Karl Rove Speech to Republican Natl Lawyers Association -- April 7, 2006 MR. ROVE: Enough!

You obviously haven't been outside -- otherwise, you wouldn't be clapping like that. You'd be saying, let's get this over quick so we can get outside and enjoy the nice day. Thank you. Harvey and I have known each other a long time. Harvey used to strike the fear of God into me, because Harvey was inevitably the treasurer or the counsel for every campaign in Missouri for 20 years that I did business with -- did Kit Bond, all the Kit Bond races, all the John Ashcroft races, the state Republican Party, and there at the bottom of every one of those contracts would be Harvey's name. So we worked together on many campaigns in Missouri, and it's great to be here and be introduced by him tonight. I see that you've got a couple of other people. I ran into Thor Hearne as I was coming in. He was leaving; he was smart, and he was leaving to go out and enjoy the day. I understand Phil Kline is here; General Kline is around -- or maybe he's smart as well. (Scattered laughter.) I do see -- I do see Dick Wiley and Charles Cooper here, at least I see Dick. I appreciate your leadership of Bush-Cheney Lawyers in 2004. I understand -- in fact, I'm not a lawyer, but I understand that my personal law firm helped underwrite today's expenses. That's the firm of Nasty, Brutish and Short. (Laughter.) And I'm happy they were able to make a generous contribution to your efforts today. I know I've been making generous contributions -- too much generous in the way of generous contributions to them. I want to thank you for your work on clean elections. I know a lot of you spent time in the 2004 election, the 2002, election, the 2000 election in your communities or in strange counties in Florida, helping make it certain that we had the fair and legitimate outcome of the election. We have, as you know, an enormous and growing problem with elections in certain parts of America today. We are, in some parts of the country, I'm afraid to say, beginning to look like we have elections like those run in countries where they guys in charge are, you know, colonels in mirrored sunglasses. I mean, it's a real problem, and I appreciate that all that you're doing in those hot spots around the country to ensure that the ballot -- the integrity of the ballot is protected, because it's important to our democracy. I also appreciate all that you've done in our campaigns in the past. I know that for some of you it's meant your partners have been swept away to serve in the government, but don't worry, they'll be back with enhanced reputations and the ability to bill even bigger hours. And we really appreciate what you all have done on our judges. To think that this president has appointed 27 percent of the members of the federal judiciary, and most -- most of all, that he has been able to appoint such terrific individuals to the U.S. Supreme Court. John Roberts and Sam Alito will serve for decades with distinction and integrity, and it's going to be really -(applause). I have to tell you, I do have to admit, it was sort of interesting in the interview process. You cannot imagine how nervous those two lawyers were in the interview process. I mean, for a non- lawyer, it was sort of like attending a judicial philosophy seminar in a way, but it was also an interesting case study in human behavior, because there they came in for the interview with, sort of, the murder board, and a couple of very smart lawyers on the interview panel and a couple of non-lawyers. But it was really interesting to see the hands trembling and the voices sort of nervous until they got into it, and then it was really a remarkable set of interviews in which I learned a lot, both about the character of the individuals and a lot about their attitudes towards the law. But it was really very, very interesting. I want to talk today not specifically -- I want to start out talking not just specifically about the law, but I want to talk about a business. I want to describe a business to you. What would you think about a business that had $260 billion in revenues in 2004? And that was up $14.4 billion, or 6 percent, from the 2003 earnings. That'd be a pretty big business, and that's the American tort system. And since 1950, the growth in tort costs has exceeded the GDP growth by -- every year by between 2 (percent) and 3 percent. That means that our tort system is growing significantly faster than inflation and significantly faster than the economy, chewing up a larger and larger share of the economy. Tort costs, it's estimated, have increased over a hundredfold in the last 50 years, in real terms. Lawyers today earn approximately $40 billion; that is 50 percent more than Microsoft's annual sales and twice the revenues of Coca-Cola. The U.S. tort costs of $260 billion are as big or bigger than the entire economies of Norway, Denmark, Poland or South Africa, and it's just part of our economy.

This is really a problem. It's great for us to have a tort system in which people can seek redress for their claims. It's a system that works. But it's gotten out of kilter in too many ways. And we, as Americans, have got to be concerned about the imbalances that are building into the system. The litigation climate in this country puts us at a competitive disadvantage to other countries. According to the National Academies of Sciences, in 2001 U.S. industries spent more on tort litigation than on R&D; spent more in lawsuits than we did on the basic research that's necessary to power innovation in our economy. Non-economic damages are higher in the U.S., accounting for half of all compensation awarded, and these damages are capped and restricted in other countries, and largely not capped or restricted in this country. The United States continues to have the highest tort costs of any developed country in the world. They are -in 2003, they were roughly three times France or Britain, nearly three times those in Japan, twice as big on a per capita basis as Germany, and nearly twice Italy's costs -- and that can't be healthy. Maybe one reason the United States has so many more claims and so much more in the way of costs is that we have over 6.35 times as many lawyers as France, 3.8 times as many lawyers as Italy, 3.07 times as many lawyers as Japan, 2.33 times as many lawyers as Great Britain, 1.85 times as many lawyers per capita as Canada, and 1.64 times as many lawyers per capita as Germany. Maybe sometimes there is too much of a good thing. I'll tell you, though, that it's not merely numbers. The impact that the imbalances in our tort system are having on health care and the economy are powerful, and I want to talk to you just a moment about health care. In 2003, 51 of the 82 counties in Mississippi faced doctor shortages. Rural obstetric care was in serious jeopardy; in fact, Cleveland, Mississippi had lost three of six OB/GYNs, Greenwood, Mississippi had lost two of four, Yazoo City, with 14,550 people living in the city -- not the county, but in the city -- had not a single practicing OB/GYN. I remember going down there with President Bush, in the first event that we ever did to talk about the liability crisis in health care. And we sat around a table and, unfortunately, there was no press there. I say unfortunately because the stories that we heard were powerful. There was a fellow there -- a big, tall, strapping guy, plainly not particularly well-educated, but clear-spoken -- and the president said, tell me your story. And he said, "I was in a terrible accident in my town in the Delta." And he said, "They told my wife I'd never walk or talk again, or work again. " And he said, "I'm doing all that and a whole lot more, Mr. President, and it's because Doc Fatheringham (sp) saved my life." And the president said, "That's a wonderful story. Doc, tell us about your -- tell us about this." (He) turned to the elderly guy sitting next to this big, tall, strapping young guy, and he said, he explained he was the head trauma guy in his community. And he said, "The first hour is when you save them or you lose them, and we got -- we were fortunate, I'm the only guy in my community who does head trauma, but, you know, we found -- we got him and we got him in the first hour and we were able to save him." And he said, "Mr. President, I didn't make any money last year." He said, "Between the cost of my nurses and my office and a huge increase in my insurance" -- it went from something like $40,000 to $110,000 a year -- he said, "Between that I didn't make any money." But he said, "I was okay, I had some rent houses and some timber income." Think about this. Here's a guy who saves lives. Here's a guy who's the only head trauma guy in his community, and he's saying, I did it for free last year. And he said, "But you know what, the problem is is that we can't get a younger doctor to come and take my place, and I don't know what I'm going to do. I can't keep doing this to my family, and I'm worried about my community." And the guy broke down in tears. There was a young doctor and his wife sitting in the room. They were a young couple; she was a nurse, he was a doctor, a pediatric doctor. And he was from Fargo, North Dakota, and they felt the calling of their faith. They felt that their faith caused them to serve the poor. They felt God was saying to them, this is -- you know, your nice life in Fargo, North Dakota's fine, but God wants you to go serve the poor, and so they picked the part of the country and said, where are the poor that need health care? And they looked at Mississippi and they moved to Mississippi. A guy named Kurt Kuer (sp), a doctor and nurse, husband and wife. He was the only pediatrician among three docs in town, Rolling Fork, Mississippi. He was responsible for the infant mortality rate decreasing, before he arrived there, from 10 deaths per thousands births to 3.4 per thousand births. Think about this. This guy comes rolling into town and spends several years of his life providing

quality health care in this community, and it has a clear and obvious result. People are living who would not otherwise be living. The problem was -- and look, it wasn't about money. He made more money in North Dakota, he readily acknowledged, but he said, the quality of life, the satisfaction they felt living out their faith was powerful. But he and his wife were agonizing because lawyers could file suit against him without the patient's knowledge that their physician was being sued, and their insurance was going through the roof, and he was worried that he wasn't going to be able to continue practicing. And guess what? That was 2003, I guess it was. Guess where he is today? They're back, reluctantly, in North Dakota. It is a powerful message. We went to Pennsylvania. They have out-of-control medical liability lawsuits that have driven up insurance rates by double and triple digits for doctors and hospitals. Pennsylvania faces an estimated shortfall of 13,000 physicians by 2020, if the present trend continues. Lloyds of London has informed hospitals in southeast Pennsylvania that the region is one of the three most difficult regions in the world to write medical liability coverage. Most of the disappearing docs are neurosurgeons and orthopedic surgeons and OB/GYNs, and their increasing withdrawal from practices in Pennsylvania has resulted in reduced access to emergency care, particularly in rural areas. One in four Pennsylvania OB/GYNs is dropping -- has dropped or is planning to drop obstetrics, due to high liability costs. And again, this means something important. The Philadelphia Daily News sort of said, okay, there's this talk, conversation about the liability crisis, so let's find out if it's true. They went in and found that more than two out of every three medical residents in six medical specialties were planning to leave Pennsylvania after completing their training. They concluded, quote, "The resident brain drain is greatest among doctors going into high-risk specialties. These doctors, not surprisingly, are most likely to be sued for malpractice and pay some of the highest malpractice insurance premiums." But Ill tell you how powerful this was for me. We met a young doc, pair of docs, husband and wife. She was a practicing OB/GYN with privileges at three Philadelphia area hospitals. And we saw them, I guess, late in 2003 or in 2004 somewhere in Pennsylvania, and they talked about how they were struggling with these enormous increases in medical liability rates. I kid you not. December of 2004, Hannukah party at the White House during the holidays, I see the couple. They're there for the event. Maybe late 30s, early 40s couple. There we are at the State Floor of the White House during the holiday season, there's decorations everywhere, holiday spirit. I go up to them, I say, "It's great to see you docs. How are you doing?" He says, "Well, we're doing okay, but she's had a rough time recently." And I said, "Oh, really? I'm sorry. What's going on?" He said -- and she's sort of clearly not able to -- she's started to already get a little caught up -- he says, "She no longer practices. We just couldn't cope with the insurance, and so she's taking a breather and she's not practicing." And I said, "I'm so sorry to hear that." And with that, on the State Floor of the White House, holiday party, joyous time of the year, she begins crying, because all she could do was think about and talk about the women who she could no longer care for. Now, I understand that we need to have recourse to the courts, but can we not find a system in which caring individuals -- she'd never been sued, had never had a problem, and the insurance rates were out the wazoo and she could not practice. Now, that is powerful. That is a practical impact of how this has affected real people and real lives. You go out to Nevada; we were out in Nevada, and a woman said -- she was enormously pregnant, and I said, "How much longer do you have?" And she said, "Oh, I've got two weeks more." She said, "I'm really going to be glad when the baby comes, because I won't have to drive 80 miles into southwestern Utah in order to see a baby doctor." That is not how America should be. And we've got an example. California's had a law for 27 years, and during those 27 years, they've had in place reasonable caps on certain kinds of damages. Medical liability insurance in California has increased 245 percent during that time. That's compared to over 750 percent for the rest of the country. Now, we've got to find a way to control this, because it is undermining our health care system. You see it also -- there's a moral dimension to this as well. Take a look at asbestos. There are approximately 600,000 claimants -- that's fewer than a quarter of the estimated total -- have filed suit. But non-malignant claims comprise almost 90 percent of the claims, and almost two-thirds of the compensation awards. So people who aren't sick are 90 percent of the claims and two-thirds of the money. It's cost tens of thousands of jobs through the bankruptcies of at least 70 asbestos-related firms.

