was announced at the Blair House, called the Blair House Accords or something like that, which I’m not sure at the end of the day stuck for as long as it was supposed to. And the GATT round never did get finished while we were in office. That occurred afterwards.

Young

You were at the meeting in Brussels? Wasn’t there a meeting at Brussels?

Franklin

I was not there. No, they—Clinton was—

Womack

When they walked out?

Young

Yes, that’s what I’m talking about.

Franklin

No, I was not there. That administration finished it. The other subsidy issue that plagued us that just wouldn’t go away was Airbus subsidies. I think today that's probably a dead letter. Nobody wants to make it an issue today. Boeing doesn’t want to. I mean it’s still there, but on our side, there was a lot more steam behind it back then and in here there was a note about the Airbus subsidy agreement on those kinds of subsidies that was not popular here. I think your text said that the airlines were for it. The airlines were not relevant. It was the aerospace industry, and they didn’t like it, and I made a little noise about it. I was convinced that we should back off that, but so did some other people at the time, it was not a great agreement. It didn’t do much to curtail what Airbus was already doing. If we had wanted to get after those subsidies, we were about a decade too late. They already had that consortium going. But subsidies have always been a sticky wicket and they still are—subsidies of different kinds, agriculture in particular—our Japanese friends of course. This has been one of the sticky points with China in the WTO, too, and we will have concern about this issue with our friends in Latin America in the FTAA. They don’t like some of our agriculture supports either, by the way, so this is just a hard one that's going to be with us for a while.

Young

What was the toughest problem you had to face on the international—

Franklin

Probably the China mission, because of the flapping that surrounded it, the controversy that surrounded it. It was not an easy mission either, because we were not sure what to expect, but the groundwork had been laid by Bill’s trip.

Young

You had said earlier that it wasn’t as bad as you thought it would be in terms of the Chinese response—

Franklin

Well, no. That doesn’t mean that it wasn’t the toughest.

Young

In retrospect, it looked like it was go from the beginning, in retrospect.

Franklin

Yes, but we didn’t know that for sure.

Clark

Hindsight is always 20/20.

Franklin

We didn’t know that for sure at the time. Then because there was so little, on my part anyway, time to prepare. I mean some of these other missions that were done later took months to prepare. This was weeks.

Womack

And it was a new direction versus continuity.

Franklin

Yes, and it was a lot of cramming on my part. I was not a China hand either, and so I remember having some people in who were China scholars and just trying to get some feel for the culture, the Chinese people, some of the history, all that kind of thing, and that was helpful. Then one just builds on what one learns in one’s experiences. So now, I feel quite comfortable about China and I know a lot about it now. I think I understand how they operate too, and I have learned a lot of the history and the culture, which is fascinating. It’s a fascinating country, no question.

Young

Was Russia your greatest disappointment?

Franklin

In retrospect, I think yes, given the amount of energy that went into trying to help Russia make some changes. It was just disappointing that change has not happened. Now it’s become a more diffused situation, though I do see some of those people. I haven’t been to Russia for a couple of years, but I see some of these people, such as Aven, who has become so prosperous. If you could see the photographs of him that are in my office and see him today, he looks very, very prosperous. Gaidar and [Vladimir] Lukin, who was the ambassador, who is now rather highly placed in the Duma. There are so many of these folks. One of the interesting things—they came to see me as we were going out of office. It was Lukin and a couple of his henchmen from the embassy. In the Secretary’s reception room at Commerce, the photographers had made a bunch of big blowups of various scenes and placed them on the walls around the room. There was one of Yeltsin, and I guess it was the business summit, come to think of it, Yeltsin and Bush. I was in it, too. They came in there that day and wanted it. May we have that? So we took it down and they carried it—I mean it’s rather large—and they walked out with it. I don’t know where it’s ended up, but they wanted it. My guess it’s—

Riley

The guy at the desk who stopped you from going up, he didn’t stop them from going out with it?

Franklin

No he didn’t. Actually, I think during that Russia summit, the same thing happened again—one of the guards wouldn’t let me in my own office. During that business summit I went out for a jog. I was trying to clear my head or take a break during those meetings with the Russians. Anyway, I didn’t have any ID with me and I was dressed in jogging clothes, and I'm running around the block. It was quite a nice day, and when I went to come back into the department they didn’t want to let me in. I said, But I'm the Secretary. He said, Oh really? I never went out without ID again. Now, what else?

We mentioned Canada and softwood lumber. We had a variety of things going with our Canadian friends. We always will. When you have that big a trading relationship there are going to be disputes, so it becomes a question of how well you handle them. I know that I went to see the Canadian ambassador, who was one of the great screamers. Burney, Derek Burney, remember him?

Clark

Quite a big Japan expert.

Franklin

What?

Clark

He’s a Japan expert.

Franklin

Is he? I didn’t know that. Well, he knew how to yell and carry on, when he felt Canadian interests were being hurt by the U.S.. There were several things that were converging at once and I can’t remember all of what they were but softwood lumber was one, and I think we had a beer dispute going and I think another was steel. Anyway, what I did was to take a hard hat, and have a beer bottle mounted on it. There were a couple of other things—including lumber—on the hard hat. We put it in a big Tiffany box, and I was having lunch with him over in his palatial office, and I took the box and he opened it. I figured I was going to get a lot of stuff at lunch about how awful the U.S. was. We were ganging up on Canada, poor little Canada, which is the way they view themselves. This elephant is across the border and the elephant sneezes and Canada catches a cold. So he opened the Tiffany box. Here is this hard hat and a beer bottle and all the other things that are going wrong and he cracked up. That seemed to dissolve—I did not get a big harangue. It dissolved his anger for the moment. I went back there after we were out of office, and there's a bar area up there in the ambassador’s dining room area, and anyway, the hard hat was still there. There was a new ambassador who didn’t know where this thing had come from, so I had to explain what that meant. This was just one way to try to get over some of our differences.

Young

President Bush had a very, as I understand it, a very close relationship with Brian Mulroney.

Franklin

He definitely did.

Young

Did that affect your relations with Canada at all, any of your business with Canada?

Franklin

Oh, I don’t think so. Everybody knew the two Presidents were very friendly. What I can't remember is what was converging at the time and the ambassador was saying that, You planned this, and I do remember saying, You know, you’re giving our government more credit than we deserve.

Clark

There was an advertising dispute going on with them, I think.

Franklin

There was something else that they were upset about besides the lumber and I just don’t recall, but it wasn’t that we had planned this. That was too much credit to give to us. It was different departments. It wasn’t that we had sat around and decided that we were going to get Canada. Canada is one of our best friends and we view them that way. Mulroney was very supportive of Bush in a variety of ways whether it was Gulf War or other things. They still are quite good friends. I serve on a board with Mulroney today. He's always full of the most wonderful gossip about almost everything. Everybody and everything, it’s just a delight. Okay, now where are we here, Mr. Chairman?

Womack

Is one little question okay?

Franklin

OK.

Womack

Do you feel that basically Canada took care of its own interests pretty well, being very alert to its opportunities in U.S.-Canadian relations? My impression is that small countries in friendly relations usually do marginally better than the large countries.

Franklin

Well, if you look at the trade balance that they are running, you would say yes. Well, that was what I always pointed out to them too. You’d think that—

Womack

There would be a fire here.

Franklin

Yes, if the deficit would be on the other side. Well the deficit was in their favor. Why are you screaming at us when you are doing so well? Well, they felt they had to, I think. Although not so much lately, except the softwood lumber issue again has been in the press on both sides. I know on our side we are worried about them throwing a lot of stuff across the border in the absence of an agreement.

Riley

A lot of what you’ve talked about relates to agricultural policy. Did you have many interactions with the Secretary of Agriculture during your time in Commerce?

Franklin

Yes, some. I don’t know that it was any more than anybody else. When I first went into office, because I was the new kid on the block, I had a series of lunches and breakfasts with Cabinet colleagues. Some of them I didn’t know, some I did, but that was to begin to establish working relationships.

Riley

Was that all-inclusive? Did you see everybody or just people you felt like?

Franklin

I pretty much did. Let’s see, with the exception of—I already knew Dick Cheney, and Baker. Baker probably wouldn’t have gone to the Commerce department for lunch anyway, I don’t think so. But I knew them, but people like, well, let’s see, like Lou Sullivan, like Admiral Watkins, because we did have some connection with Energy and so I just went down the line. I think I had virtually all of them there. I had the Fed chairman, too.

Riley

This would be one-on-one or would you—?

Franklin

One-on-one, lunch in the office. I had this round table that I had brought from my own conference room. I like round tables and we would just sit at one end, and at that point, there still was a Secretary’s dining room. It was very rarely used, but there was a person up there who would cook. He wasn’t a really good cook, but it was passable, and so that's what we would have. It was often pasta. We were big on pasta in those days. I know we had pasta and salad, just the two of us. We would have a lunch and talk about whatever. There was some preparation that was done. I had the CIA director in there, Gates.

Riley

Did you talk electoral politics on these occasions too? I would think it would be natural in an election year.

Franklin

It was a mixed bag. Some of it was issues, some of it was—it depended who I was talking to. Some of it was political, yes. Never had Dick Darman over there. I don’t think he would have come.

Riley

Because?

Franklin

He did not like the Commerce Department. He had worked there, back I think, in the ’70s and maybe when Baker was the undersecretary. Before there was a deputy, there was an undersecretary. Anyway, Darman has nothing but contempt for the department.

Riley

This one in particular?

Franklin

Hmmm?

Riley

This department in particular.

Franklin

The Commerce Department?

Riley

Yes.

Franklin

Yes. What discussion I did have with him probably it was to intimidate me in some fashion.

Riley

Can you tell us about it?

Young

Yes.

Franklin

No, it was just that he doesn’t think the Commerce Department has any purpose. You know, one of those bald comments. Actually it stems from it’s being a conglomerate, what we were talking about before, that confusion. I think that's really where it starts. It’s not a focused mission. But he didn’t like it. Maybe he had a bad experience when he worked there. He never did anything to me. I’m just saying there was an attitude.

Riley

Well, I believe we have picked up signals from some of your colleagues that he had an attitude, so—

Franklin

Well, that too, not just about the Commerce Department.

Riley

No. No, no, about almost every department. Yes. That was why I was asking if you were being generic and—

Franklin

No, I don’t think we were singled out. I think that he just doesn’t like that department.

Young

I’m kind of bemused by his thinking this department isn’t, is a bad department because it’s the kind of department it is. You weren’t a big cost item for him.

Franklin

No.

Young

He didn’t apparently have anything he wanted to cut out, except a little piece of Fritz Hollings’—

Franklin

Well, it really wasn’t important enough to deal with.

Young

It wasn’t big bucks, big buck for him.

Franklin

No, no. Three or four billion. Not big bucks compared to huge budgets that are in DOD or even State.

Young

You’re not worth my time. Is that basically it?

Franklin

I would say so. Which was okay with me.

Young

Count your blessings.

Franklin

I did see some of the other antics from the sidelines. This is true.

Young

Do you want to talk about export licenses in relation to relations with other departments, like Defense, for example?

Franklin

Well we talked a little about that earlier, and the interagency process that has to surround certain items of sensitive technology.

Young

Sometimes this reaches the press.

Franklin

Sometimes it does.

Young

There are some instances in the book.

Franklin

We relaxed a number of those controls. There was a time when I remembered the precise number of how many thousand products were now going to be out from under this process because we didn’t think it was important enough anymore. That was an interagency decision. Oh, there was a lot of tugging and pulling. I can't remember all that much the specifics. But you often had Defense in one place, sometimes State, but you know, the State Department then was getting more enlightened I felt.

Clark

We tried.

Franklin

Don’t you think? I did. I thought Eagleburger was OK on some of these kinds of things, and not as knee-jerk, No we don’t want to sell anybody anything, which is where DOD tended to be. After we left office there were some changes made in that whole process. It happened in Clinton years. If you had to ask me exactly what they did and what was changed, I'm not sure I could tell what kind of—

Young

There were occasions where the dispute or the inability to settle the problem on some interagency level required you to deal directly with a Cabinet member?

Franklin

No, not that I remember, except—

Young

You never had to talk with Cheney about—

Franklin

—except the China computer sale to a weather service. No otherwise not.

Young

Was there anything left over on your watch concerning the Iraqi issue?

Franklin

The Gulf War—

Young

The Gulf War or the preceding—the issues about which did involve the Department of Commerce about aid to Iraq prior to the turn to the confrontation.

Franklin

Not that I was engaged in. In the aftermath of the war, one of the environmental research vessels, part of the NOAA operation, did go to the Gulf to try to determine what damage or what had not been damaged through the whole war effort, I did talk with the captain of that vessel when he returned. In fact I have the hat he gave me in my office. It was the S.S. Mitchell, his cap. I think they did some quite good work. There was some environmental damage done, needless to say. But other than that, that was over. We had moved on.

Young

It was on —one of the allegations, at least concerning Iraq was on the question of export licenses and that there had been an overruling of a finding about export of some technology to Iraq and it all was in the newspapers. There was a Congressional investigation of it.

Riley

Excuse me, six months before the invasion?

Young

Six months before the invasion and the deputy secretary of Commerce left and then testified in Congress about this. It concerned the internal process by which a recommendation against an export was undone or overruled or second-guessed and the technology was exported, and then when we became enemies, that became—thought you might have known something about it.

Clark

I didn’t know anything about that. I was in India at the time.

Young

I was just wondering.

Clark

I vaguely remember, but I can't even tell you what it was about.

Franklin

I wasn’t there.

Young

So the issue was over with by the time—It was gone by the time you got there, okay. BCCI [Bank of Credit and Commerce International] was also—

Franklin

BCCI was earlier too. So there was not anything left over from the war. At that point I feel that the great glory that had come out of the war was gone too, by the time I got to Commerce. People were not talking about that anymore. They were worried about their jobs. They were talking about the economy, and unemployment being what it was. Somebody mentioned—

Clark

The ninety percent approval rating only lasted a little while.

Franklin

That’s right. It just—no discussion about that.

Riley

Did you, among your colleagues in the business community, as you were getting ready to come into the administration, my assumption is you probably touched base to let people know what you were about to do. Can you tell us a little bit about the mood of your colleagues towards the administration going into this final year? Was there anxiety about the future? Was there anger about the reneging on the tax pledge? Was there protective instinct to say, No don’t go there. You’ve got a great career outside. Why do you want to go—?

Franklin

No, people never say that to you. Well, sometimes they do but I don’t know that there would have been anger or any of those kinds of feelings. It was more of concern about things. And it wasn’t maybe the same level of anxiety that I heard from some of the folks when I was campaigning. It was just concern. People were a bit edgy, and that was due to the economic situation. That's the way I would characterize it rather than people being really mad or upset or down. They were just concerned and a little bit anxious about what’s going to happen. There was concern about whether Bush was going to get reelected or not. At that point, Clinton hadn’t really emerged, I don’t think. I’ll have to think back in time.

Riley

It was just beginning because you recall—the stand-by-your-man 60-Minutes interview occurred on Super Bowl Sunday, which would have been, I guess, the end of January.

Franklin

Oh, is that right? Okay. Well that saved him. She saved him.

Clark

Yes, several times.

Franklin

Several times. It was the first time from Gennifer Flowers and other assorted sins. Well, there was anxiety about that. Anxiety is too strong. People didn’t know who Clinton was, or most people didn’t, that I had talked to, business people didn’t.

Young

There is testimony from other interviews that the mood was not what it was shortly after, different people date this, perhaps disillusion, disappointment, a bad mood, a bad feeling about the future, and about the direction of the administration. A convenient point, for them to say is, of course, the budget deal and the breaking of the tax pledge.

Franklin

That's hindsight, I’ve got to tell you.

Young

That may be hindsight, but there is some testimony, that whether or not it started that when the credit crunch was on, there was a lot of flak coming from the business community. You know, Something’s got to be done, and, Where does the President stand on this? and we need help. And they didn’t seem to think as I have heard this story in testimony, because I don’t know, it didn’t seem—the President didn’t seem to be listening or they didn’t seem to be so concerned about this. These were not general—These were businessmen who were important supporters of the Republican Party, of Bush.

Franklin

There was some of that, that's true. Particularly some of the big donor folks who were in places that they were being crunched, real estate developers and some others. Actually that's true. I guess I was thinking more broadly. Some of those people were making a lot of noise internally and maybe outside, very concerned with what was the administration doing. It’s hard to figure out. But somebody—and I look at some of the folks sitting around the President who were supposed to be the economics experts—did not get it, just didn’t understand what was going on out there. Even though some of us were trying to send messages back. People were upset. I was in a terrible session in Silicon Valley, and I went out there because I felt somebody had to do that. They were furious, if you remember. Now, this has got to be the summer of ’92.

Riley

As Commerce Secretary.

Franklin

I was in office then. Well, Clinton had been out there and the guy who then headed Apple, [John] Sculley and another CEO gathered—as I was told the story afterwards—a group of the Silicon Valley CEOs to what was supposed to be a meeting to meet the candidate. At the close of the meeting, apparently Sculley stood up and said, Well, we’re with you Mr. President. Congratulations, or something to that effect. There were photographs taken, and as it came out, the PR around it was that, Hey, he's got all this support from Silicon Valley. Well, that was not totally true. Some of the folks who were there got dragged into this and people were mad. They were mad, but so were the folks who were backing Clinton. They were mad at the administration. Now, this is where you get back to Darman, and I had a meeting pulled together. Gil Amelio, was one of the key guys in it. He was the CEO of National Semiconductor at that time. I had a meeting with a bunch of these other CEOs, some of whom had been in this earlier photograph with Clinton, in a hotel, and we had dinner. They got to telling me what they were mad about, and Darman and Sununu were at the top of the list. The more they talked about Darman, the hotter the room got. It was quite eye opening for me. I am still not entirely sure why except that some of it stemmed back to what we talked about this morning—Darman did not like the advanced technology program or anything that gave money to technology or to business. That was industrial policy, your word. They were furious with him.

Young

But on the other hand, he didn’t cut it out.

Franklin

Well, he may have cut out some other stuff. I don’t know. I'm just talking about Commerce, but they were really mad at him. Or maybe it was just an attitude that they had been exposed to—

Young

Well, he was very strongly, at that time—he was very closely associated—It was his budget deal. He put it over. He wanted it. He got the President to break the deal, to turn his back on the pledge that he took in his nomination speech, and Sununu was also in that secret meeting. So it may be that rather than anything specific against them. I just don’t know if it’s—

Franklin

It could be. That particular thing was not talked about at this dinner. I do remember that dinner very well. It was contentious. But it made a difference, because then we went back and did a campaign event, and some of those folks indeed endorsed Bush. The problem was that we were behind the curve on it. The Clinton campaign had gotten ahead of the game and it stayed that way. But that was awful, and I had no idea the feelings were as strong as they were, and as I said, I'm not totally sure why. The budget deal, I think. I was not in there at the time, but I felt it was a bad deal then as I knew others did, who were part of the Bush group or Bush friends. It just seemed as though the President had given away something and didn’t get anything for it. The Democrats never stuck to their part of the bargain, probably had no intention of it, and our side underestimated George Mitchell. I think the way that deal was done—it was done under a blanket, these secret sessions with Darman and Sununu literally keeping everybody out, Brady maybe in and out a little—generated a lot of hostility in the administration.

Young

The deal was also rejected by the Republicans in Congress.

Franklin

And the famous deal about Newt walking the other way when they were—that was not helpful.

Young

They announced a betrayal.

Franklin

Well, that’s true, and then Buchanan and others jumped on that.

Young

So that was intra-Republican, too.

Franklin

Probably. That was the beginning of the downslide in this administration, but it was not recognized that way, I don’t think until afterwards. That's my point.

