Cheney on CNBC's 'Capital Report

(Sorry for the long clip, but I find this of great importance and it should be read in its entirety. I may snip it down later. please skip ahead if you like)

OK, this level of denial is alarming. How can one man be so convinced of what was clearly his own fabrication? How many times do we have to hear the data on this was trumped up by Cheney's own intel-squad? This is pretty alarming to say the least. I have to not call into question the VP's candor but his stability. Cheney should step down.

(as snipped from Drudge):

Vice President Dick Cheney said that there were clearly ties between Saddam Hussein and the al-Qaeda terrorists, and he called the New York Times coverage of the story "outrageous."

The vice president was responding to a report from the 9-11 Commission saying it had found no evidence of "collaboration" between Iraq and Al Qaeda.

ALAN MURRAY, co-host:

Hello and welcome to CAPITAL REPORT. I'm Alan Murray. Our top story tonight, the 9-11 Commission ended its hearings today with some surprising news. Among other things, the panel says it's found no evidence that Saddam Hussein collaborated with al-Qaida terrorists, seeming to contradict the White House, which has emphasized links between the two. In a CNBC exclusive tonight, we get Vice President Dick Cheney's first reaction to today's news.

My partner, Gloria Borger, is with the vice president in the battleground state of Ohio, where he campaigned in Lewis City, just outside of Columbus, today. Gloria.

GLORIA BORGER, co-host:

That's right, Alan. We are at NexTech Materials, which is a high-tech manufacturer in Lewis Center, Ohio. Of course, as you know, the vice president just gave a speech here this afternoon. John Kerry has also been here this week and, as you mentioned, Ohio is, of course, a battleground state.

Thank you so much for being with us, Mr. Vice President. And we will get to talk about the economy in a few minutes.

Vice President DICK CHENEY: OK.

BORGER: But obviously first the news of the week is the 9-11 Commission report. And as you know, the report found, quote, "No credible evidence that al-Qaida collaborated with Iraq or Saddam Hussein. Do you disagree with its findings?

Vice Pres. CHENEY: I disagree with the way their findings have been portrayed. This has been enormous confusion over the Iraq-al-Qaida connection, Gloria. First of all, on the question of whether or not there was any kind of a relationship, there clearly was a relationship. It's been testified to. The evidence is overwhelming. It goes back to the early '90s.

It involves a whole series of contacts, high-level contacts between Osama bin Laden and Iraqi intelligence officials. It involves a senior official, a brigadier general in the Iraqi intelligence service going to the Sudan before bin Laden ever went to Afghanistan to train them in bomb-making, helping teach them how to forge documents. Mr. Zarqawi, who's in Baghdad today, is an al-Qaida associate who took refuge in Baghdad, found sanctuary and safe harbor there before we ever launched into Iraq. There's a Mr. Yasin, who was a World Trade Center bomber in '93, who fled to Iraq after that and we found since when we got into Baghdad, documents showing that he was put on the payroll and given housing by Saddam Hussein after the '93 attack; in other words, provided safe harbor and sanctuary. There's clearly been a relationship.

There's a separate question. The separate question is: Was Iraq involved with al-Qaida in the attack on 9/11?

BORGER: Was Iraq involved?

Vice Pres. CHENEY: We don't know. You know, what the commission says is that they can't find any evidence of that. We had one report which is a famous report on the Czech intelligence service and we've never been able to confirm or to knock it down.

BORGER: Well, let me just get to the bottom line here...

Vice Pres. CHENEY: But it's very important that people understand these two differences. What The New York Times did today was outrageous. They do a lot of outrageous things but the headline, Panel Find Qaida-Iraq Tie. The press wants to run out and say there's a fundamental split here now between what the president said and what the commission said. Jim Thompson is a member of the commission who's since been on the air. I saw him with my own eyes. And there's no conflict. What they were addressing was whether or not they were involved in 9/11. And there they found no evidence to support that proposition. They did not address the broader question of a relationship between Iraq and al-Qaida in other areas, in other ways.