I met with a guy who bought a company that happened to have the same name as a company that in the '20s and '30s was involved in asbestos. Two different companies, but they had vaguely the same- sounding name. The guy said, "I have to pay a lawyer 1,200 (dollars) to $1,500 many times a year -- six, seven, eight, nine times a year -- in order to file the papers to get me out of a lawsuit where I'm being captured because the name of the company that I purchased, that has nothing to do with asbestos, has as name vaguely like another company. I met a guy from Louisiana; he makes industrial cooling units that go on the top of plants. In those customized units, there is one screw that goes into one holder in the threads, of which there is asbestos. And the guy says, "Look, I'm getting sued left and right." They screw it in at the plant, you know? And they did so not knowing that there was asbestos in the threading. But the guy says, "I'm paying -" he said, "My insurance company's paying it. I'm paying out 10 (thousand dollars) and $12,000 a whack, plus legal fees, on each of these cases." And he said, "I cannot get coverage. When my coverage runs out, I'm not going to be able to get any more coverage. I can't get money at the bank because I'm too big a risk. I've got a business that could grow; we're making money. But I can't grow the business because of the economic conditions that we face here." How fair is that? You know, you see it in Texas. I saw it in my home state. There are 44,000 asbestos claims filed by Alabamians in Jefferson County, Texas. Why is it that all the counties that tend to be litigation problems -- Madison County, Illinois; Jefferson County, Texas -- why are they all named (after) the founders? (Laughter.) The founders deserve better that that. You know, in 2003 we had 105,000 new claimants come into the asbestos litigation system. This is 70 million new claims that are filed on behalf of those 105,000 people. Of the 105,000, approximately 10,000 are ill. But more than 90 percent, or roughly 90 percent of them aren't, and so we're chewing up the system taking care of people who don't yet have an illness, may never have an illness, and yet the people who are really in need -- those that are actually sick from it -- are not getting the help they need. And then, of course, we saw the Wall Street Journal series. Twelve doctors singled out for supporting 10,000 phony silicosis claims where they diagnosed both asbestosis and silicosis, even though they virtually never occur together. They were paid millions of dollars by an X-ray screening company hired by plaintiff lawyers. One doctor personally diagnosed the disease in 51,048 claims and supplied 88,258 reports in support of other claims, and he'd diagnosed more claimants in one day than any other doctor on record -- 515 people in one day, or the equivalent of more than one a minute in an eight-hour shift. (Scattered laughter.) That is one perceptive doc. (Scattered laughter.) We've got another doctor who provided 10,700 primary diagnoses and a further 30,329 reports in support of other claims. His daily high was 297. Another doctor found silicosis in more than 3,600 plaintiffs, only to admit later that he didn't even know the criteria for diagnosing the disease. I guess he was just sort of counting on the emanations. A law firm had actually provided the X- ray screening company the boilerplate language for the diagnosis and would actually send the company an inventory of prospective plaintiffs for handling. You know, this is just not right. It's not fair, and it undermines people's confidence in our judicial system. How can you explain to that guy I talked about earlier, Mike Carter, Monroe, Louisiana. How can you explain to that guy -- he has now been sued more than 100 times, and he's not in the asbestos business. I think it's important that as we look at this issue that we put it in a broader context. It's not just our health system, it's not just asbestos, it's not just the cost. I think we need to think about it in a larger context. First of all, the concerns that people have about our tort system go straight to the foundations of a democratic society. Can we have confidence in the legal system? Is it fair and balanced and aimed at justice, or is it susceptible to being jiggered by crafty lawyers who can get unfair and unreasonable outcomes by shopping for the right judge and the right jury? Is it a system that's fair and predictable, with clear rules, or irrational and biased? And if it ends up being the latter, people's confidence is going to be undermined in the rule of law in America. Can we have confidence in lawyers? Now, despite all the jokes -- and I've heard a couple of good ones myself recently -- lawyers have always had a trusted place in American society. Lawyers have always been seen as dispassionate, public-minded citizens. Everybody can make jokes about them, but everybody knows that white-shoe lawyer who handled the dispute or handled old Grandpa's this and, you know, kept this from happening. Everybody can tell that joke, but they also know somebody that they see at the center

of the culture of their community as a trustworthy individual who puts the interests of the community and of his clients above any narrow agenda. And yet the image of the guy advertising on the back pages of the Yellow Pages, on the back cover of the Yellow Pages, is eating away at the trust ordinary Americans have in the legal profession, and that is not healthy. Can we have confidence in our democratic, representative form of government? Are laws crafted for the common good for fairness and equity for all, for holding people responsible for their actions and not somebody else's, or are laws -- and, by extension, those who pass them and administer them -- are they merely tools by which a politically privileged class extracts wealth from the economy? I remember in 1987 and 1988 in Texas when we had a horrific scandal on our Supreme Court. It was really one of the most remarkable political episodes I've ever seen in my life. Let me take you back 10 years before that point, 1978. We've had a brief spell in Texas during which we didn't have a Republican governor -114 years. (Laughter.) 1978, Bill Clements gets elected governor by defeating the then-attorney general, John Hill, Jr., and he attacked John Hill as a personal injury trial lawyer and beat him by about 11,000 votes, out of several million cast. Complete upset. After his defeat in the 1978 election, John Hill subsequently became elected the chief justice of our Supreme Court, and the court was dominated by personal injury trial lawyers, and there were nine Democrats, as there had been since 1871. By the end of the 1980s, John Hill was so sickened by what he saw on the court that he did an extraordinary thing in 1987. Our court was such a scandal that we had the incumbent chief justice, a Democrat, resign as chief justice in order to give the Republican governor, Bill Clements, the guy who'd defeated him for governor 10 years before and had gotten himself reelected governor in 1986, to give Clements the power to appoint a new chief justice. We'd had a scandal that involved, for example, in one instance, where a prominent lawyer with a very wealthy client with a case before the court, gave over $400,000 to one of the sitting justices while the case was being held, and the justice changed his vote in the case. He voted one way, got the $400,000plus, and changed his vote. This so sickened John Hill that he stood up and said, "Enough is enough. I am resigning from the court so that I may speak out clearly about this, and I will lead a bipartisan effort to clean up the Supreme Court. It was an extraordinary moment. Bill Clements appointed a young judge from Harris County, Texas, named Tom Phillips, as chief justice, and we cleaned up the court. But I will tell you this, it hurt people's confidence in the judiciary to see a system of justice so biased in favor of one element of the bar and so patently unfair and so jiggered in one direction, and it's indicative of something. Wherever we see these concerns emerge -- Texas, Alabama, Mississippi, Georgia, Ohio, Michigan -- when people become convinced that the system of justice is at risk, we see a public reaction. I saw it in Alabama. Alabama suffered similarly, like Texas. And in 1994, a Republican candidate for chief justice won the election by 300 votes, I think it was, out of well over a million votes cast. What happened was, election night it was announced that he'd lost. The next morning, a Democrat county reported that it had switched some digits and had made an authentic counting -- not a counting mistake, but a reporting mistake, and corrected its numbers. And he went from being several thousand behind to being 300 votes ahead. And yet it took 13 months to get Perry Hooper seated as the chief justice of the Alabama Supreme Court. The sitting chief justice, who made it a practice to fax from the Supreme Court fax machine dunning requests to lawyers saying, "I expect you to write me a check for this amount of money and send it to me today," attempted to stay on as chief justice and attempted to require that there be several thousand absentee ballots, which mysteriously appeared a day or two later, none of them witnessed nor notarized as required by Alabama law. He attempted to get them counted, which would have given him -- it's surprising; this may shock you -- but those several thousand ballots were overwhelmingly for the incumbent chief justice. I don't know why that happened -- (scattered laughter). But it took, including -- one of our lawyers who was fighting this case for 13 months is Bill Pryor. That's where I got to know Bill real well. So there's a public reaction when this happens, and I think it happens because people understand that at the heart of it, this is really about people's confidence in the rule of law. The restoration of public confidence, or the maintenance of public confidence in our legal system and in lawyers, is absolutely vital to the maintenance of American government as the true expression of America's values. George Washington put it this way in his farewell address; he said, quote, "This government, the offspring of our own choice, uninfluenced and unawed, has a just claim to your confidence and your support. Respect

for its authority, compliance with its laws, acquiescence in its measures, are duties enjoyed by the fundamental maxims of true liberty." In a fundamental sense, the government remains what it was during the time of General Washington -- the offspring of our own choice. Our duty is to make sure that it exercises a just claim on our confidence and our support, as he said. But doing that means that we need to have a reform of our legal system that can help return balance and fairness to our system and, in doing so, that can deepen the public's confidence that our laws reflect the common good and common sense in what is right and just in American governance. Thank you for what you do as a member of this important group. Thank you for helping to do what you do to ensure that we have fair and honest elections. Thank you for doing what you do to recommend good justices and to give up members of your organization to serve. I cannot imagine a more difficult and demanding job than being a judge. I'm not a lawyer, but I've worked around a lot of judges since 1988 in the Texas Supreme Court and the Alabama Supreme Court, and I see these remarkable men and women -- my friend John Cornyn, Priscilla Owen, Tom Phillips -- who gave up, really, the best years of their legal careers when they could have been bringing in the big paychecks and having a lot of billing hours and enjoying the practice of law and instead taking huge pay cuts in order to serve as judges in our system, and it really gives me a great deal of pride that our government and our country can still call on the talents of men and women to make sacrifices like that. So thank you for doing what you do to encourage people like that to serve, and thank you for serving yourself. I appreciate it. (Applause.)