Riley

Yes, I wanted to ask you, because I—in looking at the timelines, your fundraiser that gets cited here occurs in November of 19—

Franklin

It was ’91. Well, people were grumpy then and sort of despondent, which is why that was an incredible success, if I say so myself. We had a goal of 600,000 dollars and we doubled it at a time when people were down. But let me tell you, that was just sheer pounding, pounding away at things, in effect, among that group that was working with me around that round table in my office. We would have these meetings. I created a crisis. Now, it may have been a real crisis. I wasn’t sure at the time, but I created a crisis anyway, Hey, I’m afraid we’re not going to get there. We can’t let the President down. So what we did, everybody worked harder and harder and we doubled our goal despite the bad grumpy mood. That was just sheer work, I think.

Now there were people who wanted to believe too, you understand, there were people who wanted to support Bush and who were Bush supporters, but were really concerned. The budget thing was in there, but then we had the war, and that covered the budget mistake up for a while. But then the war went away and then there it was. The economy was soft and this is not a good situation when you are running for reelection. I wish he had come up with some things. A plan or a I don’t know what, but something to give people hope. A plan to have people hang their hats on and say, Well, okay, he really is going to work at fixing this. But the view of the economic team was that there wasn’t anything wrong.

Clark

Which was right.

Franklin

Which was correct, but that's not the way people felt, and they were missing the people. Those were the voters.

Young

The were looking at aggregate figures but they weren’t listening to—

Franklin

Listening to what was being said.

Young

They had no ears outside of Washington.

Franklin

When we were out there, I heard it in spades, and I was communicating it back, but and so were some others. I know Lynn Martin did too, because she and I talked about it, and we were all getting the same thing, but nobody was wanting to hear that, and that was a great tragedy.

Young

You couldn’t bring it to the President’s attention?

Franklin

I did, but he was surrounded by the folks who weren’t listening. I’ve got copies of my handwritten notes about my campaign stops.

Clark

But he made some efforts at that, that were really bad advice. I mean, buying a pair of socks wasn’t going to fix it.

Young

Well, that one—That was not supposed to—There are people who would say that wasn’t what happened, but it’s like Carter with the rabbit.

Clark

But that’s what was reported so, that's what happened.

Young

That's the reality. But you know if this is—We can go perhaps into more length on this tomorrow, but it’s going to be quite striking, I think, to people in the in the future to come back, to wonder why the President didn’t step out of his character so to speak, and pound the table. He was somebody who was looking at his reelection, which presumably he wanted—

Franklin

Yes, I believe he did.

Young

—going down the tubes. The opposing candidate is beginning to say, It’s the economy. It’s the economy. It’s the economy, and what do the aggregate figures matter if the President does not appear to be concerned?

Franklin

That was the appearance. I don’t know that that was true, but that was the appearance. Then the other thing that happened—you have to give credit to the other side here—was that they ran a masterful campaign without a lot of errors in it. They started pounding on the need for change early on. I remember, and I think it was June of ’92, I was out doing some campaign events. I came back and said to Wally that I didn’t think anyone was listening to the President anymore. That was early. That was June, and we’re talking about November.

I think it was over well before November, and I think it was because the administration looked disinterested. The President looked ho-hum and then Clinton pounded away on change, It’s the economy stupid and we need a change, and they never got off that message. I think George Bush, at the end of the day, really thought character was going to count. I have a handwritten note from him toward the end of the campaign that he thought when people got into the voting booth, character was going to count. Obviously, he didn’t think Clinton had any. Character didn’t count. Nobody cared about that.

Clark

And Clinton didn’t have any.

Franklin

And Clinton didn’t have any, right, as it turned out. We really found out about him in spades, but it was all over. So give credit to the other side for a smart campaign.

Riley

There’s been some testimony that some of the—some people like Clayton Yeutter when they went into the domestic operation of the White House began to solicit elements to create the appearance of a domestic policy agenda because the administration was being charged with not having one, especially on the economic side. Were you approached by people in the White House about, you know, Can you produce some legislative initiatives or some administrative initiatives or some administrative initiatives that we can use to trumpet as part of our domestic agenda?

Franklin

I can't remember what the timing of that was. That may have been a little before I got there. We were doing some things, the national export initiatives, Bob had started that; the technology initiatives, same thing, which we were doing and some of this other stuff that we dreamed up, that Japan export event, for example. I don’t remember precisely, but I think Clayton may have done that before I got there. He and I were good friends. We’ve known each other a long time, so I don’t remember a specific entreaty—would you dream up initiatives?— except that we were all doing that anyway. It’s part of what you do in an election year. I had been trained in the Nixon White House, remember, which was the best at doing things like that. However, if you look at again, what the Clinton administration did, they really did that terribly effectively, put forth initiatives in a far more coordinated fashion, not to mention the whole financial fund raising piece. I have never seen anything quite that baldly flagrant: deciding to go after foreign money, knowing it was illegal. It is a strategy and they got away with it. That's the bad part. They got away with it. Won the election, and got away with the flaunting of the rules.

Young

It will be a puzzle. A lot of people will want to look at why has this happened? Look at the first election campaign. Then look at the second.

Franklin

Which was very well done.

Young

Highest approval rating in history of any President, and it doesn’t mean anything. The economy is not all that bad. It’s turning around—didn’t matter. So where do you look for the sets of explanations of this? So we try to get this subject covered and covered pretty thoroughly from each person’s perspective in the administration. It’s an interesting puzzle. Let’s have a break so we can—

Franklin

So Bill can leave.

[BREAK]
Franklin

Let me see here. I was looking at the small business stuff and I was looking at all my notes over Robert’s. I’m kidding.

Riley

Can we have the revised version of this for our records.

Franklin

On the trail of small business, these centers to help smaller businesses train workers and adopt new technologies, that was a true effort and I think was ongoing and was useful. There was something else that I did during this credit crunch. I had nearly forgotten this until you mentioned the credit crunch which was a real phenomenon at the time, and everybody was at everybody else’s throat as I remember. The regulators were being very difficult, the bankers were not helping at all, and the business people were the ones that were in the crunch, mostly the smaller business people. So I decided to—from the small business perspective—have a little summit in my office around that same round table, inviting some of the more vocal small business people that I knew. One man in particular from Connecticut, Murray Gerber, who knew how to talk this stuff and who was experiencing it was there. He had some bankers from the key institutions, the big banks. Also, the regulators, the comptroller of the currency and the FDIC. We had those guys and then deputy treasury secretary, John Robson, was interested in all this. We had an agenda, and we went through an explanation of what the problem was and how we could solve it. I do remember that I was concerned that people were going to get angry. There were a lot of people around the table and we were in fairly close quarters, on purpose. There was a second tier of people around the table. We had a lot of food on the table. We had popcorn and fruit. The food was to take the edge off this conversation if it got contentious, which it did. But we worked through the agenda, and I felt that for the first time—John Robson I think agreed with this—some of these regulatory people began to understand what the problem was, and with the bankers in the middle. We probably would have done more with this as time went on. I’m not sure when we did this. It must have been the summer of ’92. I would have to look it up. (It was early October.) It was going to be the start of a process to at least try to get to the bottom of this and change some of the mindset.

Young

But there wasn’t much you could—I mean on the regulatory side, reducing some of the burdens and costs, but that’s not an immediate fix on the credit crunch.

Franklin

Well, bankers were being quite difficult too. We were just trying to cause everybody to talk to each other. It was one of those things though that we were, in hindsight, glad we did, and Treasury was glad we did, because the regulators were part of this problem. Anyway, that was our credit crunch summit.

Young

I forget what we were talking about before was started on China, but I think you had gotten through the early days in office. The retreat we had talked about.

Womack

Actually, I think you had two more points left on your agenda that we hadn’t—you were going through your agenda. You got down to entrepreneurship.

Franklin

Okay. Well, deregulation, that's just obvious. We were trying to draw attention to that. This was a problem for business.

Young

How could you do anything about that since you did most of the regulating?

Franklin

Well, you can't, except to talk about it and to rattle cages if somebody in the government seems to be—

Womack

Joining the chorus.

Franklin

Yes, joining the chorus, basically is what we did. Along those lines, not quite deregulation, but something similar—product liability legislation—was moving in the Senate in the early fall of ’92. I thought we had a shot at passing a bill that was going to make that situation a little more palatable. Brent Scowcroft wanted me to go to an APEC meeting in Asia. I felt I couldn’t because this bill was pending in the Senate, and I really had to be around to talk to people and appear at the Senate, the Tuesday lunch, which is what I did. We came very close to winning.

Riley

Can you tell us about the lunch? Do you remember any details?

Franklin

I made my pitch about why you needed to vote the right way on this. They have a lunch every Tuesday and they just talk about things. This was the Republicans.

Riley

Exactly, and your credentials on this issue would be?

Franklin

Quite fine.

Riley

Yes, because of your—

Franklin

So I went and did my pitch, whatever specifically that pitch was at the time, but that’s why I stayed home.

Riley

Did you ever formally testify on this before committees or was it already through committee by the time you came in?

Franklin

No, I think it was. I don’t remember. I don’t think I testified on this because it was coming to the floor. It was more then a question of counting votes. We got some Democrats too as I recall, but it wasn’t quite enough. So this was in much the same category as deregulation.

Now, sustainable development. That leads to NOAA, and this is harder to connect, I must say that it’s harder to connect some of NOAA to the rest of what goes on in the department, but we tried to do that. You already know what is in there, the weather service being a major piece. We were missing one of the satellites that shows the weather photos that we see all the time of various parts of the country. It had conked out. This was before I got there, and we had obtained a backup from the European Union, so we were using one of theirs. Another one was in process, but it was not in place, and that was something we monitored closely all the time I was in there. I worried about that from the time I got there to the time I left, that something was going to happen before we got that new satellite up there. That would have meant that some part of the country would have been without its typical weather information. When you are in agriculture or a variety of other things, you need to monitor closely the weather. That would have been a disaster politically, if something like that had happened. That’s the kind of thing, you see that the guys who said, well why don’t you run out and campaign the instant you had gotten here, had no clue about. I think it would have wholly irresponsible for me to not get on top of this. There was a task force that Bob had set up to watch this and I ratcheted it up a little more tightly. Preston Moore was heavily involved in that one, too. That was a worry.

Womack

What could you do about it though? It’s like watching the weather, only watching the weather satellite.

Franklin

Well, we were in a box on this. If something had happened, we just would have had to get a backup from some other place. But you need to watch. My whole theory was the more closely you monitor, the better chance you have of being able to do whatever you need to do if something happens.

Womack

Sure, and you don’t look like—

Franklin

Like you don’t know what’s going on.

Womack

Yes, right. Exactly. Was the European satellite already up there, or were you prior to the launch? It was part of their network.

Franklin

Yes. It was already there.

Womack

You’re turning on over the U.S.’s weather—

Franklin

After we left, that satellite got put up there. The other thing that was going on, was the change—this had started really some years before—the change from these weather stations that were all over the country in various places, to more advanced radar systems, the Doppler radar. The Dopplers were not all installed. That was underway, but the cost overruns were horrendous and the IG, the inspector general, was on top of this. So I had to rattle a few cages on this too. It was not the most adept contracting but this was before my time. I think it was even before Bob’s. We’d inherited a mess. Then there was the political flapping that occurred, because as part of the plan, you get the radars in place and then you phase out some of these weather stations. There was a plan for this mostly in place, but when it came right down to doing it, you know, certain Senators and Representatives didn’t want particular weather stations closed. So there was a certain amount of concern about this that I had to deal with.

Riley

There were people employed in those weather stations.

Franklin

There were people employed. Yes, it was people issue.

Barnes

Commerce equivalent of trying to close a firehouse.

Riley

Or a post office or a—

Womack

Or a military base.

Franklin

In some cases, some of these were being relocated, meaning getting rid of it one place and relocating elsewhere. I do remember one incident, and this is a lesson in what happens at the end of the administration sometimes. There was to be a weather station relocated in Michigan and it was in my court to decide. Again, one of the decisions that a Secretary can make that an interagency process has nothing to do with. I decided where it should go. It was in one particular congressional district. I mean, there was a political consideration here from my perspective. I admit it. I decided to do that. Just days before we left office, they reversed it. They, the folks in the weather service.

Womack

Mutiny, huh?

Franklin

That's right. Knowing full well that there was nothing I could do about it. We were going to be history.

Womack

Past tense.

Franklin

Yes, and the irritating part was that they let me know. The Congressman was very unhappy. He's a friend of mine. I was unhappy too and there was nothing I could do about it. It was a very frustrating experience. There were some people who really were just hoping and praying that the minutes would go by sooner so that this new administration could come in, and we had some of that going on in the career service. That's also what happens at the end of an administration. The interesting thing about the weather service then, and I think it may still be the same now, it’s all career people. So the head of it is a high level career person, and he was a problem. If I had stayed longer, I would have moved him out of there. He was always freelancing. He was always running around on the Hill doing his own thing. They had their own set of constituents, and it is very hard to manage an operation like this. Finally though, Bill Daley moved him. Bill Daley pulled him out of that job, put him in a lateral position. I mean he's career, so he had some rights, so he was moved over. I don’t know if he's still there, but he was difficult.

I should say something anyway about NOAA that I said before. NOAA was not clear that it was part of the Commerce Department. It was very hard to manage this operation. They were always wanting to do their own thing, and so it took some watching to try to keep them going in the right direction. There weren’t many political appointees. The individual who headed it, I inherited. He was an academic who was often on his own wavelength, very scientifically oriented, lovely man, but not very political. He almost got me into trouble at one other point, because he had a vote on one of the ecological acts. I’ve forgotten which one, and he was going to vote the wrong way. There was some strong discussion—Clayton Yeutter was involved in that—to make sure John was going to vote the right way in terms of what the President would have wanted. He did. These are some of the wonderful anecdotes about NOAA.

Well, I didn’t get to fish. Fish. Now this is the biggest surprise that every Commerce Secretary has. It’s the coastal fishery management. (The inside waterway is under the purview of the Interior Department.) There are regional councils, eight of them I think still, extending all along our coastline, and these councils in effect govern what goes on in the given area in terms of what can be fished and what has to be conserved. This is to be scientifically based. Otherwise, we would run out of some kinds of fish if we over fish. The councils have a mixture of different fishing interests on them, those who fish for a living, those who are sports fishermen, there's some scientific people—I’ve forgotten some of the particulars. But the seats on these councils become very important to various constituencies and various folks in these given states. This is something that the Secretary can decide, period, based on recommendations that come up from NOAA. There is a lot of lobbying on these seats and a lot of general concern about what was going to be fished and what wasn’t. So there would be hordes of people that would come in to see me. I think I probably got lobbied more on fish than any other single thing.

Womack

Whole schools of lobbyists.

Franklin

They’re coming at us, lobstermen and everything else. It’s an industry and there's a lot of economics involved . It’s something we don’t think about from that perspective very much. I have talked to, probably, a half a dozen former Commerce Secretaries. We’ve all had the same experience. Everybody is surprised by the intensity of the fishing concerns and lobbies. So there is more time spent on that, that’s my point here, the time issue, than one would believe.

Womack

Is this to the two hundred-mile limit or all fishing?

Franklin

All fishing. It’s whatever we consider our territorial sea. There are some other issues too. We had disputes with Canada about which fish were theirs and which were ours. The minister of fisheries came to see me. He was quite a great character. So there were a lot of ramifications, and more time spent by the Secretary. But it’s under the radar screen. I think people don’t know about this.

Young

The only authority you had was appointment of people to these things. You didn’t have authority over their charter?

Franklin

NOAA had to approve the plans that emanated from these councils. So, yes, I had some other input into this whole process of what ended up being in the plan and then NOAA also was monitoring implementation. So there was a lot of power over this particular—

Young

These people are appointed for terms?

Franklin

Yes.

Young

Overlapping terms?

Franklin

Yes, and from different states. I mean, to give you an example, I went to see Trent Lott. He was not yet the majority leader, and he had a lot to say about fish. Don Evans has had the same experience. He had a lot to say to him about fish, because of where he is, Mississippi, I think his congressional district is a fishing district. Well, I had an appointment to make to the Gulf council in the summer or early fall of ’92. There were competing candidates. One was from Florida and one was from Mississippi. The Congress gets into this too and they lobby for these candidates. And I thought long and hard about it. Trent had lobbied pretty hard, but who ever was from Florida had too, and I picked the guy from Florida based on his qualifications. But frankly, there was a little politics in my thinking too, Florida was Florida and Mississippi was Mississippi in electoral terms. Well, Trent had a fit and so I went to see him and took him a goldfish bowl. I was good at doing stuff like that. A goldfish bowl—

Young

Let’s see, a helmet, a goldfish bowl, oatmeal.

Franklin

With a card—well I find these things are useful tools—with a Commerce mug and there were goldfish running around in there. I gave him this and said, I know you’re mad at me, but here’s a peace offering, which cracked him up, but he has never let me forget it. To this day, when I see him, he talks about that. You’ve heard that, Wally. He talks about fish and how I didn’t do the right thing back then. Well, I thought I had, but it gives you an idea of some of the intensity that surrounds this. People don’t realize it.

One other thing that happened on my watch, that came out of the NOAA environmental process, was the Monterey Bay National Marine Sanctuary. It is in Monterey Bay, California, and it was described to me as a national park, but it’s underwater. There is a discreet area and ecosystems that were to be protected, and so I was the one who presided at the opening in September of ’92.

I don’t know what more we need to say about NOAA, but you get the picture. It’s a big entity. There's a fleet of ships in there too, to do this environment research and my recollection is that I put some money into the budget, because some of these ships are very old. I am not sure whether all of them are even there today because they were on a schedule to be phased out. Another interesting thing that goes back to the weather service. There are the two aircraft, again old, big things.

Barnes

Lockheed Electras.

Franklin

Okay, he's the pilot in the family. That fly into hurricanes, and one is called Miss Piggy and one is Kermit the Frog. I had a visitation with the folks who do that. They are very highly trained career civil servants. I get offended when later on people were saying we can get rid of the weather service. They don’t understand who these people are. They’re very serious. They’re meteorologists. They’re really serious people, and they are career people and they don’t get paid that much for what they do. This particular hurricane flying is a dangerous assignment, and there is a lot of equipment in these planes. You find dents in the framework at the top of the cabin, where things have gotten loose as they fly into a hurricane. Items bounce up there. This is to underscore that it is dangerous work. Hurricane Andrew occurred in Florida in September of ’92 while I was in office. Since there were a lot of Commerce weather installations down there, there were a number of Commerce people affected by all of this. In fact, in Coral Gables, one of the key places that weather data are collected, the whole satellite dish blew off the roof. So, they were shut down for a time. I went down there because I was concerned about the people in the department who were hurting and visited with a number of them in different installations. I also was flown around to see the damage. It was really horrendous. So that was me trying to let these folks know that I understood their trouble and that we were going to do what we could to help.

Riley

There’s also a role for the department in the post-disaster clean up, small business loans and so forth, or is that not something that—

Franklin

I don’t know that we applied it there. We did that when the Los Angeles riots occurred. We pulled some money out of EDA [Economic Development Administration] and fed it into LA. It was for entrepreneurial activity, small business help, some seminars and so on, to help people get started again. We got away with that for a time, and then the appropriations committee head in the House, he's no longer there, Neil Smith, who was from rural Iowa, didn’t think this money should be going into a city. Then we had to stop. But we had gotten a fair amount done, and I would have done more. We didn’t have all that much excess budget to do some of this, so it was a question of being creative if we wanted to do something that wasn’t specifically in the budget. We had to get creative about where to get the funds, and we got pretty creative about some things. (I had inherited the budget.)