BORGER: Well, my reading of the report is that it says that, yes, contacts were made between al-Qaida and Iraq, but they could find no evidence that any relationship, in fact, had been forged between al-Qaida and Iraq.

Vice Pres. CHENEY: And you're talking generally now, not just 9/11.

BORGER: Not just 9/11. And let's talk generally and then we'll get to 9/11.

Vice Pres. CHENEY: Talk generally.

BORGER: Generally.

Vice Pres. CHENEY: That's not true.

BORGER: So you disagree?

Vice Pres. CHENEY: Absolutely. Look at the Zarqawi case. Here's a man who's Jordanian by birth. He's described as an al-Qaida associate. He ran training camps in Afghanistan back before we went to war in Afghanistan. After we went in and hit his training camp, he fled to Baghdad. Found safe harbor and sanctuary in Baghdad in May of 2002. He arrived with about two dozen other supporters of his, members of the Egyptian Islamic Jihad, which was Zawahiri's organization. He's the number two to bin Laden, which was merged with al-Qaida interchangeably. Egyptian Islamic Jihad, al-Qaida, same-same. They're all now part of one organization. They merged some years ago. So Zarqawi living in Baghdad. We arranged for information to be passed on his presence in Baghdad to the Iraqis through a third-party intelligence service. They did that twice. There's no question but what Saddam Hussein really was there. He was allowed to operate out of Baghdad. He ran the poisons fact ory in northern Iraq out of Baghdad, which became a safe harbor for Ansar al-Islam??? as well as al-Qaida fleeing Afghanistan. There clearly was a relationship there that stretched back over that period of time to at least May of '02, a year before we launched into Iraq. He is the worst offender. He's probably killed more Iraqis than any other man in Iraq today. He is probably the leading terrorist still operating in Iraq today.

BORGER: Now some say that he corresponded with al-Qaida only after Saddam was deposed.

Vice Pres. CHENEY: That's not true. He had been involved working side by side, as described by the CIA, with al-Qaida over the years. This is an old established relationship. He's the man who killed our man Foley in Jordan, an AID official, during this period of time. To suggest that there's no connection between Zarqawi, no relationship if you will, and Iraq just simply is not true.

BORGER: Well, let's get to Mohammad Atta for a minute, because you mentioned him as well. You have said in the past that it was, quote, "pretty well confirmed."

Vice Pres. CHENEY: No, I never said that.

BORGER: OK.

Vice Pres. CHENEY: Never said that.

BORGER: I think that is...

Vice Pres. CHENEY: Absolutely not. What I said was the Czech intelligence service reported after 9/11 that Atta had been in Prague on April 9th of 2001, where he allegedly met with an Iraqi intelligence official. We have never been able to confirm that nor have we been able to knock it down.

BORGER: Well, now this report says it didn't happen.

Vice Pres. CHENEY: No. This report says they haven't found any evidence.

BORGER: That it happened.

Vice Pres. CHENEY: Right.

BORGER: But you haven't found the evidence that it happened either, have you?

Vice Pres. CHENEY: No. All we have is that one report from the Czechs. We just don't know.

BORGER: So does this put it to rest for you or not on Atta?

Vice Pres. CHENEY: It doesn't add anything from my perspective. I mean, I still am a skeptic. I can't refute the Czech plan. I can't prove the Czech plan. It's ...(unintelligible) the nature of the intelligence (unintelligible).

BORGER: OK, but let's...

Vice Pres. CHENEY: But that is a separate question from what the press has gotten all in a dither about, The New York Times especially, on this other question. What they've done is, I think, distorted what the commission actually reported, certainly according to Governor Thompson, who's a member of the commission.

BORGER: But you say you disagree with the commission...

Vice Pres. CHENEY: On this question of whether or not there was a general relationship.

BORGER: Yes.

Vice Pres. CHENEY: Yeah.

BORGER: And they say that there was not one forged and you were saying yes, that there was. Do you know things that the commission does not know?

Vice Pres. CHENEY: Probably.

BORGER: And do you think the commission needs to know them?

Vice Pres. CHENEY: I don't have any--I don't know what they know. I do know they didn't talk with any original sources on this subject that say that in their report.