2 of 3 DOCUMENTS CQ Transcriptions "All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday

KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS

LENGTH: 7459 words SPEAKER: KARL ROVE, DEPUTY WHITE HOUSE CHIEF OF STAFF

KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATION APRIL 7, 2006 SPEAKERS: KARL ROVE, DEPUTY WHITE HOUSE CHIEF OF STAFF

Page 7 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday ROVE: Thank you. Enough. You obviously haven't been outside, otherwise you wouldn't be clapping like that, you'd be saying let's get this over quick so we can get outside and enjoy the nice day. Thank you. Harvey and I have known each other a long time. Harvey used to strike the fear of god into me, because Harvey was inevitably the treasurer or the counsel for every campaign in Missouri for 20 years that I did business with -- all the Kit Bond races, all the John Ashcroft races, the state Republican Party. And there at the bottom of every one of those contracts would be Harvey's name. So we worked together on many campaigns in Missouri. And it's great to be here and be introduced by him tonight. I see that you've got a couple other people. I ran into Thor Hern (ph). As I was coming in, he was leaving. He was smart. He was leaving to go out and enjoy the day. I understand Phil Klein (ph) is here, General Klein is around, or maybe he is smart as well. I do see Dick Wylie (ph) and Charles Cooper (ph) -- at least I see Dick. I appreciate your leadership of Bush/Cheney lawyers in '04. I understand that -- in fact, I'm not a lawyer, but I understand that my personal law firm helped underwrite today's expenses, that's the firm of Nasty, British and Short. (LAUGHTER) And I am happy they were able to make a generous contribution to your efforts today. I know I have been making generous contributions -- too much in the way of generous contributions -- to them. I want to thank you for your work on clean elections. I know a lot of you have spent time in the '04 election, the '02 election, the '00 election in your communities or in strange counties in Florida helping making certain that we had the fair and legitimate outcome of the election. We have, as you know, an enormous and growing problem with elections in certain parts of America today. We're, in some parts of the country, I'm afraid to say, beginning to look like we have elections like those run in countries where the guys in charge are colonels in mirrored sunglasses. I mean, it's a real problem. And I appreciate all that you are doing in those hot spots around the country to ensure that the integrity of the ballot is protected, because it's important to our democracy. Also appreciate all that you have done in our campaigns in the past. I know for some of you, it's meant your partners have been swept away to serve in the government. But don't worry, they will be back with enhanced reputations and the ability to bill even bigger hours. ROVE: And we really appreciate what you all have done on our judges -- to think that this president has appointed 27 percent of the members of the federal judiciary and most of all, that he has been able to appoint such terrific individuals to the U.S. Supreme Court. John Roberts and Sam Alito will serve for decades with distinction and integrity. And it's going to be really remarkable. (APPLAUSE) I have to tell you -- I do have to admit, it was interesting in the interview process. You cannot imagine how nervous those two lawyers work in the interview process. For a nonlawyer, it was like attending a judicial philosophy seminar, in a way. But it was also an interesting case study in human behavior because there they came in for the interview with, sort of, the murder board and a couple of very smart lawyers on the interview panel and a couple of nonlawyers. ROVE: But it was really interesting to see the hands trembling and the voices sort of nervous, until they got into it. And then it was really a remarkable set of interviews in which I learned a lot, both about the character of the individuals and a lot about their attitudes toward the law. But it was really very, very interesting.

Page 8 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday I want to talk today -- I want to start out talking, not just specifically about the law, but I want to talk about a business. I want to describe a business to you. What would you think about a business that had $260 billion in revenues in 2004, and that was up $14.4 billion, or 6 percent, from the 2003 earnings? That would be a pretty big business. That is the American tort system. Since 1950, the growth in tort costs has exceeded the GDP growth every year by between 2 percent and 3 percent. That means that our tort system is growing significantly faster than inflation and significantly faster than the economy, chewing up a larger and larger share of the economy. Tort costs, it's estimated, have increased over 100-fold in the last 50 years, in real terms. Lawyers today earn approximately $40 billion. That is 50 percent more than Microsoft's annual sales and twice the revenues of Coca-Cola. The U.S. tort costs of $260 billion are as big or bigger than the entire economies of Norway, Denmark, Poland or South Africa. And it is just part of our economy. This is really a problem. It is great for us to have a tort system in which people can seek redress for their claims. It is a system that works. But it has gotten out of kilter in too many ways. And we, as Americans, have got to be concerned about the imbalances that are building into the system. The litigation climate in this country puts us at a competitive disadvantage to other countries. According to the National Academy of Sciences, in 2001, U.S. industries spent more on tort litigation than on R&D. They spent more in lawsuits than we did on the basic research that's necessary to power innovation in our economy. Noneconomic damages are higher in the U.S., accounting for half of all compensation awarded, and these damages are capped and restricted in other countries, and largely not capped or restricted in this country. The United States continues to have the highest tort costs of any developed country in the world. In 2003, they were roughly three times France or Britain, nearly three times those in Japan, twice as big on a per capita basis as Germany, and nearly twice Italy's costs. And that can't be healthy. ROVE: Maybe one reason the United States has so many more claims and so much more in the way of costs is that we have over 6.35 times as many lawyers as France, 3.8 times as many lawyers as Italy, 3.07 times as many as Japan, 2.33 times as many lawyers as Great Britain, 1.85 times as many lawyers per capita as Canada, and 1.64 times as many lawyers per capita as Germany. Maybe, sometimes, there is too much of a good thing. I will tell you, though, that it's not merely numbers. The impact that the imbalances in our tort system are having on health care and the economy are powerful. And I want to talk to you just a moment about health care. In 2003, 51 of the 82 counties in Mississippi faced doctor shortages. Rural obstetric care was in serious jeopardy. In fact, Cleveland, Mississippi, had lost three of six OB/GYNs. Greenwood, Mississippi, had lost two or four. Yazoo City, with 14,550 people living in the city, not the county but in the city, had not a single practicing OB/GYN. I remember going down there with President Bush and the first event that we ever did to talk about the liability crisis in health care. And we sat around a table. And unfortunately, there was no press there. I say "unfortunately" because the stories that we heard were powerful. There was a fellow there, a big, tall, strapping guy, plainly not particularly well educated, but clear spoken. And the president said, "Tell me your story." And he said, "I was in a terrible accident in my town in the delta." And he said, "They told my wife I'd never walk or talk again or work again." And he said, "I am doing all of that and a whole lot more, Mr. President. And it's because Doc Farthingham (ph) saved my life." The president said, "That's a wonderful story.

Page 9 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday "Doc, tell us about this." He turned to the elderly guy sitting next to this big, tall, strapping young guy. And he explained he was the head trauma guy in his community. And he said, "The first hour is when you save them or you lose them. And we were fortunate -- I'm the only guy in my community that does head trauma, but you know, we got him and we got him in the first hour and we were able to save him." And he said, "Mr. President, I didn't make any money last year." ROVE: He said, "Between the cost of my nurses in my office and a huge increase in my insurance" -- it went from something like $40,000 to $110,000 a year -- he said, "between that, I didn't make any money." But he said, "I was OK. I had some rent houses and some timber income." Think about this: Here's a guy that saves lives. Here's a guy who is the only head trauma guy in his community. And he's saying I did it for free last year. And he said, "But you know what, the problem is, is that we can't get a younger doctor to come and take my place. And I don't know what I'm going to do. I can't keep doing this to my family, and I'm worried about my community." And the guy broke down in tears. There was a young doctor and his wife sitting in the room. They were a young couple. She was a nurse; he was a doctor, a pediatric doctor. And he was from Fargo, North Dakota. And they felt the calling of their faith; they felt that their faith caused them to serve the poor. They felt God was saying to them, you know, your nice life in Fargo, North Dakota, is fine, but God wants you to go serve the poor. And so they picked a part the country and said, where are the poor that are in need of health care? And they looked at Mississippi, and they moved to Mississippi. A guy named Kurt Kooyer (ph), a doctor and nurse, husband and wife. He was the only pediatrician among three docs in town, Rolling Fork, Mississippi. He was responsible for the infant mortality rate decreasing before he arrived there from 10 deaths per 1,000 births to 3.4 per 1,000 births. Think about this. This guy comes rolling into town and spends several years of his life providing quality health care in his community, and it has a clear and obvious result. People are living who would not otherwise be living. The problem was -- and look, he wasn't about money. He made more money in North Dakota. He readily acknowledged it. But he said the quality of life and the satisfaction they felt, living out their faith, was powerful. ROVE: But he and his wife were agonizing because lawyers could file suit against him without the patients' knowledge that their physician was being sued. And their insurance was going through the roof. And he was worried that he wasn't going to be able to continue practicing. And guess what. That was 2003, I guess it was. Guess where he is today. They're back, reluctantly, in North Dakota. It is a powerful message. When we went to Pennsylvania -- they have out-of-control medical liability lawsuits that have driven up insurance rates by double and triple digits for doctors and hospitals. Pennsylvania faces an estimated shortfall of 13,000 physicians by 2020 if the present trend continues. Lloyd's of London has informed hospitals in southeast Pennsylvania that the region is one of the three most difficult regions in the world to write medical liability coverage. Most of the disappearing docs are neurosurgeons and orthopedic surgeons and OB/GYNs. And their increasing withdrawal from practices in Pennsylvania has resulted in reduced access to emergency care, particularly in rural areas.

Page 10 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday One in four Pennsylvania OB/GYNs is dropping or has dropped or is planning to drop obstetrics due to high liability costs. And again, this means something important. The Philadelphia Daily News said, "OK, there's this talk, a conversation about the liability crisis. Let's find out if it's true." They went in and found out that more than two out of every three medical residents in six medical specialties were planning to leave Pennsylvania after completing their training. They concluded, quote, "The resident brain drain is greatest in doctors going into high-risk specialties. These doctors, not surprisingly, are most likely to be sued for malpractice and pay some of the highest malpractice insurance premiums." But I'll tell you how powerful this was for me. We met a young doc -- a pair of docs, a husband and wife. She was a practicing OB/GYN with privileges at three Philadelphia area hospitals. And we saw them, I guess, late in '03 or in '04, somewhere in Pennsylvania. And they talked about how they were struggling with these enormous increases in medical liability rates. ROVE: I kid you not. December of 2004, Hanukkah party at the White House during the holidays. I see the couple. They're there for the event. Maybe late 30s, early 40s couple. There we are, the state floor of the White House during the holiday season. There's decorations everywhere, holiday spirit. I go up to them, I say, "It's great to see you, Docs. How are you doing?" He says, "Well, we're doing OK, but she's had a rough time recently." And I said, "Oh, really? I'm sorry. What's going on?" He said -- and she's sort of clearly not able to -- she's started to already get a little caught up -- he says, "She no longer practices. We just couldn't cope with the insurance. And so she's taking a breather and she's not practicing." And I said, "I'm so sorry to hear that." And with that, on the state floor of the White House, a holiday party, joyous time of the year, she begins crying, because all she could do was think about and talk about the women who she could no longer care for. Now, I understand that we need to have recourse to the courts. But can we not find a system in which caring individuals -- she had never been sued, had never had a problem. And the insurance rates were out the wazoo and she could not practice. That is powerful. That is a practical impact to how this is affecting real people and real lives. You go out to Nevada -- we were out in Nevada and a woman said -- she was enormously pregnant -- and I said, "How much longer do you have?" And she said, "Oh, I've got two weeks more." She said, "I'm really going to be glad when the baby comes because I won't have to drive 80 miles into southwestern Utah in order to see a baby doc." That is not how America should be. And we've got an example. California has had a law for 27 years. And during those 27 years, they have had in place reasonable caps on certain kinds of damages. Medical liability insurance in California has increased 245 percent during that time. That's compared, however, to 750 percent for the rest of the country. Now, we've got to find a way to control this because it is undermining our health care system. There is a moral dimension to this as well. Take a look at asbestos. There are approximately 600,000 claimants -- that's fewer than a quarter of the estimated total -- have filed suit. But non-malignant claims comprise almost 90 percent of the claims and almost two thirds of the compensation awards. So people who aren't sick are 90 percent of the claims and two-thirds of the money. It's cost tens of thousands of jobs through the bankruptcy of at least 70 asbestos-related firms.

