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Federal Regulators Mitigate Energy Prices for the West

Aired June 18, 2001 - 17:00   ET


ANNOUNCER: Live, from Washington, this is INSIDE POLITICS with Judy Woodruff.

As California braces for more blackouts, federal regulators respond to the political heat.

The president defends his top political strategist, as calls for an investigation percolate on the Hill.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My level of confidence with Karl Rove has never been higher.


ANNOUNCER: Plus, the latest from Congressman Gary Condit on the missing intern saga.

And guess who is hogging some of the spotlight, as we profile a special House election in Virginia.


UNIDENTIFIED MALE: A certain political analyst grew up there. With good hair like that, he was clearly destined for a future in television.


ANNOUNCER: Now, Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. Californians are being warned of possible blackouts later today and tomorrow, as the temperature and the use of electricity soar. And here in Washington, energy politics may be peaking again, even after federal regulators unanimously approved a new order just a short while ago, designed to ease power prices out West.

For more on that action and the political reaction, here is CNN's Kate Snow.


CURTIS HEBERT, FERC CHAIRMAN: The commission feels, and certainly I believe, that it is time to stop blaming and start solving problems.

KATE SNOW, CNN CORRESPONDENT (voice-over): The Federal Energy Regulatory Commission's new order extends price mitigation efforts beyond California to 10 other states, 24 hours a day, seven days a week, through September 2002. The price of electricity would be based on how much it costs the least efficient plant to produce that power, an idea embraced by President Bush.

BUSH: They're not talking about firm price controls. They are talking about mechanism to -- as I understand it, a mechanism to mitigate any severe price spikes that may occur, which is completely different from price controls.

SNOW: Politically, it's a sort of middle ground, not going as far as capping prices, but allowing Republican members, especially those from California, to show they're doing something. Congressman Doug Ose was one of the first to promote the new plan. He says his constituents will be relieved.

REP. DOUG OSE (R), CALIFORNIA: They understand that price caps don't get them more supply. They understand that price caps reward the guy who pollutes everything in the area. They don't want that. What they want is available supply, low prices and no harm to the environment. And that's what my plan does.

SNOW: But Democrats say the action by the commission, known as FERC, won't bring prices down.


SNOW: And Democrats say that they want FERC to go even further than what they have already done. They want them to enforce price caps. On the other side, Republicans -- some of them -- saying that they don't think that this is the right action at all, and in the letter to the chairman of FERC today, written before the decision, from House majority whip Tom DeLay, he says he's concerned about the use of price caps. He says he is concerned that any price mitigation could further diminish energy supply.

And as the back-and-forth continues here in Washington, Judy, also more back-and-forth and more of the blame game going on in California. A new ad starting to run today in both Spanish and in English.


NARRATOR: He's pointing fingers and blaming others. Gray Davis says he's not responsible for California's energy problems. After all, the Public Utilities Commission blocked long-time cost-saving contracts for electricity. But who run the PUC? The people Gray Davis appointed, Loretta Lynch and other Davis appointees who left us powerless. That's why newspapers says Davis ignored all the warning signals and turned the problem into a crisis. Gray-outs from Gray Davis.

(END VIDEO CLIP) SNOW: Those ads paid for by an organization called the American Taxpayers Alliance. They have more than 10,000 contributors, including utility companies. So far, they have spent $1.5 million on those ads just in California. They plan to spend up to $25 million.

And one last thing: Governor Gray Davis shooting back a bit, in a written today suggesting that Californians will find it galling that out-of-state electricity companies are running these ads. He said, quote: "If they think we are going to back down, they are dead wrong. We will fight back against out-of-control prices." Judy, back to you.

WOODRUFF: Kate, you mentioned the letter from Tom DeLay to the chairman of the Federal Energy Regulatory Commission. Does that suggest that Republicans are united in their opposition to price controls?

SNOW: Well, it's a little bit fuzzy, Judy. There are certainly those who feel that price caps are the wrong way to go. They feel that that will diminish supply, it will reduce the supply of electricity. They are firm in that resolve. Tom DeLay is one of those.

There are other Republicans, particularly those from California and from some of the Western states who, like Doug Ose who you saw in the piece, are more willing to talk about control measures, they are more willing to talk about price mitigation. It is that group, that block that really encouraged the FERC to take this action today. In fact, some of those Republicans wrote a letter last week, including Chairman Tauzin, Billy Tauzin of the Energy Committee, urging FERC to do exactly what they have done today -- Judy.

WOODRUFF: All right. Kate Snow reporting from the Capitol. Thanks.

And we are joined now by GOP strategist Scott Reed, who had a hand in that new ad targeting California Governor Gray Davis. Also with us: Representative Anna Eshoo, Democrat of California. She joins us from Palo Alto.

Scott Reed, to you first. Who put this ad together and what -- and who paid for it?

SCOTT REED, GOP STRATEGIST: I did. About 30 days ago, when Governor Gray Davis hired these new -- these two guys, the masters of disaster from the Gore campaign, I and a group decided we needed to do something about this, there needed to be some strike-back, that Gray Davis is clearly, with these guys pulling the strings behind the scene, is going to go out and start blaming, blaming the Republicans, the former governors of California, the Republican legislature, the Republican White House, the Republican members of Congress here.

We thought enough was enough, and we ought to go back, look at what has been said about Gray Davis in the state by his own newspapers, how he has ignored these early warning signs, how he has done nothing, taken no action. And the bottom line is, these are rolling blackouts, and we think they are rolling gray-outs, because if he had done something, we wouldn't be in the situation we are today.

To answer your question about who paid for it: this is a group called the American Taxpayers Alliance, made up of over 10,000 contributors everywhere from mom and paps that write $5 checks up to leaders of corporate companies that agree with our philosophy, that when government makes unwise decisions, you should go out and do something about it.

WOODRUFF: Representative Eshoo, what is wrong with a group like this putting these ads together, in response to what they say have been irresponsible accusations made by the governor and others?

REP. ANNA ESHOO (D), CALIFORNIA: Well, I think that Mr. Reed really whitewashes what this effort is -- is all about. The federal commission that just voted -- completed voting just a few minutes ago, made a determination that there was just an unreasonable pricing, that Californians and all of us as rate payers were being gouged, and they placed a price tag next to it.

Now, the galling part of this ad campaign is, is that the profits that have been skimmed off and plucked out of the pockets of my constituents and Californians is now being used to run a political ad campaign in California to say, essentially, gouging is good. So, I think that Mr. Reed really whitewashes this, and I'd like to know if he will put forward to the public all of the contributors that have contributed to what he describes is a somewhat truthful and noble campaign.

WOODRUFF: Well, I can ask him that question, and I -- and Scott Reed, I would like to put that question to you, and then ask you about her accusation that these profits -- that the companies, the energy companies are making have been poured into this.

REED: First of all, this is -- congresswoman, I know you are a very smart and talented politician, you know this is a 501-C4 organization, that is tax exempt. That means taxpayer money does not go into this effort, unlike the effort that Governor Gray Davis is using.

ESHOO: I didn't say taxpayer money. I said contributions.

REED: But I have a fiduciary responsibility to these contributors not to show who they are. Look, this is -- this argument you're making...

ESHOO: I thought so.