BORGER: They did talk with people who had interrogated sources.

Vice Pres. CHENEY: Right.

BORGER: So they do have good sources.

Vice Pres. CHENEY: Gloria, the notion that there is no relationship between Iraq and al-Qaida just simply is not true. I'm going to read this material here. Your show isn't long enough for me to read all the pieces...

BORGER: Sure it is.

Vice Pres. CHENEY: ...but in the fall of '95 and again in the summer of '96, bin Laden met with Iraqi intelligence service representatives at his farm in Sudan. Bin Laden asked for terror training from Iraq. The Iraqi intelligence service responded. It deployed a bomb-making expert, a brigadier general in the Iraqi intelligence.

BORGER: OK, but now just let me stop you there, because what this report says is that he was not given the support that he had asked for from Iraq, that he had requested all of these things but, in fact, did not get them.

Vice Pres. CHENEY: He got this. We know for a fact. This is from George Tenet's testimony before the Senate Armed Services Committee February 12th, 2003, etc. I mean, it's there. It's ...(unintelligible).

BORGER: So is the commission credible as far as you're concerned?

Vice Pres. CHENEY: I haven't read their entire report on everything. I think they're doing good work. I think it's a very tough job they've been doing and I don't mean to be overly critical of them. I think this is not an area they looked at. According to Governor Thompson again, they didn't spend a lot of time on the question of Iraq and al-Qaida except for the 9/11 proposition.

That's what they're asked to look at. They did not spend a lot of time on these other issues. They've got one paragraph in the report that talks about that. And so the notion that you can take one paragraph from the 9-11 Commission and say, `Ah, therefore that says there was never a connection between Iraq and al-Qaida.' It's just wrong. It's not true. I'd love to go on on all of this stuff, but the fact of the matter is there clearly was a relationship there. Now...

BORGER: Let me just ask you, bottom line, though, on 9/11...

Vice Pres. CHENEY: On 9/11...

BORGER: ...Saddam Hussein had nothing to do with 9/11?

Vice Pres. CHENEY: We have never been able to prove that there was a connection there on 9/11. The one thing we have is the Czech intelligence service report saying that Mohammad Atta had met with the senior Iraqi intelligence official at the embassy on April 9th, 2001. That's never been proven. It's never been refuted.

BORGER: OK. And let me ask you one more personal note. The commission also reported today that you gave the order to shoot down those airplanes that were commandeered by the terrorists but that your orders never reached the American pilots. Can you tell us how agonizing that was?

Vice Pres. CHENEY: Well, actually it went very fast. First of all, I discussed it with the president. The president made the decision. Then I was asked sometime after that--an officer came into the emergency operations center into the White House where I was located and wanted to know if they were authorized to shoot down the aircraft. And based on my earlier discussion with the president I said yes. I didn't spend a lot of time thinking about it. They needed a fast decision. There was a report of an airplane 80 miles out headed towards the White House and towards Washington.

So it was a quick decision. It had to be quick. Planes were flying 500 miles an hour at buildings. It turned out--we didn't know this at the timeÑit turned out that by the time the order was given, the plane that was headed that way--United 93--had crashed. The passengers had obviously...

BORGER: Had your order gotten to the planes?

Vice Pres. CHENEY: No.

BORGER: Would that happen another time? I mean, is that fixed?

Vice Pres. CHENEY: Well, is it fixed? I think it is now, but at the time, nobody had ever trained for or planned on having American fighters shoot down American commercial airliners. That's not a drill that, you know, anybody's ever practiced before and it's not clear that day that if the pilot had received that order that he would have quickly and instantly followed it. It would have been a hard thing to do to fall in on a United Airlines flight and shoot it out of the sky if you're up there with--an American flying an F-15.

So again, what we know now based on the timelines and so forth that were established is that by the time that order was transmitted, United 93 had already gone down because of the action of the passengers.

BORGER: Let me ask you what your response is to the Democratic presidential candidate, John Kerry, who said upon looking at this 9/11 report that this administration, quote, "misled America."