Page 11 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday I met with a guy who bought a company that happened to have the same name as a company that, in the '20s and '30s, was involved in asbestos -- two different companies but they had vaguely the same- sounding name. The guy said, "I have to pay a lawyer $1,200 to $1,500 many times a year, six, seven, eight, nine times a year, in order to file the papers to get me out of a lawsuit, where I am being captured because the name of the company that I purchased that has nothing to do with asbestos has a name vaguely like another company." I met a guy from Louisiana. He makes industrial cooling units that go on the top of plants. In those customized units, there is one screw that goes into one holder, in the threads of which there is asbestos. And the guy says, "Look, I'm getting sued left and right. They screw it in at the plant, you know, and they did so not knowing that there was asbestos in the threading." But the guy says, "I'm paying out" -- he said, "My insurance company's paying it -- I'm paying out $10,000 and $12,000 a whack plus legal fees on each of these cases. And he said, "I cannot get coverage. When my coverage runs out, I'm not going to be able to get any more in coverage. I can't get money at the bank because I'm too big a risk. I've got a business that could grow. We're making money. But I can't grow the business because of the economic conditions that we face here." How fair is that? You see it in Texas. I saw it in my home state. There are 44,000 asbestos claims filed by Alabamans in Jefferson County, Texas. Why is it that all the counties that tend to be litigation problems -- Madison County, Illinois, Jefferson County, Texas -- why are they all named about the founders? (LAUGHTER) The founders deserve better than that. In 2003, we had 105,000 new claimants come into the asbestos litigation system. This is 70 million new claims that are filed on behalf of those 105,000 people. Of the 105,000, approximately 10,000 are ill. But more than 90 percent -- or roughly 90 percent of them aren't. And so we're chewing up the system taking care of people who don't yet have an illness, may never have an illness. And yet the people who are really in need, those that are actually sick from it, are not getting the help they need. And then, of course, we saw the Wall Street Journal series: 12 doctors singled out for supporting 10,000 phony silicosis claims, where they diagnosed both asbestosis and silicosis, even though they virtually never occur together. They were paid millions of dollars by an X-ray screening company hired by plaintiff lawyers. One doctor personally diagnosed the disease in 51,048 claims and supplied 88,258 reports in support of other claims. And he diagnosed more claimants in one day than any other doctor on record: 515 people in one day, or the equivalent of more than one a minute in an eight hour shift. (LAUGHTER) That is one perceptive doc. (LAUGHTER) We've got another doctor who provided 10,700 primary diagnoses and a further 30,329 reports in support of other claims. His daily high was 297. Another doctor found silicosis in more than 3,600 plaintiffs, only to admit later that he didn't even know the criteria for diagnosing the disease. I guess he was just, sort of, counting on the emanations.

Page 12 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday The law firm had actually provided the X-ray screening company the boilerplate language for the diagnosis and would actually send the company an inventory of prospective plaintiffs for handling. ROVE: You know, this is just not right. It's not fair. And it undermines people's confidence in our judicial system. How can you explain to that guy I talked about earlier, Mike Carter (ph), Monroe, Louisiana, how can you explain to that guy? He has now been sued more than 100 times, and he's not in the asbestos business. I think it's important that as we look at this issue, that we put it in a broader context. It's not just our health system, it's not just asbestos, it's not just the cost. I think we need to think about it in a larger context. First of all, the concerns that people have about our tort system go straight to the foundations of a democratic society: Can we have confidence in the legal system? Is it fair and balanced and aimed at justice or is it susceptible to being jiggered by crafty lawyers who can get unfair and unreasonable outcomes by shopping for the right judge and the right jury? Is it a system that is fair and predictable, with clear rules, or is it irrational and biased? And if it ends up being the latter, people's confidence is going to be undermined in the rule of law in America. Can we have confidence in lawyers? Now, despite all of the jokes, and I have heard a couple of good ones myself recently, lawyers have always had a trusted place in American society. Lawyers have always been seen as dispassionate, public minded citizens. Everybody can make jokes about them, but everybody knows the white shoe lawyer who handled the dispute or handles old grandpa's this and kept this from happening -- everybody can tell that joke, but they also know somebody that they see at the center of the culture of their community, as a trustworthy individual who puts the interests of the community and of his clients above any narrow agenda. And yet, the image of the guy advertising on the back pages of the yellow pages, on the back cover of the yellow pages, is eating away at the trust ordinary Americans have in the legal profession. And that is not healthy. Can we have confidence in our democratic, representative form of government? Are laws crafted for the common good, for fairness and equity for all, for holding people responsible for their actions and not somebody's else's, or are laws -- and by extension those who pass them and administer them -- are they merely tools by which a politically privileged class extracts wealth from the economy? I remember in 1987 and 1988 in Texas, when we had a horrific scandal on our supreme court. It was really one of the most remarkable political episodes I've ever seen in my life. Let me take you back 10 years before that point: 1978. We'd had a brief spell in Texas during which we didn't have a Republican governor -- 114 years. (LAUGHTER) In 1978, Bill Clements gets elected governor by defeating the then-attorney general, John Hill, Jr. ROVE: And he attacked John Hill as a personal injury trial lawyer and beat him by about 11,000 votes out of several million cast, a complete upset. After his defeat in the '78 election, John Hill subsequently became elected the chief justice of our Supreme Court. And the court was dominated by personal injury trial lawyers. And there were nine Democrats, as there had been since 1871. By the end of the '80s, John Hill was so sickened by what he saw on the court that he did an extraordinary thing in 1987. Our court was such a scandal that we had the incumbent chief justice, a Democrat, resign as chief justice in order to give the Republican governor, Bill Clements, the guy who defeated him for governor 10 years before and had gotten himself re-elected governor in 1986, to give Clements the power to appoint a new chief justice.

Page 13 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday We'd had a scandal that involved, for example, one instance where a prominent lawyer with a very wealthy client with a case before the court gave over $400,000 to one of the sitting justices while the case was being held. And the justice changed his vote in the case. He voted one way, got the $400,000-plus, and changed his vote. This so sickened John Hill that he stood up and said," enough is enough. I am resigning from the court so that I may speak out clearly about this. And I will lead a bipartisan effort to clean up the Supreme Court." It was an extraordinary moment. Bill Clements appointed a young judge from Harris County, Texas, named Tom Phillips, as chief justice. And we cleaned up the court. But I will tell you this, it hurt people's confidence in the judiciary to see a system of justice so biased in favor of one element of the bar and so patently unfair and so jiggered in one direction. And it's indicative of something. Wherever we see these concerns emerge, Texas, Alabama, Mississippi, Georgia, Ohio, Michigan, when people become convinced that the system of justice is at risk, we see a public reaction. I saw it in Alabama. Alabama suffered similarly, like Texas. And in 1994, a Republican candidate for chief justice won the election by 300 votes, I think it was, out of well over a million votes cast. ROVE: What happened was, election night, it was announced that he'd lost. The next morning, a Democrat county reported that they had switched some digits and had made an authentic counting -- not a counting mistake but a reporting mistake -- and corrected its numbers. And he went from being several thousand behind to being 300 votes ahead. And yet, it took 13 months to get Perry Hooper seated as the chief justice of the Alabama Supreme Court. The sitting chief justice -- who made it a practice to fax from the supreme court fax machine, dunning requests to lawyers, saying "I expect you to write me a check for this amount of money and send it to me today," attempted to stay on as chief justice and attempted to require that there be several thousand absentee ballots which mysteriously appeared a day or two later, none of them witnessed nor notarized as required by Alabama law, he attempted to get them counted, which would have given him -- it's surprising; this may shock you, but those several thousand ballots were overwhelmingly for the incumbent chief justice. I don't know why that happened. (LAUGHTER) But it took, including -- one of our lawyers who was fighting this case for 13 months is Bill Pryor. That's where I got to know Bill real well. So there's a public reaction when this happens. And I think it happens because people understand that, at the heart of it, this is really about people's confidence in the rule of law. The restoration of public confidence or the maintenance of public confidence in our legal system and in lawyers is absolutely vital to the maintenance of American government as the true expression of America's values. George Washington put it this way in his farewell address. He said, quote, "This government, the offspring of our own choice, uninfluenced and unawed, has a just claim to your confidence and your support. Respect for its authority, compliance with its laws, acquiescence in its measures, are duties enjoined by the fundamental maxims of true liberty." In a fundamental sense, the government remains what it was during the time of General Washington, the offspring of our own choice. ROVE: Our duty is to make sure that it exercises a just claim on our confidence and our support, as he said.

Page 14 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday But doing that means that we need to have a reform of our legal system that can help return balance and fairness to our system and in doing so, that can deepen the public's confidence that our laws reflect the common good and common sense and what is right and just in American governance. Thank you for what you do as a member of this important group. Thank you for helping do what you do to ensure that we have fair and honest elections. Thank you for doing what you do to recommend good justices and to give up members of your organization to serve. I cannot imagine a more difficult and demanding job than being a judge. I'm not a lawyer, but I've worked around a lot of judges since 1988 in the Texas Supreme Court and the Alabama Supreme Court. And I see these remarkable men and women -- my friend John Cornyn, Priscilla Owen, Tom Phillips -- who gave up, really, the best years of their legal careers, when they could have been bringing in the big paychecks and having a lot of billing hours and enjoying the practice of law, and instead taking huge pay cuts in order to serve as judges in our system. And it really gives me a great deal of pride that our government and our country can still call on the talents of men and women to make sacrifices like that. So thank you for doing what you do to encourage people like that to serve. And thank you for serving yourselves. I appreciate it. (APPLAUSE) MODERATOR: Karl Rove, we have a little memento that we put together in honor of the Alito and Roberts confirmations. MODERATOR: And we'd like to present it to you, from the Republican National Lawyers' Association. ROVE: Thank you. MODERATOR: And we understand that Mr. Rove will take some questions, so take a few. Anybody have any questions? QUESTION: I read the same article that you did in the Wall Street Journal. And I thought then, and I'm sitting here wondering now: Why hasn't the Department of Justice indicted those lawyers, those doctors, the medical evaluation firms, on multiple counts of mail and wire fraud and racketeering? That would solve a lot of the problems. ROVE: Maybe they have already begun that work. I don't know. But it is an interesting question. But even the common practices that may not be indictable offenses are pretty remarkable in that case. I don't know, but my suspicion is that somebody is collecting documents and looking at things at the Justice Department or the U.S. attorney's office, particularly given what the judge said. It is a pretty powerful statement, or set of statements. QUESTION: In 2008, what states do you think are going to be the swing states? And, recently I heard, or some time ago, I read that you went into a chatroom to talk with some kids about politics. Is that correct? ROVE: Not that I know of. (LAUGHTER) On the Internet, you know, anybody could be me, so who knows? (LAUGHTER) You know, I think in 2008, there will be a number of states which will be competitive that are familiar states: Pennsylvania, Michigan, Ohio, maybe not Florida, Colorado, Arkansas, Wisconsin, Minnesota, Nevada, Iowa, New Mexico.

Page 15 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday But I think we're also going to see, depending on who the candidates are, some other states come into play. And that's the interesting thing about elections -- is that who would have forecast before the 2000 election that West Virginia would be a swing state? ROVE: Think about it. In 1996, Bob Dole lost the state by 16 points. In 2000, we won the state by six. That means a 22-point shift. That means that 40 percent of the people who voted for Clinton/Gore in 1996 voted for Bush/Cheney in 2000, a pretty remarkable shift in four short years. So a lot in American politics is up for grabs. There are very few states like the District of Columbia or Texas where it can be reliably forecast that they're out of play for the 2008 election. I intend to observe it with a great deal of interest. (LAUGHTER) ROVE: And my wife insists that I observe and observe only. (LAUGHTER) ROVE: Don't believe a single word this guy says about me later. He's a lying, no good SOB and I've known him for 30 years. (LAUGHTER) (UNKNOWN): Hey, I haven't seen you. Congratulations. ROVE: Well, thank you very much. Thank you very much. (UNKNOWN): He obviously found a woman with very poor judgment. (LAUGHTER) ROVE: Well, I learned all I needed to know about election integrity from the college Republicans. (LAUGHTER) (UNKNOWN): There you go. He was for me in the election. The other guys tried to steal it. That's right. The other guys tried to steal it. (LAUGHTER) The question I have: The Democrats seem to want to make this year an election about integrity, and we know that their party rests on the base of election fraud. And we know that, in some states, some of our folks are pushing for election measures like voter ID. But have you thought about using the bully pulpit of the White House to talk about election reform and an election integrity agenda that would put the Democrats back on the defensive? ROVE: Yes, it's an interesting idea. We've got a few more things to do before the political silly season gets going, really hot and heavy. But yes, this is a real problem. What is it -- five wards in the city of Milwaukee have more voters than adults? With all due respect to the City of Brotherly Love, Norcross Roanblank's (ph) home turf, I do not believe that 100 percent of the living adults in this city of Philadelphia are registered, which is what election statistics would lead you to believe. I mean, there are parts of Texas where we haven't been able to pull that thing off. (LAUGHTER) And we've been after it for a great many years. So I mean, this is a growing problem.

