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Inside Politics

House Passes President Bush's Budget Plan; Senate Approves Raising 'Hard Money' Limits

Aired March 28, 2001 - 5:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(VIDEO GAP)

JONATHAN KARL, CNN CORRESPONDENT: ... to the people that are liaisoned between the White House and Congress that he is not comfortable at all with a budget that includes room for a tax cut as large as what Bush is trying to push.

FRANK SESNO, CNN ANCHOR: Jonathan Karl on Capitol Hill and Major Garrett over at the White House. That's all that we have time for. But we will say this, it all adds up to 50 plus 50 equals the United States Senate. Thanks very much.

The Bush White House today, meanwhile, handed congressional Democrats more ammunition for their attacks on environmental policy. As our senior political correspondent Candy Crowley explains, global warming is the latest in the series of environmental issues to generate political heat.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): The Bush administration has made it clear it will not implement an international global warming treaty known as the Kyoto Protocol. Only one nation has ratified that treaty, and in 1997, the U.S. Senate signaled unanimously it wouldn't agree to it anyway.

So, the immediate impact of the Bush administration's statement is more political than practical. Critics believe they have found a way to pierce the compassionate conservative image, and they are playing it for all it's worth.

WILLIAM MEADOWS, WILDERNESS SOCIETY: It's open season on basic environmental laws and safeguards that protect the air we breath, the water we drink and the special places that we love. It's a strange definition of compassion.

CROWLEY: The walk away from Kyoto is the latest in a series of enviro-headlines, which also include a decision not to reduce the level of arsenic allowed in drinking water; a decision not to limit carbon dioxide emissions at power plants; and a push for energy exploration in protected wilderness.

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: The president says that he's a compassionate conservative, but isn't it true that a truly compassionate conservative would do everything he could to conserve the beautiful gifts of nature that God has given us here in America?

CROWLEY: Looking to motivate members of Congress into action, the Sierra Club is up in arms and out with radio ads.

(BEGIN VIDEO CLIP, SIERRA CLUB RADIO AD)

NARRATOR: Why did George W. Bush brush aside decades of scientific study that says there's too much cancer-causing arsenic in our water? Why did he break his campaign promise to reduce the amount of carbon pollution in the air? Because the coal and mining industries asked him to.

(END VIDEO CLIP)

CROWLEY: The ads will air in nine states, seven of which have Senate races next year. So far, the president's environmental protection chief is the one taking the flack.

CHRISTIE WHITMAN, EPA ADMINISTRATOR: I would hope we would all understand that no one, and particularly this administration, would jeopardize the public health because of campaign contributions. I don't see that happening as decisions are made.

CROWLEY: In many ways, the environmental decisions are to critics of President Bush what the issue of gays in the military was to critics of President Clinton -- proof that the man who campaigned as a moderate is governing as something else.

PHILIP CLAPP, NATIONAL ENVIRONMENTAL TRUST: I don't think that the American public was voting for Newt Gingrich's environmental policies when they voted for George Bush in November of last year. I think this is going to come as a very large surprise to the majority of Americans, and many people who voted for the president.

(END VIDEOTAPE)

CROWLEY: In truth, the Bush administration doesn't think there's much it can do to please the professional environmental groups, so it is charting a path of its own, one they say of balance, of a Kyoto- type agreement that would also protect U.S. interests, and of a reduction of levels of arsenic in the drinking water, which doesn't bankrupt local economies -- Frank.

SESNO: Candy, you talk about the professional environmentalists, but Bill Clinton, for example, went back on that environmental issue again and again and again, using it as a tool -- a weapon really -- against Republicans. And it appeared to work for him. Concern that that's going to happen again?

CROWLEY: Well, sure, there has to be, because, here's what: The reason that these ads are out there is not to appeal to other environmental groups, but to appeal to suburban votes, to people for whom the environment is an interesting issue. It might not be the driving issue, but it is one. So the more they can get that name "Newt Gingrich" out there, they believe, the more they can chart this as a very conservative president who is ruining the environment.

So, yes, this is -- has to be worrisome insofar as it's clear that the environmental groups are trying to reach out beyond their own lobbying effort, into the hinterlands.

SESNO: All right. Candy Crowley, thanks very much.

And we want to turn now to a pivotal senator, who this day, played a pivotal roll on the subject of campaign finance reform. California Democrat Dianne Feinstein, she joins us now.

Senator, thanks very much for coming over.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Thank you.

SESNO: We know that you helped to broker the deal, if you will, on raising the limits of this hard money, that is to say, the check that someone can write to a particular candidate on an individual candidate from $1,000 to $2,000. It went through. What does it do for McCain-Feingold, the larger bill?

FEINSTEIN: Well, I think it almost guarantees support for McCain-Feingold. Many of us are concerned that if you don't in some way ease the regulation on the $1,000 contribution, you skew the field. In other words, all the regulated disclosed dollars to candidates and to parties are there.

But the unregulated, undisclosed dollars essentially go through independent campaigns. Those independent campaigns can come at the last minute with what's called issue advocacy, and attack a candidate. A candidate doesn't have the money to respond. So easing the hard dollar limits, easing the aggregate limit, indexing these things for inflation, I think are important, long term, if you're going to have campaign spending reform that's going to stand the test of time.

The important thing is that millions of dollars of soft money, undisclosed, unregulated, is out of the political system. It's out of the candidate's coffers, it's out of the party coffers, but it still exists out there with independent campaigns.

SESNO: Senator Thompson wanted to raise the limits to $2,500, and a lot of Democrats said: "No way, we won't go with that," and the reason, the calculation was pretty simple, and that is that Republicans repeatedly out raise Democrats in this money category. Won't that happen with the $2,000 limit as well? Wouldn't it build in a Republican advantage, Senator?

FEINSTEIN: I don't think so. I think -- now, again, there's a difference between the small state and the big state. To the person in the big state, it would mean that they could do half as many fund- raisers. That's not such a bad idea when you are supposed to be doing other things with your time.

I also think this establishes a more level playing field between the challenger. I think it's a fairer way of doing it. Now, you know, way back in 1990, when you -- 10, 11 years ago, you do a political spot at 6:00 in the Los Angeles market. Well, it's now five, six times more.

So if you don't have some way for inflation to be accommodated, the cost of bulk mail is more, the cost of spots, the cost of consultants, of fund-raisers, all of that. So I mean, there are those, certainly, that say we shouldn't change, but I think we should. I think this ensures success of McCain-Feingold, and I'm a happy camper about it.

(LAUGHTER)

SESNO: Let me ask you about that point, not the happy camper part, but the success and the signal today specifically from 1600 Pennsylvania Avenue, George W. Bush through a spokesman says don't count on a veto. What does that mean to you?

FEINSTEIN: Well, don't count on a veto means that he has an open mind to signing a bill, and I think that's very good news, indeed.