REED: ... that two weeks ago, the Democratic Congressional Campaign Committee came forward with ads in Republican districts around the country -- I didn't hear this outcry from you at the time about why we are spending all this money on misleading ads, some of those ads, which by the way, had to be pulled off the air by, both by the DCCC and the stations, because they were blatantly wrong.

You are not hearing a single point made about these ads, what we're saying in these ads, you haven't heard a single thing out of the congresswoman or the governor about our facts, and you know, at the end of the day, this is about the facts, and California's becoming a third world country because you don't know when the lights are going to be on or off.


ESHOO: ... largest economy in the world, Mr. Reed.

REED: Right, and if you have to make your business plans or your family plans to go to the state, the first thing you now are going to look at and see is see what the weather is like and see if the lights are going to be on. You know it's very disturbing.

ESHOO: But what we have called for is price relief, and I think that's really what underneath your ads.


ESHOO: I think, Judy, what I am trying to put in here is what is really underneath all of this, is the resistance of both the administration of -- of many of my colleagues, not all Californian Republicans, by the way, because I had bipartisan legislation on price relief.

REED: But they have been adamantly opposed to it. They have not wanted those words to cross their lips. So this is what this ad campaign is about.

If I can --

ESHOO: To point the finger of blame, and to try to develop a smokescreen, I think Californians are just far too smart for this, though. And I think that they will see right through it.

REED: If I could add one small point, Congresswoman. About four, five months ago, your commissioner, Lynch, personally lobbied in Sacramento for a bill to be killed that would have opened up the markets. She personally went to Sacramento and lobbied against it.

ESHOO: I don't need you to lecture on markets, Mr. Reed. We don't have a market in California.

REED: I'm not lecturing. I'm just pointing out the facts.

ESHOO: It's dysfunctional. We have a dysfunctional market in California.

REED: You have a dysfunctional governor.

ESHOO: That's why we -- well, you can attack politically as much as you want.

REED: I will.

ESHOO: I am trying to pursue very sound public policy, that many of my colleagues, including you, are opposed to and that's price relief.

WOODRUFF: All right. We're going to have to leave it there. Many more questions and I know this is something that we'll have to come back, but for now, let's thank representative Anna Eshoo and Scott Reed here in Washington.

ESHOO: Thank you.

REED: Thank you.

WOODRUFF: Thank you both, we appreciate your joining us.

Now we have a breaking story we want to turn to right away in Terre Haute, Indiana. Death row inmate Juan Raul Garza awaiting the final judgment from the highest court and our own Charles Bierbauer has been waiting for that opinion to be handed down on the decision from the court -- Charles?

CHARLES BIERBAUER, CNN CORRESPONDENT: Judy, the court has just handed out a very brief sheet of paper, the statement saying that the application for a stay of execution, which had been brought to the court by Juan Raul Garza's lawyers has been denied by the court. And also with that, is the denial of his appeal for a rehearing of his case.

This is the second time today that the court has denied Mr. Garza a stay of execution. Two separate issues were raised, one involved ultimately jury instructions, as to whether he could have been given life in prison without parole, rather than the death penalty. This second application for his stay dealt with a question of whether there was a human rights violation of the charter of the organization of American states. Both of those have been denied.

The only hope that he has left, prior to his scheduled execution tomorrow morning, would be his plea for clemency from President Bush. However, throughout the day, statements from the Justice Department suggests that there is very little hope of clemency within the Bush administration -- Judy?

WOODRUFF: Charles, how is it that they went back a second time, asking for a Supreme Court ruling here?

BIERBAUER: Well, they came back on two very separate issues that had been dealt with in the lower courts. This question of whether there was an international treaty violation. In reality, what the charter is, is a nonbinding document in terms of enforcing human rights, many and other countries of course, as we know, do not support the death penalty. Many other countries do not have a death penalty. Some of those feel that that's an issue that the U.S. should be addressing much more broadly.

And so that was the latter question that was raised before the court here. That was the question addressed in this second denial. The earlier one dealt with the ability to inform the jury as to what it's options were. In both cases, what these denials mean is, that the court has looked at the record and judged that there were no violations of Mr. Garza's rights and is no question about his guilt that was not an issue even raised by his attorneys, with regard to his sentence for the murders of three individuals down in Texas.

WOODRUFF: And just quickly to clarify, Charles, you said that his only hope to -- to hold off on execution tomorrow morning would be clemency granted by the president. However...

BIERBAUER: However is a very strong however. Yes, he had three things going at the start of the day. He's got one left now. That was the plea for clemency. Basically a carry over from the clemency plea that was filed with the Clinton administration, it raises the question of whether the death penalty is administered in a disproportionate effect on minorities.

The recently-completed Justice Department study says that there is no bias against minorities. That is the approach. The Bush administration has taken that as the signal that the Bush administration has been giving. We were led to understand the White House would not act until it had heard what the Supreme Court has done. And the Supreme Court has now acted by denying this application for a stay of execution.

WOODRUFF: And no word from the White House?

BIERBAUER: No word yet. But that would be the next element to fall into place.

WOODRUFF: All right, Charles Bierbauer with that report from the U.S. Supreme Court.

And from the state that put Garza on death row, comes more news on the death penalty. Texas governor Rick Perry vetoed a bill yesterday that would have banned the execution of mentally retarded prisoners. CNN's Ed Lavandera has this report.


ED LAVANDERA, CNN CORRESPONDENT (voice-over): John Paul Penry has been convicted of capital murder twice. Both times the U.S. Supreme Court overturned the conviction because of the mental retardation issue looming over the case. Penry has an IQ below 70.

UNIDENTIFIED MALE: I'm a human being and I don't know for sure if I committed this crime or not.

LAVANDERA: Penry's case helped convince the Texas legislature to pass a bill banning the executions of mentally retarded defendants.

RODNEY ELLIS (D), TEXAS STATE HOUSE: It ought to be the policy of the global leader on executions, Texas, the policy should be -- we should not execute people who are mentally retarded.

LAVANDERA: But Texas governor Rick Perry has vetoed the bill. Perry, flanked by prosecutors and crime victim's families, says there are laws already on the books in Texas that protect mentally retarded defendants.

GOV. RICK PERRY (R), TEXAS: We trust juries of our peers to make decisions about guilt and innocence and about the punishment phase, and we trust that system and we support that system, and we want to keep that system in place.

DAVID WEEKS, TEXAS DISTRICT ATTORNEY'S ASSN.: I think what we have are people who are not looking at the definition of mental retardation but throwing out IQ scores as if they were some sort of bright line rule.

LAVANDERA: In the state that leads the nation in executions, this bill has reignited the hotly-contested issue.

PERRY: We do not execute the mentally retarded in Texas. That has been a fallacy that has been promoted by many inside this state and outside this state.

ELLIS: Texas will continue to be viewed as bloodthirsty and callous.

LAVANDERA: Since 1976, a death penalty watchdog group says 35 mentally retarded inmates have been executed, six of those in Texas. Fifteen states have banned the executions of mentally retarded criminals, and two more states, Connecticut and Missouri, are thinking about doing the same.

Some political observers suggest in many parts of the country the attitude over the death penalty is changing.

UNIDENTIFIED FEMALE: There is clearly a trend away from executing people with mental retardation, the public is making distinctions. While there is general support for the death penalty, there's not unconditional support for the death penalty.