We did do some things to help those folks in Florida. Afterwards they sent me a replica of one of the airplanes with their gratitude. They really appreciated my coming down there. That was awful. That’s all I can tell you. Even thinking about makes me remember how awful it was. But they did well. They carried on anyway, despite the fact that a lot of them had lost their homes. They had a job to do and they did it. That's what people don’t understand. As I said before, that's what made me so angry when in, was is ’94, ’95, the Congressman from—I don't know. What’s going on here? [Noises outside the room].

Young

You were talking about weather and I’m looking around. Somebody, maybe that guy who was in the weather service, is listening in.

Franklin

Well, when the Congressman from Ann Arbor, Republican, thought we should get rid of the Commerce Department—I guess it was ’95?

Riley

Ninety-four. This was post revolution in the House of Representatives.

Franklin

Yes, and I think I was after Ron Brown’s tragic accident, or was it during that, or before? I don’t know, but you’re right. It was post revolution. That guy, when told that the weather service—I was there when he said this the first time—the weather service is in there. I said, You just can not get rid of the department. He said, We don’t need the weather service. We have the weather channel. I mean, what do you say? The guy lost his seat in the next election, maybe not because of this, but—

Young

First he lost his head.

Franklin

How dumb, you know.

Womack

Clearly a member of the television generation.

Franklin

Yes, apparently.

Young

One of the first assignments I had in graduate school was to do a study of the weather service.

Franklin

Oh, you did.

Young

The politics of the weather service. This was way back yonder, and I looked even at the constituencies back then: resort, resort, insurance companies, farmers, transportation and they put in the—what was it called? Discomfort index, at that time. They changed the name to THI and now they’ve changed it to something else. Cities didn’t want that report. New York City didn’t want that.

Womack

In China during the summer in some cities, they keep the temperature report below forty degrees centigrade, below 100 degrees, because if it’s above a certain temperature, then people get time off for hardship, so there's a—it really has to jump several degrees beyond before—

Young

I understand a few things about the weather service.

Franklin

Well, then if you understand the constituencies, you see where they can then go on the Hill and you see what comes back around. These folks, their budget never gets cut, not that it should, but they’ve got it very well handled on the Hill with the appropriations process. So sustainable development is in some ways a little bit of a stretch. But there is business and business-y activity that is really a part of this NOAA situation.

Womack

So that's the point to NOAA, basically.

Franklin

That is basically what that is.

Barnes

Well, the fishery management is another good example.

Franklin

Fishery management is very definitely an economic situation, but these other things relate. The weather, you named the constituencies who are in business who are concerned. It’s just that it’s a little less direct, a little more remote than some of the other things we were talking about. But that’s what it was. It was basically a way to pull NOAA into the whole department so that it wouldn’t think that it was it’s own agency, even though I am not sure that anybody has totally succeeded.

Young

Did the issue of fish farming ever come up in connection with these regional councils, because that's now become an environmental and economic issue all around?

Franklin

Not so much back then. I think it’s more of an issue now.

Young

They’ve been doing a lot more of it now.

Franklin

Yes, I think so. That was that. What else? We didn’t talk much about technology. There was the technology administration that is part of Commerce and had a couple of different assistant secretaries and undersecretary. The national technology initiative, though, is what I wanted to get into. That was an effort started by Bob because some of the laboratories were under statutes which were changing. They were allowing or were allowed to bring some of the technology that had been guarded there into the public domain for commercialization. So the technology initiatives—and that was a group of departments—it was Commerce led, but Energy was big into it and the science advisor and there were a few more. We had these initiatives all over the country in various cities, for the purpose of acquainting folks who were interested in commercializing some technologies with what was available. They needed to know what they had to do to cross the bridge to get it from the lab into a commercial zone. The President spoke at a couple of these, actually and I think there was a lot of progress made, again, below the radar screen. But it’s all in line with what we were trying to do though. We were thinking globalization. We were thinking exports and trade, and this was another piece. How you use more technology to do what we were trying to do.

Of course, I had felt always that technology is a U.S. competitive edge, and that we needed to do all we could to maintain it and push it. Some other countries could do some things, in this globalized world that we couldn’t do, some of the cheaper labor for example, we could not duplicate. But where really have an edge, we did and we still do, is in technology. We have used it to enhance productivity in a way that was hard to fathom even just a decade ago, and we were interested in getting more of it into the marketplace. So that’s what those initiatives were about. I had forgotten how many there were. I was trying to look that up, whether there were fifteen of these, so we had a lot going on. We had export initiatives going on around the country. We had technology initiatives, and took turns chairing. The export initiatives—those Commerce chaired totally. There were representatives from some other agencies, but this was our ballgame. We were in the lead on the technology meetings, but there were some that Jim Watkins chaired or that I chaired. We had Hill people involved. We would get the congressional people involved wherever we went. It was good stuff.

Womack

Was the technology focused on transfer of government lab inventions to the commercial side? Were the inventions patented before they were transferred?

Franklin

I'm not sure what the patent status was, because we had some discussions about that. Whatever the concerns were had been cleared up about patents because you can't just ignore this aspect.

Womack

I had a long ride with a patent attorney and it was very eye opening.

Franklin

Oh no.

Womack

Unlike copyrights, it’s whoever patents it. It doesn’t make any difference of its prior existence. Whoever gets the first patents, owns it.

Franklin

Yes. All that had been worked out. Right now, that’s the kind of thing I can't remember but if it gets a little closer, I can. Of course the patent office is part of the Commerce Department. Which is—

Young

Long predated it too. Another one of those.

Franklin

Long predated it, and that was another one of those, that’s right. I have to say that this activity was something that I, in our budget deliberations, gave some more money to. The place was way behind the curve. There was stuff in drawers. I couldn’t believe it. You could walk in there and stuff papers under your shirt and walk out and nobody would be the wiser. Oh, it was awful, and I think they have now done a much better job of computerizing the whole—

Womack

The patent attorney told me, Go visit the patent office. You won’t believe it.

Franklin

Prehistoric. That’s right.

Womack

Yes.

Young

Well, early history.

Womack

Pre-modern.

Franklin

Pre-modern. Sure.

Young

The patent office was one of the buildings that was not burned when the British got Washington, because the head of the patent office was out there and he put his body between them and the British marines, and he said, This is the genius of our people. Destroy it, and you destroy me.

Franklin

Oh my goodness.

Womack

Wow. He should be famous. There should be some statue to him.

Young

So they went to the White House.

Womack

Did he say, Go over there?

Riley

No, that's a modern concept, not a pre-modern concept.

Franklin

You’re not making this up? This is true?

Young

No, no, no, no, no. At least that was the story that was reported after the burning of Washington in the local press. He didn’t leave. He stayed.

Franklin

I see. I hadn’t known that one, but—

Young

So yes, I’ll see if I can get you a reference. Unfortunately I don’t have a photograph.

Franklin

I guess not.

Young

I would like to go back to this list and this retreat. How did you think—did you have this list in your mind as a result of your own, or something like it, as a result of your own familiarity with the issues, your own study or taking soundings of the department, looking at what was in it, or did this sort of emerge after you’d gotten the office? Was it something you brought with you, more or less?

Franklin

A combination, combination.

Young

Okay.

Franklin

Yes, I mean it’s true—

Young

You gave some thought to this.

Franklin

I had some of this in my head, yes, and wanted some of this to come out of this discussion, but it was a participatory process, and it did come out. Now, sustainable development was not something I walked in with. That came out of the discussion. The rest of it, one way or another was probably in my scheme of thinking. I have an old Commerce organization chart that we’d had blown up, that I was using.

Young

Hear that, Rob?

Franklin

What?

Young

I was saying get the organization charts first.

Franklin

I had a lot of handwriting along the side as I was thinking about things, and you would find, and that was before we did this, you would find some of these same things here. Maybe some of the words were different. We fussed around with technology and innovation, or should it be innovation and technology, I mean, you know those kinds of things. But mostly it was there and there were a couple of other things that were folded into the others. Statistics was one of the things that we just thought was a foundation, a backbone kind of a thing, that supported everything else. So we didn’t put it in the objectives. That came out of the agenda, but it is a very important aspect of what Commerce does. So anyway, that's what we came up with.

We also decided that nine items on the agenda list were too many. We started with nine and then tried to work it down. So we came out with seven, and it seemed to make sense. That's the other thing. If you are going to do something like this, it has to be understood, or it doesn’t work. It has to be understood. You have to be able to talk about it so the people can understand it. It did work, and it did achieve its purpose, I felt.

Womack

Can I ask one more agenda question?

Franklin

Oh yes.

Womack

On exports and free and fair trade, was this, were these seen as exports? The free and fair trade being the sanctions and—

Franklin

Well, trade agreements, bilaterals, all of that kind of stuff. Exports, I mean there's this specific export promotion activity that is part of ITA and that's what that was, and these two—

Womack

And is this a ranking of priorities?

Franklin

Well, I always used to fudge that.

Womack

You can continue.

Franklin

Well probably, personally, exports was the number one. We were trying to get the export percentage of our GDP up. It was far lower than the same percentages of Japan’s exports to GDP, or Germany’s, and those were the two competitors we were looking at. We were by then in total exports ahead of those two, but not by much. But their percentages of exports to GDP were much higher than ours. My other point was that there was a lot of room for growth here, and this was an important way to grow the economy and create jobs. So it was all the same pitch. It was all connected. It sounds disjointed now, because I haven’t been talking about it this way for a while, but it was fine at the time.

Young

No, it doesn’t sound disjointed at all to me. I mean from the moment I saw it, I thought this is probably very well thought out. This is no accident and it’s the way to get started. When you are coming into a going organization.

Franklin

It was a way for me to get my arms around the department and to create my own team. I didn’t start with my own team and some of them were folks I probably wouldn’t have picked. The department was not in great shape, and as I said, I’m not sure Bob knew what was going on because he was sort of half in and half out for a time.

Riley

I was just going to take off on that because one of the questions we had discussed when we were preparing was whether there was some heavier burden on you following in the footsteps of someone who had the presidency or obviously—

Franklin

He was a close friend, a longtime friend of the President’s. Sure. Sure there was, and I knew that, and there wasn’t anything I could do about it much. The other thing I should say though was that the President and Barbara Bush were friends of mine, too. I mean, we had certainly been in and out of the VP’s mansion a lot in social situations, Wally too, but it wasn’t like Mosbacher. That went back a long way and I was not a Texan either. So sure there was a burden, but that was the way it was. You don’t spend a lot of time thinking about those things, except that I did know I had to get a hold of the department somehow and that I was probably going to have different style of operating than Bob, and I did. As I said, some of those guys didn’t like it, but that was the way it was.

Riley

Did you find anything in particular or can you recall anything in particular that you felt the need to come in and reverse, other than the general sense of having, as you said, to get your hands around things? You were stepping in the stream. Were there certain cases where you felt the need to bend and found some resistance on the part of the White House because no, this is Bob’s pet project?

Franklin

No, no, there wasn’t anything really like that at all. We were carrying on some of what he had started, but there were certain innovations and differences and so on. I never felt anybody was looking over my shoulder and saying, Hey, you’re doing something differently from Bob, except maybe Bob was from across the street. I don’t know, but he never said anything. The one person that I really had to phase out was the chief of staff, who just didn’t get the message. He’s a good guy whom I liked personally. He was the one I got the private sector job for, was instrumental in getting a good job for. His view was that he was going to interpret what was going on in the department back up to me so that I would do what the bureaucracy wanted. It’s supposed to go the other way around, you know. It’s supposed to be that the chief of staff is to be interpreting the Secretary to the constituencies in the department. He could never quite get that right and it just was not going to work given the way I wanted to operate. That had to change and so I got that done.

Young

Did you have a kind of an open, modified open door policy? That is for people who come in and see you with out going through a chief?

Franklin

No. You don’t have time to do that.

Young

I meant for the service chiefs.

Franklin

I mean the folks who were heads of—oh yes, they could always get through one way or another. We did not use e-mail heavily back then, some, but now there is a concern about using it because you can get a freedom of information request, and there are things in e-mail that you don’t want to have found. One thing I did do—there's a corridor that leads to the Secretary’s office on one side and the reception area is on the other. That was walled off with glass doors that were locked on either end. I unlocked them. They are now gone altogether, but I felt that was a little bit too, too confining. My style was not going to be imperial, and I just didn’t think locked doors were necessary. I’m not sure who took them away, or how long they have been gone, but now it’s just a corridor, which is what I wanted to create the feeling of. So we unlocked the doors.

Young

Earlier, you made a reference to congressional liaisons, people who helped you deal with Congress or whatever they did. Would you talk a little bit about what that job was as you defined it? What you expected of these people? What you looked to them for and some—you referred to some experiences, one of them got you into a bit of trouble.

Franklin

Yes, he got a little out in front of himself. Well, the job is the care and feeding of the members, particularly those who are most important to us to make sure we know what is going on with them, what their concerns are, what they’re going to get mad about, and to keep the communication flow going. That worked reasonably well. The situation I was referring to was the person who was acting in that job, who was an okay guy, but he put a hold on a bill that Pete Domenici was pushing. It had something to do with labs. I'm a little fuzzy on exactly what it was for. But anyway, he didn’t tell me he was putting a hold on the bill. He was using my name to put a hold on the bill. Pete Domenici was furious—the labs in his state are his pride and joy. He had a fit. So, I decided the better part of valor was to go up there and apologize for what had happened. So I did and it receded. But that's not what you want your congressional people to do, to do things like that, that get the Secretary into trouble without telling her. He had a good reason for what he did, but he overstepped himself just a little.

Young

Did you, did the department have legislation?

Franklin

Were we pushing legislation? No we were not, no. I don’t recall that we were pushing anything except the product liability situation I mentioned before. But it wasn’t as though we had some specific legislation or legislative initiatives. Now, you always have concerns about appropriations and you need to make sure you don’t get killed in that process if you are not paying attention. But I don’t think that really happened to us much either.

Young

So it was mostly just maintenance of good relations with the critical people and a source of intelligence about what was going on?

Franklin

That's right, and making sure that there wasn’t something that was going to hit us adversely. Of course there are lots of letters that you get from members about one issue or another and we had to make sure that all of that got handled expeditiously and appropriately. So we had a pretty good system to do that.

Young

Did you ever have the need for weekly, not weekly, regular meetings with congressional leaders, committee people, or was that ad hoc?

Franklin

Well, I did. Well, I'm not sure how regular, but I did do that and certainly talked to some of them on the phone quite a lot, like Hollings and Danforth for openers, and certain others on these committees, but it wasn’t as though we had a weekly meeting. It might have been a good idea or maybe not weekly, biweekly, might have evolved into that. There were some I consulted with quite a lot, and who were very helpful really. There were others who didn’t pay much attention to what we were doing, didn’t care and that was okay too.

Young

Did this person alert you to items that were coming up, not just personal wishes and moods on the Hill, but items that were coming up that you ought to know about?

Franklin

Yes. That was part of the job. The person who I got confirmed for the congressional job was pretty well connected on the Hill already, and she had been in the Reagan administration and was pretty good at ferreting out what was going on.

Young

She knew. She knew the Hill.

Franklin

Also, she knew a lot about business constituencies because she had been in business and she has worked for NAM at one point. She had been on the Hill herself, early in her career, that's how I had first met her, she was a Commerce Committee staffer in the Senate early in her career. So, there was a lot of good stuff that she brought to this table. So that was good, I just wish I could have had her in there a little earlier, but, you know, that was the way it was.

Young

She was your pick.

Franklin

She was my pick.

Young

What about the other political people on your staff? What did you need? How did you use them?

Franklin

Political people, let’s see. I had a chief of staff, I brought in—

Young

Did you have a press officer?

Franklin

Yes, we did, but the press operation never worked the way it really should have. I did hire a guy to head the whole communications effort, and he was really not up to it. It was hard. I must say this, it was hard at that point to get people to come, because everybody was looking at the election. The PR guy I really wanted was off the Hill, and he decided to jump into business. That was a better move for him probably than coming to the Commerce Department. Those were the kinds of decisions some people were making. So I felt fortunate that I was able to get who I was able to get at that late date, but it was not perfect, and so—

Young

How would you have changed it if the President had been reelected and you were staying put, you got a new lease?

Franklin

Well, I would have. I would have.

Young

What would you have wanted to do that was not happening?

Franklin

I would have changed—well, a number of people, and some of the folks who were there in the political spots were ready to go anyway. They were burned out or wanted to get back to business or whatever and it would have been a different process. I would have looked in some cases for some different qualities, in some cases some heavier folks than were in some of those jobs. There were some good people there, but it was not uniform.

Womack

And you yourself would have been willing to stay for a time.

Franklin

I would have. I would like to have stayed a little longer. We didn’t really finish what I would like to have accomplished. But that was not the way it was so, you do the best you can. But I would have changed some of those folks, and certainly would have got that scheduling operation fixed.

Young

Tell us about that. You said this never got—

Franklin

It just never was good enough.

Young

What would be good enough?

Franklin

Well, how do you explain a good scheduling operation? Someone who—or a set of people who knew the way I wanted to be scheduled, and then who had judgment about what they were doing. Now, the chief of staff was overseeing this but they just weren’t good enough. That’s all I can tell you. Bob didn’t care apparently, because he had a lot of people coming in and out. In other words, he wasn’t managing his time in the same way, and it worked for him. But it was not they way I liked to operate, so that was a sticky point.

The communications apparatus was not good enough either. We never had good enough speechwriters. That’s an art form anyway. That's really difficult. There was one young man who was hired there who just was bombastic, is all I can say. I am not bombastic, and I can't talk that way. So that never was very useful, and we had to cobble together much of my speeches. There were a couple of people who kind of knew, so it was a group effort, which is not perfect. Some of it I did, because I couldn’t quite get it the way I really wanted it said. So that never worked as well as I would have like either.

The office of the Secretary sorted itself out and was working okay. I would have upgraded the business liaison operation and some of the other people in the key spots, I would have changed.

Young

What was the business liaison operation?

Franklin

It was a way to keep track of the business community, to interact with all kinds of different companies of different sizes and in a variety of businesses. It needed to be upgraded. It needed to be heavier.

Young

That was your point person for dealing with the interested parties.

Franklin

Yes. So there were things like that, that when you come in this way, you just have to do the best you can. In some cases it wasn’t quite the caliber that I would have liked, but it was what it was, and it was pretty good at the end of the day. We did quite a lot in a short time and got a lot done with this set of folks who did become my team, for the most part. A couple of these folks were not ever going to get there. That's always true. I don’t care who comes into anything, so—

Young

Particularly in this case. It put a lot of work on you, that you would have preferred not to have had to do.

Franklin

It put a lot of work on me. That’s right. That’s exactly what it did, and well, it’s okay, you can sprint like that for a time, which is what I did for a year, and then I was a little weary when I got out. These folks right now in the new administration are having to do some of the same, because they haven’t got the underpinning either and having to just go flat out. There’s no learning curve time either when you go in this late. No on the job training time. You just have to do it. No time for building relationships particularly either. My attempt at that was these lunches and breakfasts and so on that I had with colleagues. There were some folks whom I knew and I had worked with before and so I wasn’t alien to this whole scene or these people or the Bush folks. But you know it’s different when you are in one of those chairs.

Young

The administration is going out whether they know it or not and you’re just coming in and it’s sort of—

Franklin

It’s very strange in that sense.

Young

It’s an odd time during the administration.

Franklin

It’s an odd time. It’s a difficult time. In hindsight, I think it was more difficult than I realized, so I feel pretty good about how I performed. It was the way it was. You just have to do what you do, and we did do a lot, as I said.

Young

You did indeed. It’s five o’clock.

Franklin

Are we finished?

Young

I won’t cite the butt rule. I think this has been a very enlightening session for us. I hope it’s been a bit of, some fun. I hope it’s been productive for you, if not fun.

