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CNN Wolf Blitzer Reports

Federal Regulators Approve Constraints on Electricity Prices in West

Aired June 18, 2001 - 20:00   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Tonight, with energy prices soaring, soaring temperatures have California facing more blackouts. Can federal regulators cool things off?

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Price controls will not solve the problem.

(END VIDEO CLIP)

BLITZER: It's a hot-button issue. We'll have the details.

There hadn't been a federal execution in 38 years, the second in a little more than a week is scheduled for just 12 hours from now. As convicted murderer and drug trafficker Juan Raul Garza fights for his life, we'll go to the Supreme Court.

And, if convicted of spying for Moscow, former FBI agent Robert Hanssen is eligible for the death penalty. So why wouldn't the government pursue execution? I'll ask former CIA director James Woolsey, and Mark Hulkower, prosecutor in the Aldrich Ames case.

Good evening. I'm Wolf Blitzer reporting tonight from Washington.

After months of standing by on the sidelines, federal regulators are stepping directly into California's energy crisis. Today, they approved a plan designed to limit spikes in the cost of electricity in California and 10 other Western states.

The plan represents a middle ground. It stops short of the stringent price controls sought by California Governor Gray Davis, but goes beyond what President Bush had proposed, and that's our top story.

The regulators' decision followed intense pressure from all sides. The plan prohibits energy suppliers from withholding power to drive up market prices.

(BEGIN VIDEO CLIP)

CURT HEBERT, FERC CHAIRMAN: This is a plan that is good for California, good for the Pacific Northwest, and good for the entire West. It is a balanced plan that respects market forces, and that attempts to restrain prices while offering an inducement for new supply and delivery capability.

(END VIDEO CLIP)

BLITZER: Even before the regulators had announced their decision, President Bush insisted, once again, that price controls won't solve the problem. He said he could live with what federal regulators are planning.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

BLITZER: Price controls, caps, or mitigation, is it a word game? Or will it bring relief to California consumers, who've suffered a 10- fold increase in wholesale energy prices in just the last year. Let's go live to Los Angeles, and CNN's Thelma Gutierrez.

Thelma, tell us what is going on?

THELMA GUTIERREZ, CNN CORRESPONDENT: Wolf, word games is all Californians have been hearing lately. Energy bills are skyrocketing, they're threatened with the prospect of rolling blackouts. Some people here say the only way to spell relief is hard core price controls.

(BEGIN VIDEOTAPE)

GUTIERREZ (voice-over): Elizabeth Seigei sells flowers for a living. Her electric bill has gone up a whopping 30 percent.

UNIDENTIFIED FEMALE: I basically see the price of flowers going up.

GUTIERREZ: Gary Ono is retired homeowner. His electric bill is $1800 a year.

UNIDENTIFIED MALE: When you have to turn on the AC, the bills just double.

GUTIERREZ: Californians have been hoping for relief. Today, federal regulators voted unanimously to approve an energy relief plan for all Western states. California Governor Gray Davis says it's a step.

GOV. GRAY DAVIS (D), CALIFORNIA: I'm pleased that the federal government is finally -- some 9 months after making a determination that our market is dysfunctional -- doing something in the right direction. GUTIERREZ: But consumer activist Doug Heller says price mitigation is nothing more than political posturing.

DOUG HELLER, CONSUMER ACTIVIST: This means no relief to California consumers. The decision today is just a political sop, it's just an attempt to stop all the nagging from California.

GUTIERREZ: A world away from Washington, in this small Santa Monica flower shop, Elizabeth Seigei is not all that impressed with promises. She says regulators must impose strong price caps.

ELIZABETH SEIGEI, CONSUMER: Unless prices go down drastically for everyone, I don't really see it getting too much better.

(END VIDEOTAPE)

GUTIERREZ: Analysts say that the energy crisis is a political hot potato. Republican congressmen and senators have finally figured out that the outcome of this energy crisis could well effect the outcome of the elections in 2002 -- Wolf?

BLITZER: Thelma, who stands to win politically in this situation, as of right now? The California Governor Davis or the president George W. Bush? In terms of California politics?

GUTIERREZ: That is a good question, Wolf. In fact, analysts say that President Bush actually stands to gain the most right now, because it is perceived that he is trying to do something for Californians, but they also caution that the real test comes when people start looking at their bills, months down the road, to see that they are going to want to make sure that they are going to see some relief in those bills. And relief that is reflected in the prices that they are paying -- Wolf?

BLITZER: Thelma Gutierrez in Los Angeles, thank you very much.

And in other news tonight, the president and the U.S. Supreme Court have rejected last-ditch appeals by convicted murderer Juan Raul Garza, and his federal execution remains on schedule for tomorrow morning. More now from CNN senior Washington correspondent Charles Bierbauer.