Page 16 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday The spectacle in Washington state; the attempts, in the aftermath of the 2000 election to disqualify military voters in Florida, or to, in one instance, disqualify every absentee voter in Seminole county -- I mean, these are pretty extraordinary measures that should give us all pause. The efforts in St. Louis to keep the polls opened -- open in selected precincts -- I mean, I would love to have that happen as long, as I could pick the precincts. ROVE: This is a real problem. And it is not going away. I mean, Bernalillo County, New Mexico will have a problem after the next election, just like it has had after the last two elections. I mean, I remember election night, 2000, when they said, oops, we just made a little mistake; we failed to count 55,000 ballots in Bernalillo; we'll be back to you tomorrow. (LAUGHTER) That is a problem. And I don't care whether you're a Republican or a Democrat, a vegetarian or a beefeater, this is an issue that ought to concern you because, at the heart of it, our democracy depends upon the integrity of the ballot place. And if you cannot... (APPLAUSE) I have to admit, too -- look, I'm not a lawyer. So all I've got to rely on is common sense. But what is the matter? I go to the grocery store and I want to cash a check to pay for my groceries, I've got to show a little bit of ID. Why should it not be reasonable and responsible to say that when people show up at the voting place, they ought to be able to prove who they are by showing some form of ID? We can make arrangements for those who don't have driver's licenses. We can have provisional ballots, so that if there is a question that arises, we have a way to check that ballot. But it is fundamentally fair and appropriate to say, if you're going to show up and claim to be somebody, you better be able to prove it, when it comes to the most sacred thing we have been a democracy, which is our right of expression at the ballot. And if not, let's just not kid ourselves, that elections will not be about the true expression of the people in electing their government, it will be a question of who can stuff it the best and most. And that is not healthy. QUESTION: I've been reading some articles about different states, notably in the west, going to mail-in ballots and maybe even toying with the idea of online ballots. Are you concerned about this, in the sense of a mass potential, obviously, for voter fraud that this might have in the West? ROVE: Yes. And I'm really worried about online voting, because we do not know all the ways that one can jimmy the system. All we know is that there are many ways to jimmy the system. I'm also concerned about the increasing problems with mail-in ballots. Having last night cast my mail-in ballot for the April 11 run-off in Texas, in which there was one race left in Kerr County to settle -- but I am worried about it because the mail-in ballots, particularly in the Northwest, strike me as problematic. I remember in 2000, that we had reports of people -- you know, the practice in Oregon is everybody gets their ballot mailed to them and then you fill it out. And one of the practices is that people will go to political rallies and turn in their ballots. And we received reports in the 2000 election -- which, remember we lost Oregon by 5000 votes -- we got reports of people showing up at Republican rallies and passing around the holder to get your ballot, and then people not being able to recognize who those people were and not certain that all those ballots got turned in. On Election Day, I remember, in the city of Portland, Multnomah County -- I'm going to mispronounce the name -- but there were four of voting places in the city, for those of you who don't get the ballots, well, we had to put out 100 lawyers that day in Portland, because we had people showing up with library cards, voting at multiple places.

Page 17 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday I mean, why was it that those young people showed up at all four places, showing their library card from one library in the Portland area? I mean, there's a problem with this. And I know we need to make arrangements for those people who don't live in the community in which they are registered to vote or for people who are going to be away for Election Day or who are ill or for whom it's a real difficulty to get to the polls. But we need to have procedures in place that allow us to monitor it. ROVE: And in the city of Portland, we could not monitor. If somebody showed up at one of those four voting locations, we couldn't monitor whether they had already cast their mail-in ballot or not. And we lost the state by 5,000 votes. I mean, come on. What kind of confidence can you have in that system? So yes, we've got to do more about it. QUESTION: There are still quite a few pending judicial nominations in the Senate Judiciary Committee, that the White House has submitted. And some have been there many, many months, even years. (CROSSTALK) QUESTION: Should the Senate Judiciary Committee turn its attention, now, to processing those nominees? ROVE: Yes, they should. As you say, a number of those, particularly the circuits, have been there for a long, long time: Brett Kavanaugh, a colleague of mine at the White House, who would be superb; Jim Haynes. There are several of them that are there and ready to be considered. We also have about -- I think there are 25 that are before the Congress and there are 23 that are in background. And there are, I think, 17 vacancies that we are awaiting names from home state senators or that have just become vacant. And then I think there are roughly the same number that are literally in the process of being interviewed and recommendations being framed. So my point is that they've got 25 now. They're about ready to get 20-some odd more. And they're about ready to get a bunch more shortly after that. So it would be useful if we could turn up the pressure there to encourage them to start paying attention to some of those. QUESTION: The elections in Iraq: Did Secretary Rice and Secretary Straw's visit do anything to get that government formed? ROVE: Yes, I think so. A very good visit, very straightforward. One of the issues here is, you know, they're not familiar with it. Democracy is a little hard to get right the first time. We proved that with the Articles of Confederation. But the second issue is that they have a two-thirds requirement, which is good, because it forces the government to be a national government. But you have stresses and strains within the Shia with regard to the prime minister and with regard to how they're going to split other things up. They have, however, made several important actions, the most important of which is to agree upon a security council, a council that will look after the security of the country. That's an important step. But yes, we want them to get it done. It's time that they get it done. The healthy thing is that they understand the necessity of having a unity government that can encompass all the religious and all the ethnic parties so that they have a piece of the action, an appropriate piece of the action. My sense is it was a very fruitful visit and that we'll see something here shortly. Think about this, though. This is pretty remarkable to me. This is a country that has never known democracy. And in the last election, despite threats of violence -- I mean, we go to polls and most of the time, it's like, will I have to stand in line? There, it's, will I have to stand in line and get blown up -- a slight difference. (LAUGHTER)

Page 18 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday But despite the threats of violence, despite the efforts by some elements of the Sunni community to discourage voting, despite the unfamiliarity of the practice, despite the enormously confusing array of political parties, several hundred political parties, 75 percent of the eligible voters turned out. I mean, that is a pretty remarkable comment about how powerful it is to be able to have one's say. And I've got a cousin who has been over there three times, and I don't mean for a weekend visit -- 82nd Airborne -- fantastic kid, sergeant, 82nd Airborne, early 30s. His father was from Mississippi. My wife doesn't allow me to say "redneck from Mississippi." His mother is Lebanese. His name is Omar; his brother is Khalil -- only in America, Omar Logue (ph), you know, IrishLebanese. (LAUGHTER) And I've got to tell you, I'm so proud of what he's doing. And I know he's proud of what he's doing because he sees this -- nobody is born to live in slavery. Nobody wants to live under tyranny. And the fact that these people have the opportunity to form a democracy in which they can see a life for themselves and for their kids and grandkids that is hopeful and optimistic is powerful. And we are doing absolutely the right thing. It was the right thing to go there; it is the right thing to get the job done. And it would be a wrong thing to walk away from it. And as long as this guy is president of the United States, he's not going to let us walk away. (APPLAUSE) Let me take one last one, as long as it's a good one. And then I've got to go to the Blair House to honor Andy Card, who is ending his service as chief of staff, where the senior staff of the White House is. (APPLAUSE) QUESTION: I had some economic numbers from Miss Reed this afternoon; they're all going great. The president's numbers don't seem to track that. Is there some way we could make them do so? ROVE: Yes, well, change the tone on the evening news, which involves substituting Harvey for Katie. (LAUGHTER) No, look. These things go up, go down. We're going to have to get out there and lay out the case. ROVE: And the president's doing that in a more robust fashion, going out there and spending an hour and a half yesterday, answering every question in Charlotte, North Carolina. And we're going to be talking about Iraq every week. We're going to be talking about the economy. Today, 30 members of the Cabinet and sub-Cabinet were out around America heralding the effect. We were right to cut taxes when we did. You heard it earlier this afternoon. We have the fastest growing economy of any industrialized country in the world. My favorite was -- the president quoted him today -- when we passed the tax cuts, there was one leader of the other party which said there will be no jobs created. Well, they're only wrong 5.1 million times over. I mean, we did the right thing by cutting taxes. And we've cut taxes every year that this president has been in office. We cut taxes for everybody who pays taxes. And if you don't think there is a difference between the two parties, consider this: three-quarters of the Democrats in Congress voted against cutting the income tax rates for everybody who pays income taxes; threequarters of the Democrats voted against reducing taxes on marriage and taxes on children; three-quarters of the Democrats voted against ending the death tax; three-quarters of the Democrats voted against reducing taxes on small business; 95 percent of Democrats voted against reducing taxes on capital gains; 95 percent of Democrats voted against reducing taxes on dividend income. And yet, those are exactly the reason why our economy is growing as powerfully as it is.

Page 19 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS CQ Transcriptions"All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ Transcriptions. You may not alter or remove any trademark, copyright or other notice from copies of the content." April 7, 2006 Friday So we've got to get out there and advocate it, clarify it and contrast it by telling people -- reminding people: Here's what we did and here's what the people on the other side said at that time. Let me say one last thing before I go. Thanks for applauding Andy Card. He's a really remarkable individual. It has been a joy to work for him the last five years. He's one of the longest-serving chiefs of staff. He has an absolutely, you know, bone-killing job. He's there, most days, by 5:00 a.m. He leaves there at 7:00 or 8:00 at night. He's on call 24/7. The president's on call 24/7, but in order to get the president up on some of those odd hours of 24/7, you've got to go through Andy first, who makes the decision as to whether or not it's useful to roust the president out of bed at 2:00 in the morning. So he really has a killer of a job. And he's done it with grace and with dignity and with integrity, with a gentleness of spirit that's pretty remarkable, with an inner toughness that is really inspiring to be around. And I'm going to miss the guy. He's really been fun to be around and great to work for. And it's a testament to the president that he's been able to keep Andy at his side as long as he's been able to, because it is a tough job. Thank you again. END LOAD-DATE: April 11, 2006 LANGUAGE: ENGLISH TYPE: NEWS EVENT NOTES: [????] - Indicates Speaker Unknown [--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said. Copyright 2006 Congressional Quarterly, Inc. All Rights Reserved.