SESNO: And very, very quickly Senator Feinstein, before we wrap, how close -- what would you say to the viewers, how close do you think the United States Senate is to signing off on some kind of sweeping campaign finance reform here?

FEINSTEIN: Well, I would say that by Thursday night, we should have a bill. The vote on this was 84 to 16. That's a substantial vote. I think we should have a bill that a dominant majority of the United States Senate will vote for, and soft money will be out of political parties and will be out of candidates' campaigns, and that is great news for the American people.

SESNO: Senator Dianne Feinstein, we appreciate these few minutes of your time.

FEINSTEIN: Right, thank you.

SESNO: And when we come back, we're going to talk to reporters outside the Beltway and see how this and other stories are playing where people live and work and vote.

Also ahead on INSIDE POLITICS, as we come down to the nitty gritty on campaign finance reform, we'll get an inside view of the intense lobbying operations under way, and the unlikely allies fighting McCain-Feingold.

Also, former White House press secretary James Brady talks about his crusade for gun control 20 years after he was shot by John Hinckley Jr.

And later:

(BEGIN VIDEO CLIP)

PANAYIOTIS ZAVOS, FORMER UNIVERSITY OF KENTUCKY PROFESSOR: We have no intentions, and I emphasize that, we have no intentions to step over dead bodies or deformed babies to accomplish this.

(END VIDEO CLIP)

SESNO: Congress joins the debate over cloning and hears from two groups with plans to clone humans soon. This is INSIDE POLITICS.

(COMMERCIAL BREAK)

SESNO: As promised, it's time to go outside of Washington's Beltway. So, let's talk more about the top political stories with Mark Silva of the "Miami Herald". Jim O'Toole of the "Pittsburgh Post-Gazette." And Joel Connelly of the "Seattle Post Intelligencer."

Joel, let's start with you on the subject of campaign finance reform. Maria Cantwell, your new senator, ran using her own money, but also on the subject of campaign finance reform; is this a resonant issue in the Northwest?

JOEL CONNELLY, "SEATTLE POST-INTELLIGENCER": It certainly has resonated here. The McCain presidential campaign was quite strong in the Northwest last year and Cantwell made this a key issue in defeating incumbent Republican Senator Slade Gorton, who is a member of the Republican leadership and one of the people that led the filibuster that blocked this legislation before.

Moreover, Cantwell's financial difficulties have become national news, she tried to finance the campaign herself without taking any political action committee money, and since her high-tech stock has tanked, she is deep in debt.

SESNO: So, everybody hanging on every word?

CONNELLY: I don't think people are hanging on every word. There is a general feeling that campaigns cost too much money. We were either the second or third market in the country, depending how you tabulate in the amount of political commercials that ran. We had our first $20 million Senate campaign. We had a race for a seat in the House of Representatives, where the candidates and the interest groups probably spent $5 million. It has gotten out of control and it has gotten away from the system where the citizen counts for anything in terms of working campaigns.

SESNO: Mark Silva, the "Miami Herald"?

MARK SILVA, "MIAMI HERALD": I think this is a much bigger issue than a lot of political leaders have given it credit for. I also think the president's acquiescence is a recognition of that. He ran against McCain in New Hampshire and Michigan and lost in both places, where Independents care about issues like this. And the president has been in Florida twice in the last two weeks, campaigning for tax cuts, talking about HMO reform, but what is the mail and the phone call and the Senate offices adding up to, it's people calling about campaign finance reform.

SESNO: So, that's what your reporting is revealing, that Floridians are weighing in on campaign finance reform?

SILVA: Last week, even before some of the advertising started here by some of the advocacy groups, the phone calls to Bill Nelson's office in Washington, were running 8 to 1 campaign finance reform to tax cuts. A lot more interest in campaign finance reform. Now, clearly, some of this is driven by groups, but the margin is interesting.

SESNO: Jim O'Toole, Pittsburgh?

JAMES O'TOOLE, "PITTSBURGH POST-GAZETTE": I think I would disagree about the intensity of interest around here. People are, broadly speaking, in favor of campaign finance reform. But it's not something that, for instance -- I don't think this Senate debate is something that's gripping the public.

Having said that, I think that the White House announcement today was not surprising and smart because, while people don't follow the intricacies of the issue, they couldn't find soft money, maybe couldn't tell you what a severability clause is. McCain is kind of the brand name on this issue, so if the White House had been on the wrong side of him, if he had gone on TV really escalating a feud with the White House, that is something people would have paid some attention to.

SESNO: Let me put this question to all three of you and that is, whether Senator Mitch McConnell, Republican, who opposes McCain- Feingold, on the grounds that curtailing money into politics is effectively curtailing free speech; whether that argument is getting through in your respective regions. Joel, you want to start us off again?

CONNELLY: I think the main feeling up here is that the money in politics has led to consultants and TV experts taking over politics, and destroying -- or at least pushing into the background -- the tradition of citizen involvement in the state. And, in fact, that money is, in fact contributing to the fact that you have less participation, less enthusiasm by the voting public, and you have moved away from citizen-based campaigns and into the situation of cheek to jowl commercials on TV.

Almost all of them nasty. Many featuring front groups, we had an Op-ed called Americans For Job Security, spending hundreds of thousands of dollars here last fall that nobody has ever heard of. Nobody knows what ax they have to grind, nobody knows where their money is coming from.

SESNO: Jim?

O'TOOLE: I think it's an issue that people have, to be honest, thrown their hands up about. I don't think that the promises of Congress to reform the system are really accepted by the average person on the street. They've heard this for a number of election cycles, and the level of skepticism I think is pretty high.

SESNO: Mark?

SILVA: I would agree, but also, I think the concept of free speech in the public's eye has been crowded out by paid speech. They see the TV commercials and they feel that their voice does not get through all of that paid advertising. I think the public in general doesn't know the intricacies of hard money limits versus soft money restrictions, but they do know that there is too much money in politics or they believe that. And they've seen McCain as the champion of that. I think that ready action of the Congress this quickly is catching a lot of people's attention.

SESNO: Gentlemen, let's slip over to another issue here, one that really does matter in each of your respective regions, and that is the environment. It's becoming a real battleground issue here in Washington now, the Democrats are out accusing George W. Bush and his administration of a search and destroy mission. He and his administration say, look, we're just trying to do the nation's business here and bring it to a moderate center point. Again, the question, how is this playing in various parts of the country -- Joel?

CONNELLY: It's playing very strongly in the Pacific Northwest, where we have some of the forests that were to be protected by the Clinton administration, and aren't going to be now. And also, a national monument on the (UNINTELLIGIBLE) of the Columbia River, which was identified yesterday by House Republicans as a side for oil and gas drilling.

SESNO: Is this all over your front pages?