ELLIS: Surely if we can make a decision on whether or not someone is retarded for other areas in life in Texas, we ought to be able to make the decision as whether or not they are mentally retarded before we execute them.

LAVANDERA: The execution of mentally retard criminal tugs on every emotional side of the death penalty issue.


LAVANDERA: On one side, families trying to understand why a loved one was victimized and on the other, the question of whether some criminals fully understand why they can be executed.

Ed Lavandera, CNN, Dallas.


WOODRUFF: A Clinton investigation with a different target: will the periods probe land Roger Clinton in hot water?



WOODRUFF: Now to the White House, where the Bush administration very much wants political strategist Karl Rove not to become a major political issue himself. The president today defended Rove, even as some Democrats push for an investigation of Rove's contacts with the Intel Corporation.

CNN's Kelly Wallace has an update.


KELLY WALLACE, CNN CORRESPONDENT (voice-over): President Bush says his confidence in his trusted aide, Karl Rove, couldn't be higher.

BUSH: He's a man of -- he gives me sound advice. He is -- adheres to the ethical rules of our government.

WALLACE: But questions about ethics are swirling around Rove for a meeting back on March 12th with the CEO of the Intel Corporation, at which Intel brought up a proposed merger needing government approval. At the time, Rove owned more than $100,000 worth of Intel stock, stock he didn't sell for nearly three months. White House officials say Rove told the Intel CEO he was not a part of the merger decision and referred Intel elsewhere.

Democrats are not satisfied, though, with Congressman Henry Waxman sending a letter to Rove saying he has, quote, "concerns Rove might have been involved in decisions that could have affected his stock holdings, which included energy companies."

REP. HENRY WAXMAN (D), CALIFORNIA: I think it's legitimate to know what role he played in the energy task force. It's legitimate to know what role he played in benefiting Intel, which also benefited himself. These are simple questions. He can answer them, and it's not a fishing expedition.

WALLACE: The White House disagrees.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I think the American people are tired of these open-ended investigations and fishing expeditions.

WALLACE: Administration officials say Rove did nothing wrong and held off selling his stock until he received a government certificate allowing him to defer paying capital gains taxes.

Senate Democrats for their part say they are in no way getting back at the Republican-led investigations of the Clinton administration, most of them spearheaded by Republican Congressman Dan Burton, whom Waxman has written to wonder if he plans a hearing into the Rove matter. SEN. BYRON DORGAN (D), NORTH DAKOTA: I don't think you can turn a blind eye to improprieties that are committed by public officials, but this ought not be payback time.

WALLACE: What makes the Rove matter a prickly one for the Bush administration is that President Bush came into office priding himself on restoring honor and integrity to the office.

MARSHALL WHITMAN, HUDSON INSTITUTE: Karl Rove is very, very smart. He knows that the appearance of impropriety can be impropriety, and what he did is hand his political opponents a weapon.


WALLACE: The Rove issue is not the only controversy facing the Bush administration. Treasury Secretary Paul O'Neill came under fire for refusing to sell his shares of Alcoa stock, his former company, and then under pressure reversed that decision back in March. Secondly, the administration's energy task force and its closed-door meetings are now the subject of an investigation by the General Accounting Office, that investigation sponsored by congressional Democrats.

And so this White House finding itself facing some of the scrutiny and criticism that Republicans leveled at the Clinton administration -- Judy.

WOODRUFF: Kelly, I'm going to turn the corner and ask you about another matter very much before the White House at this hour, and that is the fate of Texas inmate Juan Raul Garza, who is sitting on death row right now in Indiana. We know now the Supreme Court has turned down his appeal. His only hope to avoid execution is clemency from the White House. There's a meeting under way about this now.

WALLACE: That's exactly right. The president's senior advisers are meeting about this matter at this very moment. No understanding of exactly when that meeting will break up and when we'll hear a decision from the White House.

Ari Fleischer, the president's spokesman, saying earlier today that the White House would not be releasing any decision until all court matters have been exhausted. Obviously, that is the case now.

But the indication, Judy, as Charles noted, is that this White House or the president will not likely be granting clemency to Juan Raul Garza, the White House not believing race was a factor in this case. Obviously, Garza's attorneys have made a case that there are racial disparities, that minorities are disproportionately represented on federal death row. The White House pointing to a recent Justice Department study, which found no racial or ethnic bias when it comes to federal death row cases.

Also, Ari Fleischer releasing a number of statistics involved in the Garza case, saying that most of Garza's victims were minorities, that six of the 12 jurors were minorities, that there was a Hispanic prosecutor. So again, the White House not believing race was a factor, the White House also not believing his guilt or innocence in a factor, and also believing he had full access to the judicial system. So not likely to get a clemency, granting of clemency from this administration.

But again, we won't have that officially until we hear from the president or his advisers after that meeting -- Judy.

WOODRUFF: All right. Kelly Wallace reporting from the White House, thanks.

The Navy schedules a new round of bombing exercises on Puerto Rico's Vieques Island, but protesters have a different idea. We'll tell you who won this battle when we return.


WOODRUFF: We'll have more of the day's political news coming up but now a look at some other top stories. Police in Pasadena, California are investigating a bus crash that sent at least two dozen people to the hospital, many of them in critical condition. A city bus collided with a car at an intersection and then slammed into the side of a hotel. Ten high-school students were among the injured. The door on the bus was pinned against the building and firefighters had to free the trapped passengers.

A huge wildfire in the Sierra Nevadas today spread from California into Nevada. Officials say the fire is about 15 miles west of Reno, but so far is not headed toward the resort town. The fire has already scorched at least 15,000 acres near Truckee, California.

In New York City, the fire department is in shock following the deaths of three veteran firefighters. They were killed yesterday in a fire explosion that destroyed a hardware store in Queens. Among the dozens injured, two are still fighting for their lives today.

Richard Roth now on how firefighters are struggling to come to grips with what happened.


RICHARD ROTH, CNN CORRESPONDENT (voice-over): A city and fire department in mourning. At this Queens, New York hardware supply store, three firemen were lost on Father's Day. All had families.

LT. KEVIN DOWDELL, NEW YORK FIRE DEPARTMENT: Eight children left fatherless on Father's Day due to this tragedy, and we (UNINTELLIGIBLE) and throughout the job, will not forget these kids as they grow up.

ROTH: At first, it appeared to be a routine job on a Sunday afternoon. But then, an explosion.

JOHN GAINE, NEW YORK FIREFIGHTER: I heard Brian Fahey on the radio call for help twice. He said, "I'm trapped. I'm underneath the stairs. Please come and get me."

ROTH: Meanwhile, the blast had showered potential rescuers, burying them under a wall of bricks. Two more died on the sidewalk.

MAYOR RUDY GIULIANI, NEW YORK: I think the deep, deep love of all the people of the city go out to the three firefighters who lost their lives yesterday trying to protect us.

ROTH: Fire investigators climbed all over the building as the probe began. The fire commissioner said the store illegally kept some one-pound propane bottles below ground level.

COMM. THOMAS VON ESSEN, NEW YORK FIRE DEPARTMENT: There was some stored below ground, which is not proper. We'll probably give him a summons for that.