Franklin

It’s been interesting for me. It makes me think of things I haven’t thought of or in a different way perhaps, so I appreciate your questions and your insights and your relating this to something else over here, and so on.

Young

Sometimes rightly, sometimes wrongly.

Franklin

That doesn’t matter. That's what—

Young

That’s what we’re here for. I know you are not spoken out or thought out yet. I notice you looking—

Franklin

I have a couple more things here.

Young

Well, we’ll spend a little time in the morning with that.

Franklin

Statistics being one, that will not take a long time, but that's an important thing that goes on at Commerce. I did try to beef up this activity, and well, there are some things to say about statistics and Commerce and also the linkage around the government to the other statistical agencies. Interestingly, recently Greenspan has been complaining about some of the statistics and I understand what he is complaining about. So that's important I would say, and a little, a few words about this TWA situation.

Young

Okay, fine.

Franklin

Totally under the radar screen. And, I may think of something else.

Young

Some more about the last days of the Bush administration and the economy. We might come back to the subject a little bit more. There was a major change in the White House, Sununu’s out. Atwater’s out. Two people who were very much involved in the first election. I don’t know how to characterize what was going on in the White House then, but maybe you can fill in some of those blanks, and in general the experience of being in an administration that is having this kind of difficulty, while you were trying to carry on your job.

Franklin

It was a difficult time. It was. Too bad, too. The guy should have been reelected. I'm in that camp.

Womack

There is another issue that we haven’t talked about that would seem relevant given your experience dating back to the Nixon administration—that is women in government and how do you feel about being the highest ranked woman in the Bush administration and coming in so late in the administration. Should he have done more?

Young

We are—that's to talk about later.

Franklin

We can talk about that. I have some views on that.

Womack

Sure, sure.

Franklin

I got criticized for looking for women for some of the jobs in the department, and some guys said, Hey, what about the men?

Young

On that note.

Franklin

I’ve played this scene before. I know about this.

Wednesday, April 18

Young

You had mentioned two things you wanted to cover today, at least two, and one was statistics and one was TWA.

Franklin

Before we get to that, there are a couple of things to mop up from yesterday that I thought about overnight. One of them has to do with Russia, and this is just an anecdotal thing, but it tells you something about Yeltsin’s state visit. The evening before we had the first bilateral meetings in the Cabinet room, there was a state dinner, and when one goes through the receiving line, the principal goes first, which meant that I would be first and Wally was following me. Now, Yeltsin had not yet met me, and of course, he did not speak any English. As we go through the line and President Bush is saying, This is the Secretary of Commerce, and the translator behind him was saying that, Yeltsin reached right across me to Wally.

Womack

There's Russian sexism.

Barnes

I became Secretary of Commerce for an instant.

Womack

And you became a pilot.

Franklin

I became a pilot. Then there was a great flurry of oh my goodness, no, no.

Riley

For the record, the pilot reference is from dinner last night so it will make no sense to the reader.

Franklin

Okay, that's very good. Anyway, that's just another little bit of Yeltsin color of which there was quite a lot. I happen to have a photograph. They took a photograph when this was happening, so I have got a photograph of that. There is the back of my head, and he's reaching for Wally.

Barnes

Literally you had to turn your head to avoid having his arm hit your nose.

Franklin

People. This has to do with the management aspects of the department and the people. There was one thing that was—Well, I’ll say it the other way—one wishes one didn’t have to do if one is a Secretary, but one does. Bush was very keen on having no scandal in that administration. There was none because a lot of attention was paid to ethics at the outset.

The deputy secretary, Rockwell Schnabel who was in place when I got there, committed an ethics violation that came to light in the summer of 1992. I found out about it because the inspector general came to me with a long face, and said, I have something to report. We have investigated it. It is an open and shut case, and it’s somebody high level. Then he told me who it was. What had happened was that Rock had written a letter—this was quite clear, it was in writing—to a counterpart at the Veteran’s Administration, asking him to do business with his father-in-law’s company. This is against the regulations. The IG had it all buttoned up, said, I’ve got to send this to Justice. I became concerned about this. I talked to Rock and was convinced he was going to have to resign over it, because this may well get out and it was an election year.

After a process of a couple weeks, I convinced him he needed to resign, which he then did. His wife did not want him to. I think she's probably never forgiven me for it. But he resigned the day before we were leaving for the Republican convention in August. There was an announcement made, then it just disappeared. It got no attention at all, and internally we just said that he went back to California, which is where he came from, and I made Wendell Wilkie, who was the general counsel, the acting deputy. It was one of those things that was too bad.

There was another thing that when I got there had to be calmed down. This had to do with the feelings in the department and the weariness of people. Bob Mosbacher had one aide, who used to go and give people orders in different parts of the department, and then if they didn’t do exactly what he said, he would punish them somehow. He would leak something, or something would happen to a head count in that part of the department, or it was stuff like that. Some people were really quite anxious and felt quote terrorized, as one person told me. I had that to contend with and to calm things down. So we did. These are just little management tidbits.

Womack

How did you handle that one?

Franklin

Well, you behave a different way, and the folks around you behave a different way, and then the fear about getting your head chopped off goes away. But it takes a little time.

Womack

But you didn’t remove the guy.

Franklin

Well, the guy wasn’t there. HHe had left. He’d left. Oh, if he had been there, that would have been far more difficult. No, he’d already left.

Riley

Well, since you’ve raised the ethics question here, you’d mentioned earlier that you had agreed to recuse yourself but—

Franklin

That was never an issue, actually.

Riley

Okay, I didn’t know whether there were instances in which you actually had to—

Franklin

I don’t think there was anything. I mean springs in automobiles—that doesn’t usually get into the mix of issues. Where it might have been would have been auto parts, but we didn’t have anything really going on, so I never had to exercise that recusal.

Riley

Sure, and was there any public notice taken of the waiver that you had received? Did you or the President take—

Franklin

I think that was on the table and got reported after my confirmation hearing, which is I believe how John Dingell knew about it, or his staff, but it was never exercised. I didn’t have to do it. This is not uncommon either, to have certain recusals.

Young

No, especially in that administration.

Franklin

Yes, but anyway, one likes to be extra careful, so that’s what we do.

Young

So let me just—you mentioned that this individual who had left the department was not good at human resources management, shall we say?

Franklin

Well, it wasn’t his long suit.

Young

There was—there is some testimony that there was somebody in the Commerce Department who was known, sort of suspected of being a leaker. I imagine it was this person.

Franklin

I think it was the same person.

Young

Okay.

Franklin

This person—

Young

I didn’t know which—under whose regime this comment was made.

Franklin

I think this person is ethically challenged.

Womack

Both a leaker and a drip.

Franklin

I thought that maybe we should put on the record the Herbert Hoover story from last night. Do you think so?

Riley

Of course. Please.

Franklin

Well the legend went like this. I should back up for a moment. The building, the Commerce building, is named for Herbert Hoover, who was the longest serving Secretary of Commerce, prior to his becoming President. His spirit is known to inhabit the building. There was in the Secretary’s office, a bathroom that was prehistoric, the best description I could think of. There was a phone in there that used to ring on occasion, and if I ever could get there, because it was a long way from where my work space was to this room, if I ever could get there, there would never be anybody on the other end. What others said was that it was Herbert Hoover, calling to check on things in the department, heard a woman’s voice, thought he had the wrong number, and hung up.

Young

A nice story.

Franklin

Sort of silly. A couple of things that we mentioned from yesterday. Statistics. The Bureau of Economic Analysis is part of Commerce as is the Census Bureau. BEA is where the GDP statistics come from as well as a few other things, but the GDP is probably the most important one. I became concerned when I was there about how we were measuring services in terms of the total GDP but also exports and imports. I didn’t think our ability to collect the right data and then integrate it into the BEA process was good enough. Services were climbing as a percent of our economy at the time. I did manage, as you can do as a Secretary, to move some monies around. I put some more money into that function, specifically designed to gather better data on services. Now, the Census Bureau is often the gatherer of the data, but the massager and the put-ter together of it is BEA. So, that did start them on the track to do a better job, and actually, the guy who is running that now said something—I talk to him on occasion—said something to me about that maybe a month or so ago. You were the one who started us into a better data situation on services, and of course, that leads to productivity too.

Actually though, I’m told there was a step backwards after the next administration came in. They didn’t want to put that money there and the money came out and went somewhere else. It isn’t much. Statistical operation doesn’t really cost much. Census has 10,000 people in it, that's a bigger deal, but BEA is a cast of really quite good professionals, I think, and the process that produces these figures is very tightly controlled and locked up. I mean political appointees don’t have anything to do with it all. That would be really hard to influence, which was why, to go back to something yesterday, when I was accused of cooking the books in October of ’92, even if I had wanted to, I couldn’t have. I couldn’t have, because they have to estimate certain things. That’s why there are the revisions. I talked to Don Evans last week about this. He's concerned about the revisions of GDP in particular and how can we avoid that, and that’s a worthy objective. My own view about statistics government-wide is that we don’t pay enough attention to them and there's no champion for—

Womack

You mean to the results or to the process of making them right?

Franklin

To the process that gets there, and some of it comes out of Commerce, some out of Labor. The Federal Reserve produces some. Agriculture produces some. My own view would be that we ought to pull those things out and put them in an independent statistics agency with a head that's like the head of the Federal Reserve, with a term that's not coterminous with the President.

Womack

Are there any international models for that?

Franklin

I don’t know. What I do know is that there is no champion for statistics anyplace in the government. Mike Boskin, who was Bush’s economic CEA advisor, was trying to do something about this and had an initiative underway, but it’s hard to sell that on Capitol Hill. Nobody cares, and it’s wrong, because we should care, and we’re now basing a lot on what’s coming out here. Markets react, more that they used to, based on GDP figures and unemployment, retail sales and of course productivity. So, I, just for the record, wanted to beef that up. If we’d stayed, I would have worked on it some more. I do believe that the secretaries of these departments are the ones that have to push for improvements.

Young

Your predecessor in this effort was Franklin Roosevelt, who wanted to establish an office of facts and figures.

Franklin

Oh, is that right?

Young

He wanted facts and figures. He had an idea for a central—well, he needed them. He said, We don’t know whether what we’re doing is working or not. I need to know the right figures, and so he wanted an office of facts and figures, and Congress wouldn’t have it.

Womack

Can I ask a question?

Franklin

I was in good company there, huh?

Riley

I don’t know. Do Republicans accept Franklin Roosevelt as good company?

Womack

His facts and figures, sure, and this bipartisan—

Franklin

I think by now he's just—

Riley

He's laundered a bit.

Franklin

We might not have liked all his programs, but I would agree with him on that. There are few other things I agree with him on, too.

Womack

Was your sensitivity towards this services question from your background in accounting, or had the department raised that question?

Franklin

No, actually, I don’t think they had. I came in with that, because of all that I had been doing in business. I was on the boards of seven large companies, and some of them were service companies.

Womack

And you were paying a lot of attention to the numbers in those businesses, too.

Franklin

Yes. Our data were behind the curve, and as the economy becomes more globalized, it’s harder. The export/import stuff gets a little fuzzier.

Young

Didn’t Alan Greenspan raise somewhat recently—talk about some questions about the statistics?

Franklin

Yes, and that's part of what he was talking about, that we’re behind, the Federal Reserve is, too. The whole governmental process is behind the curve, I think, given what we have going today, and it’s more acute today than it was back when I was concerned about that services piece.

Riley

That would seem politically that if you have a greater degree of independence in the leadership of this, it insulates the process more from the kinds of accusations that you were accused of.

Franklin

From politics. That would be, yes. That would be one of the outcomes, I would hope.

Womack

Yes, but does it raise attention to it? I mean people are automatically suspicious, so why do you want to add services?

Franklin

Well, I don’t know that anybody was. The statistical people got the picture, but again—

Womack

Yes, sure. Sure, because as the shape changes, you need new measurements.

Franklin

Exactly, and they were aware of it. But you know, they were operating on a pretty thin budget, and there aren’t many people in that, in the BEA part, and Census, as I said, collects, but doesn’t do the statistical work. I think it’s (BEA) a very good operation and they’re very good people. They’re real pros. They’re all career people.

TWA, this was under the radar screen totally, and this was toward the end. I'm not sure I know what the timing was. I think it has to be the fall of ’92 though. There is something called the Pension Benefit Guarantee Board [PBGB] that’s housed in Labor, and it keeps watch over pension liabilities, of companies like TWA. If the liabilities get so out of whack that there was not enough net worth to pay that off, they raise red flags, talk about it publicly. I think they have some other powers, but I can't remember at this point exactly what they can do to force a company to do better on this.

Barnes

Require disclosure in the proxy statement.

Franklin

Excuse me. I'm sorry.

Barnes

They can require disclosure in the proxy statement.

Franklin

Proxy statement, okay. Well, that gets investors involved. TWA was such a company and was from their perspective, in a lot of trouble with respect to their pension liability portfolio. They were about to blow the whistle. Now there is a board—like a board of directors, of the PBGB—that is chaired by the Secretary of Labor. The Secretaries of the Treasury and of Commerce are on it. In all the years of that thing being in existence, which was, I don't know, twenty-five years, the board had never met. Somehow or other, I still don’t know how that occurred, John Robson at Treasury got wind of the fact that the Pension Guarantee Benefit Board was about to pull the plug on TWA. There was concern about TWA and what that would do to consumers. But there was also concern about Missouri, where its home base was, St. Louis. There was concern there. Anyway, John called me one day and said, You know, we’ve really got to do something about this, because what they are going to do at Labor, they didn’t like business as much over there anyway. This is not going to be good.

We contrived—Nick Brady was in on this as well, but really Robson was the one who carried the freight for Nick, and I think even replaced Nick on one of these calls. We got Lynn Martin to convene the board, which made the pension benefit people very nervous, and so we did it on the phone. We had a couple of these meetings. Then the TWA folks came in and made a pitch to me and they had their union with them. So it was both management and union. It turns out that the CEO of that company was a guy who had been in my class at Harvard Business School. I didn’t know very well, but there he was, and anyway—long story short here. We decided we were going to put the lid on what the career people at the board at Labor were trying to do. You’re not going to do this to TWA in effect, and that's what we did, which gave TWA a reprieve. Now they have been bought by somebody—

Barnes

It’s over.

Franklin

It’s over, but this is nearly ten years ago, and we gave them the chance to get themselves together. The other factor in the meeting was that they had their creditors with them. In other words, they had put together a plan, and a group that said, Hey, we’re going to try to save this airline. What we did was give them a reprieve, and put the lid on the guys at Labor who were going to pull the plug, at least publicly pull the plug. So that was I think, a worthwhile little snippet that nobody knows about. That just happened.

Young

Nobody in White House knew about it either?

Franklin

I don’t know if they did or not.

Young

I mean they weren’t real concerned.

Franklin

No, they were not. At this point, the administration was otherwise occupied. So we just did it.

Young

Let me go back to the ethics problem once more and just ask the same question. When you discovered something like this, did you keep it within the department? Did you talk to somebody in the counsel’s office about it in the White House?

Franklin

Well, I did, because the deputy secretary is a presidential appointment. I called the chief of staff. I called Sam Skinner, and said, Sam, this is what I’ve got here and this is what I’m intending to do. I need you to back me up, and that was in case there was an appeal made to the White House. Sam said, I’ll get back to you. He never did. So I did it anyway, because it needed to be done. Then when Rock was on the verge of resigning, I called Sam again and told him. That was that.

Young

There was no need for a return call.

Franklin

No, by then it was a done deal. So, I don’t know. He may have been distracted on other things, but I sure didn’t want this to blow up. It wouldn’t be good timing with everything else. So, okay, I think that's—those are my tidbits from overnight. I may think of something else, but I think we did it.

Young

Yes.

Womack

I have a question that I imagine you’re going to be going to sort of the end, so let me ask you this question that is more about the beginning. With all your working and promoting women in leading positions in government, don’t you feel that Bush waited a little long?

Franklin

That's hard to second guess. He had two women in the Cabinet. I was the third. Well, I always want there to be more, you know. He had done better on that, overall if you looked at the whole administration, than the previous one had. I set about recruiting some women when I went to Commerce, for those empty chairs, and actually there appeared an article in the press because I was looking for a woman for that congressional job. I found one. That was Mary Jo Jacobi, an old friend. But somehow it got into print that I was looking for a woman for that job, and there was a mini firestorm of, You can't do this. What about men? It’s kind of comic. I didn’t think that was all bad.

Womack

But, before your appointment, how did you feel about the administration? It was doing okay on these issues?

Franklin

Yes, I think they were doing okay on women. As I said, I always wanted there to be more, and there certainly was a women constituency.

Riley

Did you find Bush himself was comfortable dealing with women on a professional basis.

Franklin

Yes, Bush is okay on this. In particular if you look at his generation, where he came from, yes. There always can be more attention paid. It’s a question of how one does it. The way the thing was organized in the Nixon era has never happened since. Carter had some kind of a women’s office, but what you really want to do is to have the thinking about advancing women in everybody’s heads and into the mainstream not off to the side in some office. The Nixon approach got away from that by causing the Cabinet secretaries to submit action plans. That's how we got into the mainstream, and that caused the bureaucracy to loosen up on women and that stayed. There were very interesting advances back then that bureaucratically became part of the way things were, and it almost didn’t matter who was in the White House after that. It just went on. That's how to do these things, I think. Now today, I don’t see much of a real issue in terms of numbers of women. If you look at this administration, the current Bush administration, even though there is a women constituency out there that tends to be—a part of it anyway—tends to be more liberal, maybe than this administration. But this administration has got women everywhere.

Riley

Well, I guess it was in relation to this administration that we first began hearing a lot about the so-called gender gap in electoral support. Have you thought about that at all?

Franklin

Yes, I have. But we have had a gender gap on the Republican side for a long time, and I personally think now is the time to start to figure out why we have it. Then once you figure that out, then implement a plan to outreach to those women. One has to segment the population of women, and you have to ask yourself why college-educated women, why did they vote for the Gore ticket overwhelmingly? Why did young women do that? Why did suburban women do that? It takes some research to figure this out, and then I think if you are on the Republican side, you try to match the key segments with your own philosophy. In other words, which ones are more likely to come your way, if you can communicate in the right way, and do the right things. So I think that's what needs to be done. There needs to be a plan and then it needs to be implemented, and it’s not going to happen overnight. In order to get some of the women back over to the Republican side, who I think should be there, but weren’t in the last election. It was interesting to see which, because we do have the demographic segments, to see which ones went so heavily for the Gore ticket. Some of it didn’t make sense to me, and I have looked at it in some detail. But we have had, since my time in the White House—which is when I start to remember this—a gender problem. Richard Nixon was an unlikely person to have done what he did. The women’s movement was going strong at that point, and it was really a left, a further left-wing approach. There was a lot of confrontational activity, you probably don’t remember, but the burning of the bras and some of the symbolic things that were going on. I believe that what Nixon did though, by having a presidential effort, is pull equality for women into the mainstream. He made it okay. Equality was fine.

Womack

He sort of kick-started that affirmative action-type program.

Franklin

Yes, which of course is out of fashion, but we never—in the work for Nixon, we never had quotas. We had certain targets however.

Womack

This is beginning to sound like Japanese trade. Free trade, a target.

Franklin

I have to tell you that worked, but that too would be probably out of fashion today. Just to close the women thing, there's some work that Republicans need to do in terms of that whole constituency and which parts of it ought to be with Republicans. Business women are one, but some of them went the other way, too. It makes you scratch your head. I tried to do my bit on this wherever I was and I find that it’s expected. If I don’t do it, people wonder, What’s wrong with her?

Young

Right.

Franklin

For example, in the corporate scene today in the board world, there are now more women on boards. It’s much better to have several then just one, and also now, men raise some of these same issues, which I always—

Womack

One is certainly a lot better than zero.