CONNELLY: It is, and one interesting thing that happened: McCain's presidential campaign here -- his honorary chair was Theodore Roosevelt's granddaughter, Edith Williams. She told me yesterday that she is so appalled what the Bush administration is doing on this, she no longer considers herself a Republican, but rather, a progressive Independent, very much in the tradition of grandpa.

SESNO: And Mark, we all know what Florida was like in this last election, right down the middle, and the source of endless, sleepless nights; environment a major issue there?

SILVA: The environment is a bedrock here, which is something the Republican Party learned a long time ago and is very faithful to. Jeb Bush, the president's brother, will not drill for oil off the shores of...

SESNO: So how is Jeb Bush playing what is happening up Interstate 95?

SILVA: I think he's trying to be a little bit quiet about it. The global warming issue and some of these other issues are fairly involved. Let me go back to my little, informal unscientific measure of phone calls to the senator's office. The number one phone call and e-mail issue is oil drilling in the Alaskan preserve.

SESNO: Jim, the Democrats are trying to use this; are they going to be able to use it and get traction in your view, in your region?

O'TOOLE: I think it's a real danger for the administration if this is one of a series of incremental steps. The Kyoto Treaty in isolation cuts both ways, there's some coal-mining interest around here are quite pleased to see them walk away from that. That is one of the reasons that Gore lost West Virginia, not too far down the road here. But, having said that, there is broad and universal support for environmental protection in general, and I think...

SESNO: There is also broad support -- if I may -- there's also broad support for jobs; right?

O'TOOLE: Well, yeah, despite what's happening -- excuse me, despite what's happening with the stock market, the job picture is still pretty good, so I think the anxiety on that issue isn't quite there yet.

SESNO: Jim O'Toole, Mark Connelly, Mark Silva; thank you very much. I appreciate your time today and your insight.

PANEL: Thank you.

SESNO: Thank you. And now behind the scenes: some of the nation's powerful lobbying groups operate there. And they've mounted major operations in the battle over campaign finance reform. The groups are aiming squarely at the public and at Capitol Hill.

(BEGIN VIDEOTAPE)

SESNO (voice-over): Ground zero in the effort of advocates by campaign finance reform to push the McCain-Feingold bill through the Senate. Banks of volunteers work the phones trying to woo senators on the fence.

Common Cause says it's spending $400,000 to rally support, through phone banks, e-mail alerts, and personal lobbying, energized by their belief that money has tainted the political system and the time for action is now.

SCOTT HARSHBARGER, PRESIDENT, COMMON CAUSE: We need reform, and we're not going to accept just anything called reform just so it gets by in terms of the politics.

CAROLYN JEFFERSON-JENKINS, LEAGUE OF WOMEN VOTERS: Please vote for McCain-Feingold without the weakening amendments.

SESNO: The League of Women Voters has enlisted many of their citizen lobbyists, as they're called. The league and some other groups have fought any amendments to the bill that would put more money into the political system.

JEFFERSON-JENKINS: The league is opposed to increasing hard money contributions, but we want to look at the total comprehensive package before we make a decision, as to how we're going to proceed.

SESNO: Meanwhile, those who opposed bill, such as the U.S. Chamber of Commerce, are working just as hard, propelled by their belief that the proposed reform would hinder their access and hamper free speech.

BILL MILLER, U.S. CHAMBER OF COMMERCE: This time, this campaign finance debate is fought with real bullets.

SESNO: The Chamber is just one group in a strong coalition fighting the bill. Others include the Christian Coalition and the National Right to Life Committee. These groups say limiting issue ads would muzzle debate.

DOUGLAS JOHNSON, NATIONAL RIGHT TO LIFE: This is a very high priority for us, because we feel it's essential that we be able to communicate directly with citizens who are concerned with the right to life issue.

SESNO: Trying to build grassroots opposition, the National Right to Life Committee uses its monthly news letter and its Web site, urging members to contact their senators to vote "no" on McCain- Feingold.

SESNO: A notable voice on the coalition against the bill, the American Civil Liberties Union, which usually aligns with liberal causes.

MURPHY: To the extent that you limit someone's ability to get their message out by putting ceilings on how much they can spend, you are limiting their free speech rights.

SEN. JOHN MCCAIN (R), ARIZONA: In the same week, the AFL-CIO and the National Right to Work organization came out against the bill. Strange bedfellows, my friends, strange bedfellows.

(END VIDEOTAPE)

SESNO: And it may get stranger still. Groups on both sides vow to keep the pressure on, if not intensify it, as the Senate nears a final vote and even that won't be the last word. If the bill becomes law, opponents say they'll challenge its constitutionality. If it fails, advocates say, they'll be back to try again.

Friday will mark the 20th anniversary of the shooting that wounded President Reagan and nearly cost White House Press Secretary Jim Brady his life. Today, Jim and Sarah Brady went before TV cameras to say their fight to tighten handgun restrictions over the past two decades has made a difference.

But citing recent school shootings, they say much more still needs to be done.

(BEGIN VIDEO CLIP)

SARAH BRADY, HANDGUN CONTROL, INC.: President Bush, and some in Congress, apparently believe there is nothing Congress can do related to guns to prevent these deaths. The president and members of his administration talk about teaching children morals and values, which we agree totally with, but they do not acknowledge what is staring them in the face, millions of American children have too easy access to too many guns.

(END VIDEO CLIP) SESNO: The Bradys and members of Congress who attended their news conference called for new legislation to include requiring background checks for buyers at gun shows and child safety locks.

And INSIDE POLITICS will be back.

(COMMERCIAL BREAK)

SESNO: We'll have more of the day's political news coming up, but now a look at some of our other top stories this hour. A Palestinian official says the seaside home of Yasser Arafat was damaged today in an air attack by Israel. In a separate attack by Israel, a man described as one of Arafat's personal bodyguards was killed. Israel struck at Palestinian targets in the West Bank and Gaza after another bombing against Israeli civilians, a costly one, in Jerusalem.

CNN's Mike Hanna.

(BEGIN VIDEOTAPE)

MIKE HANNA, CNN CORRESPONDENT (voice-over): Helicopter gunships launch attacks in the West Bank and Gaza Strip. The Israeli defense force says the targets were carefully selected. A primary focus, facilities of the elite Force 17 Palestinian police unit. which the Israeli government has accused of complicity in the current wave of bombing attacks in Israel. Force 17 serves as the personal bodyguard of the Palestinian Authority president.

RA'ANAN GISSIN, ISRAELI PRIME MINISTER SPOKESMAN: What we have done serves as a warning. We still hope that the Palestinian Authority will come to its senses, and we will be willing to negotiate peacefully.

MEIR SHEETRIT, ISRAELI CABINET MINISTER: The last thing we want and this government wants and Mr. Sharon wants is an escalation. We don't want to see an escalation. We would like very much to see that all the terror actions and violence should stop.