ROTH: Whether the propane contributed to the fire is not known. What is known is that two fire houses are stunned, one company turned "Heartbreak Hotel" now, since two other firemen based there died in the mid-'90s.

Decorated fire hero Harry Ford served 27 years on the fire frontline, known as the king of the one-liners by the men who loved him at Rescue Company 4.

JACK CORCORAN, FORMER CAPTAIN, RESCUE 4: We called them "Harrygisms," you know, the heart and soul of this man. He can't be gone. He was indestructible.

ROTH: John Downing, an 11-year veteran, was called the gentle giant.

LT. MARK BOYD, NEW YORK FIRE DEPARTMENT: He was like a pope going down the road in a rig. People would wave, you know, young people, old people.

ROTH: Forty-six-year-old Brian Fahey taught junior firemen Excelling in Rope Instruction.

GAINE: Any firefighters put in a position of where Harry or Brian Fahey were put into would have done the same thing. You're called to duty. Similar to the military. You're going to a war, you're going against a fire.

It's basically, you're going to war. When you kiss your wife and your children goodbye, as Lou, Harry, and Brian.

ROTH: Richard Roth, CNN, New York.


WOODRUFF: To Puerto Rico's Vieques Island now, where the Navy was supposed to resume bombing exercises this morning. But a small group of protesters found their way out onto the bombing range and stalled the exercises, at least for a few hours. Navy officials say they finally detained eight protesters, and the USS Theodore Roosevelt battle group began its bombardment at 2:00 p.m. Eastern today. Those war games will continue into the evening. The balance of power in Congress and in Virginia's fourth district when we come back -- our Bill Schneider takes a trip down memory lane and reflects on what's at stake in tomorrow's special election.


WOODRUFF: Virginia's 4th Congressional District holds a special election tomorrow. The contest is getting national attention because it could be a bellwether for the battle for the House in 2002. But the race to succeed the late Democrat Norman Sisisky is a bright spot on our Bill Schneider's radar screen for an additional reason. You see, he grew up in Portsmouth, on the fourth district's border. Bill went back there and he found that the district is different from the way it used to be, and politically divided.


WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): George W. Bush carried Virginia's 4th District last year by about 600 votes, making it a kind of mini Florida.

STEPHEN MEDVIC, OLD DOMINION UNIVERSITY: I'd say that the district is incredibly diverse, in lots of ways, and that makes it sort of a swing district.

SCHNEIDER: The district I grew up in was very different -- strongly southern, deeply military and intensely committed to its history. It meant growing up within hearing distance of the Navy Yard's 9:00 gun, which has signaled curfew for kids and allowed grown- ups to set their clocks since 1847.

These days, the district has a little bit of everything. The military, for sure...

ALF MAPP, PORTSMOUTH HISTORIAN: You have the largest Naval shipyard in the United States here, and a very successful one.

SCHNEIDER: A population that's almost 40 percent African- American.

MEDVIC: It's the largest percentage of African-Americans in any Congressional district in Virginia, except for the 3rd, which is a majority-minority district.

SCHNEIDER: And farming. Ever hear of Planter's peanuts? While Portsmouth where I grew up is very old, the booming city of Chesapeake is very new.

MAPP: A number of the newcomers, of course, are brought here by large corporations now, and they tend, particularly, to favor a businessman's view in politics.

SCHNEIDER: But shipyard workers make labor a significant force. The Naval base adds a dash of worldliness.

MAPP: This whole area has gotten more cosmopolitan because of the fact that the Navy capital of NATO is located here.

SCHNEIDER: But make no mistake. This is still a southern district.


SCHNEIDER: We found that out at the Virginia Pork Festival in rural Emporia, where the voters ate like pigs and the candidates hogged attention.

UNIDENTIFIED MALE: What pork have you eaten so far?

SCHNEIDER: It was really a pork and politics festival.

UNIDENTIFIED MALE: Sir, do you think there's too much pork barrel spending in politics?

SCHNEIDER: Southern politics means race, especially when one of the candidates, Democrat Louise Lucas, is African-American, and Republican Randy Forbes is white.

(on camera): The Portsmouth I grew up in was a city of total racial segregation. Segregated libraries, segregated movie theaters, segregated seats on the ferry boat. Woodrow Wilson High School class of 1962 was 100 percent white. Woodrow Wilson High School 2001 is about 40 percent white, 60 percent African-American.


SCHNEIDER: Of course, race is a factor in this campaign, but it's coded by both parties.

MEDVIC: Forbes' campaign has said that Louise Lucas is soft on crime. The Lucas campaign says that's sort of coded language for trying to play the race card.

SCHNEIDER: Lucas is using the Social Security issue to broaden her appeal.

LUCAS: Social Security is the central issue, because people are outraged that there is any thought of privatizing Social Security.

SCHNEIDER: But national Democrats are turning the Bush tax cut into a race issue.

STEPHEN MEDVIC, OLD DOMINION UNIVERSITY: The Democratic Congressional Campaign Committee sent out a press release saying -- talking about how the Bush tax cut would affect African-Americans. The Forbes campaign immediately said, they are playing the race card.

SCHNEIDER: Meanwhile, Forbes is running hard on issues affecting the military.

RANDY FORBES (R), VIRGINIA CONG. CANDIDATE: We're excited that we're going to have a seat on the Armed Services Committee if we are elected. SCHNEIDER: But Lucas says she intends to caucus with the conservative Democrats in the House.

LUCAS: I thoroughly am anticipating the prospect of joining the Blue Dog Democrats.

SCHNEIDER: It's a costly and intense campaign. Signs everywhere. Saturation TV ads, intensely negative ads to the voters' dismay.


NARRATOR: Call Louise Lucas, tell her to stop saying one thing and doing another.



NARRATOR: Insulting, unfair and scares seniors. Randy Forbes allies for shame.


SCHNEIDER (on camera): The old Virginia politics was gentile and tightly controlled, like the old aristocratic who used to live in these historic homes. Now, national politics has come here, less gentile but more democratic. A local congressional race with national stakes, negative ads that's too close to call -- unimaginable in my day.

Bill Schneider, CNN, Portsmouth, Virginia.


WOODRUFF: That wasn't so long ago.

Well, just a couple of hours ago, I sat down with Stu Rothenberg of "The Rothenberg Political Report" and Charlie Cook of "The National Journal," and I started by asking them whether they believe race is an issue with the Virginia 4th District contest.


STUART ROTHENBERG, "ROTHENBERG POLITICAL REPORT": Well, Judy, there is no doubt race is a huge factor in a couple of ways. First of all, in this district, as in many parts of the country, black votes are going to vote overwhelmingly for the Democrat Louise Lucas, and white voters overwhelmingly for Randy Forbes the Republican.

But even more than that, it's a way that the candidates are -- it's a lens to what the candidates are defined. Seems to me, many voters in this congressional district think Lucas, the black Democrat, she must be liberal. It's easier for the Republican to paint her as a tax-and-spend, big-government, liberal Democrat. And conversely, if you have seen Randy Forbes, he's kind of a cookie-cutter, white, conservative Republican. He looks that, so it's easy to tag him that way, so that Louise Lucas can maybe get out some additional black voters by tagging him as that Southern conservative Republican.