(BEGIN VIDEOTAPE)

CHARLES BIERBAUER, CNN CORRESPONDENT (voice-over): Juan Raul Garza started the last day before his execution with three hopes for delaying or eluding the death sentence. Each was slim, and one by one they were taken away.

At 10:00 a.m. the Supreme Court denied an application for a stay of execution and an appeal to hear claims the jury in his Texas murder trial had not been properly instructed that life without parole was an alternative to the death penalty. None of the legal efforts suggested Garza was innocent.

JUAN RAUL GARZA, DEATH ROW INMATE: I chose the wrong path and I made some big mistakes which I regret.

BIERBAUER: Garza was sentenced to die for committing one murder and ordering two others. All were related to drug trafficking.

ABEL PEREZ, CAMERON CO. SHERIFF'S OFFICE: The position of the body, the way he lay there, the gunshot to the back of the head. You could tell it was execution style.

BIERBAUER: At 5:00 p.m. the Supreme Court denied a second application to stay the execution. The justices declined to hear arguments Garza's execution violated human rights provisions of an international agreement.

At 6:00 p.m. Garza's last hope was extinguished at the White House.

GARZA: Can you have mercy on me and commute my death sentence to life without the possibility of parole?

BIERBAUER: But President Bush found "no grounds for clemency," and rejected the claim that the federal death penalty is racially biased.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: All of Mr. Garza's victims except one are Hispanic. The prosecutor in the case was Hispanic, The presiding judge is Hispanic. At least six of the jurors were Hispanic.

BIERBAUER: As his legal chances ebbed away, Garza spent the day at the same execution facility where Timothy McVeigh was executed a week ago.

(on camera): At day's end, attorneys for Juan Raul Garza said they saw no further possibility for appeal.

Charles Bierbauer, CNN, the Supreme Court.

(END VIDEOTAPE)

BLITZER: Overseas tonight, a close call for American diplomats and other U.S. personnel in Yemen, scene of last year's deadly attack on the USS Cole.

CNN's Andrea Koppel joins us now live from the State Department with that story -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Wolf, CNN has learned that in recent days the U.S. Embassy in Yemen's capital, including the U.S. ambassador, senior U.S. diplomats, and FBI agents, were not only targeted by terrorists, but they also came dangerously close to being attacked.

(BEGIN VIDEOTAPE)

KOPPEL (voice-over): 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 10 suspected terrorists planning to carry out the attack were arrested by Yemeni authorities over the weekend and had hand grenades, automatic weapons and bomb making equipment. But the information as to whether this group was in the words of one U.S. official "homegrown" or whether it received support from outside Yemen is as yet, unknown.

FBI agents investigating last year's attack on the USS Cole, which killed 17 American sailors, closed their operation Sunday as a result of these new threats. U.S. officials say the FBI and the U.S. Embassy were at odds over how the agents could arm themselves.

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.

(END VIDEOTAPE)

KOPPEL: Still, the State Department did order all nonessential U.S. personnel at the embassy to return to Washington earlier this month. And just last week, Wolf, the State Department issued a travel warning for Yemen, telling all U.S. citizens to avoid travel there -- Wolf.

BLITZER: Andrea, is there any known connection at this point to Osama bin Laden?

KOPPEL: Well, that is certainly the obvious question, considering the neighborhood that Yemen is in. Just down the block is Afghanistan and that is where Osama bin Laden other terrorist cells have been known to operate there -- the terrorist training camps, but having said that, the U.S. officials I have spoken to say it is too soon to tell, and while they are not ruling it out, it could also be groups like the Islamic Army of Aden, a local group that in fact has problems with the government, and not with the United States -- Wolf.

BLITZER: Andrea Koppel of the State Department, thank you very much.

Charged with spying, former FBI Agent Robert Hanssen could face the death penalty. But will the government let things go that far? I'll ask two veterans of another spy case, former CIA Director James Woolsey, and former prosecutor Mark Hulkower.

And the Navy has two years to halt the bombing on its Vieques range. Can protesters make it stop sooner?

(COMMERCIAL BREAK)

BLITZER: Welcome back. Former FBI Agent Robert Hanssen is charged with spying for Moscow over 15 years. And sources say the alleged espionage may have gone on much longer. The government calls the damage, quote, "exceptionally grave." If convicted, Hanssen could face the death penalty, but there are signs prosecutors want a plea deal. That's been the pattern in other spy cases, including that of Aldrich Ames, a former CIA official, now serving a life sentence.

Joining me now are two men who were involved in that case, former CIA Director James Woolsey, and Mark Hulkower, he was the prosecutor in the Ames case. He is now a criminal defense attorney here in Washington. Thanks for joining us.

Mr. Woolsey, why wouldn't the government want to go forward with the death penalty, given the gravity of the crimes he is accused of engaging in -- Robert Hanssen -- at this point?