HANNA: The Israeli attack came in the wake of three bomb blasts in the past two days. The latest: Two youths, aged 14 and 15, were killed while waiting for transport to a religious studies school in the West Bank. Another four students were injured when a Palestinian detonated what police say was a suicide nail bomb.

The militant Hamas organization claimed responsibility for the attacks, and released a videotape of the university student which it said carried out a suicide bomb attack Tuesday in which more than 30 Israelis were injured. Reading from a prepared text, the student said he was one of 12 suicide bombers sent out by Hamas.

The Palestinian Authority has rejected Israeli allegations of involvement in the bombing attacks, and a senior minister said the Israeli military action is further evidence of the need for permanent international observers in the region. SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: Mr. Sharon is pointing his finger at us, saying Arafat is responsible, the Palestinian Authority is responsible. What does he have to hide by rejecting the concept of international observers? Why do they reject bringing in international observers?

HANNA: The Israeli helicopter attacks were relatively brief, less than 30 minutes.

(on camera): The question now: To what extent will Israeli attacks against those targets in Palestinian territory help deter suicide bombers from carrying out attacks in Israel?

Mike Hanna, CNN, Jerusalem.

(END VIDEOTAPE)

SESNO: To the air now. Nine people were hurt, none seriously, when a United Airlines jetliner lost cabin pressure today. The United Airbus, with 126 people on board, was forced to return to Los Angeles International Airport shortly after taking off for Florida. The injured were treated for nose bleeds and earaches. One passenger said that about 10 minutes after taking off, the oxygen masks dropped down.

Jesse Jackson is in the thick of a protest in New York. The civil rights activists joined bus and subway workers who are upset over increased medical costs. As many as 10,000 are expected to take part.

To San Francisco, lawyers charged in a deadly dog attack case remain in jail after a bail hearing today. A judge set bail at $2 million for Marjorie Knoller, and $1 million for her husband, Robert Noel. Knoller was with the couple's two dogs when they mauled to death 33-year-old Diane Whipple back in January. Both Knoller and Noel are charged with involuntary manslaughter. Knoller is charged with second-degree murder. They are to be arraigned tomorrow.

And still ahead, several witnesses tell the Congress they are prepared to clone a human being, but lawmakers say that's going too far too fast.

Also, marijuana as a medicine: Should it be legal under certain circumstances. The Supreme Court hears both side of the argument, when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

SESNO: It is an emotional debate, and it arrived on Capitol Hill today. It involves human cloning. As cloning supporters made their case before a skeptical House subcommittee.

CNN's Christy Feig reports both sides turned to science, even science fiction, to justify their arguments.

(BEGIN VIDEOTAPE) CHRISTY FEIG, CNN CORRESPONDENT (voice-over): It was a debate that brought the pages of "A Brave New World" to Capitol Hill. Two groups who want to clone humans versus a Congressional panel and many experts who think the idea is horrendous.

DR. PANOS ZAVOS, FERTILITY SPECIALIST: Those that say "ban it" -- those would not be the Neil Armstrongs that would fly us to the moon.

DR. RUDOLF JAENISCH, MASS. INST. OF TECHNOLOGY: From the experience with animals, we can clearly predict how cloned humans would look like. The great majority will be abnormal. Some may live, but they may be not normal.

FEIG: A group called the Raelian movement wants to clone a 10- month-old boy who died of a heart defect. The group's scientific director read a letter by the boy's father.

DR. BRIGITTE BOISSELIER, RAELIAN MOVEMENT; At the age of 38, I was blessed with a perfect baby boy. My wife and I were not expecting this miracle. As a matter of fact, I never even considered having children. The day our son was born was both the happiest and saddest day of my life.

FEIG: But the story didn't sell the Congressional panel.

REP. JAMES GREENWOOD (R), PENNSYLVANIA: The odds are overwhelmingly in favor of the reality that were you to try to bring such a baby into existence, that you would give this poor couple yet another happiest and saddest day of their life.

FEIG: Experts who have worked with animal cloning are convinced the science isn't ready to move forward. They say the vast majority of cloned animals have problems.

DR. MARK WESTHUSIN, TEXAS A&M UNIVERSITY: During the first trimester, approximately 90 percent of the pregnancies are lost or abort.

FEIG: One leading ethicist agrees.

ARTHUR CAPLAN, UNIV. OF PENNSYLVANIA: It's an open-and-shut case against human cloning right now and for the foreseeable future. It's just not safe.

(END VIDEOTAPE)

FEIG: The Food and Drug Administration says they have jurisdiction over any attempts to clone a human being in the U.S. But the bigger question being wrestled by this committee is whether the U.S. should join a growing list of other countries and ban human cloning.

Christy Feig, CNN, Washington.

SESNO: Comments by Congressman J.C. Watts, by the way, typified the hostile reception lawmakers gave cloning advocates. Watts issued a statement that read -- quote -- "Dolly the sheep will learn to fly before the U.S. House of Representatives condones human cloning."

Abortion rights advocates today announced plans to launch a four- year, multimillion-dollar public relations offensive. The program is designed to target what organizers call the -- quote -- "unprecedented threat posed by President Bush."

(BEGIN VIDEO CLIP)

KATE MICHELMAN, NARAL PRESIDENT: We will invest $10 million a year, each year, to organize, energize and mobilize pro-choice Americans to block appointments of any anti-choice Supreme Court justices and lower federal court judges, restore pro-choice leadership in Congress in two years, elect a pro-choice president in four years, and fight anti-choice policy initiatives at every level -- federal, state, and local.

(END VIDEO CLIP)

SESNO: The first ads in what NARAL calls its "Fight for Choice" campaign began running today in newspapers across the country.

At the Supreme Court today: the debate over marijuana as medication. A 30-year-old federal law classifies the drug as an illegal substance, but more recently, a number of states, including California, have approved the use of marijuana for certain medical purposes. Now the high court will decide if state or federal law should prevail.

Here's CNN's senior Washington correspondent, Charles Bierbauer.

(BEGIN VIDEOTAPE)

CHARLES BIERBAUER, CNN CORRESPONDENT (voice-over): Yvonne Westbrook (ph) has multiple sclerosis. Westbrook (ph) has tried prescription drugs, but finds marijuana eases her pain better.

YVONNE WESTBROOK (ph), MEDICAL MARIJUANA USER: With the medical marijuana, a couple of puffs and the spasticity is relieved, and I'm able to get on with the rest of my day.

BIERBAUER: But acting Solicitor General Barbara Underwood told the justices, Congress, the Attorney General, and the Secretary of Health and Human Services have each determined there is no medical use for marijuana. And it is the subject of abuse. In 1996, California voters passed the compassionate use act, creating a medical marijuana provision for such diseases as cancer, AIDS, glaucoma. The Oakland Cannabis Buyers' Cooperative began serving patients who had a doctor's approval.