Franklin

One is better than zero. I have been there, done that.

Womack

I’m sure you have.

Franklin

But it’s better to have three or four or whatever in some of these situations that have been mostly male. It makes a difference in tone. It changes paradigm, so that's usually where I come from.

Young

Not to speak of the voting power.

Franklin

Not to speak of the voting power.

Young

When you get more than one.

Franklin

Yes.

Young

Let me ask you to start speculating or thinking or sharing your thoughts about George Bush in his presidency and his White House, and to start it off, let me ask, did you—when did you feel you got to know George Bush, as against being acquainted with him, if in fact you ever did? You were not in the inner circle in the White House.

Franklin

In the White House, no. I felt I knew him pretty well before that, before he became President.

Young

You had taken his measure? You knew—

Franklin

Yes, I felt I knew who this man was.

Young

He was not just an acquaintance?

Franklin

No, no, I did not feel that way at all, and I’ve considered him a friend, in many ways a role model, a mentor perhaps in a way also. No, I felt I really knew this guy. I didn’t grow up with him—

Young

What were the qualities that you paid particular attention to that you considered important?

Franklin

Well, I thought he was somebody who had a vision of how things should be even though he always said he didn’t have the vision thing. I always thought he really did. I thought he had the qualities of intelligence, but certainly of character. I admired his quality of character, of integrity, loyalty, some would say to a fault, to friends. But his credo always was faith, family and friends. It still is, but it was, I think, almost ever since I knew him, which goes back a long way. But I felt I got to know him far better when he was Vice President, or toward the end of the ’70s, during the time he was party chairman. I used to see him occasionally for lunch. We were all sort of, as I said, downtrodden at that point. The Republicans were out of favor. So I felt that I knew who he was.

Young

So you had been acquainted with him, and watching him and associated with him over a considerable period of his public life—

Franklin

That’s right.

Young

Starting with CIA.

Franklin

Well before that.

Young

Even before CIA, okay.

Franklin

I knew the Bushes when he was at the UN and I was at the White House. I was a young White House aide.

Young

Seeing him in all these different contexts, some up close as an acquaintance, did you notice any change in him over this period. You know this. A lot of people say there is no training to be President. Of course, I think that's not entirely true, but as you move from an appointee and then Vice President of somebody else to a President, in your own right, did you notice any changes in his style, in his manner, in his way of dealing with his public persona?

Franklin

He had to grow into some of this. The thing that stands out is that he had to talk himself into being able to put forth why he should run for President. I remember this from some of those visits to the Vice President’s mansion. He would articulate this. This is hard for me. My mother always told me not to do that. You don’t brag and you don’t talk about yourself. That's why he doesn’t say I. He’ll say we. But he verbalized all of that. Well, I know I’ve got to do this if I am going to run, and he talked himself through it. But that’s the most vivid change that I can remember.

Riley

The visits that you are talking about to the Vice President’s home, these were just routine gatherings of people or he would have a private dinner or something?

Franklin

It was a little of both. The one I am thinking of was out under a tent, I feel, it must have been in the summer. I don’t know what year it was though, because those things went on for a while. We were in and out of there a lot. He had a cadre of supporters, and we would be there, sometimes small groups, sometimes larger. You know he kept the fires going in the preparation. I would say this, that his presidential bid had friends in it who would go the extra mile for George Bush, all over the country, and that is what made the difference in that campaign, I believe. It’s what Bob Dole, for example, didn’t have in ’96. He didn’t have the extra-mile crowd, is what I call them.

Young

Did he lose that in his reelection? Did he have that also?

Franklin

It’s harder to discern, but something was missing in that campaign. That may be a whole other subject, but it was different. Eighty-eight was quite an upbeat situation, and I do remember early on when the primaries had just started, actually, one of my vivid memories was at a corporate board dinner. This should remain nameless as to what board that was, and we got into politics and I was saying that I was for Bush and the reasons why. I did a lot of that, and a guy across the table yelled, George Bush couldn’t sell anybody anything. This was ridiculous. This got a little hot and heavy. He literally almost threw a roll at me across the table, Will you shut up.

Riley

Your pilot wouldn’t let that happen though, would he?

Barnes

I wasn’t there.

Riley

Oh.

Franklin

No, Wally wasn’t there. It was just this bunch of men and me on that board.

Barnes

She’s pretty good a roll throwing herself.

Franklin

Which I did not do. I just was my usual self, and he—afterwards, after the election was over—this was somebody from Bob Dole’s, well actually, Elizabeth Dole’s home state—rather sheepishly said to me, My wife says I need to apologize to you because of that conversation. So tell your wife, Thank you very much.

Young

That's nice. My wife says—

Franklin

I wasn’t sure he really wanted to do it. So Bush was no shoe-in, early on. He had to work for wins in the primaries, and in Washington there was a split. The lobbyist camp was for Dole, because they had to work with Dole. Nobody wanted to get on the wrong side of Bob Dole in ’88. There were a couple of other people in the mix who have now faded from memory. Jack Kemp was trying to run also. But it took, I think, that set of friends talking about George Bush early on, to lay the groundwork.

Riley

That raises an interesting question about his performance as Vice President and there was kind of the sense that he had dwindled politically as Vice President.

Franklin

Whose sense was that?

Riley

Well, I mean, if I step back a little bit, one of the things that those of us who study the President see over time, recognize is the vice presidency—John Nance Garner and his famous comment about what it’s worth.

Franklin

Yes, I know about it.

Riley

And it has the effect of not providing a great venue for an individual to exercise the qualities that one would like to see in a President eventually, and I guess what I am trying to get you to do is comment on that as somebody who was a supporter of Bush’s. Did you develop any frustrations about what was happening to his public image during the period of time that he was Vice President or did you think that basically everything was fine in that regard? Were there any concerns about him getting lost in Reagan’s shadow, or ideologically—he and Reagan, of course, weren’t from the same tradition. Was there a sense that he was becoming too Reaganized or not Reaganized enough?

Franklin

Well, I wasn’t looking at it that way because I always thought that he was going to run for President. So I wasn’t looking at whether he was being diminished. Some people who were around him were concerned about that. I was not one of them, I think. As I said, because I wasn’t looking at it that way. I figured he was going to run. I think one of the issues that confused some folks—we’re back on the woman thing again—was the abortion issue. He seems to have changed his view on that, and Barbara Bush seemed to be in a different place from him.

Young

Yes.

Franklin

But I think Vice Presidents really have to be where their President is and so that's what he did. I would have preferred he’d stayed where he was, but that was not going to change my view. I think we never agree with anybody one hundred percent.

Young

Well, it’s also, despite this conventional wisdom, the Garner wisdom, it’s also interesting that he is very unusual in how he used the vice presidency as a successful launching pad for the presidency. And, one of the things that is interesting for people to inquire about, scholars to study, is how that happened and what are the qualities or the circumstances which allowed this historically atypical and unusual event to take place, particularly when the man who succeeded Reagan was one who was associated with voodoo economics and had run for President in his own right, early, had run for the nomination and lost to Reagan. Then he becomes Reagan’s choice, maybe a reluctant choice, one doesn’t know, but he’s very careful of the management of that relationship with the Reagan people moving from there to the President. The press image—I think what you are referring to is the lapdog label that people put on Bush. He wasn’t standing up to Reagan, but of course no Vice President can do that.

Franklin

Can't do that. I think from where he sat, that relationship worked out pretty well. I think he feels he learned a lot from Ronald Reagan. He really wasn’t Reagan, when it came to being a great communicator, and in that sense maybe I wish he had used the bully pulpit a little more. He wasn’t as comfortable with doing that as Reagan was. There was the wimp thing, now that you reminded me, and I guess that's where it came from because he was second in command. I knew he wasn’t a wimp. That was ridiculous actually. Anybody who had done what he had done in that war and who had done a whole variety of other things that were not easy wasn’t a wimp. One of the things about George Bush though, is that he makes things that are difficult look easy, and doesn’t, therefore, always get credit for them. I’m thinking of his presidency and the whole foreign policy aspect of it. When the Cold War was over, the world situation could have come unglued a lot more than it did. His handling of that was quite masterful. The German reunification, same thing. The Gulf War too, but he is not the kind who puffs about it. He just does it, and, therefore, I think, doesn’t get always the credit that should go along with these things. That’s his style though, a question of doing it, not talking about it. That's his mother again. Don’t talk about it.

Womack

And not grandstanding.

Franklin

Don’t grandstand. You just do it and people will understand that. Well, they didn’t in the ’92 election. So maybe we have some sea change in our society about this. I don’t know. There are some questions about what happened in our society.

Young

So the idea that Bush was ill-advised in not making a grandstand play for his reelection is not entirely the whole story. There was something in the man himself that didn’t like that kind of grandstanding. It was not natural for him.

Franklin

It was not natural. I have talked to Marlin Fitzwater and the President’s physician, Burt Lee, about the campaign situation in ’92, which got started late. Everything got started late.

Young

Very late, which is another question.

Franklin

Which is another—we can talk some about the campaign too, and I pulled out one of my campaign calendar trips so you can get some idea of what I did and how we mixed some Commerce business in with some campaign activity. One explanation is the medical one, and that's the one that the physician puts forth and so does Marlin, that there was something about the medication that they were using for the atrial fibrillation and the thyroid. It just caused him to be tired, to be not himself. He wasn’t quite himself. I would say that. I thought, this man is very energetic, very competitive, and I had known that for years. Those were some of the qualities that I always liked about him. He was always kind of bouncing around, had a good sense of humor, funny actually. He was far more subdued and not himself during that time. And I do know that there were efforts going on around him to try to get him going.

Young

Yes.

Franklin

That people like Jim Baker and Alan Simpson and others had something to do with. But still, that's the summer of ’92.

Young

That’s very late.

Franklin

It’s late. By then, as we said yesterday, I felt that the other side was running such a good campaign. I say this partly in hindsight, but they were running that campaign that pounded away on the need for change, even before Clinton was nominated.

Womack

And visions of energy.

Franklin

And energy and youth, and all this stuff, yes. It was just too much of a contrast I think. Then there is the other thesis that everybody was weary of having Republicans in office, including the press, the national press, for twelve years. There is something to that. I also think people get tired, because some of those same people were in there for a long period of time and maybe even grew a little bit arrogant. You know, We do really know how to do everything here.

Young

Some people who, including some people who had been on the White House staff talking about the burnout problem. For that and other reasons, they suggest in the President’s office two years is about it—

Franklin

For the staff, you mean?

Young

For the staff. People ought to circulate out, and then change.

Franklin

I think that's not the right amount of time myself. It’s too short.

Young

Too short because there are hazards in bringing in new guys.

Franklin

Well, you need some continuity and some institutional memory, even for a presidency. I think two years is a little bit too short. I might go for three, four. But yes, people do burn out and you do lose some of your judgment when you burn out. The key is knowing when you are burnt out and being able to do something about it and not just go charging ahead anyway.

Young

Did you find as Secretary of Commerce that you had the same problem, or would have had if you had stayed in? Burnout?

Franklin

With the people, you mean, or with myself?

Young

No, your own, with yourself.

Franklin

No, I had done a lot in a year. It was like doing two jobs, as I think I said. One was running the department. The other was campaigning. I couldn’t have done that probably very successfully for another year, but I certainly could have done one of them for another year or more. I was weary, not physically weary, but I was, what would be the word, emotionally, psychologically weary because of all I had done in a short time. That was par for the course. That's what I had to do. There was no other way to do it.

Riley

I guess the same factor could also affect a President who has been Vice President for eight years and served as President for four years. Is there a possibility that this lack of energy, native energy, that you’d noticed before was a function of just having done twelve years worth of a very difficult job?

Franklin

I don’t know. That’s an interesting question. I don’t have the answer.

Womack

It would sort of be unconscious burnout in a sense if—

Franklin

Yes. It would be unconscious. You know when you are President, you have so much done for you, so you don’t have to worry about whether your shirts are coming back from the laundry, you know, the little things that the rest of us have to worry about. So you really have to pace yourself in terms of doing the job and handling whatever comes at you that is not expected, as well as pursuing your own agenda, and pacing yourself so that you don’t burn out. It’s an interesting question, whether we have unconscious burnout.

Riley

You might watch the son’s habits in the White House to see whether he thinks he can learn something the rest of us haven’t seen.

Young

He starts out much younger.

Franklin

Well, he’s younger and—Oh, I think he has learned a lot of things from watching his dad’s administration and campaigns. But he's a different guy. He's a Texan, number one, a real Texan, and he's a different guy altogether.

Young

Well, his father came into office with a very long record of public service with many different areas, probably the most experienced Presidents, one of them, certainly in this century.

Franklin

Yes, I think so.

Young

Only one of two who had any extensive foreign policy and diplomatic experience, the other being Eisenhower.

Franklin

And happily, it was he sitting in that chair when what happened in the world happened. That could have been a real turmoil. That could have been a real problem. It was not, I think largely because of his handling of it, and the fact that he knew a lot of these leaders personally. He worked at that all the time too. That was part of his style. It’s always been. He’s always talking to people, I mean as long as I have known him. It may even be just a few minutes on the phone. He did that with heads of state and encouraged those of us in these other chairs to be doing the same thing with our counterparts. So we did. I did spend considerable time doing that. We didn’t discuss this earlier, but this was just part of the job.

Barnes

Permit me just one quick observation.

Young

Sure.

Barnes

It’s interesting to me that so few people cite the influence of Bush’s father on his subsequent life, and I knew his father.

Franklin

Oh, you mean Prescott Bush, the former Senator.

Barnes

Yes, knew him, campaigned with him, knew him well, a very powerful man and the epitome of a Connecticut Yankee, and a lot of George Herbert Walker Bush’s characteristics, I think, were shaped by his father, and one doesn’t hear or see that discussed very often.

Franklin

No, that's true and his father—

Young

Tell us more about that. In what respects?

Barnes

Well, he was a very formal man. The embodiment of authority. If anything, he was taller than the President. Very formal, but very polite, very courteous. I was running for a congressional seat and campaigned with him when he was running for the Senate, and he always went way out of his way to make sure that people knew I was there, and that I was introduced and, Have you met this young man who is running for Congress. and so forth. He went way beyond what would be the normal—Courtly, you know that expression? Also disinclined to blow his own horn.

Franklin

Same thing, huh? Maybe that's Yankee, rather than his mother.

Womack

It’s not Texas.

Barnes

When you said the current President is a Texan, the corollary is the former President was a Connecticut Yankee. There's no question about it. I know he moved to Texas and ran from there, but he had all the characteristics that a Yankee does. I don’t know. I just wanted to inject that.

Young

Well, I think that's very useful, because the stories you always hear about are his mother and the baseball, saying you know, George it was the team that did it, don’t get

Franklin

Well, and that’s interesting. Not many people knew Prescott Bush who are around now.

Barnes

And indeed there is a style thing that is very similar to his father.

Franklin

To his father. That's interesting.

Barnes

So I just think that it’s unconscious. His mother and Barbara, his wife, are the more verbal ones, but in terms of style—the other characteristic that seems to me is relevant to his service in the Reagan administration is that family, and Prescott Bush particularly, had a concept of service that was sort of hierarchal and that if you were second in command, you were second in command, and it would be inappropriate to presume that you weren’t second in command. George Herbert Walker Bush was ideally suited by that upbringing to be a Vice President. It was just perfectly natural for him to be a second in command, and so there's a little military there in it too, and it never would have occurred to him to not be a loyal and honorable servant to the President, even though there are obvious constraints in that. It was just a part of his normal being. He had a commander in chief, and he was something below the commander-in-chief. So I think many of the things he was sort of criticized for in his service during the Reagan years, puzzled him, because he would say, You know, I’m the Vice President. What do people expect me to do?

Franklin

And his background, that's an interesting point about his background. He is somebody who always is unfailingly gracious. This is true, but that doesn’t mean he isn’t tough. I mean it’s the same thing that Rockefeller was after—He's both.

Young

Well, I think you’re—he was very hierarchical, and very authoritative. The authority goes with the place, and also his career had not been in electoral politics, I mean he had won some and he had lost some. But, Ronald Reagan’s career was going public and persuading the public in that. So this is one reason it becomes interesting how he caught fire during the first campaign and with that Peggy Noonan speech—

Franklin

It was quite a good speech.

Young

—at the convention. Some people have commented, I don’t know whether you were there or saw it, that they saw George Bush change before their eyes when he gave that speech. He was now first in command.

Barnes

That’s right.

Franklin

Yes, I would agree with that. I was there.

Young

And had converted from the second to the first.

Barnes

We were both there.

Young

Was that one of the things you saw, or did that speech surprise you or did you see a new Bush?

Barnes

It didn’t surprise me particularly because I felt that he felt, Okay, this is now my moment. I have served. I have done this. I've done this. I mean he—going through the ranks is an important process for George Herbert Walker Bush, and he had done that, and so now he—He was now the man. This raises another observation that you have made often that you have commented on here, about how this is likely to be difficult, very difficult days for him, because he is no longer the leader of the family. And, I think that you are on to something because he lived under a strong leader of the family whom I knew, then came out from that shadow, and now suddenly because his son is President, he is no longer leader of the family.

Franklin

We have been observing this, or I should say, I have been, and I have articulated it to Wally, maybe to one other. There has been a change of roles for them, both Bushes, and I first saw it at the convention last summer. They have become parents, not former President and First Lady, and they are behaving differently. They don’t want to get in George W.’s way, and apparently George W. doesn’t want them in his way either. I mean this is a tough guy, overtly, his son. I had just seen it progress that way at the inaugural and then we saw them again in—was that in February or March? In Atlanta, the two of them, at Morehouse College of Medicine. There was a chair being installed in both Bushes names, and Lou Sullivan, who was, of course, HHS secretary and is back being President of Morehouse, was presiding. And it was quite interesting to me that George Bush in particular when he spoke, never referred to the fact that Lou Sullivan was in his Cabinet. It was, Lou Sullivan, my dear friend. That's another manifestation of what I consider to be a change of roles. Now there are some folks who have been saying, Oh the President all of a sudden is looking older. Well, if he is, maybe it’s because he is older. But it could also be what we are talking about here, the role change, that for the first time he is not the leader of everything, family, and the world. This is different. But it’s a discernable change. Now, he's the old George Bush, in private, with his funny emails and his notes and some of the stuff he says. I had a funny conversation with him that day in Atlanta. I mean this is the old George Bush, but not overt, not in public.

Barnes

We were talking about—and you leaned in and said something to me. You said, Honey, have you said hello to the President? And I said, Well, yes I have. And he said No you haven’t, Honey. Oh, it’s you, he said.

Franklin

Typical George Bush sort of comment. Those are the sorts of things that endear him to a lot of people. These funny asides are sort of absurd and some of the way he puts words together on occasion. It’s called Bushspeak. It’s funny. But you see I always knew, I felt, behind that there was—this was a really strong, quality human being. I think that was true then, and I think it is true today.

Young

So you know, it may be that being he was no longer running for President, he was President. I’m talking second term, and I am what I am and if the people want that, but if they don’t, they don’t, so much the worse for them or something. It’s time for me to—so the fire was not there even with him.

Barnes

It’s interesting. He never liked the, what he would define as the posturing that is necessary to be President, and it never occurred to me, but you may be on to something. That he was there. He had proved he could be President in the Gulf War and all of that, and he didn’t have to prove anything to anybody anymore, and if you want me again, here I am. There could have been a little bit of that too. This is, for the first time I can behave as I really am, which is a modest, funny person devoted to service. I am willing to serve again if you would like me to serve. You don’t get elected that way, but that's the way he would approach this.

Franklin

But he was really devastated when he lost.

Barnes

Well, of course.