Vice Pres. CHENEY: In what respect? I haven't seen that.

BORGER: In terms of the relationship between al-Qaida and Iraq.

Vice Pres. CHENEY: We never said that Iraq was responsible for 9/11. We never said that. You can't find any place where I said it, where the president said it. I was asked that, as a matter of fact, by Tim Russert on "Meet the Press" on the Sunday after the attack and said, `No, we don't have any evidence of it.' Later on we received this information from the Czechs, but again, as I say, we've never been able to prove that nor have we been able to knock it down.

BORGER: Now the report says, though, that there isn't any relationship, so...

Vice Pres. CHENEY: They've concluded, based on what they've done.

BORGER: And you're not there.

Vice Pres. CHENEY: They've concluded and I haven't had a chance to read all of their report. They've concluded based on the work they've done that there was no connection, that Iraq was not responsible for 9/11. And I can't say they were. I've never seen evidence that supports that, except this one report from the Czechs.

BORGER: Are we close to getting Osama bin Laden?

Vice Pres. CHENEY: I think we will get Osama bin Laden. I wouldn't want to put a time frame on it. We're actively in the hunt. We have been now for some considerable period of time and I think eventually we'll run him to ground.

BORGER: Now recently the Saudis have also been victims of al-Qaida. There was an attack that killed 22 people. Now an American is being held hostage there. The family of this hostage, Paul Johnson Jr., has asked for the release of al-Qaida detainees so he can be released. What's your response to their request?

Vice Pres. CHENEY: Well, we're working closely with the Saudis on this matter. We're--our officials have been in touch with the Johnson family, as it should be. We do not, as a general proposition, believe it makes any sense to negotiate with hostage takers. All you do when you do that is put a price on the head of every other American out there. If, in fact, the terrorists can come capture an American and trade him for 12 of their own who are in custody for their past murderous acts, then you will almost guarantee there will be further kidnappings. So as a general proposition, the policy of this administration and our predecessors has always been you don't negotiate with terrorists.

BORGER: In hindsight, Mr. Vice President, are you disappointed in the quality of the intelligence that you received before launching an attack against Iraq?

Vice Pres. CHENEY: I can't say that, Gloria. I think the decision we made was exactly the right one. Everything I know today, everything the president knows today, we would have done exactly the same thing. Saddam Hussein was an evil man. He'd launched two wars. He'd produced and used weapons of mass destruction in the past. He had provided safe harbor and sanctuary for terrorists. He was paying $25,000 a pop to the families of suicide bombers who'd kill Israelis. He hosted Abu Nidal in Baghdad, Palestinian Islamic Jihad, had established a relationship with al-Qaida. This was an evil man who had tried previously to expand his influence in the area and we did exactly the right thing.

Now could we have better intelligence? You always want better intelligence. If you had complete knowledge on these kinds of decisions and issues, you wouldn't need a president to make the decision; some robot could. The President has to make judgments. You go to the president of the United States and you lay down a very strong case that this guy is all the things I've said plus had reconstituted his weapons of mass destruction program, tell him it's a slam dunk case and you've got the ongoing evidence of a relationship with al-Qaida and we had 9/11. 9/11 changed a lot. Remember what happened after 9/11. We said henceforth we will no longer make a distinction between the terrorists and states that sponsor or have safe harbor sanctuary for terrorists. If you're going to host a terrorist, you're going to be held responsible for their actions just as much as the terrorists are, which is what we did in Afghanistan. And it's very important for us to remember that when 9/11 occurred, it forced us to look at the world a new way, that part of the world in particular, where in fact Saddam Hussein operated.

BORGER: Mr. Vice President, I don't think I've ever seen you, in all the years I've interviewed you, as exercised about something as you seem today.

Vice Pres. CHENEY: I was. I admit, Gloria, and you and I have known each other a long time. But I do believe that the press has been irresponsible, that there's this temptation to take...

BORGER: But the press is making a distinction between 9/11 and...