JAMES WOOLSEY, FORMER CIA DIRECTOR: Well, in principle, I imagine a number of government officials now feel the same way I felt in the Ames case, which is a major espionage case like this, we would very much like to see the death penalty, but the reality is that the government really desperately needs the details, chapter and verse, of what he gave to the Soviets and to the Russians, and that is worth more, really, I think, as a policy position for anyone to say, to it is worth much more to do that, to get that than it is to carry forward with the death penalty.

BLITZER: You would accept that assessment as a former prosecutor? In the Ames case, he was not eligible for the death penalty, because it wasn't passed by Congress, signed into law, but subsequent to that, it has become a law of the land that in certain espionage cases the death penalty would be appropriate?

MARK HULKOWER, CRIMINAL DEFENSE ATTORNEY: Wolf, there is first off questions of the constitutionality of the death penalty here. The law came into play after most of Mr. Hanssen's conduct.

But even more than that, the Department of Justice gives great weight to the client agency, CIA, the FBI, they need to know what went on. This man spied, according to the charges, for 15 or more years. If you don't know what he gave over, if you can't do a damage assessment, you have to assume he compromised everything, and that makes it even worse.

BLITZER: And the only way, assuming the other side, in this case the Russians, are not going to tell you, the only way is to basically try to get it from the accused in this particular case?

WOOLSEY: Well, the only way to get some of it. The FBI or the CIA or some combination of them stole some remarkably detailed stuff from the Russians, and I think we can all be proud of that, but they probably don't know everything, and to degree they don't, they really need to get it from Hanssen. It's the only other place to get it.

BLITZER: "The Seattle Times" in an editorial wrote this on June 16, it said this: "The same gumshoes who never spotted the framed autographed picture of Kim Philby on his desk now imagine they can pick Hanssen clean with a thorough debriefing." Is that realistic? I mean, if he is a liar, if he is a spy, what makes the U.S. intelligence community or the FBI think he is going to come clean in a debriefing?

HULKOWER: You are never completely satisfied in a debriefing. I have participated in the debriefing of Ames -- you always have the lingering doubt, but it's a place to start. You use polygraphs, you have skilled questioners, and it's the only hope you've got. Otherwise again, you are left with nothing.

BLITZER: You were never convinced that Ames, in the case you were involved in with, completely came clean, told the FBI everything he knows about the espionage he was engaged in?

WOOLSEY: No, there is doubt that he told everything. On the other hand, as time went on, and he is -- there -- pretty much in isolation, and he had only the interrogators to talk to, he came forward with more and more. And there will always be a doubt that he came forward with everything.

BLITZER: How strong, Mark Hulkower, is the government's case, based on what you have read -- you are not directly intimately involved -- based on what you know, how strong is the government's case against Robert Hanssen?

HULKOWER: If you read the affidavit they used to arrest Mr. Hanssen, it appears to be an overwhelming case, but the one thing that everyone who has ever tried a case knows, is there is no such thing as a lock case. No matter how strong the evidence looks, anything can happen when you get into a courtroom.

And in a case like an espionage prosecution, where you are dealing with classified information, you've got a lot of secrets to protect, almost anything can occur, and that is a big risk. If you can get life without parole in a plea deal and debriefing to boot, you are better off.

BLITZER: But isn't he in a sort of strong position, Robert Hanssen, right now? If he doesn't cooperate, he is -- he obviously could go to trial. That would force the intelligence community to presumably reveal a lot of classified sensitive information they would rather not reveal in an open courtroom?

WOOLSEY: Well, they may well be able to get by with what they have. And disclosed in the affidavit, there is extraordinary amount of detail in those affidavits. And if there is some way that they can legally introduce that material into evidence, he would have to worry that they could get a conviction.

BLITZER: But Mr. Hulkower, on that specific point, as a former U.S. attorney, a former prosecutor, they would have to bring in the Russian alleged the agent who provided all this information, and say, this was the source. Couldn't Plato Cacheris, a well-known, excellent, highly-regarded defense attorney here in Washington say, how did you get this information? Where is it coming from?

HULKOWER: They could give the government some uncomfortable moments in a prosecution, there is no question about that. That always happens. There is laws in place, though, Wolf, to prevent defense from blackmailing the government, from threatening to disclose classified information just to get some leverage with the government. So, there hasn't been that kind of disclosure in a long time, and the government would have a strong hand there.

BLITZER: Is it possible that this kind of a case could go before a secret jury, a secret trial?

WOOLSEY: Not a secret jury, but counsel can be bound not to reveal some material under the Classified Information Procedures Act. As Mark just suggested, there are statutes that make it possible to operate here. It is difficult, but not impossible.

BLITZER: Some have suggested, Mr. Woolsey, that if the government were serious about the death penalty in espionage, and wanted to send a signal to other moles -- let's say there are some out there, spies out there -- why not go ahead and roll the dice and try to get the death penalty in this particular case, and Hanssen is accused of providing the Russians with information that led to the execution of two American agents?