Franklin

Well maybe that's not inconsistent. He was always a man on a mission too, and if his mission wasn’t finished, he wouldn’t have wanted to step out. I don't know. We’ll never really know.

Barnes

Bits and pieces, and you know, he clearly thought the opponent was a Bozo, so that, he could not believe, even before or after, that he was beaten by this man.

Franklin

Well, as we said yesterday, he really thought character was going to count in the end, and I have a note that says that toward the end of that campaign. Character did not matter to anybody at that point. They were worried about their jobs and whatever else. That defeat was very disappointing. He felt he’d let a lot of people down. He kept saying that afterwards, I feel as though I have let you down.

Riley

My question was about—was going back to your comments about his father and I wondered if you could say a few words about the nature of Connecticut politics as he was first exposed to them. I come of out of a deep southern tradition, which is very populist and very participatory, and the impression that I get is that Connecticut politics would be very different, if someone like Prescott Bush was successful in it.

Barnes

It was then. It’s less different now and much more sort of populist driven now, but back in those days, the—well Meade Alcorn was the national chairman and also the Connecticut chairman, and he was sort of the old courtly school of politics. He was part of the Eisenhower movement as you remember and so Prescott Bush fit the mold of what people in Connecticut thought a Senator ought to be in those days. He was courtly. He was distinguished. He was handsome and articulate and to be successful, particularly in the Republican Party in Connecticut in those days, one needed all of those characteristics. So that's what George Bush, George Herbert Walker Bush grew up in, in terms of his political, his first exposure to a political role model and Prescott Bush was very successful. I have forgotten how many times he ran, but he had a very successful political career, and he was always understated, always courtly. I just think that given the fact that in those days—this was when George Bush was much younger, these impressions took hold in a very firm way. If I can just fast forward, and then I’m going to get out of this. This is not fair.

Franklin

It’s okay.

Young

It’s about Bush. It’s okay.

Barnes

One of the interesting things has to do with the way, in my opinion, the way he used the vice presidency as a stepping board to the presidency, which, as we all know, has not happened, if ever, before. In my opinion, one of the ways he did that in spite of the fact that he had this notion that, clearly that he was number two, and that he was there to serve Reagan as his Vice President, he had been around in government long enough so that he masterfully used trappings of the vice presidential office over eight years, to advance his campaign for the presidency. The trappings of the President, as we all know, are enormously powerful: the aircraft, the homes, the press operation and all that. And second only to the presidency, are the trappings of the vice presidency, if you know how to use them, and he knew how to use them. He knew how to use that home. He knew how to use Air Force Two. I mean he was very comfortable, for someone—there was a contradiction, because for some one so self-effacing and modest, he knew very well how to use all those trappings of office and one of the ways he kept this group of friends and loyalists intact during these eight years, was all these—again he used the trappings of the office—the stationary and all of that sort of thing. We’ve got more models of the vice presidential residence and all kinds of things kicking around the house. So he knew how to do that and that came out of his long exposure to Washington and to the government and to, and as party chairman and so forth.

Franklin

That is a very good observation actually, because that’s how it was done. That was how the support was built and kept intact and the extra mile crowd, as I continue to call them, were right there when he needed them in that ’88 campaign. That, as we said, wasn’t a shoe-in at all, neither the primary side or then in the general. Dukakis did not actually do himself any favors. The riding around in a tank, and a few other things that were just, but it was—

Young

The Republicans didn’t do him any favors either.

Franklin

No, I guess not. He was no shoe-in. No, that's right. George Bush knew how to use the house and the office and in a way that was appropriate, always having friends in. And he still has a lot of friends.

Young

Still, something was missing in the second campaign, and it’s going to be a puzzle, that people—I can see it now, people who are thinking it’s the President. Something happened to him, some trait of character or something, or some medical problem. Others would say he was very ill-served. He didn’t have Lee Atwater and John Sununu around to manage the dirty politics or whatever it was. You know, there's going to be a lot of speculation, so we try to get whatever insights we can on the record, to at least give people in the future some guidance, keeping to the realities.

Barnes

No one was in charge of that campaign. It was a three-headed monster.

Franklin

And it was late, and the three people—if you looked at the three people—I don’t know—

Young

Teeter.

Franklin

[Robert] Teeter, [Frederic] Malek and Mosbacher, I knew all of them. I knew Fred particularly well. He had been in my Harvard Business School class. Also, he headed presidential personnel and was the one who brought me to the White House. Fred is more managerial than political. Bob Teeter was a pollster, who had not run a campaign before. Of course, Bob had raised a lot of money before, but he hadn’t done quite this. I think the three never figured out who was going to do what. So, it was not clear to me as a surrogate who was doing exactly what. I had a couple of visitations over there and was trying to find out what the strategy was. I never could find out. I didn’t know whether they didn’t want to tell me or whether there wasn’t one. My suspicion was it was the latter, and there was just a lot of jockeying around over there as far as I could tell. I'm talking about down below the top three. Jockeying around for a position or, you know, What am I going to do after this? and they were looking at positions in government, and the campaign was not together. That's what I saw from where I sat.

Young

There was apparently, and I’d like you to comment on this if you can. Apparently there was a real disconnect between the presidential staff and the White House people and the campaign people, until Jim Baker came in, which was also very late, and brought his crew into the White House, put it in its place or whatever, and tried to manage the campaign. And one also wonders, if this disconnect occurred, if it was real, how much that that helped the President between the government and the campaigning, occupying the office and being President and then going out and trying to be President in public, you know, trying to do the public thing.

Franklin

It didn’t work. Whatever it was, it didn’t work.

Young

It didn’t work, but what was the White House doing? What was the White House staff doing during this period? Skinner was there. Yeutter was there. Darman was still around.

Franklin

Hard to tell, and then Baker came over there. Baker pretty much ducked, though. He started out I think trying to manage the campaign and but it didn’t work and he just backed off. I saw it. Maybe I shouldn’t say that, but that's what happened. There was a disconnect. I think we’ll just leave it there. It was hard to tell who was doing what.

Young

Sam Skinner announced when he came over one of the things he wanted to do was to connect himself and key people in the White House to the campaign because there was this big problem of what is your answer to Clinton. I mean what are you doing? You do have a domestic record. I mean let’s get something done. Let’s get the message out. That never happened, so far as I can tell. There were always—we’ve heard accounts of endless meetings of strategy and how can we get this together. but nothing ever seemed to come of it. Is that your opinion?

Franklin

I don’t know what was going on. We, who were out there being surrogates could not always figure out what was going on. I’ll speak for myself. I don’t know.

Young

You didn’t have a theme or a directive to say what—is that it?

Franklin

My basic stump speech was based on what we were talking about yesterday. We had a lot of opportunity in the world. There were many new markets, and the opportunity to export and create jobs. We needed to go for it. That was it, and I was never directed to do anything differently. Now there were some lines, some lines of the day that would get worked into media appearances and so on, but that was it. I think those things—I can't remember whether they came out of the campaign. They must have out of the campaign rather than the White House. It was hard to tell who was actually in charge.

Young

I see.

Franklin

From where I was sitting.

Young

It’s kind of a mystery. At the moment when you really need to get it together and push, it just went kaflooey. Nothing came together. It’s just a puzzle.

Franklin

Well, I think it is a bit of a puzzle. It is to me, too.

Barnes

And you thought about it a lot. There was a great sense of disappointment.

Franklin

I worried about it.

Womack

At the time.

Franklin

At the time.

Barnes

At the time, yes.

Franklin

Do they know what they’re doing? When you’re out there beating the bushes and getting beat up a little, but that goes with the territory, you do hope that there is a master plan here at work that is going to unfold.

Riley

You went to the convention, the second one?

Barnes

Yes.

Riley

Do you have any observations about that? That was a convention that—

Franklin

Badly run convention, compared to the ’88 convention. There again, there was a shortfall. I don’t know why, but you have to go back—there was no real strategy, no master plan that the convention was supposed to fit into, and maybe it didn’t. It was not very tightly run at all. There was some concern about it thematically. I remember Jack Kemp being very concerned about it at one of the meetings we were at.

Riley

As it was unfolding, you were already sensing this isn’t—.

Franklin

The campaign you mean?

Riley

No, as the convention was unfolding, do you remember thinking, This doesn’t feel right?

Franklin

I couldn’t really tell, but Buchanan over-stayed his time and knocked Reagan out of prime time, that was really a bad mistake. It should not have happened, and you have to step back and say, Well, why were they putting Buchanan on anyway? And why in that particular time slot? And then why we didn’t drop him through the floor or something when he spoke too long. There are a lot of questions like that. It was just not tightly controlled. Also, I don’t think they knew precisely what he was going to say, and certainly with the rest of us, they knew what we were going to say, so there was something wrong in the process. Now, I was on that program on Tuesday evening, in a segment that had some Cabinet Secretaries. Lamar Alexander was in that segment, I was and there was somebody else, I thought. Tommy Thompson, then the Wisconsin Governor, was the chair of it. I was to talk about my usual stuff for eight minutes. We were gathered in a room ahead of time. I guess it was the green room down underneath the podium. Craig Fuller, who was running the convention, came in there, and this was the night after we had the Buchanan debacle, and looked at us and said, If you go over your time, we’re going to turn the microphone off. This did not go over terribly well with those of us in the room, because we hadn’t done anything. It was you guys who didn’t control Buchanan.

Riley

They’re trying to get all jazzed up to go before the biggest crowd you’ve ever—

Franklin

And they’re saying they’re going to turn your microphone off. Anyway, we did our bit. I was also a delegate to that convention from Pennsylvania. I think it ended up okay with an upbeat spirit, but unfortunately what the television audience saw was not what the television audience should have seen. Knocking Reagan off was really a disaster, and of course Buchanan said some rather dreadful things that turned a lot folks off. I feel that some people didn’t like what Marilyn Quayle had to say either, although I don’t really remember what she said, but there was something that came out of that that the other side then used.

Young

One of the things that the viewers saw on camera, was the cameras moving to the delegations and asking them what they thought of the quote division in the party, which was on full public display with demonstrators outside. What I remember is you were getting a lot of delegate testimony, which was regretting this and even saying this is not the Republican party I know, and that didn’t help either, to show the delegates expressing considerable dissatisfaction, possible alienation, right there on camera.

Franklin

Which I didn’t see that.

Young

The spokespeople supposedly from their Party. I remember that, Well, I don’t feel like this is really my Party. You know, we have to watch out here. You know that's, that’s powerful signals.

Womack

Well after they let Buchanan speak, I guess that’s kind of a leading question. He said, Oh that's fine with me, and then you are stuck with what he says.

Franklin

Why they let him speak—

Young

But sure, you’re advertising divisions in your Party.

Franklin

Well I don’t know why—he had a—

Womack

That would be the question. No, that’s right. It’s not like it was a surprise that he said what he said.

Franklin

No. That's right. He shouldn’t have been on the program at all, in my book. I have known Pat Buchanan for more than thirty years. When I was in the White House, he was always teasing me about the women thing. Oh, we really don’t need any women here. He's a very decent person, but he was never big on that. His wife Shelley, whom I knew even before I knew him, used to keep the lid on Pat, at least as far as what I was doing, and he really had no direct contact with it. But he has evolved over the years. He used to be a free trader, I think, way back. He became somebody else in the course of all his campaigning. Anyway it was very damaging to the party as well as to that particular campaign. So I have to tell you that when he left the party last year, there was a great sigh of relief. He belongs somewhere else, instead of confusing the Republican establishment.

Young

You have your calendar of the ’92 campaign.

Franklin

I have a few of these. It’s hard to decipher, but just to give you a flavor of what I was doing, and this would not have been atypical at all. This would have been leaving Dulles and going to Denver, doing some media when I got there, doing a Colorado businesswoman’s—

Young

Excuse me. Did you say when this was in ’92?

Franklin

Oh, October 13th of ’92. Leaving at 9:15 from Dulles on a United flight to Denver. We had interviews with the Denver Post and others, and then we had a mix and mingle and a luncheon speech with the Colorado businesswomen in a hotel and the Colorado Bush/Quayle Women’s Coalition in a hotel. I do remember that my microphone got turned off and there was a Democrat event somewhere else in the hotel. We have always thought that somebody did a dirty trick and pulled the plug. Anyway, we’ll never know. They got it turned back on, but it was disruptive.

Young

Are you sure nobody spoke overtime?

Franklin

Right, I really get you guys. More press avail, and then the Baldridge award, the winners were to be announced, so I had some time here to call them, to call these companies, the three or four of them, tell them, and then there was a radio interview, and then there were several more media things for a couple of hours, and then we left, and went to Orange County, California. Then let’s see, the next morning it started with a breakfast, and then we had the national export initiative. What we were doing here? Tuesday was totally campaign. Wednesday, I think was half and half, campaign and half Commerce, and we had to be careful who was paying for what, but we did. The national export initiative, which was our way of promoting exports, was taking place. I must say we did a fair amount of this, tried to mix in these kinds of things that were outreaching what Commerce was doing into what was a campaign framework.

Riley

That would allow Commerce to pay for your travel?

Franklin

No, it had to be definitely segmented as to what the campaign paid and what we did. We were very careful about that. But I'm just telling you how we were constructing a schedule, trying to get the most mileage out of the time that was spent. So we had that event at which I was speaking and then there was, oh, it looks like there is a press conference announcing the Malcolm Baldridge award winners. I don’t remember doing that, but we must have done that out there. More media for a couple of hours, a luncheon that went with the export initiative that we had Congressman Chris Cox at, an editorial board with the Orange County Register, and a little more media and then we went to San Jose. Then, this I told you about yesterday, I couldn’t remember when it had taken place. We had a reception that related to the national technology initiative that was going to happen the next morning, and a little press stuff in there. Then this dinner with the CEOs at the Fairmont Hotel, the one where the temperature in the room got so hot. They were so mad.

Womack

The Silicon Valley.

Franklin

The Silicon Valley crowd and where I felt I really earned my keep, explaining what the administration was doing and changing some of those people so that they came over to our side. That was a long one. It looks like I was at dinner for a long time.

Young

Did you get any of that flak in Orange County in your morning—

Franklin

I don’t remember any flak in Orange County. I remember it in Silicon Valley. Then let’s see, we started again with a breakfast and then with the national technology initiative, at which I was—I think I was presiding at this one. Then there was a press conference, and we were signing a memorandum of understanding—It was Watkins (Energy), EPA administrator Reilly, and somebody from NASA. I can't remember precisely what we were doing, but it was a collaborative effort. Then let’s see, we went on to a lunch that related to technology, and then we had a little more media stuff, and then we had a press conference, outside somewhere. That was a campaign event and Gil Amelio was the one who helped us set that up. Then let’s see, where did we go from there? We had a dinner that I was speaking at, at the hotel, the Saint Francis Hotel. That was in the evening. I think that was a campaign event as well. Then we went the next morning to Portland, Oregon.

Young

This is day three now?

Franklin

Yes, we started on Tuesday. We went through Wednesday. This was Thursday. Then we went to Portland, Oregon. Then let’s see, what did we do, a Victory ’92 lunch, and then let’s see. We had the Farm Bureau—I’m not sure what that was about—a press conference with women business leaders, more media, a tour of the Blue Diamond Almond growers association, more press avail, and then we had an event at the Oregon Museum of Science and Industry, and I think that was it. That was a long night. I remember that one too, and then we went home. No, we went back to Minneapolis the next day and then we came home, and that was Saturday. That was the way it was.

Young

How would these events be set up?

Franklin

Well, this was scheduling. If the campaign was in the loop, they were telling us where to go. If it was our event, the technology initiative, we would be doing it. Otherwise they would be doing it, setting up the media stuff.

Young

The local Republicans? .

Franklin

Yes, they or the campaign would set up the political stuff. We did not do that. One interesting thing that occurred—this was earlier, when there was a swing through Kentucky and Tennessee. This is one way I knew that my message was working. They were bracketing me all over the place. You know what the bracketing technique is? We think Republicans invented it years ago. That's media bracketing. If one side sends a surrogate in, what you do is bracket the media around the surrogate. I mean the surrogate may have appeared there, but then you appear there afterwards. You have somebody ahead and you have somebody behind. You bracket.

Well, they were bracketing me in spades, all over the place by then. That's how I knew my message was working. I’m talking about the Democrats. I had Al Gore’s dad following me in Tennessee, and he was of course no longer in the Senate, this great white-haired guy, and countering everything I was saying. You know, you’d give your message and they’d come in and say, Oh no, it’s not this way. That was the technique. We didn’t do it in that campaign, to my knowledge. I don’t know why we didn’t do it. They did, and I’m sure I wasn’t the only one being bracketed, but I certainly was in various places. What we would try to do was to get a handle on who it was who was following me. Sometimes the media people could get that from the station, if they were friendly folks. It was fun and games, but that's the way this pretty much was, this schedule, particularly in the fall, that kind of bouncing around in events at each place. And it was a mixture—campaign and official. That’s the way it was right up until the end.

Young

Were other Cabinet members doing the same thing?

Franklin

Some were.

Young

Who were they?

Franklin

Quite active, Jack Kemp and Lynn Martin, both very good on the stump. The ones who weren’t, Defense, typically did not. Nick Brady didn’t do anything, Treasury. State, I’m trying to think who else. I don’t know how much some of the others—

Barnes

Andy did some, Andy Card.

Franklin

Andy did some. That's right. Ed Madigan may have been doing some, Agriculture. Manny Lujan, that was Hispanic.

Barnes

That veterans fellow probably did. We didn’t run across him much, but I’m sure it’s—

Riley

Derwinski.

Franklin

Derwinski. He probably did, but I never crossed paths with him. How much everybody else did, I don’t know. I know that I did my share here.

Young

You weren’t sent out or recruited or assigned by any operation of the White House. This was by the campaign.

Franklin

No, no, this is campaign.

Young

This was campaign and then you worked with the departmental—

Franklin

We had integrated some of our stuff so that it would, we thought, be more effective. I think that was right. It wasn’t always easy to do. Sometimes you get frustrated with—I mean you wonder, why are they sending me here to campaign? Because I was in New England, I was in some tough places. New England, Midwest, California, I mean everywhere.

Riley

Did you ask that question about being sent to Orange County?

Franklin

No, I don’t think I did. I think I just went. Most of the time, you just go because there isn’t time to fuss around with it. You just go, but in the back of your mind you might wonder what was the rationale for some of these. In some cases it was because some big contributor said, I want to have somebody come here. I know that was part of why I was at certain places in Michigan. I think it was a mixed bag. It really was. It makes me think, because I think of all the ground we covered. Makes me a little weary, and at the same time, I was having to keep track of what was going on back at the ranch, just in case anything erupted that we hadn’t expected.

Young

Did you do that mostly by electronic communication?

Franklin

On the phone, yes.

Womack

That was a week without fish.

Franklin

That was a week without fish, I think, except—

Young

Well, don’t be too sure.

Franklin

I see a fishery meeting that was the week before that. But that's the way it really was. Wild, wild. It was the way it was. You wanted the election to come out differently, but it was the way it came out. What I did do, too, that I remember—we can’t find a copy of it. After the election, it was either the next day or the day after, the political appointees in the department were really down. I do remember gathering them, this is maybe a couple hundred people then. They have cut down the politicals at Commerce today, some of the schedule C’s, but we gathered them in the auditorium, and I gave a little speech. I know how I started. I started by saying the American people have just made a terrible mistake. But having done that, that’s what they did, so now we have a transition to conduct here, and the President had already said, Do it. Do a good job, and so I went through some of my rules for transition, and this is what I wish I could construct, because it was pretty good and people remember it, even now. It’s slightly humorous—about how they should conduct themselves. It ended up with be proud of what you have done.