GERALD UELMAN, OAKLAND CANNABIS CO-OP: I realize it's hard for some people to conceive of cannabis as a medicine, this plant that has become a symbol of a counterculture of permissiveness.

BIERBAUER: The justices were not easily sold. Chief Justice Rehnquist: "How serious does the condition have to be? IT's not a life-saving drug."

But California's permissive law clashes with a federal prohibition. Marijuana is in the most restrictive category under the Controlled Substances Act.

BARRY MCCAFFREY, FMR. DRUG POLICY DIRECTOR: We have national standards on what should be available in pharmacies with a doctor's prescription, where they're clinically safe and effective, even when they're extremely dangerous.

BIERBAUER: The case has see-sawed through the court system. First, the federal government obtained an injunction to stop the medical marijuana sales. Then the Coop was granted an exception. The Supreme Court halted distribution until it decides if federal or state law prevails. Still, the justices sensed difficulty prosecuting a medical marijuana user where local sentiment is sympathetic.

Justice Scalia: "If he really thinks he's going to die, that's an easy gamble -- a jury versus the grim reaper. I'll take the jury any day." sympathetic. A ruling is expected by summer.

Charles Bierbauer, CNN, the Supreme Court.

(END VIDEOTAPE)

SESNO: The environment, tax cuts, and campaign finance reform. We'll discuss the day's big issues with Margaret Carlson and Tucker Carlson, when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

SESNO: We've got a story just coming to us from our Capitol Hill producer, Ted Barrett. An interesting wrinkle in something that we were tracking on and off over the last several months. And effort to hammer out a bipartisan select committee on election reform in the U.S. House of Representatives has apparently gone down in failure, according to a rare statement issued -- joint statement -- by minority leader Dick Gephardt and the speaker of the House, Dennis Hastert.

The special commission was supposed to look into what went wrong in Florida and how to fix it in the years to come. And the two gentlemen, Hastert and Gephardt, couldn't agree on the makeup of the committee, so there will be no select committee after all.

So now let's turn to the Carlsons, Tucker and Margaret, on that and other stories.

Let's start with election reform, Margaret. What happened here?

MARGARET CARLSON, "TIME": Well, remember, we were going to get this straightened out right away. It was the highest priority. Everyone wanted to do it. Even the disputed winner wanted to do it.

And it's been left to languish without anything being done about it. And this is the second time they failed at trying to put together a group, because the Democrats want 50/50 on it, on the committee, and the Republicans are saying no. The Republicans don't have as much interest as the Democrats in having this problem, so...

SESNO: Tucker, why not 50/50 representation on the committee that's supposed to look into election reform, for crying out loud?

TUCKER CARLSON, CO-HOST, CNN'S "THE SPIN ROOM": Well, before we get to that, I mean, there are three potential problems with election reform as an idea. One, each side is suspicious the other is going to get an advantage from it. Two, it's an obvious invitation to the worst kind of pork. Every municipality says, Oh, we need millions for new voting machines. And third, there's not a huge amount of evidence that there are profound voting problems.

In a country with more than 100 million voters, I mean, it's not -- the system didn't break all the way down.

SESNO: After stand-off 2000, though, isn't something called for? We have a presidential commission, if you will, with Carter and Ford.

M. CARLSON: And if you have a close election -- you don't know about it until it's really close, and then you really do know about it because it's a huge problem. You pull back the curtain and you see that it's very unequal who has the better equipment. The Republican precincts tend to have the better equipment than the Democratic precincts, which is why Al Gore was cherry picking in the recounts, which did him in, in the end.

But this is why Republicans are just simply less interested in this issue.

SESNO: And separately -- and Tucker, I know this you will find deeply moving -- Ted Barrett reports from Capitol Hill the Democrats have begun their own separate ad hoc committee, just Democrats. So perhaps we can go there for answers.

T. CARLSON: Doubtless, they'll fix every problem.

SESNO: Let's turn to campaign finance reform, speaking of fixing problems, and today the word from the White House that you know what, maybe the president won't veto this thing if it makes through the Senate and the House.

M. CARLSON: And maybe he won't. He doesn't want to sign something that has John McCain's name on it. He might be pushed into a corner to do it because the Hagel bill failed, and because the guy who spent -- you know, broke all records with fund raising may not want to be seen as not being in favor of the campaign finance reform.

SESNO: Pressures, pressures.

T. CARLSON: Yes, I mean, a pressure not to look, you know, obstinate and unduly right wing. On the other hand, you know, the campaign finance reformers, the side that is arguing this, is all about restoring democracy and a voice to the American has won. The only person who has told the truth in this whole thing is Dick Gephardt, who yesterday or two days ago said, gee, I'm against raising the hard money limit. Why? Because it might hurt my team, because it might hurt Democrats. I mean, the amount of phoniness thrown around, high-mindedness...

(CROSSTALK)

M. CARLSON: And actually the House, I think, is -- could save Bush in that they might not go along with McCain-Feingold in its current -- in its current constitution because they run every two years, and it's harder for them, and they don't care that much about soft money, but they've got to have party money coming in.

SESNO: We had a very interesting discussion with three reporters from outside of Beltway earlier in this program in Pittsburgh, in Seattle and in Miami, and all of them said that in their areas, campaign finance reform is playing higher than is commonly believed here in Washington. You know, there are senators who say -- Senator McConnell says people are about as interested in this as static cling.

M. CARLSON: When is the last time he did laundry?

T. CARLSON: They're more interested in static cling. Let's be honest.

SESNO: But we're from your esteemed reporting colleagues outside the Beltway, Tucker, that maybe...

T. CARLSON: Reporters love this stuff.

M. CARLSON: John McCain -- I think John McCain made it an issue that people do care about. It got up into the 60s and 70s there for a while, and you know, the bill passed the House before by 50 votes. But Tom DeLay, for instance, thinks he can peel off 50 votes now that Democrats think it might be passed and they have a tougher -- the guys in the House running every two years just have a tougher time with it.

T. CARLSON: Well, I think people care about it to the extent it's a metaphor for the battle between the little guy, and you know, the monied special interests trying to subvert democracy. But I've never seen a poll that showed people cared about or knew much about the details of it, the severability. I mean, I'd like to see a poll on what people think of severability.

SESNO: If this thing prevails, what, then, with John McCain?

M. CARLSON: Severability is like ergonomics. I think nobody, quite frankly...

T. CARLSON: Except (UNINTELLIGIBLE)...

M. CARLSON: Well, John McCain likes the spotlight. He's in it. But you know, he's a happy loser. He's a happy martyr. So if it goes down, he's still got his issue. I don't think he wants it to go down, but... T. CARLSON: He'll be much happier if it goes down because that's a vindication of a truly noble cause is when it fails. When it all blows up, then you can say, well, I fought the good fight and that's why I lost, because I was so...

