When NEWSWEEK last sat down with Jack Welch, in December 2000, he'd just picked Jeff Immelt as his successor, and the U.S. Supreme Court had just cemented George W. Bush's presidential victory. At one point, Welch interrupted the interview to take a call from the president-elect. In an interview this month, Welch told NEWSWEEK's Daniel McGinn what they discussed--and why he didn't think an affair would cost Suzy her job. Edited excerpts:

Did the president talk to you about a cabinet post?

I've had opportunities to be considered.

You weren't interested?

They're brutally hard jobs. You have to understand, the reason CEOs don't often make great cabinet officers is they've been the chief executive for the last, in my case, 21 years. Going to be a staff man for somebody else's policies is not something that appeals to me in any way, shape or form.

You were approached last year to run Coca-Cola. Have you ruled out becoming a CEO again?

Absolutely positive.

The recent firing of Boeing's CEO involved romantic e-mails he sent to another Boeing executive. Your ex-wife, Jane, discovered your affair with Suzy when she saw your e-mails. Are people too naive about the privacy of e-mail?

I think e-mails are difficult if people are doing something wrong, but I wouldn't make a broad point about it. If Eliot Spitzer picks up a bad e-mail because somebody is setting prices, I'm glad he did. But I was retired; my affair was with someone who was divorced--I'd send those e-mails tomorrow.

Didn't Suzy deserve to be fired over your affair?

Let's assume you and I are gay--you're a gay guy, I'm a gay guy and you're writing a story about me. We have a great chemistry. At Harvard, when you do an article, you have a chance to negotiate with the writer the context of the article. So [after Suzy and I first met] we had six weeks of e-mails, phone calls, with no relationship whatsoever... Then she came down for a photo shoot [and] I invited her to lunch afterwards, which was the beginning of the relationship. Nothing happened, but it was clear I was liking her, and she was liking me... When something did happen, she went to her boss and said, "I'm having a romantic relationship with Jack Welch. I think the article has to be pulled." They pulled the article... With her record and her resume and her withdrawing the article, I thought, "Suzy, this will not be a criminal offense." She said: "This is Harvard--they won't want any bad press." She was right.

What do you think of Larry Summers's woes?

If you read the transcript, he raised thoughtful questions that an academician should be able to raise. I think it's outrageous. I think it got more outrageous when Will Smith's wife went there and they criticized her for being "heteronormative." I'd never even heard the word before. It's a funny place over there.