CHARLES COOK, "NATIONAL JOURNAL": You know, unfortunately, in the South, and for that matter in a lot of parts of the country, race -- when you have a multiracial race -- contest -- it defines things, as Stu said.

The estimates are that to win, Louise Lucas needs to get somewhere between 20 and 30 percent of the white vote. In the polls that I'm hearing now, she's coming up below that point, and in fact, that Jeff Forbes, the Republican, is actually doing slightly better among black voters than Louise Lucas is among African-American voters.

Having said that, we have seen big, big African-American turnouts in a bunch of key Southern and border state races over the last two elections, and if there is that kind of turnout in this election, then she could pull off an upset, but I don't expect to see that happen.

WOODRUFF: Given all that, is this race, to any extent, a bellwether for 2002?

ROTHENBERG: I don't really see it. I mean, on one hand, you can say Lucas has been talking about HMOs and about Social Security, and those issues have not moved white voters to her side. So, you can say, she has not used traditional Democratic issues.

On the other hand, Republicans have tagged her on taxes, on the pledge of allegiance and the flag, used traditional Republican patriotic themes to portray her as a liberal. But in terms of a reference to George W. Bush, there is no evidence that that is working to benefit Louise Lucas.

WOODRUFF: Charles.

COOK: Well, this is one of the most hotly contested districts in the country, where I think George Bush won this district by 400 or 500 votes, something like that only, in the year 2000. But -- and some of the issues are the same that will be played out in the national scene, as Stu said.

But I think any time you have a multiracial contest, it just gives it a set of dynamics that are different from any other kind of contest, and so, you know, the winner is going to say it is a bellwether, the loser is going to say, all politics is local. And then, that's the way it's going to carry on afterwards.

WOODRUFF: Let me ask you both about energy politics. Today, starting today, you have got Republican-sponsored ads, TV ads, running in the state of California, criticizing Democratic Governor Gray Davis, holding him responsible, in large part, for the energy crisis out there. Stu, is he vulnerable, and is he more or less vulnerable than any other politician out there?

ROTHENBERG: Well, Davis' numbers have dropped dramatically in the state. Obviously, the president's numbers are not good in California. They started off poor, they're poor. Gray Davis' numbers have started out quite good and have dropped. I think, clearly, he has picked up some negative baggage.

I also think, Judy, that he has been reasonably successful in also bringing in the president, in terms of Californians' view of who is responsible, of adding negatives to George W. Bush, for painting him as partly responsible. That doesn't mean that Davis hasn't been hurt. He has, but he is -- he is -- he has offset some of his own problems onto Bush.

WOODRUFF: Charlie, will these ads hurt Davis more?

COOK: Well, the thing is, people in California read newspaper, they watch news less than people in other places, and so advertising is more important. But the thing is, I think that Republicans had made two assumptions early one: No. 1, that George Bush will never carry California, so they are writing it off at a national level; and two, that they couldn't beat Gray Davis.

Now they are saying -- well, wait a minute, maybe Gray Davis is beatable, so maybe we ought to spend some time and money there, and they also saw that you can't just write off a state that is 10 or 12 percent of the country. I mean, even for no other reason other than for congressional purposes. You can't just, you know, take a razor blade and cut that state off the map, it's too big.

WOODRUFF: Just quickly, to the subject that we really shouldn't be quick about, it's the death penalty. It's very much in the news, again, last week, this week. Stu, is this something that some politicians are worried about hurting them next year?

ROTHENBERG: Judy, politicians are worried about everything actually hurting them. But I don't necessarily believe it has long- term power, staying power, unless we have a series of executions. Obviously, we had one, we have got another one scheduled.

But I think the sides on the death penalty, on capital punishment, are probably polarized along the lines of other issues, whether it's religious issues or tax issues. People who are for capital punishment, many of them are strong Republican conservatives, their minds are made up. People who want to end capital punishment, many of them are liberal Democrats, their minds are made up. I am not sure people a year from now are going to use this as a vote cue. I think they will turn to taxes and other issues.

COOK: I think the general level of support, the intensity of support for the death penalty has come down a little bit, but it has come down at such a slow rate that, you know, we are talking repeal 20 or 30 years from now, not anytime soon.

But you know, it's ironic -- where it's controversial, it's in Europe. It is like a white, hot burning issue, where they just can't understand why the United States has the death penalty. And you hear -- you know, for every time I get asked that question here, if I'm doing a speech, or if I am in Europe some place, you get it asked dozens and dozens of times. It's just sort of a weird issue, but it's hugely more controversial over there than it is over here.

WOODRUFF: And you think it will stay that way?

COOK: I think it will stay that way for a while, yeah.

WOODRUFF: The issue everyone is keeping an eye on this week, patients' bill of rights, up for a debate and a vote in the Senate. Charlie, what do you expect is going to happen?

COOK: Well, I think the two things that we have to watch for: one is, do Democrats want to get a patients' bill of rights and compromise in order to get one, or would they rather have an issue in the fall campaign to use?

The second thing is, if a John McCain-supported patients' bill of rights passes Congress and goes to the president, to the White House for his signature, and if the president vetoes it, that could be the trigger point for John McCain switching parties, if Bush vetoes a patients' bill of rights. The other, obviously, would the McCain- Feingold campaign finance reform bill, if it were to pass.

WOODRUFF: Wow, headline! Stu.

ROTHENBERG: Well, clearly, it's going to depend on the various liability provisions of the bill, and as to whether the president can sign it, but if Charlie is right about Senator McCain, that might be reason enough for the president to veto the bill.

WOODRUFF: This one we have to pursue, but we are out of time now. We'll do it next time. Stu Rothenberg and Charlie Cook, thank you.


WOODRUFF: And coming up: Congressman Gary Condit reaches out to the parents of the missing Washington intern. We'll have more on the Chandra Levy story when we return.


WOODRUFF: Now an update on the case of a young Washington intern, missing now for seven weeks. A spokesman for California Congressman Gary Condit said today that Condit tried to call the parents of 24-year-old Chandra Levy over the weekend, but the parents insisted that he talk with their Washington attorney. Condit says he and the missing woman were friends. Joining me now with more on this story is CNN national correspondent Bob Franken.

Bob, why is the congressman's phone call and their response a newsworthy development?

BOB FRANKEN, CNN CORRESPONDENT: On Thursday, the parents, particularly Susan Levy, the mother of Chandra Levy, said repeatedly that Condit should tell what he knows. Of course, there have been recurring innuendoes that there was a romantic relationship between the 52-year old congressman and the 24-year old Washington intern. So on the weekend in response to that, Condit called their home in Modesto, where he is from and they are from. Both the Levys and Condit's office acknowledged that that happened, and the Levys said: We don't want to talk to you. We will only do so in the presence of our attorney.

Their attorney is somebody who they apparently retained, a Washington, D.C. attorney, but they have not yet named this person, only saying he's a prominent lawyer and that they are coming to Washington as a matter of fact to meet with him.

WOODRUFF: Now, there was separate from this a report -- tell me if I have this correct -- that the mother of Chandra Levy had gone through the phone records and found a frequently dialed number on Chandra Levy's cell phone, apparently, and so the mother called that number. Now, what happened?