M. CARLSON: He'll be a happier martyr than winner.

T. CARLSON: Of course.

SESNO: Tucker Carlson, Margaret Carlson, always a winner when you're here. Thanks.

M. CARLSON: Thanks, Frank.

SESNO: Great to see you both.

There are new reports of gaping holes in the 2000 census. We'll look at what that might do to the nation's political road map when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

SESNO: Democrats have new ammunition today in their fight to have the 2000 census figures adjusted to make up for people who were missed in the survey. New estimates show greater proportions of Americans were undercounted in states with booming minority populations and in big cities. For example, a half-million people were not counted in California, according to the Democratic-backed estimates.

During a Senate hearing today, Democrat John Kerry asked if the nation can live with flawed numbers for the next 10 years.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS: The problem is that even those who engaged in the census, even those who undertook to do the best census possible, acknowledge, as I am sure that you do, that there still is an overcount and an undercount. I assume you accept that even your current census is flawed to some degree. The question is, to what degree?

(BEGIN VIDEO CLIP)

SESNO: In that hearing, Commerce Secretary Don Evans noted the Census Bureau is still reviewing its numbers.

(BEGIN VIDEO CLIP)

DON EVANS, COMMERCE SECRETARY: Will we take more time to evaluate the data? Yes, we will. I have instructed Bill to do that, and he is -- he has indicated to me that it will be sometime this summer before they will be willing to be ready to come back to me with a recommendation as to whether or not the data should be statistically adjusted.

(END VIDEO CLIP)

SESNO: Evans has agreed with the Census Bureau recommendations against using adjusted numbers to redraw political districts. Democrats believe they would gain more congressional seats if minorities were better represented in the census.

A census footnote: Numbers released by the Census Department today show Detroit's population has fallen below 1 million for the first time in 80 years, while its suburbs are booming.

And still ahead on INSIDE POLITICS:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Well, I think they need a lot of money for campaign, so, sometimes I don't think they're too fussy about where they get it.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I really think they ought to leave campaign finance alone.

(END VIDEO CLIP)

SESNO: Bill Delaney hits the street to get the buzz on campaign finance reform outside the Beltway. Stay with us.

(COMMERCIAL BREAK)

SESNO: The Senate may be closer to banning one kind of political cash after voting to raise the limit on another.

BILL DELANEY, CNN CORRESPONDENT: At the South Street Diner in downtown Boston, about the last thing on the menu: Campaign finance reform.

SESNO: Bill Delaney gives us taste of public opinion.

Plus an investigation of a strip turns up some startling allegations.

Welcome back to INSIDE POLITICS. Judy is off this week. I'm Frank Sesno.

It is on to the next battle over campaign finance reform after supporters cleared another major hurdle a little more than an hour ago. The Senate voted overwhelmingly to raise the limits on individual contributions to candidates to candidates from $1,000 to $2,000, and to raise individual contributes to the parties as well.

It is part of a compromise between measures proposed by Republican Fred Thompson and Democrat Dianne Feinstein, aimed, in part, at maintaining Democratic support for the overall campaign finance reform legislation.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D) CALIFORNIA: The challenge was really to bring the two parties together. To get something that would get enough of a vote. To give some additional critical mass to McCain- Feingold, and I really think we have done that. I think McCain- Feingold now is on its way to passage.

SEN. FRED THOMPSON (R), TENNESSEE: I can't imagine Democrats, after fighting to get rid of soft money all these years, and us focusing in on that together for all these years, if we're able to do that I can't imagine them getting off this bill for these incremental changes.

(END VIDEO CLIP)

SESNO: For more on that compromise and what comes next let's bring back our congressional correspondent Jonathan Karl and our White House correspondent Major Garrett. Jonathan, first to you to digest some of what we just heard and put it in perspective.

KARL: Well, this was really the critical test vote for McCain- Feingold, because Republicans, many Republicans supporters, including -- by the way -- Fred Thompson were going to be extremely uncomfortable in voting for a soft money ban if there wasn't some increase in these hard money limits, these direct contributions to candidates. So that was critical for them, but there was a real risk on the other side that if you went too hard in raising these limits the Democrats would jump ship.

Now, Frank, there were 14 Democrats who voted against raising this hard money limit. Many of them party liberals who didn't want to see any increase in any kind of campaign fund-raising, some of them Democrats from small states like North Dakota and Montana, who didn't see a need for a raise.

But I've spoken to several of those 14 who all seemed to be saying the same thing, which was, they were against this, but in the end they will be for McCain-Feingold. Which seems to mean that we are that critical step closer to passing what John McCain's been fighting for, for about five years.

SESNO: Which begs the question, what might the president do in all of this and what posture is he striking -- Major.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, the White House is using every tool in the tool box here to make it clear to lawmakers in the Senate and the House of Representatives that there will be no presidential veto here, at White House, if McCain-Feingold arrives on the president's desk.

The President's is also using senators, themselves, to spread that message. Senator Conrad Burns, a Republican from Montana, who flew back from his home state with the president just yesterday, told Republicans in the Senate cloakroom today, that the president told him -- and these are Senator Conrad Burns' words that paraphrases the president's statement -- that the president said he will expend no political capital to try to stop McCain-Feingold.

A very clear signal to Senators and to those House of Representatives members who also might be listening, that, if they want to stop it, they'll have to stop it themselves because the president will not.

SESNO: So, what does this mean for momentum today, Jonathan?

KARL: Well, the momentum is there. There is another major hurdle along the way, not necessarily affecting final passage of this bill, but affecting whether or not we actually have changed in our campaign finance system, and that's the courts. One critical vote to come is on this issue called "nonseverability," and in English what it means is that if the Senate passes so-called "nonseverability," it means that if the courts strike down any provision of McCain-Feingold, even the smallest provision, the whole amendment, the whole bill is thrown out. The whole law is thrown out. So that's the critical test. There will be a vote on that tomorrow.

Now regardless on what happens on that, it's expected that McCain-Feingold, that the supporters of McCain-Feingold have enough votes to get this passed, so the bill will pass. It will go onto the House of Representatives. If the president follows through and does not veto, you would have a McCain-Feingold law, but, Frank, everybody on both sides of this expects that there will be constitutional challenges to the aspects of this bill. So, if nonseverability passes it could, in the end, force the courts to knock down the whole law.

SESNO: Major, let's flip over, if we can, to one of the many other issues that's occupying the president's attention, the White House attention, and that's the ongoing discussion over tax cuts. Efforts there continuing very at pace despite all this attention to campaign finance reform.