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3 of 3 DOCUMENTS Political Transcript Wire April 10, 2006 Monday

KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS

LENGTH: 7289 words KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATION APRIL 7, 2006 SPEAKERS: KARL ROVE, DEPUTY WHITE HOUSE CHIEF OF STAFF [*] ROVE: Thank you. Enough. You obviously haven't been outside, otherwise you wouldn't be clapping like that, you'd be saying let's get this over quick so we can get outside and enjoy the nice day. Thank you. Harvey and I have known each other a long time. Harvey used to strike the fear of god into me, because Harvey was inevitably the treasurer or the counsel for every campaign in Missouri for 20 years that I did business with -- all the Kit Bond races, all the John Ashcroft races, the state Republican Party. And there at the bottom of every one of those contracts would be Harvey's name. So we worked together on many campaigns in Missouri. And it's great to be here and be introduced by him tonight. I see that you've got a couple other people. I ran into Thor Hern (ph). As I was coming in, he was leaving. He was smart. He was leaving to go out and enjoy the day. I understand Phil Klein (ph) is here, General Klein is around, or maybe he is smart as well. I do see Dick Wylie (ph) and Charles Cooper (ph) -- at least I see Dick. I appreciate your leadership of Bush/Cheney lawyers in '04. I understand that -- in fact, I'm not a lawyer, but I understand that my personal law firm helped underwrite today's expenses, that's the firm of Nasty, British and Short. (LAUGHTER) And I am happy they were able to make a generous contribution to your efforts today. I know I have been making generous contributions -- too much in the way of generous contributions -- to them. I want to thank you for your work on clean elections. I know a lot of you have spent time in the '04 election, the '02 election, the '00 election in your communities or in strange counties in Florida helping making certain that we had the fair and legitimate outcome of the election. We have, as you know, an enormous and growing problem with elections in certain parts of America today. We're, in some parts of the country, I'm afraid to say, beginning to look like we have elections like those run in countries where the guys in charge are colonels in mirrored sunglasses. I mean, it's a real problem. And I appreciate all that you are doing in those hot spots around the country to ensure that the integrity of the ballot is protected, because it's important to our democracy.

Page 21 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday Also appreciate all that you have done in our campaigns in the past. I know for some of you, it's meant your partners have been swept away to serve in the government. But don't worry, they will be back with enhanced reputations and the ability to bill even bigger hours. ROVE: And we really appreciate what you all have done on our judges -- to think that this president has appointed 27 percent of the members of the federal judiciary and most of all, that he has been able to appoint such terrific individuals to the U.S. Supreme Court. John Roberts and Sam Alito will serve for decades with distinction and integrity. And it's going to be really remarkable. (APPLAUSE) I have to tell you -- I do have to admit, it was interesting in the interview process. You cannot imagine how nervous those two lawyers work in the interview process. For a nonlawyer, it was like attending a judicial philosophy seminar, in a way. But it was also an interesting case study in human behavior because there they came in for the interview with, sort of, the murder board and a couple of very smart lawyers on the interview panel and a couple of nonlawyers. ROVE: But it was really interesting to see the hands trembling and the voices sort of nervous, until they got into it. And then it was really a remarkable set of interviews in which I learned a lot, both about the character of the individuals and a lot about their attitudes toward the law. But it was really very, very interesting. I want to talk today -- I want to start out talking, not just specifically about the law, but I want to talk about a business. I want to describe a business to you. What would you think about a business that had $260 billion in revenues in 2004, and that was up $14.4 billion, or 6 percent, from the 2003 earnings? That would be a pretty big business. That is the American tort system. Since 1950, the growth in tort costs has exceeded the GDP growth every year by between 2 percent and 3 percent. That means that our tort system is growing significantly faster than inflation and significantly faster than the economy, chewing up a larger and larger share of the economy. Tort costs, it's estimated, have increased over 100-fold in the last 50 years, in real terms. Lawyers today earn approximately $40 billion. That is 50 percent more than Microsoft's annual sales and twice the revenues of Coca-Cola. The U.S. tort costs of $260 billion are as big or bigger than the entire economies of Norway, Denmark, Poland or South Africa. And it is just part of our economy. This is really a problem. It is great for us to have a tort system in which people can seek redress for their claims. It is a system that works. But it has gotten out of kilter in too many ways. And we, as Americans, have got to be concerned about the imbalances that are building into the system. The litigation climate in this country puts us at a competitive disadvantage to other countries. According to the National Academy of Sciences, in 2001, U.S. industries spent more on tort litigation than on R&D. They spent more in lawsuits than we did on the basic research that's necessary to power innovation in our economy. Noneconomic damages are higher in the U.S., accounting for half of all compensation awarded, and these damages are capped and restricted in other countries, and largely not capped or restricted in this country. The United States continues to have the highest tort costs of any developed country in the world. In 2003, they were roughly three times France or Britain, nearly three times those in Japan, twice as big on a per capita basis as Germany, and nearly twice Italy's costs. And that can't be healthy. ROVE: Maybe one reason the United States has so many more claims and so much more in the way of costs is that we have over 6.35 times as many lawyers as France, 3.8 times as many lawyers as Italy, 3.07 times as many as Japan, 2.33 times as many lawyers as Great Britain, 1.85 times as many lawyers per capi-

Page 22 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday ta as Canada, and 1.64 times as many lawyers per capita as Germany. Maybe, sometimes, there is too much of a good thing. I will tell you, though, that it's not merely numbers. The impact that the imbalances in our tort system are having on health care and the economy are powerful. And I want to talk to you just a moment about health care. In 2003, 51 of the 82 counties in Mississippi faced doctor shortages. Rural obstetric care was in serious jeopardy. In fact, Cleveland, Mississippi, had lost three of six OB/GYNs. Greenwood, Mississippi, had lost two or four. Yazoo City, with 14,550 people living in the city, not the county but in the city, had not a single practicing OB/GYN. I remember going down there with President Bush and the first event that we ever did to talk about the liability crisis in health care. And we sat around a table. And unfortunately, there was no press there. I say "unfortunately" because the stories that we heard were powerful. There was a fellow there, a big, tall, strapping guy, plainly not particularly well educated, but clear spoken. And the president said, "Tell me your story." And he said, "I was in a terrible accident in my town in the delta." And he said, "They told my wife I'd never walk or talk again or work again." And he said, "I am doing all of that and a whole lot more, Mr. President. And it's because Doc Farthingham (ph) saved my life." The president said, "That's a wonderful story. "Doc, tell us about this." He turned to the elderly guy sitting next to this big, tall, strapping young guy. And he explained he was the head trauma guy in his community. And he said, "The first hour is when you save them or you lose them. And we were fortunate -- I'm the only guy in my community that does head trauma, but you know, we got him and we got him in the first hour and we were able to save him." And he said, "Mr. President, I didn't make any money last year." ROVE: He said, "Between the cost of my nurses in my office and a huge increase in my insurance" -- it went from something like $40,000 to $110,000 a year -- he said, "between that, I didn't make any money." But he said, "I was OK. I had some rent houses and some timber income." Think about this: Here's a guy that saves lives. Here's a guy who is the only head trauma guy in his community. And he's saying I did it for free last year. And he said, "But you know what, the problem is, is that we can't get a younger doctor to come and take my place. And I don't know what I'm going to do. I can't keep doing this to my family, and I'm worried about my community." And the guy broke down in tears. There was a young doctor and his wife sitting in the room. They were a young couple. She was a nurse; he was a doctor, a pediatric doctor. And he was from Fargo, North Dakota. And they felt the calling of their faith; they felt that their faith caused them to serve the poor. They felt God was saying to them, you know, your nice life in Fargo, North Dakota, is fine, but God wants you to go serve the poor. And so they picked a part the country and said, where are the poor that are in need of health care? And they looked at Mississippi, and they moved to Mississippi. A guy named Kurt Kooyer (ph), a doctor and nurse, husband and wife. He was the only pediatrician among three docs in town, Rolling Fork, Mississippi. He was responsible for the infant mortality rate decreasing before he arrived there from 10 deaths per 1,000 births to 3.4 per 1,000 births. Think about this. This guy comes rolling into town and spends several years of his life providing quality health care in his community, and it has a clear and obvious result. People are living who would not otherwise be living.

Page 23 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday The problem was -- and look, he wasn't about money. He made more money in North Dakota. He readily acknowledged it. But he said the quality of life and the satisfaction they felt, living out their faith, was powerful. ROVE: But he and his wife were agonizing because lawyers could file suit against him without the patients' knowledge that their physician was being sued. And their insurance was going through the roof. And he was worried that he wasn't going to be able to continue practicing. And guess what. That was 2003, I guess it was. Guess where he is today. They're back, reluctantly, in North Dakota. It is a powerful message. When we went to Pennsylvania -- they have out-of-control medical liability lawsuits that have driven up insurance rates by double and triple digits for doctors and hospitals. Pennsylvania faces an estimated shortfall of 13,000 physicians by 2020 if the present trend continues. Lloyd's of London has informed hospitals in southeast Pennsylvania that the region is one of the three most difficult regions in the world to write medical liability coverage. Most of the disappearing docs are neurosurgeons and orthopedic surgeons and OB/GYNs. And their increasing withdrawal from practices in Pennsylvania has resulted in reduced access to emergency care, particularly in rural areas. One in four Pennsylvania OB/GYNs is dropping or has dropped or is planning to drop obstetrics due to high liability costs. And again, this means something important. The Philadelphia Daily News said, "OK, there's this talk, a conversation about the liability crisis. Let's find out if it's true." They went in and found out that more than two out of every three medical residents in six medical specialties were planning to leave Pennsylvania after completing their training. They concluded, quote, "The resident brain drain is greatest in doctors going into high-risk specialties. These doctors, not surprisingly, are most likely to be sued for malpractice and pay some of the highest malpractice insurance premiums." But I'll tell you how powerful this was for me. We met a young doc -- a pair of docs, a husband and wife. She was a practicing OB/GYN with privileges at three Philadelphia area hospitals. And we saw them, I guess, late in '03 or in '04, somewhere in Pennsylvania. And they talked about how they were struggling with these enormous increases in medical liability rates. ROVE: I kid you not. December of 2004, Hanukkah party at the White House during the holidays. I see the couple. They're there for the event. Maybe late 30s, early 40s couple. There we are, the state floor of the White House during the holiday season. There's decorations everywhere, holiday spirit. I go up to them, I say, "It's great to see you, Docs. How are you doing?" He says, "Well, we're doing OK, but she's had a rough time recently." And I said, "Oh, really? I'm sorry. What's going on?" He said -- and she's sort of clearly not able to -- she's started to already get a little caught up -- he says, "She no longer practices. We just couldn't cope with the insurance. And so she's taking a breather and she's not practicing." And I said, "I'm so sorry to hear that." And with that, on the state floor of the White House, a holiday party, joyous time of the year, she begins crying, because all she could do was think about and talk about the women who she could no longer care for. Now, I understand that we need to have recourse to the courts. But can we not find a system in which caring individuals -- she had never been sued, had never had a problem. And the insurance rates were out the wazoo and she could not practice. That is powerful. That is a practical impact to how this is affecting real people and real lives.