FRANKEN: That's correct. And again, this is acknowledged by both sides. And she called the number and it was a pager. So they punched -- they, meaning the parents -- punched in that number and got a call back from Congressman Condit, and had what was described as an awkward, brief conversation.

I must inject here -- always must inject, that when people suggest that there's a romantic relationship between the Congressman and Chandra Levy, Congressman Condit's office repeatedly says there was no romantic relationship.

WOODRUFF: What are the police focusing on? And why does he continue to be focused on if not much more is known about this case?

FRANKEN: First of all, the focus on Congressman Condit has frankly for the most part been a creation of media reports. Of course, that raises the interest in what really is another missing person's case. The police repeatedly say they have no evidence that Congressman Condit was involved in any way in the appearance of Chandra Levy, which, by the way, occurred seven weeks ago.

Nevertheless, the police have not been able to develop any leads. They have questioned Congressman Condit. And there is some dispute over what he told them. But the fact of the matter is that Congressman Condit has really raised interest because of the suggestion, repeatedly denied, that there was some sort of personal romantic relationship between the two.

WOODRUFF: Bob Franken, thanks very much. Appreciate it.

A milestone for the former first family as Chelsea Clinton dons her cap and gown and prepares for her next journey. INSIDE POLITICS will be right back.


WOODRUFF: The former president and the New York senator are now the proud parents of a Stanford graduate. The Clintons watched their daughter, Chelsea, celebrate with her classmates yesterday at the spring commencement festivities. After four years virtually shielded from the news media by her parents and the university community, Chelsea Clinton graduated with honors with a degree in history.

Content to watch the ceremony, the Clintons did not speak to the news reporters, although the former president did release a statement saying they were: "grateful for the friendships and the great learning experiences that Chelsea had at Stanford." Chelsea Clinton plans to go to Oxford University in the fall, following in the footsteps of her father.

Defending the justice system, our Bruce Morton on the death penalty. Are Americans still behind legal executions? That story and much more ahead on INSIDE POLITICS.


WOODRUFF: Six months after the bombing of an American warship comes word of a new terrorist threat against a U.S. target in Yemen.

Also ahead: international journalists reflect on President Bush's European tour. We'll try to get to the heart of his newly-forged relationship with Russia's President Putin.

Welcome back to INSIDE POLITICS. U.S. officials say the danger of terrorism in the country of Yemen remains high, after a threat against the United States embassy there. That threat prompted FBI agents to pull out of Yemen, where they were investigating last year's bombing of the USS Cole.

CNN's Andrea Koppel has more from the State Department.


ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT (voice-over): CNN has learned that in recent days the U.S. embassy in Yemen's capital was not only targeted by terrorists, but also came dangerously close to being attacked. One U.S. official said: "We narrowly dodged a serious attack," and added that the threat was "imminent, specific and credible."

U.S. officials tell CNN the group planning to carry out the attack had hand grenades and was arrested by Yemeni authorities over the weekend. But information as to whether this group was, in the words of one U.S. official -- quote -- "homegrown," or whether it received support from outside Yemen is as yet unknown. As a result of these new threats, the FBI closed its operation in Yemen on Sunday. Agents had been on the ground since the days immediately following last year's attack on the USS Cole, which killed 17 American sailors.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: The FBI made a decision based -- to leave Yemen based on what they saw as a credible threat to their employees. They made the decision to withdraw their personnel from Yemen on June 17. Although our embassy is closed to the public, our embassy does remain open and our diplomats continue to do their jobs.


KOPPEL: Still, the State Department did order all nonessential employees at the U.S. embassy home earlier this month. And then, just last week, Judy, the State Department issued yet another travel warning for Yemen, urging all Americans to stay away -- Judy.

WOODRUFF: All right. CNN's Andrea Koppel at the State Department.

Overseas and here in the United States, the reviews of President Bush's trip to Europe still are coming in. His apparently chummy visit with Russia's President Vladimir Putin is getting particular attention.

Our John King reports on the postmortems being offered from the White House to Capitol Hill.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you very much, it's nice to be home.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Back to work on the home front, but not without first claiming progress from a week on the world stage, especially in U.S.-Russia relations.

BUSH: The conversation with President Putin was positive. It indicated to me that we can have a very frank and honest relationship, that there are areas where we can work together.

KING: Saturday's two-hour mini-summit was the last stop of the president's five-nation trip to Europe, and he called Britain's prime minister and the leaders of Spain and Poland Monday to share his thoughts.

BUSH: They were most pleased that the conversation went well. They were pleased to hear that the United States welcomes Russia to look westward and will help Russia to do so.

KING: The warmth and relaxed atmosphere of the Bush-Putin talks was the surprise of the trip. As a candidate for president, Mr. Bush took a tough line, and said his predecessor had an overly romanticized view of relations with China and Russia. Yet after just two hours of talks, Mr. Bush jumped at the opportunity to say Mr. Putin was trustworthy.

BUSH: We had a very good dialogue. I was able to get a sense of his soul.

KING: Several leading Democrats recalled Mr. Putin's role in the Russian military campaign in Chechnya, others said they were surprised Mr. Bush would make such a sweeping assessment after just one short meeting.

JAMES STEINBERG, FORMER CLINTON DEPUTY NATIONAL SECURITY ADVISER: I think it's hard to make a judgment that quickly about whether you have trust in another person, and how you really understand what they might do going forward.

KING: Skepticism from NATO allies about the U.S. missile defense plan has made good relations with Russia all the more important.

STEINBERG: The strategy that he wants to pursue is based on the idea that we have a new non-adversarial relationship with Russia, and the test of that is going to be obviously the kind of relationship that he's able to carry on with Russia's leaders.

KING: Mr. Putin also offered an upbeat assessment, saying he found Mr. Bush easy to trust.


KING: But the Russian leader also said there are still major disagreements between Russia and the United States over the missile defense plan, over NATO's plans to expand again. So that personal relationship, Judy, will quickly be put to the test because of these still very major policy differences.

WOODRUFF: And John, just two questions. No. 1, about China: To what extend is the White House concerned about Putin's trip to China, just before -- or meeting with the Chinese leader just before he met with Mr. Bush? Is there concern about Russia-Chinese cooperation?

KING: Well, there would always be concern, certainly. U.S. officials likened this to a game of a strategic chess, if you will. U.S.-China relations are at a bit of a low point right now, although U.S. officials said they are making some progress, particularly on the trade front, since the low of the EP-3 standoff.

Certainly, anytime a Russian leader visits a Chinese leader and they talk about maybe pairing up because of the steps being taken by the United States, like missile defense, that concerns the White House, but they are not overly concerned. They think Mr. Putin has said he wants to improve relations not only with the United States, but with China and others as well.

Key to them is that Mr. Putin said throughout these meetings that he had an open mind about relations with the West, although he was very critical, again, of NATO's plans to expand, specifically if NATO invites anymore of those Soviet -- former Soviet satellite states to join in.

WOODRUFF: And John, to a different story. We understand there may have been a development in the White House with regard to the fate of Juan Raul Garza who is awaiting execution on death row in a federal penitentiary in Indiana?