GARRETT: Absolutely. And the White house very encouraged by the House of Representatives this afternoon, passing the outline of the president's budget. The vice president, the president and many of his top aides spent the last couple of weeks lobbying house Republicans to make sure that budget blueprint would pass. They are very encouraged, in fact, that it did, and they say that exact same methodology, of putting out the president, the vice president, Budget Director Mitch Daniels and the Treasury Secretary Paul O'Neill to lobby Republicans in the Senate next week, will produce the same result.

Right now the hard vote count, meaning those Republicans in the Senate who have absolutely committed to voting for the president's budget outline, is 47. The Republicans hope to boost that up to that critical number of 50 by the time the vote comes next week. They believe they'll be able to do that, and they might, they hope, get the votes of maybe one, two or three Senate Democrats.

SESNO: John, real prospect that this budget thing could end up being 50/50 in that Senate, or as Major indicates, are there likely to be enough defections that it'll actually pass with some wiggle room? KARL: Well, clearly there is a real prospect. It could be a 50/50 vote. Republicans are already saying that they plan to have Dick Cheney on hand up here on at Capitol Hill next week, here to pass a tie vote should that happen.

And I'll tell you, this is where the focus is right now. I mean, we have this campaign finance reform debate going on, but there's almost a sense that this is almost a done deal, as far as the Senate is concerned, and most of the wheeling and dealing you are seeing on the Senate floor right now is on the question of the budget.

And one development today, that's been very interesting to follow on this, is that Senator John Breaux, moderate of Louisiana, moderate Democrat, has been shopping around an alternative to both the Democratic tax cut proposal and the president's 1.6 tax cut proposal. Kind of a third way, middle ground.

John Breaux trying to bring along moderate Republican's support on that, and also working with Tom Daschle, trying to throw the president a defeat on his $1.6 trillion tax cut proposal. That provision of his budget going with some kind of a moderate alternative.

So that's the activity that's going on. There is a real sense that the budget is up in the air. The president, as Major said, is at least three votes shy of getting his budget past the Senate. So you have a lot of this activity going on, and that's really where a lot of the focus is right now.

SESNO: Jon Karl, Capitol Hill, Major Garrett at the White House, thanks.

Well it's hardly surprising that campaign finance reform is a hot issue here in Washington. This is, after all, Washington's cottage industry, where politics and big business and donations all commingle.

But as CNN's Bill Delaney reminds us, it's a whole different story outside the Beltway.

(BEGIN VIDEOTAPE)

DELANEY (voice-over): At the South Street Diner in downtown Boston, like almost everywhere the country's nonpolitical class clusters, about the last thing on the menu: Campaign finance reform. As for that guy -- McCain-Feingold.

NATE GAYMON, DINER PATRON: You know, I don't play enough to see McCain-Feingold around. I don't know the guy.

MARIA SORRENTI, DINER PATRON: McCain-Feingold? I don't know.

TERRY ANGELUS, DINER PATRON: Aren't they, from what I understand, they have restrictions on how much they can campaign with. Is that right?

DELANEY: With a lot on our hands. Campaign finance reform's just not much on our minds. According to a CNN Gallup pollster, ranking unerringly in order of importance among voters, dead last, compared to just about any other issue. Boston talk show host, Howie Carr, hears the same thing, or, should we say, doesn't hear it?

HOWIE CARR, RADIO TALK SHOW HOST: I hear nothing about the campaign finance reform. I have not received any phone calls, letters, e-mails, faxes, saying, "Hey, Howie, get on the stick, start talking about campaign finance." People are cynical. They think that whatever happens in Washington, these guys are going to find a way to get around it.

DELANEY: Cynicism, with maybe particular punch in Massachusetts.

(on camera): Here, after all, in 1998, voters overwhelmingly backed a referendum setting strict limits on campaign spending. Set to take effect this April first, the April fool surprise may be that legislators, who have been trying hard to block the law, may just succeed.

(voice-over): At the South Street Diner, even people who don't know who McCain and Feingold may be, know there's a campaign finance problem.

GAYMON: I know that people that are doing wrong things to get money for the campaigns are screwing all of us. Here, there, and everywhere.

DELANEY: Everywhere too, though, as in Boston, a sense that, when it comes to getting the big money out of politics, well, small chance.

Bill Delaney, CNN, Boston.

(END VIDEOTAPE)

SESNO: When we return, details on an upcoming federal trial and its high profile witness list. We will have an extended report on an Atlanta nightclub, which prosecutors say has ties to organized crime. And more.

(COMMERCIAL BREAK)

SESNO: Strippers, sex, professional athletes and the mob? Just a few of the elements in an upcoming federal racketeering case that charges nude dancers at an Atlanta strip club acted as prostitutes, paid to have sex with professional ball players by a club owner tied to organized crime. CNN's Art Harris has the story.

(BEGIN VIDEOTAPE)

ART HARRIS, CNN CORRESPONDENT (voice-over): Patrick Ewing and Dikembe Mutombo on the basketball court. A few weeks from now, they could be among several professional athletes in another court, federal court. Although not charged with any crime, Ewing and Mutombo have been subpoenaed to testify about sexual encounters with dancers at this Atlanta strip club, a club at the center of an organized crime case. For league officials, it raises the question: Were athletes and the mob too close for comfort?

KEVIN HALLINAN, MAJOR LEAGUE BASEBALL: Nothing has been proven yet, but certainly what they are suggesting went on in the Gold Club is very, very unattractive to professional sports.

HARRIS: The Justice Department says the Gold Club, which takes in millions of dollars every year, was part of a criminal enterprise that involved credit card fraud, skimming cash, money laundering, police corruption, paying protection money to the Gambino organized crime family.

Also at the club, say prosecutors, prostitution between strippers and professional athletes. That was often paid for by club owner, Steve Kaplan.

RICHARD DEANE, U.S. ATTORNEY: Prostitution was one of the key factors of the operations there. In conjunction with those prostitution activities there, it's alleged that celebrities of various sorts, particularly professional athletes, were enticed, invited and routinely cajoled to attend the Gold Club.

HARRIS: The indictment also charges that club owner Steve Kaplan arranged for strippers to travel to this Charleston, South Carolina, hotel in 1997 "to have sex with members of a professional basketball team."

The only team there at the time: the New York Knicks, then Patrick Ewing's team. CNN/"Sports Illustrated" has learned that in addition to Ewing and Mutombo, other present or former athletes who have been subpoenaed in the Gold Club case include Terrell Davis of the Denver Broncos, Jamal Anderson of the Atlanta Falcons, and former basketball player Dennis Rodman.

Sources say FBI agents also interviewed a number of other pro athletes who could be called to testify in the Gold Club case. No athlete has been charged with any criminal wrongdoing.

As for the athletes under subpoena, they've been identified by witnesses and in court papers as having had sex with Gold Club strippers. This tape, obtained by CNN/"Sports Illustrated," was secretly recorded by the defense in an attempt to help Kaplan's case. On it, the Gold Club owner's former girlfriend claims she saw Patrick Ewing in a sexual encounter in the club's exclusive Gold Room.