Page 24 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday You go out to Nevada -- we were out in Nevada and a woman said -- she was enormously pregnant -- and I said, "How much longer do you have?" And she said, "Oh, I've got two weeks more." She said, "I'm really going to be glad when the baby comes because I won't have to drive 80 miles into southwestern Utah in order to see a baby doc." That is not how America should be. And we've got an example. California has had a law for 27 years. And during those 27 years, they have had in place reasonable caps on certain kinds of damages. Medical liability insurance in California has increased 245 percent during that time. That's compared, however, to 750 percent for the rest of the country. Now, we've got to find a way to control this because it is undermining our health care system. There is a moral dimension to this as well. Take a look at asbestos. There are approximately 600,000 claimants -- that's fewer than a quarter of the estimated total -- have filed suit. But non-malignant claims comprise almost 90 percent of the claims and almost two thirds of the compensation awards. So people who aren't sick are 90 percent of the claims and two-thirds of the money. It's cost tens of thousands of jobs through the bankruptcy of at least 70 asbestos-related firms. I met with a guy who bought a company that happened to have the same name as a company that, in the '20s and '30s, was involved in asbestos -- two different companies but they had vaguely the same- sounding name. The guy said, "I have to pay a lawyer $1,200 to $1,500 many times a year, six, seven, eight, nine times a year, in order to file the papers to get me out of a lawsuit, where I am being captured because the name of the company that I purchased that has nothing to do with asbestos has a name vaguely like another company." I met a guy from Louisiana. He makes industrial cooling units that go on the top of plants. In those customized units, there is one screw that goes into one holder, in the threads of which there is asbestos. And the guy says, "Look, I'm getting sued left and right. They screw it in at the plant, you know, and they did so not knowing that there was asbestos in the threading." But the guy says, "I'm paying out" -- he said, "My insurance company's paying it -- I'm paying out $10,000 and $12,000 a whack plus legal fees on each of these cases. And he said, "I cannot get coverage. When my coverage runs out, I'm not going to be able to get any more in coverage. I can't get money at the bank because I'm too big a risk. I've got a business that could grow. We're making money. But I can't grow the business because of the economic conditions that we face here." How fair is that? You see it in Texas. I saw it in my home state. There are 44,000 asbestos claims filed by Alabamans in Jefferson County, Texas. Why is it that all the counties that tend to be litigation problems -- Madison County, Illinois, Jefferson County, Texas -- why are they all named about the founders? (LAUGHTER) The founders deserve better than that. In 2003, we had 105,000 new claimants come into the asbestos litigation system. This is 70 million new claims that are filed on behalf of those 105,000 people. Of the 105,000, approximately 10,000 are ill. But more than 90 percent -- or roughly 90 percent of them aren't. And so we're chewing up the system taking care of people who don't yet have an illness, may never have an illness. And yet the people who are really in need, those that are actually sick from it, are not getting the help they need. And then, of course, we saw the Wall Street Journal series: 12 doctors singled out for supporting 10,000 phony silicosis claims, where they diagnosed both asbestosis and silicosis, even though they virtually never occur together. They were paid millions of dollars by an X-ray screening company hired by plaintiff lawyers.

Page 25 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday One doctor personally diagnosed the disease in 51,048 claims and supplied 88,258 reports in support of other claims. And he diagnosed more claimants in one day than any other doctor on record: 515 people in one day, or the equivalent of more than one a minute in an eight hour shift. (LAUGHTER) That is one perceptive doc. (LAUGHTER) We've got another doctor who provided 10,700 primary diagnoses and a further 30,329 reports in support of other claims. His daily high was 297. Another doctor found silicosis in more than 3,600 plaintiffs, only to admit later that he didn't even know the criteria for diagnosing the disease. I guess he was just, sort of, counting on the emanations. The law firm had actually provided the X-ray screening company the boilerplate language for the diagnosis and would actually send the company an inventory of prospective plaintiffs for handling. ROVE: You know, this is just not right. It's not fair. And it undermines people's confidence in our judicial system. How can you explain to that guy I talked about earlier, Mike Carter (ph), Monroe, Louisiana, how can you explain to that guy? He has now been sued more than 100 times, and he's not in the asbestos business. I think it's important that as we look at this issue, that we put it in a broader context. It's not just our health system, it's not just asbestos, it's not just the cost. I think we need to think about it in a larger context. First of all, the concerns that people have about our tort system go straight to the foundations of a democratic society: Can we have confidence in the legal system? Is it fair and balanced and aimed at justice or is it susceptible to being jiggered by crafty lawyers who can get unfair and unreasonable outcomes by shopping for the right judge and the right jury? Is it a system that is fair and predictable, with clear rules, or is it irrational and biased? And if it ends up being the latter, people's confidence is going to be undermined in the rule of law in America. Can we have confidence in lawyers? Now, despite all of the jokes, and I have heard a couple of good ones myself recently, lawyers have always had a trusted place in American society. Lawyers have always been seen as dispassionate, public minded citizens. Everybody can make jokes about them, but everybody knows the white shoe lawyer who handled the dispute or handles old grandpa's this and kept this from happening -- everybody can tell that joke, but they also know somebody that they see at the center of the culture of their community, as a trustworthy individual who puts the interests of the community and of his clients above any narrow agenda. And yet, the image of the guy advertising on the back pages of the yellow pages, on the back cover of the yellow pages, is eating away at the trust ordinary Americans have in the legal profession. And that is not healthy. Can we have confidence in our democratic, representative form of government? Are laws crafted for the common good, for fairness and equity for all, for holding people responsible for their actions and not somebody's else's, or are laws -- and by extension those who pass them and administer them -- are they merely tools by which a politically privileged class extracts wealth from the economy? I remember in 1987 and 1988 in Texas, when we had a horrific scandal on our supreme court. It was really one of the most remarkable political episodes I've ever seen in my life. Let me take you back 10 years before that point: 1978. We'd had a brief spell in Texas during which we didn't have a Republican governor -- 114 years. (LAUGHTER) In 1978, Bill Clements gets elected governor by defeating the then-attorney general, John Hill, Jr.

Page 26 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday ROVE: And he attacked John Hill as a personal injury trial lawyer and beat him by about 11,000 votes out of several million cast, a complete upset. After his defeat in the '78 election, John Hill subsequently became elected the chief justice of our Supreme Court. And the court was dominated by personal injury trial lawyers. And there were nine Democrats, as there had been since 1871. By the end of the '80s, John Hill was so sickened by what he saw on the court that he did an extraordinary thing in 1987. Our court was such a scandal that we had the incumbent chief justice, a Democrat, resign as chief justice in order to give the Republican governor, Bill Clements, the guy who defeated him for governor 10 years before and had gotten himself re-elected governor in 1986, to give Clements the power to appoint a new chief justice. We'd had a scandal that involved, for example, one instance where a prominent lawyer with a very wealthy client with a case before the court gave over $400,000 to one of the sitting justices while the case was being held. And the justice changed his vote in the case. He voted one way, got the $400,000-plus, and changed his vote. This so sickened John Hill that he stood up and said," enough is enough. I am resigning from the court so that I may speak out clearly about this. And I will lead a bipartisan effort to clean up the Supreme Court." It was an extraordinary moment. Bill Clements appointed a young judge from Harris County, Texas, named Tom Phillips, as chief justice. And we cleaned up the court. But I will tell you this, it hurt people's confidence in the judiciary to see a system of justice so biased in favor of one element of the bar and so patently unfair and so jiggered in one direction. And it's indicative of something. Wherever we see these concerns emerge, Texas, Alabama, Mississippi, Georgia, Ohio, Michigan, when people become convinced that the system of justice is at risk, we see a public reaction. I saw it in Alabama. Alabama suffered similarly, like Texas. And in 1994, a Republican candidate for chief justice won the election by 300 votes, I think it was, out of well over a million votes cast. ROVE: What happened was, election night, it was announced that he'd lost. The next morning, a Democrat county reported that they had switched some digits and had made an authentic counting -- not a counting mistake but a reporting mistake -- and corrected its numbers. And he went from being several thousand behind to being 300 votes ahead. And yet, it took 13 months to get Perry Hooper seated as the chief justice of the Alabama Supreme Court. The sitting chief justice -- who made it a practice to fax from the supreme court fax machine, dunning requests to lawyers, saying "I expect you to write me a check for this amount of money and send it to me today," attempted to stay on as chief justice and attempted to require that there be several thousand absentee ballots which mysteriously appeared a day or two later, none of them witnessed nor notarized as required by Alabama law, he attempted to get them counted, which would have given him -- it's surprising; this may shock you, but those several thousand ballots were overwhelmingly for the incumbent chief justice. I don't know why that happened. (LAUGHTER) But it took, including -- one of our lawyers who was fighting this case for 13 months is Bill Pryor. That's where I got to know Bill real well. So there's a public reaction when this happens. And I think it happens because people understand that, at the heart of it, this is really about people's confidence in the rule of law. The restoration of public confidence or the maintenance of public confidence in our legal system and in lawyers is absolutely vital to the maintenance of American government as the true expression of America's values.

Page 27 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday George Washington put it this way in his farewell address. He said, quote, "This government, the offspring of our own choice, uninfluenced and unawed, has a just claim to your confidence and your support. Respect for its authority, compliance with its laws, acquiescence in its measures, are duties enjoined by the fundamental maxims of true liberty." In a fundamental sense, the government remains what it was during the time of General Washington, the offspring of our own choice. ROVE: Our duty is to make sure that it exercises a just claim on our confidence and our support, as he said. But doing that means that we need to have a reform of our legal system that can help return balance and fairness to our system and in doing so, that can deepen the public's confidence that our laws reflect the common good and common sense and what is right and just in American governance. Thank you for what you do as a member of this important group. Thank you for helping do what you do to ensure that we have fair and honest elections. Thank you for doing what you do to recommend good justices and to give up members of your organization to serve. I cannot imagine a more difficult and demanding job than being a judge. I'm not a lawyer, but I've worked around a lot of judges since 1988 in the Texas Supreme Court and the Alabama Supreme Court. And I see these remarkable men and women -- my friend John Cornyn, Priscilla Owen, Tom Phillips -- who gave up, really, the best years of their legal careers, when they could have been bringing in the big paychecks and having a lot of billing hours and enjoying the practice of law, and instead taking huge pay cuts in order to serve as judges in our system. And it really gives me a great deal of pride that our government and our country can still call on the talents of men and women to make sacrifices like that. So thank you for doing what you do to encourage people like that to serve. And thank you for serving yourselves. I appreciate it. (APPLAUSE) MODERATOR: Karl Rove, we have a little memento that we put together in honor of the Alito and Roberts confirmations. MODERATOR: And we'd like to present it to you, from the Republican National Lawyers' Association. ROVE: Thank you. MODERATOR: And we understand that Mr. Rove will take some questions, so take a few. Anybody have any questions? QUESTION: I read the same article that you did in the Wall Street Journal. And I thought then, and I'm sitting here wondering now: Why hasn't the Department of Justice indicted those lawyers, those doctors, the medical evaluation firms, on multiple counts of mail and wire fraud and racketeering? That would solve a lot of the problems. ROVE: Maybe they have already begun that work. I don't know. But it is an interesting question. But even the common practices that may not be indictable offenses are pretty remarkable in that case. I don't know, but my suspicion is that somebody is collecting documents and looking at things at the Justice Department or the U.S. attorney's office, particularly given what the judge said. It is a pretty powerful statement, or set of statements. QUESTION: In 2008, what states do you think are going to be the swing states? And, recently I heard, or some time ago, I read that you went into a chatroom to talk with some kids about politics. Is that correct? ROVE: Not that I know of. (LAUGHTER) On the Internet, you know, anybody could be me, so who knows?