KING: Well, Judy, Mr. Garza's last hope is clemency from the White House, that request pending before the president at this hour. Senior administration officials telling us it's all but certain Mr. Bush will turn down that request. They also tell us, though, that first they want to speak to Mr. Garza's attorney, they want to make sure that those attorneys plan no more filings with the Supreme Court. They have been told that is the case. They want to deliver the official word directly to Mr. Garza's attorneys first. We are told that is going on at this hour, an announcement from the White House expected in just a few minutes.

WOODRUFF: All right. CNN's John King at the White House.

Well, let's discuss Mr. Bush's European tour now with two international journalists. Andrei Sitov is Washington bureau chief for the TASS News Agency in Russia, and John Parker is the Washington bureau chief for the British magazine "The Economist." Thank you both for being with us.

Andrei Sitov, to you first. Reaction in your country to President Bush, to what he had to say to your president.

ANDREI SITOV, TASS NEWS AGENCY: I think it is welcome. People regard this as a recognition that Russia does play an important role in international affairs, that without Russia it's -- there is very little hope of maintaining peace and stability, and I do believe that both presidents want that for their nations.

WOODRUFF: And John Parker, what would you say the reaction -- I know it's difficult to sum up so many different reactions, but across the rest of Europe, what would you say reactions were?

JOHN PARKER, "THE ECONOMIST": Well, NATO's fairly divided. I think a number of medium-sized or smaller countries clearly falling in line behind the president. The large block of France and Germany much more skeptical, but I think that their rather positive outcome from the summit with Mr. Putin will, in general, cast sort of a warm glow over the rest of Western Europe, because so much of the most controversial area between Europe as a whole and America -- that is to say national missile defense -- depends on the reaction in Russia.

And to the extent that it's good, I think that sort of in general warms the trans-Atlantic relationship.

WOODRUFF: Andrei Sitov, was it surprising to hear President Bush using such warm words, talking about looking into Mr. Putin's eyes and seeing into his soul, and finding him worthy of trust and so forth?

SITOV: Well, I understand that it reflects on Mr. Bush's personality. He believes -- and I think he may have reason to believe -- that he a great communicator, like President Reagan used to be called. And actually, he does remind me of this great new beginning of the dialogue with President Reagan, when Soviet leader Mikhail Gorbachev was first meeting with President Reagan.

WOODRUFF: Was is it in keeping of what you expected from him?

SITOV: Yes, yes, I -- you know what? I actually like the new president, and I was rooting for him. He knows the word "humility" and then he uses it. That's what I like. WOODRUFF: That's interesting. Interesting. John Parker, you mentioned -- of course -- Russia and national missile defense, did you see real movement as a result -- or during this trip, as a result of this trip?

PARKER: Yes, I think so. The agreement between Putin and Bush to agree to start talking sounds like diplomatic waffle, to some extent. But I think actually there's a real change going on here.

The Russians...

WOODRUFF: We should say you were on the trip.

PARKER: I was on the trip, yes. I saw it. And I was sort of struck (UNINTELLIGIBLE) as the warmth of the tone. But I think below that there's a sort of substantive improvement going on.

The Russians so far have been rather standoffish, I think, about missile defense. They have basically said, yes, there's a problem of threats, but we think the ABM Treaty is cornerstone of security and so on. And they haven't really given very much sign of being willing to talk in detail about the design of missile defense.

But there's a very fundamental sort of subtlety really about the Russian position on missile defense. They're not opposed to it root and branch. They think that a limited missile defense might actually help them. But what they're really afraid of is a very powerful missile defense, which doesn't nearly prevent the threats from North Korea, say, or Iran, but might actually defend America from Russia's own missile defense and therefore neutralize the Russian nuclear forces. So it's very important for them to make sure that doesn't happen.

Now, they can try to do a sort of root-and-branch opposition. Well, that's failed because the Western Europeans were in favor. So they've fallen back on the second line to say, well, let's negotiate to make sure that missile defense remains limited and -- which we can accept -- and doesn't become a powerful force that we don't like.

WOODRUFF: And Andrei Sitov, as a result of what your -- you, your countrymen, other journalists in Russia heard on this trip, are you more confident that President Bush is talking about something that you can live with?

SITOV: Well, we certainly will -- will live with whatever an American president says. It's -- it's not the end of the world. Hopefully, that is what the ABM Treaty is for.

We all hope that the missile defense is the way we know them or the way they will be developed in the future will work. And frankly, I -- I -- although I do believe this is a centerpiece of the relationship, it should not comprise the whole of the relationship. We as two nations...

WOODRUFF: You mean missile defense? SITOV: Yes, missile defense. Surely. Surely. We have very many interesting and useful things to discuss between us and with our European friends as well.

WOODRUFF: And how many of those were discussed in this session?

SITOV: You know what? I have this uneasy feeling that it was presented as a sort of a trade-off. We will help you with the WTO or with trade issues or even -- even the issue of Russian debt was mentioned before the summit, although I'm not sure that it was actually mentioned at the summit.

But -- but there are tons, tons of different issues, and I only hope that we will get off to a new start like President Reagan and President Gorbachev did.

WOODRUFF: And Andrew (sic) Parker, what about global warming and the so-called Kyoto accord? Any headway, improvement on that -- on that matter?

PARKER: Not that I can see. It's pretty unusual for a diplomatic communique to come outright and state boldly we disagree on Kyoto. That's what the E.U.-U.S. declaration in Gothenburg said, and frankly, the E.U. going forward, they're sending out missions now to other countries to keep the Kyoto accord on the road. So it seems to me that they're trying to go ahead with the Kyoto without the United States.

WOODRUFF: So Andrei Sitov -- and I'll ask both of you this question -- what do we look for next between Russia and the United States and between the rest of Europe?

SITOV: Genoa. We all go to Italy now.


WOODRUFF: In only one month.

SITOV: In only one month, and then they've also discussed getting together again at the Texas ranch, which will be a challenge of sorts.


SITOV: And then we'll -- we will hopefully...

WOODRUFF: In what way?

SITOV: Well, I understand that it's a world to itself -- one of my favorite places actually in the United States...


SITOV: Is Texas.

WOODRUFF: Well, good. Well, perhaps you'll get the chance to go there.

SITOV: Hopefully.

WOODRUFF: And Andrew (sic) Parker.

PARKER: For me the critical thing is just the details of this negotiating of missile defense. You know, it now takes the -- it goes to the level of sort of experts, and you know, sub -- sort of junior officials and so on. And that's where the real talking will take place.

WOODRUFF: And I called you Andrew Parker and it's John Parker. My mistake. I was thinking Andre.

SITOV: Yes, a little -- a little -- a little bit, a little bit here.

I heard a wise man said that "Humility is the quality of being teachable," and since President Bush likes to talk so much about humility, let's see if whether he truly is humble in that respect, whether he's teachable.

WOODRUFF: All right, Andrei Sitov, John Parker, thank you both. We appreciate it. Thank you. We will see about that and a number of other things. Thank you both for being with us.

Coming up: last week President Bush called it a relic of the Cold War. But the Russians say it is the cornerstone of nuclear stability. When we return, a yet closer look at the politics of missile defense.


WOODRUFF: In Moscow today, President Vladimir Putin underscored the sharp differences over missile defense that still divide Russia and the United States despite his friendly meeting with President Bush over the weekend.

CNN's national security correspondent David Ensor has more on nuclear issues and the diplomatic fallout.