Then we did it—the transition. Then I got called to go to China and so we just mopped everything up as best we could. We did a good job with the transition. They were quite arrogant. The group who came in were an arrogant troupe and they were—We just dealt with them. I didn’t do most of that. I dealt with Ron Brown, but some of the other people who came in were a bit surly according to the folks around me. My instructions were, ‘Do the best you can and then we are out of here.

Young

So you don’t remember your rules for—

Franklin

I can’t remember everything, my rules for transition. I’ve got to find that somewhere, because it was really pretty good. There were a bunch of things, you know five or six things.

Young

Because there are a lot of people who study transitions who would kill get these—that said what were the rules on the outgoing.

Franklin

It was something that I had—you know, back of the envelope stuff. It was nothing formal. I’m sure it was never written, but some of those papers, some of that stuff of course, went to the national archives, but something like that I am guessing is Penn State, which is where my papers are. My papers are in the archives. But I don’t think he has cataloged all of the Commerce papers. He has done the White House, and the Product Safety Commission, but I don’t think the Commerce papers are finished.

Young

So your papers are not in the Bush Library?

Franklin

No, they’re at Penn State. We can—however we have to do that, deed some of that. I've got to find out. That's one of the things I will check when I go to Penn State, to see how we can do that. And then the Nixon Library also is interested in some of this, except they were not collecting these kinds or papers, and so it was very different. It was mostly his (Nixon’s) papers, before and after the presidency.

Young

That was a big—a lot suits over what was a public document and what was a personal, personal property.

Franklin

So, a little confusion. But I have kept the Nixon Library in the loop on the A Few Good Women project, thinking that at some point we may have some closure on all that. So let’s see. Have we missed anything else?

Riley

Did you travel with the President at all during the campaign?

Franklin

I don’t think I did. There was one event that he did and they had the women there, I was supposed to be there, but I couldn’t get there physically. I was on the West Coast and this was in New Jersey, so I don’t know who was traveling. I don’t remember who was traveling with him. I was doing my own stuff here, but we were keeping in touch. I was always writing notes back, to Baker or to the President or both about what I was finding out there, which wasn’t great. People were upset, grumpy, anxious, and I was not, as we said yesterday, I wasn’t the only one who was finding that.

Womack

When did you have time to write your notes? I mean after that dinner, you must have had some note to write.

Franklin

You get tired. Well, it’s handwritten stuff and we shipped them back. Rather than sitting there dictating or anything it was just sort of headlines. Yes, I wish I had more detailed notes on some of them, particularly that dinner with CEOs. That was the Silicon Valley crowd who were so upset with Darman and Sununu and the administration. Anyway, that too, was how it was.

Young

The villains were Darman and Sununu.

Franklin

To those people, yes.

Young

Sununu because of his association with the budget deal when it was really noted or because of his travel problems, or—

Franklin

No, I don’t think the travel problems were in the mix. I think it had to do with an attitude, a point of view. The Silicon Valley crowd, We don’t want to help technology. Government shouldn’t be doing that. There was a visceral dislike for Darman. I picked that up in some place in Oregon too. I got pinned against the wall by somebody. This was a Republican activist who thought Darman was terrible. Actually that particular person was blaming Baker for Darman. He said Baker was the one who saved Darman. Oh dear, I didn’t realize that some people were paying that close attention.

Young

I wondered how they were. It seems like it’s coming from Republican Congressmen home.

Franklin

It’s possible. It’s possible.

Young

Because I don’t know what the circuits were.

Franklin

From some inside person who knew somebody. You know there's a lot of that that goes on.

Young

Because a lot of that is inside the beltway feelings that get communicated out. Maybe you can figure out the channels. I can’t.

Franklin

I don't know. Now today, of course, everybody knows everything instantly, pretty much, through the internet. No secrets anymore, and often no editing of what goes out. No editing of information, so all kinds of junk is out there as well as real information. That was not quite so true then, but I still was amazed.

Young

When you were out on the campaign, did you hear any negatives about Quayle?

Franklin

I'm not sure I remember much of that. There were those in the party who wanted him dropped off the ticket, but this was after the convention. So I don’t really remember. I did some campaigning with Quayle though. I always liked Dan Quayle. Maybe his spelling wasn’t perfect, but he was no dummy by any stretch and he was fun to work with. He was kind of a fun guy, but never really recovered from what happened in ’88, his being chosen the way he was. That announcement came at that riverboat event at the convention, which was partly my event. I had stuffed that riverboat with all different stripes of people. We had everybody in there. We had African Americans and Hispanics, everybody. I spent, off and on, the better part of the month of August in New Orleans that year, working on this convention stuff. Actually, as an aside, the river had no water in it for a time. So, we had this riverboat arrival planned, and the river was nonexistent.

Womack

So you had to put water in the river.

Franklin

Probably, yes. Happily it rained or something, and by the time we got to the riverboat, there was water in the river, but that was a matter of grave concern at one point. This was to be this dramatic arrival, in the riverboat, pulling up to a dock and then there was a rally at the dock, and that was where the announcement of Quayle was made. There was difficulty in finding him in the crowd, and then he had to wend his way up there. It was a little squirrelly from the beginning. I still believe that the press corps, the political press covering didn’t believe that Quayle was going to be the choice, even though his name had been leaked. They didn’t take it seriously, so they were surprised, and I think he never recovered from their surprise.

Womack

Their surprise seemed to be reflected by fellow Senators too. I mean I heard those initial accounts.

Franklin

Really?

Riley

You were not surprised, then?

Franklin

Well, I didn’t know it either. I was too busy.

Young

It was known that he was on the list. There were several names. What I do remember about that riverboat thing is that the—

Barnes

He couldn’t get through the crowd.

Franklin

He couldn’t get through the crowd. That was part of it. But before we were landing, or about to get there, I was working my way—The President had walked through the crowd, the bottom floor, there were either two or three decks. I can't remember now, but we had gone up, because I was following the President and George W’s twins were up there. One of them was sick, so I tried to make her feel better. James Baker was walking around there very tense, very tense indeed, and just as we’re about to land, George Bush says, Well, here it goes or something like that. I didn’t know what he meant, but that's what he meant, that we’re going announce the VP. Barbara knew who it was. I don’t think anybody else did. Baker knew. She was teasing Doro, because Doro was up there, something about, Well, if it’s Bob Dole, you won’t mind, and you know, all this kind of stuff going on. But I don’t think anybody else in the family knew. I think this was really closely held. Quayle couldn’t get up there, and they had trouble finding him, and then he couldn’t get up to the platform. It’s on the dock. Then all hell broke loose afterwards it seemed. He was really not prepared very well.

Young

There was almost no preparation according to our testimony, that we’ve gotten.

Franklin

I think that's correct.

Young

There was no prepping of him.

Franklin

That was a mistake on the side of the Bush campaign. I don’t know who to lay that on, whether Baker didn’t do it. Baker was against the choice, you know, or whether others were assigned it and didn’t do it. I don’t know what happened or whether nobody thought of it. I don’t know.

Young

It may be that the President wanted to hold it fairly close.

Franklin

Didn’t want it done. That's possible also.

Young

Well, you think back to the goings on about the selection of Reagan’s vice presidential candidate. A very model, how not to go about it.

Franklin

That was crazy. I was—

Young

Bush came through that fine.

Franklin

But he was prepared in the sense that he had been a public—

Young

He was prepared, but it’s possible that he wanted to make it impossible for that sort of speculation stuff to occur, so he held it very close and as a result—

Franklin

It is possible. The President just didn’t— Well, Baker had said—

Young

It’s possible that they forgot to really prep Dan Quayle.

Franklin

Well, clearly Baker was tense and nervous about this, for whatever his reasons, whether he knew it was not going to play well, or was worried about it. He was worried about it, I felt, even though he never said that. That's just the way he looked, you know, What’s going on here? But who knows what went on behind the scenes. I understood what the Quayle choice was about. It was youth and he’d upset Birch Bayh. He won a stunning victory earlier in Indiana.

Young

Exactly. One of my colleagues who studies the Senate and the House had written a book about Quayle, Dick Fenno, and he would follow Congressmen or Senators around, home and back and just observe them in Washington and out of Washington, and he did a book on Quayle, and Quayle—there was a lot of respect for him in the Senate, and he did very good work there, and so there were no black marks on him as far as his previous service. In fact they were all positive.

Franklin

It was just too bad, because he never really recovered, but I thought he was a pretty good guy.

Riley

Could you tell us a bit about, did you have interactions with him as Vice President?

Franklin

I did. We worked together on some things. There was this Competitiveness Council that he headed that I was on, so we had some work together on that, and then when—Let’s see. Which Japanese prime minister was that? Was it Miyasawa? How quickly we forget which Japanese prime minister. There have been so many over the last few years. He came to visit. It wasn’t a big state visit. There was a security aspect to it and he thought it was going to be mostly that. I got together with Quayle, who was having breakfast with him. Since I was not seeing the prime minister, I got Quayle to introduce some of the economic things that we were concerned about, which he did quite well and that made a difference in terms of what the prime minister did when he went home. Quayle got a great chuckle out of it, and so did we. We liked this. So he was fun to work with in that sense. I thought he was a good guy.

Young

He was reputed to have a staff that was sort of ideological right—

Franklin

Yes. Some of them were.

Young

Yes, and they didn’t think too highly of Bush, the Bush Republicans.

Franklin

Well, I don't know about that, but ideological—the chief of staff was Bill Kristol. It may have been before this, but I know that Baker excluded him from White House staff meetings, because he was always leaking stuff to the media, and he was not trusted. It’s interesting today. I don’t know who left him in charge of Republican policy. Every so often these things come floating out of that publication, the latest being that China diatribe a few weeks ago.

Young

Out of?

Franklin

Out of the Weekly Standard.

Young

Oh, Bill Kristol’s.

Franklin

That got a lot of play, and Dick Cheney said, Hey, he's selling magazines, and dismissed it. I thought it was quite a bad article.

Womack

I didn’t see it.

Franklin

It was very anti-China. You’ve been following—

Womack

No, I hadn’t seen that. I was out of the country. That's one of the nice things about being out of the country.

Franklin

Once in a while. You’re quite right. You miss some of this stuff.

Young

You get a different perspective.

Womack

Yes.

Franklin

It got a lot of media attention, more than it should have, I felt, and so both Cheney and Powell dismissed it one way or another. But, you know, there's an ideological bent, sure.

Riley

Kristol might fit in very well in Turkish politics.

Womack

I don’t think Turkey needs a blue team.

Young

He was on some kind of a round table recently.

Barnes

[indecipherable].

Young

It was telecast by AEI.

Franklin

AEI? No, I didn’t see it.

Young

I think so, or was it Heritage?

Franklin

It probably wasn’t Heritage. I am associated with Heritage, and they do not agree with him on China.

Young

Well, he had Richard Pearle on this and he was playing the war hawk to the hilt.

Franklin

The former Turk—tell me her name, Turkish prime minister who got into trouble. What is her name? Tansu Ciller. She and I kind of became friends. She came to see me a couple of times before she was prime minister, but she was in the economic job, and always had a perfectly splendid philosophical reason for why Turkey was the middle of the universe, and why the U.S. needed to make sure that Turkey was the bulwark in the middle of the universe.

Womack

Absolutely.

Franklin

I can see her right now.

Womack

Oh, yes, right. She was the one that announced the first big devaluation of the Turkish lira in the 1990s, which didn’t win her undying admiration in Turkey, but the latest devaluation has really caused problems. Now it’s 1.2 million to the dollar. They certainly would like to be considered. They’re talking about Turkey as the center of the Bermuda triangle.

Franklin

Is that what it is? Anyway, she was really very good. Then she got into something of a scandal, she and her husband. She was educated here, in Connecticut, as a matter of fact.

Barnes

Connecticut’s [indecipherable] college.

Franklin

Yes, anyway, a little aside.

Womack

It’s an interesting place.

Franklin

I guess. It’s a place I have never been. I would like to.

Womack

It’s a very pleasant place to visit.

Franklin

Is it? I would like to do that. What else, professor?

Young

Well, I think we’re running near the end, unless you have some more things to bring up. It’s interesting to go to this school and be taught, this little school and be taught.

Franklin

This little school.

Young

Yes. Be taught. To have as teachers people who have been in the practice of politics. In some of these interviews—and this is not peculiar to the Bush presidency, it’s true to all—one of the subjects that figures very large in people’s comment is the press, the media. And it hasn’t figured very much at all in your comments, which leads me to ask, what was your experience with the press? By that, I mean the media, the whole bit. Was that problematic? Was it helpful to you? Was it neither? Did you feel the press was wronging you or distorting or what? This is a question of relations between—

Franklin

Well, you have already heard how we felt about the China mission. That we really got taken apart and that the wrong set of press people were covering that. In general, well there were a bunch of reporters who were covering the Commerce Department, and they had been covering the Commerce Department before I got there. Some of them were pretty good and some of them were not so good. The New York Times reporter, I feel, wasn’t good. The Post man was probably the best of the group.

Young

I think you mentioned that earlier.

Franklin

The New York Times reporter, I can't remember whether I mentioned this yesterday. His colleagues at the Times don’t think he's a particularly good reporter either, because he distorts. He makes things up. There was a piece not to long ago about Ford, in which he was alleging that Bill Ford and Nasser were not getting along, and all kinds of little scuttlebutt. I don’t know if any of you saw it. That’s the guy, and that's the way he writes. Ford then said it wasn’t true. And I have heard from inside at Ford that this really was not right either, but he's a kind of a sensational, sensationalist journalist. We had him and a bunch of others and never really established what I would have liked to have done with those, and with a broader population. I knew some other folks in the press. That was in part because there wasn’t quite the time—because I was doing too many other things and we didn’t have a top flight communications operation. That was one of the things I think I said yesterday. I never could get it right. It was never, never working to my satisfaction. I’m also not a blowhard either, but I have no problem with laying out what we have done and so on.

There was one press conference we had having to do with Russia, and a report that had been in the works but that I had released about Russia and what was going on business wise. It was pretty well done. I released that, and we had a big press conference at the department. It was probably the first big one I did. That must have been in March, and I found I could handle that. I am somebody who believes in preparation. I don’t like to fly blind. I’m not a totally glib person. So I think the relations that we had with the press as far as they went were okay, except for this China experience. But I would have reconfigured that staff and we probably would have had more talk about some of the other things we were doing that never got out there. I didn’t think the press was a great thorn, except for this guy that I was talking about from the New York Times. I didn’t think the press was being very fair to George Bush however, during that time. That was just not a good year, press-wise. I’m not sure the White House was handling the press well, maybe they couldn’t. Maybe it was not possible, I don’t know. The press was not for Bush in that election. That's really quite clear, the national press. I think part of it was that they had bought into the need for change. They liked the looks of Clinton. They were tired of covering the same crew of people. Let’s have a new crew.

Young

Did you ever give interviews on background?

Franklin

Some, I did some of that. I did some of that on the China trip afterwards and the guy at the Post did help. He then put out some stuff, more for local consumption, but that was okay, about what had really happened.

Young

I believe you said, you didn’t take—there was no press going with you.

Franklin

No, but there were press who popped up along the way, though.

Young

If you think back on that, do you think if you had included—

Franklin

Press?

Young

Press. It might have worked out a little bit better in terms of your press relationship?

Franklin

I don’t know, maybe.

Young

Sometimes they feel very jealous. A trip abroad and they don’t get—

Womack

We’ll show her.

Franklin

Well, I don’t know. I don't know. Maybe, maybe not. I guess I'm not convinced either way. I know we did invite a few to go, and they did not do it. Whether it was a money thing or whether—I don't know.

Womack

The Beijing people for the U.S. press must have been there.

Franklin

Well, there were press who popped up, yes, because they were in different places. The networks had some people covering this and Hong Kong. So, we didn’t have the press with us, but they showed up. The press is always something of a dilemma, I think, for every administration, and everybody criticizes the press and says, Oh, he didn’t get treated fairly. I don’t care who it is. I think there is always some of that. That’s because there are different interests at work. The administration wants the press to carry the message. The press is looking for it’s own message and looking to uncover what’s going on underneath the shell of the onion here. It’s often just, if not confrontational, just a bit contentious, and that's the way it is.

Young

There’s a lot more focus, also on the White House.

Franklin

Yes, much more. That's right.

Young

Unless something becomes very high profile, and after all the White House is the only place where the press has free quarters. They have actual offices there, so there's a close watch and the fact that they didn’t pick up—the White House press corps never picked up the Watergate thing. It was some police reporter called Bob Woodward.

Franklin

That's interesting.

Young

You know, sort of had a powerful effect on their attitudes.

Franklin

I will say this, we were pretty good, I think, about keeping the White House—whether it was the press office or the chief of staff’s office or whatever—informed if we were doing something at Commerce that might get into the public domain. I didn’t want anybody blind-sided at the White House.

Young

There were—weren’t there—this was probably not an operation you were personally involved in, but there were what, weekly or biweekly reports from each department sent in to David Bates or whoever, just saying what’s coming up—

Franklin

Yes, that’s right.

Young

—in the departments to keep people and the President—I think those went to the President.

Franklin

I think he, yes, I suspect he saw them. Those happened, but sometimes there were other things that we just wanted to keep the channels of communication open to work for. David Bates was quite good I think, when he was there. He was not when I got there, and the person who replaced him was widely thought to be a Peter principal by at least some Cabinet colleagues.

Young

I see. Was that Edie Holiday?

Franklin

I think she was a little over her head there. One of my Cabinet colleagues used to call some of the White House staffers who liked to throw their weight around, he used to call them mice.

Young

Yes.

Franklin

Don’t let the mice get you over there.

Riley

Well, I’ve heard about the rats in the White House, but the mice—

Franklin

This was the mice. I always thought that was quite an apt description, and White House staffers do that on occasion. They get a little pumped up and they like to give orders or they like to test Cabinet secretaries or their underlings and see what they can get away with. Yes, there’s always some of that that goes on.

Young

That's normal—

Franklin

It is and it’s human nature and it’s the way things are.

Young

I have heard a lot of testimony, not necessarily from Bush people about the staffs of your Cabinet too.

Franklin

Oh, I am sure that’s true.

Young

They don’t use the word mice, though.

Franklin

No they say, This is a turkey. Oh yes. They’re very dismissive, airhead or something. Oh yes, I’ve been there, done that. I think some of these—

Young

Just freelancing.

Franklin

Well, there is a fair amount of freelancing going on. There's something else that was occurring to me and I am now looking to see if I can find whatever it was. Let’s see, going through my notes. Oh, I know what it is. This is the economy, and the tension that was there when I arrived between both the President and especially Nick Brady and Greenspan. I think Brady was blaming Greenspan for the recession because of the Fed’s behavior, too much tightening, not easing enough. That's plausible, but I really don’t know. As we are finding out now, also once again, there is a lag between the time that their monetary actions are taken and anything shows itself in the economy. Nobody ever knows how long the lag is, and now they’re easing interest rates and we are sitting in another lag. It’s hard to assess what the impact of that is. So it’s always a hard call for the Fed to know how much to tighten and when to stop, and then when to ease. I think that's a very hard call, so I don’t know whether the Fed did this right or not. It’s conceivable that Nick was right. Anyway, what wasn’t right was the animosity that there was between Brady and Greenspan. I knew Alan quite well. I’ve known Greenspan for thirty years, and I know him very well from back in the Nixon era. I tried to intercede, but it was too late. It was too late and Nick was going to have none of it. I had Greenspan over for lunch one day. Nick was having for a time these meetings of the economic crew in his office for breakfast and then those stopped too.

Young

So Greenspan was—

Franklin

Greenspan wouldn’t have been at those anyway. It was just the rest of us.

Young

So he didn’t have a get together.

Franklin

It would be interesting to ask him, if you see him.