WOOLSEY: It is a reasonable argument to have, but both because of constitutional problems that Mark mentioned and because of their -- the existence of this gap of some years after he began to spy and then when he apparently started up again, there may have been a lot of material that he disclosed to the Russians, the Soviets, during those years that we don't know anything about yet. And the more we know, the more we are going to be able to limit other damage.

BLITZER: James Woolsey, Mark Hulkower, thanks for joining us.

WOOLSEY: Good to be with you.

BLITZER: Appreciate it.

And New York is morning tonight, as firefighters try to come to grips with the consequences of a deadly weekend blaze.

And on the "Leading Edge," the information age means criminals are finding it easier than ever to take over your life. Stay with us.

(COMMERCIAL BREAK)

BLITZER: In other news, U.S. military exercises resumed today on the disputed Puerto Rican island of Vieques: 17 people were detained for trespassing on the Navy bombing range. Protesters want the drills stopped immediately.

Last week, the Bush administration announced the exercises would end in May of 2003. Residents say they're at higher risk for cancer and subjected to dangerous levels of noise.

Japan's first female foreign minister paid a visit to the White House today. Makiko Tanaka is in Washington preparing for this month's visit by Japan's prime minister. Tanaka met separately with secretary of state Colin Powell and national security adviser Condoleezza Rice. Tanaka and Powell discussed the presence of U.S. troops on Okinawa, U.S. plans for a missile defense system, and Japan's attempts to restructure its ailing economy.

New York City firefighters are mourning three of their own. They died yesterday while fighting a five-alarm blaze at a hardware store in Queens. Today, ceremonial bunting was draped outside the firehouse where the three were based. Two other firefighters remain hospitalized. Officials are trying to determine what caused the fire.

Tonight on "The Leading Edge," a costly consequence of our information age: Your financial information's at risk. Banks and other institutions report so-called "identity theft" is on the rise. According to the Treasury Department, the number of cases of stolen credit card, checking account, and security numbers more than doubled in 1999. The most common ways: loss or theft of a purse, wallet, mail and fraudulent address changes.

Some California entrepreneurs say they have a solution for the world's energy needs. They've devised a way to harness power from the sea's rise and fall. Their Wave Rider uses a series of offshore floats to transmit that motion to underwater hydraulic pumps. Those pumps then drive turbines to generate electric power.

Up next, I'll open our mailbag. One of you has a different proposal to resolve the issue of live-fire bombing exercises in Puerto Rico, one that might eventually satisfy all concerned. I'll share it with you. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Time now to open our mailbag.

This reaction from Derek in Jersey City, New Jersey to my interview Friday night with Maryland's lieutenant governor, Kathleen Kennedy Townsend. "Wolf, great piece on the Kennedys. We as Americans respect their prowess in politics and have sympathized deeply in their losses."

Paul writes: "I think she will make one hell of a governor, and I too am still stinging from her father's savage death."

On the Bush administration's decision to end the live-fire bombing exercises on the Puerto Rican island of Vieques in two years, Jose writes from Plantation, Florida: "I am from Puerto Rico. While I understand that the U.S. military needs to be able to practice, why must it be done on an island where people live? Are there really absolutely no other places where this could be done?"

Lynn writes from Virginia: "Why can't the people of Vieques be compensated and relocated? There are only 9,000 people living there. Other government projects have displaced people before. People have been extremely unhappy before, but ultimately the projects were completed and life went on."

Remember, I want to hear from you. Please e-mail me at wolf@cnn.com. And you can read my daily online column and sign up for my e-mail previewing our nightly programs by going to my Web site, cnn.com/wolf. Please stay with CNN throughout the night. Michael Flatley of Lord of the Dance is Larry King's guest at the top of the hour.

Up next, Greta Van Susteren. She's standing by to tell us what she has -- Greta.

GRETA VAN SUSTEREN, HOST, CNN'S "THE POINT": Wolf, will they or won't they? Charles Barkley is going to join to tell me whether he and Michael Jordan are coming back to the basketball game.

Second, we have a controversy in Minnesota over a T-shirt. We have a high-school student who's gone to court because he wants to wear a particularly shirt -- Wolf.

BLITZER: Thanks, Greta. Sounds good. And this happy note: Congratulations to our executive producer, Sam Feist, and his wife, Danielle, on the birth of their first daughter, a beautiful daughter, Morgan Julia, born Friday night. Everybody is doing just fine.

Tomorrow night, Ford, Firestone and your safety. I'll with Congressman Billy Tauzin, who's investigating.

Until then, thanks very much for much for watching. I'm Wolf Blitzer in Washington. "THE POINT WITH GRETA VAN SUSTEREN" begins right now.

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