Vice Pres. CHENEY: No, they're not. They're not. The New York Times does not. The Panel Finds No Qaida-Iraq Ties. That's what it says. That's the vaunted New York Times. Numerous--I've watched a lot of the coverage on it and the fact of the matter is they don't make a distinction. They fuzz it up. Sometimes it's through ignorance. Sometimes it's malicious. But you'll take a statement that's geared specifically to say there's no connection in relation to the 9/11 attack and then say, `Well, obviously there's no case here.' And then jump over to challenge the president's credibility or my credibility and say ...(unintelligible).

BORGER: Do you feel it's your personal credibility on the line, because obviously you have been portrayed as...

Vice Pres. CHENEY: No, I'm grateful. I...

BORGER: ...the hard-liner in the administration...

Vice Pres. CHENEY: No.

BORGER: ...somebody who's...

Vice Pres. CHENEY: Gloria, I don't feel persecuted. I don't need to. The fact of the matter is, the evidence is overwhelming. The press is, with all due respect, and there are exceptions, oftentimes lazy, oftentimes simply reports what somebody else in the press said without doing their homework.

BORGER: But it's the commission that reached--I mean, I know. I don't want to go back over the old ground here, but...

Vice Pres. CHENEY: No, but you need to go back and look...

BORGER: OK.

Vice Pres. CHENEY: ...at what Governor Jim Thompson said today about his conclusion as a commissioner based on the work that's been done; that they focused on 9/11. Their conclusion based on what they've seen on 9/11 is there was no Iraqi involvement, but he said, we did not address the rest of it. That was not our mission. That wasn't our assignment, to look at the broader relationship between Iraq and al-Qaida.

BORGER: OK, Mr. Vice President, we are here in Ohio and I promised you that I would talk about the economy, so I will do that.

Vice Pres. CHENEY: It's very important.

BORGER: It is an important subject. State by state job numbers are coming out tomorrow. You're here in a must-win state for either party. Your administration says that 1.2 million jobs have been created this year. John Kerry says 1.2 million fewer people are employed since you took office. So what do you say to that and what do you say to the 200,000 or so people in Ohio who are still out of work?

Vice Pres. CHENEY: Well, the unemployment rate in Ohio has dropped from 6.2 percent to 5.8 percent. The Ohio economy is improving significantly just like the economy across the rest of the country. I said the economy is growing by 5 percent over the past year. That's the fastest rate of growth since the first Reagan term, nearly 20 years ago. I look at real personal disposable income and it's up 3.3 percent in the last year. In the last year of the Clinton administration it was only 1.4 percent, so it's almost three times as fast. If you look at inflation, if you look at interest rates, if you look at productivity, if you look at housing starts, if you look at manufacturing, everything's moving in the right direction. This is a very strong economy. It's getting stronger. I've heard John Kerry say this is the worst economy since the Great Depression. That's just wrong. And anybody who hears that says, `What the hell's he talking about?' He doesn't know what he's talking about obviously. And I think this notion that we're trying here to look at exactly the same situation and that you can't conclude this is a strong, healthy economy--you clearly can and I think he's clearly not credible when he tries to make the case that the economy's terrible.

BORGER: Well, he talked about--he's been talking about a middle-class squeeze this week, even in this state, saying job loss is rising, health-care costs, huge budget deficits that are going to result in cuts in social programs.

Vice Pres. CHENEY: If John Kerry had had his way, there would be no economic recovery today because he voted against the Bush tax cuts. He would not support the very policies we put in place, cutting tax rates, getting rid of the child tax credit, increasing their credit and reducing the marriage penalty, providing greater expensing for companies like this one right here, NexTech, and allow them to invest and go out and buy new equipment and hire more people. All of those policies flow directly out of the tax policies that we put in place in 2001, 2002 and 2003. John Kerry opposed it.

BORGER: Well, do we need more tax cuts now?

Vice Pres. CHENEY: There would be no economic recovery today if John Kerry had had his way. His problem is he's got to try and find some way to create a sense of disappointment and pessimism about the economy and that's exactly what he's doing.

BORGER: Do we need more tax cuts?