Young

Because get-togethers had been established in some administrations, regular informal meetings, breakfasts.

Franklin

Maybe they started out that way, but I think that had fallen apart, and then everything seemed to stop, even the meetings of the so-called economic team in the Bush administration that Nick was having. Those disappeared too, and so there was—

Young

At what point would this have been while you were there?

Franklin

Was it summer or fall of—I’m not sure I remember the timing, but it was clear to me that the tension with Greenspan was not very helpful. I would like to have helped with that, but it was too far gone. I couldn’t make any headway. Nick was not about to listen to me on this, because he had his own view. But what happened was that this kept Greenspan away from the President. I think it’s useful for the President to meet with the Fed chief once in a while, and Greenspan is someone who did like to be courted a bit. There was none of that so he was kind of shut out. It’s not a good way to conduct business. This is a conversation I have had with Paul O’Neill who saw it, too. He was there during—well, no he wasn’t at that particular point, but he understood from his days in OMB. He and Greenspan are old friends, you see, so that's not going to be a problem. Robert Rubin did very well in terms of dealing with Greenspan. So that was one of the things that I wish I could have helped to fix that was not good, given the situation we had with the economy when I arrived there.

Young

Yes, to have it falling out or falling apart at that juncture, with the campaign coming up. Very unfortunate. The briefing book here says that in June of ’92, Franklin calls on Fed to cut interest rates. That was the public—

Franklin

I did. I did, yes. Well, what else are we going to do? I don’t know what they did, but I did call on them.

Young

Is that the kind of statement you would clear with the White House first?

Franklin

I didn’t clear it, because I knew what their position was, and Nick had been saying things like that, and maybe somebody else in the White House had too, so I just added another voice. Nobody had said anything just lately, but that was still the view. I knew that, so I didn’t specifically clear the statement. It was an interview with a Wall Street Journal reporter. The same one who wrote a fairly, I felt, nasty column about GDP in the first quarter.

Womack

Cooking the books.

Franklin

She wasn’t the one who said that, but I didn’t like the way she positioned that, and so she was somebody that after the revision came out, I called her and said she ought to have better economic advisors, because she was wrong on that. I don’t think she's still with the Journal. I was looking for any of my other little notes. You’ve also got somewhere the gamesmanship that went on, the Darman kind of game. You probably have that nailed.

Young

Oh, I’m a sponge. Anything you have to say—

Franklin

I would only say what I think everybody saw. He loved the game. It was a power thing. I don’t think it was necessarily ideological. He liked to win. I was also told, I never saw this myself, he would withhold information. If there was a decision to be made, he would always have more information, so he had a better chance of winning with the President. He was very good at the game.

Young

Well, there is an old saying knowledge is power. When it comes to his—and he certainly was among the most experienced in working inside the government, if you look at his past career—

Franklin

Been a lot of places.

Young

With Elliot Richardson, and then moved another place and then with Jim Baker, so he knew his way around, and he did have an agenda.

Franklin

It wasn’t always constructive.

Young

Right, but I think the—

Franklin

But he was good at the game. That's my point.

Young

Yes, this will also be an interesting thing for people in the future to explore. There are some who think that in wake of the large deficits, and then they necessity to manage the deficits, that that was such a big ticket item following the Reagan, especially following the Reagan deficits, as to deliver or attribute to the person who was on top of the budget, the fiscal policy person, and that is the head of OMB, and who has also a very large staff and resources including a career staff, to shift a lot of the effective power over at least domestic policy. It doesn’t work so well on defense policy, out of the departments and shift them away from the departments toward the White House or at least toward the executive office so that the OMB person becomes a much more key figure in domestic policy than historically that person has been, and—

Riley

That's an interesting thought.

Young

There has been that observation. In fact, I think Darman himself says about that—

Womack

Sort of the gatekeeper role is more important.

Young

Well, It’s not only that. It’s that you can exercise considerable control over what policies get through if deficit reduction or deficit control is a mandate. So—

Franklin

Yes, I think that's true.

Young

You know, he can do a lot more, has a lot more power, and there's a lot of pop that goes with that when he speaks to the President, with all the authority. You don’t want to get in more trouble. Of course it was the program of really deficit management and deficit reduction, there had been earlier steps, Gramm-Rudman, but it was a new program of deficit management and deficit reduction that was part of the budget deal. It was part of the deal that was cut, and so, President Bush agreed to allow some increase in taxes, but the trade off was we could at least get long-term deficit management and Darman negotiated that deal.

Franklin

It didn’t work.

Young

Well, I think Clinton benefited a lot from that deal.

Franklin

Well, he maybe did. But the Democrats reneged on their part. I wasn’t in there at this point, but it was done in a closet. That was part of the reason nobody knew what was going on or what was agreed to. We always felt, some of us, that if Lee Atwater had been around, there would have been a different spin put on this. Either the President would have gotten more credit for what he was trying to do, or the Democrats would have been blamed, or both. But there was really no communications strategy. And Atwater, who was as good as anybody was at what we call spinning today, if he had still been around the RNC, the outcome could have been different. But these guys did what seemed like the right thing, but the problem was nobody understood what they had done and then it didn’t work quite the same way as it was supposed to.

Young

It is—that's—it would be very interesting to figure out what went into the fallout. What produced the kind of fallout that certainly did result and it was almost immediate, from the announcement of the deal.

Franklin

Well, and the Gingrich—it would be interesting to ask Fitzwater what he thought about that, but my impression was that there was just no communication strategy that surrounded it.

Young

I think it is very likely that the people who do the spinning in the White House didn’t know about it in time to do it.

Franklin

Didn’t understand really, what was happening.

Young

Well, it was a done deal. I mean here again, getting back to your very insightful, it seems to me, comments about Bush that he had the commitments in place. Everybody was—He had made the deal. He invited the Democrats and the Republicans, including Newt Gingrich, into the room. Are you agreed on this? Okay, I’ll take the heat for what I did, and a person in authority thinks that's settled, and the minute they leave the room—

Franklin

It comes apart.

Young

It comes apart, and he's left silent to talk about this in public. He doesn’t have a spin to put on it. Reagan increased taxes, but he didn’t call it that. He also got up there and said stay the course when things are getting bad, and Bush was not prepared to do that. They didn’t expect anything.

Franklin

But they hadn’t looked at the politics of this. That's my point about the spinning, and I have forgotten what words Sununu came up with, rather than tax increase, some other set of words.

Martin

Revenue enhancement.

Franklin

Thank you. You have to be kidding.

Young

Reagan got away with it.

Franklin

Yes, but they were good at communication.

Young

Very good at it.

Franklin

It’s spinning, and that was missing. But part of the problem again was this style of operating where they were doing everything under the table. Sununu and Darman, and they didn’t want anybody else involved.

Young

Well, that was the thing. They were out of Andrews Air Force.

Riley

And as I recall, Darman was also the public face of that deal on Tim Russert’s show and these other things.

Franklin

Was he? I don’t remember. That probably was a mistake also, in hindsight. It’s easy to say that now.

Young

Yes, so it blew apart inside the beltway and outside the beltway it didn’t fly, at all.

Franklin

Well, yes, for all the reasons we just said. It wasn’t understood. There was no spinning that covered it and that is one of the things—

Young

You saw that from the outside—

Franklin

I saw it from the outside.

Young

—and heard the explosion and the reverberations.

Franklin

And was very concerned about it at the time, I have to say. The loss of Lee Atwater was a great loss, at the time, and that was 1990, I think, and he really was a piece of work. I knew Lee reasonably well, and there was just nobody that had better instincts about what the folks needed to hear and how they needed to hear it. Nobody better that I have ever encountered, even this character—I block his name because I can’t abide him—Clinton’s—

Riley

Carville.

Young

Carville.

Franklin

Carville. I don’t think he's quite got it. He's just got a mouth, but Lee was for more sophisticated, far more, and I do believe had a lot to do with what happened in ’88 in terms of his positioning of Bush. He was in constant motion. I've never seen anybody quite like that. There were two phones, and there was always something going on and he was quite energetic and fun to be around. Losing him was a great tragedy. There was nobody like that.

Young

Yes.

Franklin

When he was gone, there wasn’t a replacement.

Young

That's another part of the puzzle, how much did that matter, how much did Ross Perot matter, how much did the economy—

Franklin

Ross Perot mattered a lot, and Lee Atwater mattered a lot.

Young

You put all these things together, how much did the President matter?

Franklin

What you can never figure out is exactly how much of the puzzle percentage wise, was each of those things, but they all mattered. I really believe, and there were some good people around Bush, you know good professionals, but some of the edge, the political edge, just was missing. Lee had provided that in ’88. I have wondered also, you know Mary Matalin was an understudy to him and she, I think, was living with Carville at the time, because I remember trying to call her and getting this guy. It was pretty abrupt. I just wonder about how much of what Carville knows came from Lee through Mary. I have always wondered.

Young

Well, we’ll never know.

Franklin

And we’ll never know. Carville is not Lee Atwater. Lee was a great loss.

Young

Well, Sununu was an important presence on the campaign in addition, in ’88, in the first campaign.

Franklin

Well, he was, but it was more winning New Hampshire which was crucial.

Young

Very crucial because they had just lost.

Franklin

Lost in Iowa and if New Hampshire had been lost, that would not have been good.

Young

John Sununu and Andy Card were all prepared to bring New Hampshire, so that gave it a big boost.

Franklin

And they did. Even though the so-called firewall, that’s what Lee Atwater used to call it, was in place. I remember all this. We thought, even if we lose New Hampshire, we’re going to win those Southern states and that’s going to turn this around. But losing New Hampshire is just bad business. That was where the—Dole’s pollster called him Mr. President. Dole got very displeased about that. That's another interesting relationship, the Bush-Dole relationship, which ended up actually okay. I don’t think that they would ever be bosom buddies, but they ended up getting along reasonably well and working together when Bush was President. Of course he had appointed Dole’s wife, that was helpful, probably to calming things down. Bob Dole is a tough guy and has a long memory, can be quite vindictive, actually. But somehow, they buried that hatchet, and I give credit to both of them for that, while they were in office. So much of what goes on has to do with human relationships at the end of the day, and that's partly what you’re about here. You’re trying to flesh some of this out.

Young

Truly get that and how it fits in with the process, the structure, the situation.

Franklin

Yes, and you have structures and you have all of that, but then there’s the human component that sometimes is quite unpredictable and—

Barnes

Which the nature of politics intensifies, of course. It magnifies human relationships.

Franklin

Magnifies, yes.

Young

Yes, that’s correct.

Franklin

And when they go awry, things happen. I mean, the Brady/Greenspan situation and sometimes decisions are made for strange reasons as we all know, not just in politics, either, lots of places, depending on people.

Young

Even universities.

Franklin

Even universities. Especially, I think—

Barnes

Now were talking real politics.

Franklin

Oh, I was aghast. I was.

Young

We have a saying about academic politics. It’s the worst politics there is because the stakes are so low.

Franklin

I think it’s probably true.

Womack

And the memories are long.

Franklin

And the memories are long. I saw that. I wasn’t standing faculty at Wharton, I was senior fellow, the dean appointed me, but what I saw, dear me. Some of the stuff that went on was quite Machiavellian.

Womack

Well, you know, the output is so ambiguous. It’s not easy to describe something as tops or bottom.

Franklin

Bottom. Anyway, I was glad that I was out of the line of fire.

Young

Well, they were probably just rubber bullets, anyway.

Barnes

Hey, Eli.

Franklin

There’s Eli. Hi.

(many people talking at once, introductions)

Young

We’ll have a break.

[BREAK]
Young

Did you speak for the tape, Eli?

E. Barnes

No, I haven’t.

Young

Well, do it now. You’ve got the tape rolling? This so we can identify who these mysterious people are.

E. Barnes

Should I just identify myself, is that it?

Young

Yes.

E. Barnes

All right, Eli Barnes, UVA student, I guess, second year student.

Riley

And your relationship to the—

E. Barnes

I am the grandson of Ms. Barbara Franklin and Wally Barnes.

Franklin

Now, what we need to get in here is my official swearing in. You know how this stuff works, once I got confirmed, I got sworn in that afternoon, quietly at the department, and I think the date was February 28, 1992, which is the date that is emblazoned on the back of my Cabinet chair. But then several weeks later we had a big swearing in at the department, at which President Bush was present, and Barbara Bush, and Sandra Day O’Connor was the person who swore me in. I had known Sandra since she came to Washington, and Jack Danforth was there to give the invocation, and the program had the Pledge of Allegiance to the Flag in it, among other things. Eli led the Pledge of Allegiance, so why don’t you talk about that for a minute.

E. Barnes

All right, I guess just, when I was asked I was pretty—I don’t know. I was excited but really nervous. It was just a big task.

Franklin

How old were you?

E. Barnes

I think I was in fourth grade at the time, so I think that translates into like eleven.

Franklin

Eleven.

E. Barnes

Eleven or Twelve. I just remember I was all excited, I didn’t really know what it entailed when I was told, when I was asked to do it. Then as it came closer, I realized that you know the President was going to be there. Judge O’Connor was going to be there, and it was this big deal on TV and stuff. I just, I rehearsed it, you know, you do it every day, and we did it every day in class and it wasn’t—it shouldn’t be a big deal.

Womack

It wasn’t unfamiliar.

E. Barnes

Exactly, it was just a couple of lines that you just, at that age in front of that many people, that many important people, you’re just very nervous, and it was—Mr. Bush made me feel very—President Bush made me feel very comfortable. We sat behind stage and it was just a memorable experience. I still have the videotape.

Franklin

You’re in it.

E. Barnes

I watched it and I got a copy of President Bush’s speech which had mentioned me and it was pretty amazing to have that.

Franklin

After you finished that, I think there was stage whisper, because I was up there, he says, Good going, Eli.

E. Barnes

Yes.

Franklin

Again, typical George Bush.

E. Barnes

He's great, and Senator Thurmond sent me a note congratulating me on how I had done.

Franklin

Oh, is that right? I didn’t know that.

E. Barnes

So that was pretty neat.

Barnes

Strom Thurmond.

Franklin

Strom was there I think, at the swearing in.

Young

What brought him there?

Franklin

Oh, I don’t know. Strom’s just everywhere.

Young

Are you sure it was really him?

Franklin

Oh yes. Well, I think probably. I mean I knew him, and I knew his wife. They were then separated, I guess. But I knew them. Actually they had a little lunch for us, not that day, but sometime after that. He was there. There were some members of Congress there and some Cabinet colleagues.

Young

You had mentioned he was at your confirmation hearing.

Franklin

A whole bunch of people. It was a big thing. Eli is right. There were a lot of people, whether it was a cast of thousands or not, I don’t know, but a lot of people, certainly well into the hundreds in the Commerce Department, and there was a stage. It was a lot of folks. Cameras running. So you did good.

E. Barnes

It was nerve-racking, but it was great.

Young

After that, you can do anything.

Riley

Sink an eight-foot putt with three thousand watching you.

E. Barnes

Yes, no problem, piece of cake compared to sitting in front of Mr. Bush. It was incredible.

Franklin

Then as a sequel to that, in his book, the book of letters—I had visited with him, whenever that was in Houston, last year or the year before, and wanted him to autograph the book for Eli. He remembered, he said, Well, now how is he anyway? He must be in college. You know, you were about to go to college, I think. Yes. George Bush.

Young

It’s nice—that’s a nice touch.

Franklin

That's why he’s got that cadre of friends that they have built through the years, the extra mile crowd, who would have done anything, and did in ’88. They really did.

Young

Are we ready to conclude?

Franklin

Well, I think so. I would only say that this administration will be—I think he will be remembered for his masterful handling of the foreign policy arena at a very crucial time, end of the Cold War, all those new countries being formed, Germany reunification, which we didn’t talk about, and you probably did with Brent.

Young

A lot.

Franklin

But I don’t think that that would have happened, from where I sat, wouldn’t have happened if Bush had objected to it. Kohl was going to plow ahead, and Bush encouraged him to do it. Margaret Thatcher didn’t like it one bit, and said so publicly, and said afterward, Now George, you shouldn’t have done that. She didn’t trust the German people. But it’s things like that, plus the Gulf War that he made look easy, that were not so easy. But that was how he conducted himself, and I think that’s what’s going to be remembered more than anything else.

Young

It certainly is remembered and will be studied, but what needs to remembered and what needs to be studied is the other part of his accomplishments, the ups and downs and accomplishments as President, which have gotten overshadowed in all the books about Bush, they’re all talking about the foreign policy. So that very little is now known about what was happening otherwise, so that's one reason we like to, since you were not a key player, as the saying goes, in the Gulf War or in those aspects of foreign affairs, but in the commercial and trade aspects. That's one reason we try to bring that out, because that's not nearly as noticed and it was never as noticed.

Franklin

And yet, I believe it was important and I am proud of what I did to further the cause, to carry on what Bob started and to do some other things to expand exports. Exports did expand. The percentage to GDP has gone up and that has continued, and we helped to change the mindset at the time. Commerce is the new front line. In other words, to change the prevailing mindset into a global economy. I think we made some inroads. I liked what we did with technology, and with various other aspects of business and advocating for business in the policy process. I am quite proud of that. Plus the China mission, which was probably the singular thing that—

Womack

But of all the foreign policy accomplishments, it’s one that's overlooked.

Franklin

The China thing, yes.

Young

That’s the downside of the stunning accomplishments.

Franklin

I think that's a good point, and we were talking about it again this morning, the fact that it never was in the interagency process—which came out yesterday—is probably part of the reason that it was, is overlooked, or not understood. And I think Bill Clark and I both have been frustrated by the fact that nobody seems to understand what happened, or that this was even done.

Womack

Well, now four more people understand it.

Franklin

And sophisticated people, too.

Womack

And if we each tell four more about it.

Young

We can't talk about it until—Remember our rules.

Franklin

That's right there are rules.

Womack

Oh, that's right.

Young

Because there may be some missing pieces still and you’ll want to mail us.

Franklin

There may be, and I don’t know, we were talking this morning. Maybe the reason that the White House cover was not there is that they didn’t want anymore digging into the F-16 sale.

Barnes

That's my theory.

Franklin

That's Wally’s theory and that may be right. Yesterday was interesting for us, because Bill and I have talked about this some, but not in this way.

Young

Well, that's very nice.

Franklin

Not in this way, where you all were interjecting and asking questions and some other things came out of that.

Young

Well, this rarely happens. That was a very good idea, bringing him, it makes for a very unusual dialogue, and a much richer account of that.

Franklin

He knew some things that I didn’t, you see.

Young

I can see it someday being a whole case study.

Franklin

Oh, it would be an incredible—I’ll tell you about this later, how all this—

Young

And that don’t get noticed. That you don’t get much of a clue to by looking at the headline news, which in this case can be quite misleading. Well, I don’t want to keep you beyond your time, and if we are finished, I want to express my great appreciation for your willingness to devote this amount of time, you’re busy people, to history. Because we think it’s important, and we don’t have to convince you, because you have done it, here. But this has been very constructive for us, it certainly will be to the people who read this record or listen to it some day. So I want to thank you very much for doing this, and for such positive additions to our usual routine, and I am so glad, Wallace you did talk, because you added some good insights that I think are very important, even though your grandfather kept silent most of yesterday.

Franklin

Well he did. It’s hard for him to do that.

Barnes

Unlikely as that seems.

Young

So I thank you very much.

Franklin

You are very welcome. It was a pleasure and I thank you for everything, and for you insights and your wisdom and your questions. It was very good. I have learned some things too, from each of you, including the note taker down there, and the stuff you put together ahead of time, which needed a little nuancing, but it was okay. It really was. Good job.

Martin

Ah, thank you.

Riley

That’s the problem when you are relying on press accounts.

Franklin

Exactly.