DAVID ENSOR, CNN CORRESPONDENT (voice-over): The atmospherics may have been good, but that does not mean there is any new Russian flexibility on issues such as the Anti-Ballistic Missile Treaty. Mr. Bush calls it a "relic of the past." Mr. Putin calls it the "cornerstone" of nuclear stability. And in the wake of the summit, the Russian president's top adviser on arms still says the treaty should not be changed.

MARSHALL IGOR SERGEYEV, PUTIN ADVISER (through translator): We have to save the system which is working. We cannot break one system first and then try to build something new.

ENSOR: Mr. Bush also raised U.S. concerns about Russian sales to Iran of items Washington fears could be useful in producing nuclear weapons. Such accusations, according to Marshall Sergeyev, do not have any basis in fact.

SERGEYEV: All that is sold to Iran is in the frame of the allowed technologies, including items of dual use.

ENSOR: Still Sergeyev praised what he called the "better-than- expected" meeting in Ljubljana, Slovenia. The Russians were pleased and surprised by Mr. Bush's effort to reach out to Mr. Putin. Critics of the president's proposal to deploy a missile defense system and his willingness to consider scrapping the Anti-Ballistic Missile Treaty in order to do so were also surprised, putting their own interpretation on what it means.

JOSEPH CIRINCIONE, CARNEGIE ENDOWMENT: By making this kind of personal commitment, president to president, it becomes very difficult, in fact, even insulting for the president to now turn around and do what some of his advisers are recommending: abrogate the treaty, turn its back on Russia, turn its back on Europe.

ENSOR: Administration officials declined to speak for this report, but they have said in the past that while they want to consult with the Russians, they must not have a veto on U.S. strategic decisions.

Still, Russian officials, and missile defense critics, are hoping that post-Ljubljana those consultations may be deeper and much longer than was likely before.

David Ensor, CNN, Washington.


WOODRUFF: Now, an update on the request by death-row inmate Juan Raul Garza for a clemency grant from the White House. Let's -- for the update, let's go to CNN's John King -- John.

KING: Judy, the president has said no, he has rejected that clemency request for Mr. Garza. White House officials telling us just moments ago the president found no grounds to grant clemency. We're told the White House counsel relayed that decision a bit ago to Mr. Garza's attorneys, and then they waited for a public announcement here at the White House because they wanted to give these attorneys time to inform Mr. Garza himself. That execution now is scheduled to go forward tomorrow.

Again, White House counsel legal officials met with the president this afternoon, reviewed the papers. They said they found no grounds for clemency. What they wanted to know before making that decision final was whether Mr. Garza's lawyer planned any additional filings with the U.S. Supreme Court.

Once told the answer to that was no, that all legal appeals have been exhausted, the White House relayed word that the president would not grant clemency. Again, they waited a little bit to announce it, so that Mr. Garza could be told personally. That execution is scheduled for tomorrow morning -- Judy.

WOODRUFF: All right. John King at the White House.

A decision on a new FBI director appears to be imminent, and one prominent candidate for the post appears to be out of the running. Sources tell CNN's Kelli Arena that George Terwilliger, a former deputy attorney general in the first Bush administration, who also served as a Bush campaign attorney during the Florida vote recount, will not be the FBI choice.

That leaves San Francisco U.S. Attorney Robert Mueller as the most likely candidate. Mueller was appointed to his current job by former President Bill Clinton, but also served briefly here in Washington as deputy attorney general under John Ashcroft.

One federal prisoner is executed. Another sits on death row, scheduled for lethal injection tomorrow morning. Coming up: a closer look at capital crime and punishment.


WOODRUFF: More INSIDE POLITICS coming up, but first let's go to Lou Dobbs for a preview of what's ahead at the bottom of the hour on MONEYLINE.

Hi, Lou.

LOU DOBBS, CNN ANCHOR: Thanks, Judy. Ahead on MONEYLINE: the Nasdaq tumbles for the seventh straight session, and the Nasdaq is below 2,000 for the first time in two months.

Oracle beats expectations with quarterly profits, but net income plunged from a year ago. I'll be talking with CEO Larry Ellison.

And General Electric has declared its deal with Honeywell all but dead. We'll take a look at why that obituary may be premature. All of that, a lot more coming right up on MONEYLINE. Please join us.


WOODRUFF: Timothy McVeigh was put to death last week, 38 years after the last federal execution. Tomorrow, Juan Raul Garza is scheduled for lethal injection at the same Indiana prison.

Our Bruce Morton now takes a closer look at how Americans view capital punishment.


BRUCE MORTON, CNN CORRESPONDENT (voice-over): President Bush on his European trip defended the use of the death penalty in the United States because this is a democracy, and that's what the people want.

BUSH: Democracies represent the will of the people. The death penalty is the will of the people in the United States.

MORTON: That's true, kind of. 60 percent said they favored the death penalty in a poll way back in 1937, 65 percent in a poll just last month. But Americans are starting to have some second thoughts.

For one thing, the case makes a difference. Timothy McVeigh, whose bomb in Oklahoma City killed 168 people, is, you could say, the poster child for the death penalty. Seventy-eight percent of Americans told a CNN/"USA Today"/Gallup poll just before his execution they supported the death penalty for him. Just 17 percent opposed it.

Raul Garza, who is scheduled to die Tuesday, is not a nice man -- drug dealer, committed one murder, ordered two others -- but only 62 percent said they favored the death penalty for him, a big drop from McVeigh's 78. And there is a kind of national squeamishness about the death penalty. In that same poll, 74 percent, three-quarters of those polled, said it was either very likely or somewhat likely that some innocent people have been executed in the last 10 years.

Advances in science, like DNA testing, account for some of that. And another sign of uneasiness with the state as executioner, 59 percent, three-fifths, were for a temporary halt to executions to make sure innocent people weren't put to death.

Texas Governor Rick Perry's veto of legislation barring the death penalty for retarded people goes against this trend, but the governor did sign a bill designed to improve the quality of court-appointed lawyers for defendants who couldn't afford to hire their own. Texas has been criticized for appointing unprepared lawyers and lawyers who slept during their trials.

(on camera): Death is very final. Trials are very subjective. I covered the military trial of one American officer convicted of killing unarmed civilians during the Vietnam war. He was a young platoon lieutenant, and he told his poorly prepared lawyer he didn't want to plead temporary insanity. The lawyer went along. The lieutenant was convicted.

His company commander, with F. Lee Bailey as his lawyer, was acquitted. What would Bailey have done with the lieutenant? "Ignore his wishes," Bailey said, "pled insanity, gotten him off with censure." And he probably would have.

Trials depend a lot on things like who your lawyer is. And the new mood about the death penalty in this country seems to be: don't get rid of it, but let's try really hard to make sure we get it right.

Bruce Morton, CNN, Washington.


WOODRUFF: And that's all for this edition of INSIDE POLITICS. But of course, you can go online all the time at CNN's, AOL keyword, CNN. Our e-mail address is

This programming note: tonight in the "CROSSFIRE," is it payback time as far as White House investigations go? The guests will be Democratic strategist Mark Mellman and Republican strategist Cliff May. That's at 7:30 p.m. Eastern. I'm Judy Woodruff. "LOU DOBBS MONEYLINE" is next.



4:30pm ET, 4/16

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