Page 28 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday (LAUGHTER) You know, I think in 2008, there will be a number of states which will be competitive that are familiar states: Pennsylvania, Michigan, Ohio, maybe not Florida, Colorado, Arkansas, Wisconsin, Minnesota, Nevada, Iowa, New Mexico. But I think we're also going to see, depending on who the candidates are, some other states come into play. And that's the interesting thing about elections -- is that who would have forecast before the 2000 election that West Virginia would be a swing state? ROVE: Think about it. In 1996, Bob Dole lost the state by 16 points. In 2000, we won the state by six. That means a 22-point shift. That means that 40 percent of the people who voted for Clinton/Gore in 1996 voted for Bush/Cheney in 2000, a pretty remarkable shift in four short years. So a lot in American politics is up for grabs. There are very few states like the District of Columbia or Texas where it can be reliably forecast that they're out of play for the 2008 election. I intend to observe it with a great deal of interest. (LAUGHTER) ROVE: And my wife insists that I observe and observe only. (LAUGHTER) ROVE: Don't believe a single word this guy says about me later. He's a lying, no good SOB and I've known him for 30 years. (LAUGHTER) (UNKNOWN): Hey, I haven't seen you. Congratulations. ROVE: Well, thank you very much. Thank you very much. (UNKNOWN): He obviously found a woman with very poor judgment. (LAUGHTER) ROVE: Well, I learned all I needed to know about election integrity from the college Republicans. (LAUGHTER) (UNKNOWN): There you go. He was for me in the election. The other guys tried to steal it. That's right. The other guys tried to steal it. (LAUGHTER) The question I have: The Democrats seem to want to make this year an election about integrity, and we know that their party rests on the base of election fraud. And we know that, in some states, some of our folks are pushing for election measures like voter ID. But have you thought about using the bully pulpit of the White House to talk about election reform and an election integrity agenda that would put the Democrats back on the defensive? ROVE: Yes, it's an interesting idea. We've got a few more things to do before the political silly season gets going, really hot and heavy. But yes, this is a real problem. What is it -- five wards in the city of Milwaukee have more voters than adults? With all due respect to the City of Brotherly Love, Norcross Roanblank's (ph) home turf, I do not believe that 100 percent of the living adults in this city of Philadelphia are registered, which is what election statistics would lead you to believe. I mean, there are parts of Texas where we haven't been able to pull that thing off. (LAUGHTER)

Page 29 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday And we've been after it for a great many years. So I mean, this is a growing problem. The spectacle in Washington state; the attempts, in the aftermath of the 2000 election to disqualify military voters in Florida, or to, in one instance, disqualify every absentee voter in Seminole county -- I mean, these are pretty extraordinary measures that should give us all pause. The efforts in St. Louis to keep the polls opened -- open in selected precincts -- I mean, I would love to have that happen as long, as I could pick the precincts. ROVE: This is a real problem. And it is not going away. I mean, Bernalillo County, New Mexico will have a problem after the next election, just like it has had after the last two elections. I mean, I remember election night, 2000, when they said, oops, we just made a little mistake; we failed to count 55,000 ballots in Bernalillo; we'll be back to you tomorrow. (LAUGHTER) That is a problem. And I don't care whether you're a Republican or a Democrat, a vegetarian or a beef-eater, this is an issue that ought to concern you because, at the heart of it, our democracy depends upon the integrity of the ballot place. And if you cannot... (APPLAUSE) I have to admit, too -- look, I'm not a lawyer. So all I've got to rely on is common sense. But what is the matter? I go to the grocery store and I want to cash a check to pay for my groceries, I've got to show a little bit of ID. Why should it not be reasonable and responsible to say that when people show up at the voting place, they ought to be able to prove who they are by showing some form of ID? We can make arrangements for those who don't have driver's licenses. We can have provisional ballots, so that if there is a question that arises, we have a way to check that ballot. But it is fundamentally fair and appropriate to say, if you're going to show up and claim to be somebody, you better be able to prove it, when it comes to the most sacred thing we have been a democracy, which is our right of expression at the ballot. And if not, let's just not kid ourselves, that elections will not be about the true expression of the people in electing their government, it will be a question of who can stuff it the best and most. And that is not healthy. QUESTION: I've been reading some articles about different states, notably in the west, going to mail-in ballots and maybe even toying with the idea of online ballots. Are you concerned about this, in the sense of a mass potential, obviously, for voter fraud that this might have in the West? ROVE: Yes. And I'm really worried about online voting, because we do not know all the ways that one can jimmy the system. All we know is that there are many ways to jimmy the system. I'm also concerned about the increasing problems with mail-in ballots. Having last night cast my mail-in ballot for the April 11 run-off in Texas, in which there was one race left in Kerr County to settle -- but I am worried about it because the mail-in ballots, particularly in the Northwest, strike me as problematic. I remember in 2000, that we had reports of people -- you know, the practice in Oregon is everybody gets their ballot mailed to them and then you fill it out. And one of the practices is that people will go to political rallies and turn in their ballots. And we received reports in the 2000 election -- which, remember we lost Oregon by 5000 votes -- we got reports of people showing up at Republican rallies and passing around the holder to get your ballot, and then people not being able to recognize who those people were and not certain that all those ballots got turned in. On Election Day, I remember, in the city of Portland, Multnomah County -- I'm going to mispronounce the name -- but there were four of voting places in the city, for those of you who don't get the ballots, well, we had to put out 100 lawyers that day in Portland, because we had people showing up with library cards, voting at multiple places.

Page 30 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday I mean, why was it that those young people showed up at all four places, showing their library card from one library in the Portland area? I mean, there's a problem with this. And I know we need to make arrangements for those people who don't live in the community in which they are registered to vote or for people who are going to be away for Election Day or who are ill or for whom it's a real difficulty to get to the polls. But we need to have procedures in place that allow us to monitor it. ROVE: And in the city of Portland, we could not monitor. If somebody showed up at one of those four voting locations, we couldn't monitor whether they had already cast their mail-in ballot or not. And we lost the state by 5,000 votes. I mean, come on. What kind of confidence can you have in that system? So yes, we've got to do more about it. QUESTION: There are still quite a few pending judicial nominations in the Senate Judiciary Committee, that the White House has submitted. And some have been there many, many months, even years. (CROSSTALK) QUESTION: Should the Senate Judiciary Committee turn its attention, now, to processing those nominees? ROVE: Yes, they should. As you say, a number of those, particularly the circuits, have been there for a long, long time: Brett Kavanaugh, a colleague of mine at the White House, who would be superb; Jim Haynes. There are several of them that are there and ready to be considered. We also have about -- I think there are 25 that are before the Congress and there are 23 that are in background. And there are, I think, 17 vacancies that we are awaiting names from home state senators or that have just become vacant. And then I think there are roughly the same number that are literally in the process of being interviewed and recommendations being framed. So my point is that they've got 25 now. They're about ready to get 20-some odd more. And they're about ready to get a bunch more shortly after that. So it would be useful if we could turn up the pressure there to encourage them to start paying attention to some of those. QUESTION: The elections in Iraq: Did Secretary Rice and Secretary Straw's visit do anything to get that government formed? ROVE: Yes, I think so. A very good visit, very straightforward. One of the issues here is, you know, they're not familiar with it. Democracy is a little hard to get right the first time. We proved that with the Articles of Confederation. But the second issue is that they have a two-thirds requirement, which is good, because it forces the government to be a national government. But you have stresses and strains within the Shia with regard to the prime minister and with regard to how they're going to split other things up. They have, however, made several important actions, the most important of which is to agree upon a security council, a council that will look after the security of the country. That's an important step. But yes, we want them to get it done. It's time that they get it done. The healthy thing is that they understand the necessity of having a unity government that can encompass all the religious and all the ethnic parties so that they have a piece of the action, an appropriate piece of the action. My sense is it was a very fruitful visit and that we'll see something here shortly. Think about this, though. This is pretty remarkable to me. This is a country that has never known democracy. And in the last election, despite threats of violence -- I mean, we go to polls and most of the time, it's like, will I have to stand in line? There, it's, will I have to stand in line and get blown up -- a slight difference. (LAUGHTER) But despite the threats of violence, despite the efforts by some elements of the Sunni community to discourage voting, despite the unfamiliarity of the practice, despite the enormously confusing array of political parties, several hundred political parties, 75 percent of the eligible voters turned out.

Page 31 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday I mean, that is a pretty remarkable comment about how powerful it is to be able to have one's say. And I've got a cousin who has been over there three times, and I don't mean for a weekend visit -- 82nd Airborne -- fantastic kid, sergeant, 82nd Airborne, early 30s. His father was from Mississippi. My wife doesn't allow me to say "redneck from Mississippi." His mother is Lebanese. His name is Omar; his brother is Khalil -- only in America, Omar Logue (ph), you know, IrishLebanese. (LAUGHTER) And I've got to tell you, I'm so proud of what he's doing. And I know he's proud of what he's doing because he sees this -- nobody is born to live in slavery. Nobody wants to live under tyranny. And the fact that these people have the opportunity to form a democracy in which they can see a life for themselves and for their kids and grandkids that is hopeful and optimistic is powerful. And we are doing absolutely the right thing. It was the right thing to go there; it is the right thing to get the job done. And it would be a wrong thing to walk away from it. And as long as this guy is president of the United States, he's not going to let us walk away. (APPLAUSE) Let me take one last one, as long as it's a good one. And then I've got to go to the Blair House to honor Andy Card, who is ending his service as chief of staff, where the senior staff of the White House is. (APPLAUSE) QUESTION: I had some economic numbers from Miss Reed this afternoon; they're all going great. The president's numbers don't seem to track that. Is there some way we could make them do so? ROVE: Yes, well, change the tone on the evening news, which involves substituting Harvey for Katie. (LAUGHTER) No, look. These things go up, go down. We're going to have to get out there and lay out the case. ROVE: And the president's doing that in a more robust fashion, going out there and spending an hour and a half yesterday, answering every question in Charlotte, North Carolina. And we're going to be talking about Iraq every week. We're going to be talking about the economy. Today, 30 members of the Cabinet and sub-Cabinet were out around America heralding the effect. We were right to cut taxes when we did. You heard it earlier this afternoon. We have the fastest growing economy of any industrialized country in the world. My favorite was -- the president quoted him today -- when we passed the tax cuts, there was one leader of the other party which said there will be no jobs created. Well, they're only wrong 5.1 million times over. I mean, we did the right thing by cutting taxes. And we've cut taxes every year that this president has been in office. We cut taxes for everybody who pays taxes. And if you don't think there is a difference between the two parties, consider this: three-quarters of the Democrats in Congress voted against cutting the income tax rates for everybody who pays income taxes; threequarters of the Democrats voted against reducing taxes on marriage and taxes on children; three-quarters of the Democrats voted against ending the death tax; three-quarters of the Democrats voted against reducing taxes on small business; 95 percent of Democrats voted against reducing taxes on capital gains; 95 percent of Democrats voted against reducing taxes on dividend income. And yet, those are exactly the reason why our economy is growing as powerfully as it is. So we've got to get out there and advocate it, clarify it and contrast it by telling people -- reminding people: Here's what we did and here's what the people on the other side said at that time. Let me say one last thing before I go. Thanks for applauding Andy Card. He's a really remarkable individual. It has been a joy to work for him the last five years.

Page 32 KARL ROVE DELIVERS REMARKS TO THE NATIONAL REPUBLICAN LAWYERS ASSOCIATIONS Political Transcript Wire April 10, 2006 Monday He's one of the longest-serving chiefs of staff. He has an absolutely, you know, bone-killing job. He's there, most days, by 5:00 a.m. He leaves there at 7:00 or 8:00 at night. He's on call 24/7. The president's on call 24/7, but in order to get the president up on some of those odd hours of 24/7, you've got to go through Andy first, who makes the decision as to whether or not it's useful to roust the president out of bed at 2:00 in the morning. So he really has a killer of a job. And he's done it with grace and with dignity and with integrity, with a gentleness of spirit that's pretty remarkable, with an inner toughness that is really inspiring to be around. And I'm going to miss the guy. He's really been fun to be around and great to work for. And it's a testament to the president that he's been able to keep Andy at his side as long as he's been able to, because it is a tough job. Thank you again. END LOAD-DATE: November 1, 2007 LANGUAGE: ENGLISH ACC-NO: 66535 PUBLICATION-TYPE: Newswire JOURNAL-CODE: PTTW Copyright 2006 ProQuest Information and Learning All Rights Reserved Copyright 2006 2006 CQ Transcriptions, LLC