Under oath, defendant Jana Pelnis agreed with the prosecutors' charges that Ewing engaged in sex at the club and that Steve Kaplan arranged for payment afterwards. She's plead guilty and admitted she was paid for having sex with Terrell Davis. Jackie Bush was also a nude dancer at the Gold Club, a single mother of three who is now a defendant in the case.

JACKIE BUSH, DEFENDANT: I was the best. I was the top dancer in the Gold Club for the last three years.

HARRIS: Her stage name was diva.

Who did you entertain?

BUSH: Oh, professional athletes, movie stars. I've seen lots of people at the Gold Club.

HARRIS: Who did you dance for?

BUSH: Well, you know, I'm not going to name names. They know who they are.

HARRIS: But the government claims she did more than just dance nude, that she performed acts of prostitution, including oral sex with an NBA player, and got paid for it. She denies it.

BUSH: These are allegations they've got in the indictment, which are totally false, and I really have no comment on that. I really can't speak further on that. It's false.

HARRIS: Ewing would not comment on any alleged activities at the Gold Club, nor would Terrell Davis, Dikembe Mutombo or Jamal Anderson. Dennis Rodman's attorney says his client did nothing wrong. Kaplan, through his attorney, Steve Sadow, says sex might well have happened between athletes and nude dancers at his club, but Sadow says Kaplan did not allow any prostitution to take place.

STEVE SADOW, KAPLAN'S ATTORNEY: If it is inappropriate and it is noticed or known about, we put an end to it. If this occurs and if it is reported, something is done about it.

HARRIS: That's not the way Kaplan's former girlfriend remembers it.

Steve Sadow insists his client is innocent of all the government's charges, including prostitution.

SADOW: That's what the trial is all about, so we can show those allegations and those claims are inaccurate and false. And we have been waiting over a year now for that opportunity. Bring it on, please!

HARRIS: Sadow says Kaplan was a huge sports fan who realized star athletes at the Gold Club would not only generate a buzz, but big bucks, a formula that helped the club ring up $20 million in revenue in its best year.

SADOW: Steve Kaplan would arrange for celebrities, athletes to receive free drinks -- on occasion, free dancers -- in order to get them to come to the club, to have a good time, because it was good for his business.

HARRIS: When federal agents raided the Gold Club in 1999, they seized boxes of credit card receipts. This paper trail obtained by CNN/"Sports Illustrated" reveals that the Gold Club attracted a virtual who's-who of professional sports. But the Gold Club often picked up the tab for VIPs. It's called comping, and pro athletes were routinely comped -- not unusual or illegal. However, in this case, the government says, the red carpet was soiled because Steve Kaplan and the Gold Club are closely linked to organized crime. Especially to this man, Michael DiLeonardo, also known as Mikey Scars, another defendant in the case. Although he's plead not guilty, the government says he's a high-ranking member of the Gambino crime family, and associate with Steve Kaplan.

(on camera): The charge is that to operate the way he did, he paid protection to the Gambino family.

SADOW: Nonsense. Absolute nonsense.

HARRIS: It is this charge, the alleged link between the strip club and the mob, that has league officials concerned. Spokesmen for the NFL and the NBA say they are monitoring the Gold Club case.

Kevin Hallinan heads security for major league baseball.

KEVIN HALLINAN, MAJOR LEAGUE BASEBALL: The comping, obviously, for entertainers and athletes is something that almost comes with the territory. And what I tell players is that, if you're going to be comped, what's happening is somebody has just started a score book on you.

HARRIS: Hallinan says gambling, especially sports betting, is the lifeblood of organized crime, so any appearance of coziness between players and the mob can hurt pro sports.

That's why he's concerned about the Gold Club case.

HALLINAN: It's really -- it's the athlete's worst nightmare. No question about it. Obviously, for the league as well. The Gambino family, obviously, is one of the five New York families, and they are very active and very aggressive in what they do.

HARRIS: While there is no evidence any athlete was compromised in the Gold Club case, Hallinan says there's always that potential, and that organized crime is always looking for ways to put its hooks into pro athletes.

MICHAEL FRANZESE, FORMER MOBSTER: You can exploit an athlete through sex and through booze and through drugs.

HARRIS: Former mobster Michael Franzese once ran gambling for the Columbo crime family, and spent 10 years in prison for racketeering. He says strip clubs are ideal settings for mobsters to compromise athletes.

FRANZESE: Nothing more would be pleasing to them than to see an athlete in a compromising position, take a picture or get the girl that he might have been with, and say: "Hey, she knows everything you're doing, and we're going to tell your wife. Hand over $100,000, $50,000." Whatever the number might be. And what is that athlete going to do?

HALLINAN: What you're going to see is about you. It's about protecting your career.

HARRIS: Kevin Hallinan says sports leagues are trying to warn players to be careful in the wake of the Gold Club case. The leagues have even put together a video for players showing the pitfalls of strip clubs.

(on camera): But for any athlete who has to take the stand in the Gold Club case, that advice comes too late. There's already the risk of fallout from public exposure.

Art Harris, CNN, Atlanta.

(END VIDEOTAPE)

SESNO: And a footnote: The trial is set for the end of April. Federal prosecutor Art Leach, with the Organized Crime Strike Force, has said in court he plans to call about 100 witnesses to testify in a case, charging more than 200 illegal acts. The defense says it's ready.

Stay tuned, INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

SESNO: Let's go now to Willow Bay for a look at what's ahead at the bottom of this hour on "MONEYLINE" -- Willow.

WILLOW BAY, CNN ANCHOR: Hello, Frank. Well, coming up tonight, the bad news bears are back on Wall Street. Blue chip stocks plummet after profit warnings reemerge with a vengeance. Will the floodgates open with warnings to come?

As the Nasdaq plunges, high-tech execs gather in Washington for a summit with President Bush. We'll talk with the man who is tapped to map out a tech strategy.

And a reality check on real estate. How the crucial industry is holding up in a slowing economy.

All of that coming up on "MONEYLINE" at 6:30. "

INSIDE POLITICS is next.

(COMMERCIAL BREAK)

SESNO: And that's all for this edition of INSIDE POLITICS, but of course, you can go on-line all the time at CNN's allpolitics.com. AOL keyword cnn.

And these programming notes: Congressman Dennis Kucinich and John Sununu will be discussing tax cut legislation tonight on "CROSSFIRE." That's a 7;30 p.m. Eastern time.

And White House spokesman Tucker Eskew will join Tucker Carlson and Bill Press tonight on "THE SPIN ROOM." That at 10:30 p.m. Eastern, 7:30 Pacific. I'm Frank Sesno. Willow Bay and "MONEYLINE" next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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