Vice Pres. CHENEY: We need to make the ones we've got permanent. That's the most important thing, because the way the Senate rules work, the ones that we put in place will expire over the next few years unless we make them permanent. And when those cuts expire, that'll result in a tax increase on the American people and that's exactly the wrong medicine.

BORGER: And, Mr. Vice President, what do you say to people who argue that the gap between the wealthy and the poor has grown?

Vice Pres. CHENEY: I look at numbers that point out the extent to which we have reduced the taxes on everybody in America who pays income taxes. That the average reduction for a family in the US has been $1,500 from those cuts and, as I say, things like real disposable personal income, which is probably the best measure of all of what people have in their pockets. It's the after tax income and it includes benefits they receive on the job. And that is growing by leaps and bounds because of the policies we put in place.

BORGER: Now just to go to a few more subjects sort of potpourri very quickly, there is obviously as you know an ongoing investigation into who within the Bush administration may have leaked the name of a covert CIA operative to Bob Novak, who is a columnist in The Washington Post. Can you say that no one in your office was involved in this?

Vice Pres. CHENEY: Gloria, you need--you get the same answer the president gives when he gets asked this question. This is a matter that is being looked at by the Justice Department. You need to go to the Justice Department if you have any questions about the matter.

BORGER: And that's all you'll say on that?

Vice Pres. CHENEY: That's all.

BORGER: Let me also ask you about the vice presidency. Obviously now John Kerry is in the process of trying to pick his vice president. If you were to wake up tomorrow and discover that, say, John Edwards was going to be the person who was going to debate you, what would come to mind?

Vice Pres. CHENEY: I'd first start out by thinking about the last debate against Joe Lieberman four years ago, which I enjoyed and I thought was a good debate between the two of us. Vice presidents only get to debate once during the course of the campaign. That's probably enough. I'm not sure the country could tolerate more than that. But I look forward to it, whoever it is. I don't know who John Kerry's going to pick. I don't have any idea. But whoever it is, I would expect we'll both do our parts and the debate's an important part of that.

BORGER: Any advice for John Kerry's running mate, whomever he may be--or she?

Vice Pres. CHENEY: Well, I offered to head up his search committee but he didn't accept the offer.

BORGER: Any other advice?

Vice Pres. CHENEY: No.

BORGER: No. Let me just ask you one final question, Mr. Vice President. And that is, for better or worse, your public image in this administration over these last few years has become that of the enforcer. You are an influential foreign policy hard-liner, some would say. You are the hawk in this administration. You are somebody the president listens to. You're the man who had to tell Secretary O'Neil it was time for him to go. So you are the enforcer. Is all of that you?

Vice Pres. CHENEY: Oh, I don't know if I would describe myself in quite those terms, but I can't quarrel with what you said basically. I'm hear to serve the president. I retired from public life in 1993, when I left the Defense Department. The only reason I came back is because he asked me to come back as his running mate. It's been a fascinating four years. I wouldn't have missed it for the world but I'm here to do what he needs to have done.

There's always a temptation on the part of people outside, especially in the press, trying to understand and explain what's happening, to try to attribute what happens in the administration to the subordinates. But the most accurate portrayal is the president of the United States makes the decision and this one especially is actively and aggressively engaged across the board. My job is to offer advice, which I do, to take on assignments which he gives me, which I do, but I say I'm there specifically to serve him any way I can and not worry a lot about what my public image might be. Am I warm and fuzzy or am I perceived as a tough guy? I really don't worry about that. This is probably my last fling in public life and I have no plans to run for anything else when I get through here and I've enjoyed immensely the privilege of serving and look forward to four more years.

BORGER: Mr. Vice President, thank you so much for being with us on CAPITAL REPORT.

Vice Pres. CHENEY: Thank you very much.

BORGER: And back to you, Alan.

MURRAY: Thank you, Gloria. Some very harsh words there for the press, The New York Times in particular, and Senator John Kerry. Gloria will join me after the break for more on this interview with Vice President Dick Cheney. Then later we're going to get reaction to the 9/11 hearings from former New York City Mayor Rudy Giuliani in an exclusive interview. That and more when CAPITAL REPORT continues on CNBC. ##