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Supreme Court Upholds Contribution Limits to Candidates; President Bush Touts His Faith-Based Initiative

Aired June 25, 2001 - 17:00   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.
ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

The Supreme Court adds its two cents to the debate over campaign finance reform.

President Bush holds a revival meeting of sorts on his faith- based initiative.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The days of discriminating against religious institutions simply because they are religious must come to an end if we want to heal America.

(END VIDEO CLIP)

ANNOUNCER: We'll explore the dramatic changes in the New Jersey governor's race, on the eve of the GOP Primary.

And before she disappeared, what was Chandra Levy's life in Washington like?

Now Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. The United States Supreme Court once again has laid down its view of the law on campaign money. Its bottom line: limits on contributions are constitutional.

Senator John McCain says the ruling increases the odds that his campaign finance reform bill will become law this year, although the decision does not address so-called "soft money," which McCain's bill would ban.

CNN's Charles Bierbauer explains what is in the ruling and the broader message it sends.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, POLITICAL AD)

NARRATOR: What's Randy Forbes doing for families and seniors? A lot.

(END VIDEO CLIP)

CHARLES BIERBAUER, CNN CORRESPONDENT (voice-over): Of course, political parties support their candidates. But the Supreme Court ruled that when the parties and candidates coordinate spending, that amounts to a contribution. And contributions, the court has repeatedly found, may be subject to limits.

REP. MARTY MEEHAN (D), MASSACHUSETTS: What the Court made clear was that the integrity of the contribution limits that are presently in the law should be upheld, and Congress can in fact pass legislation to uphold the integrity of those contribution limits. So I think it's a good decision.

BIERBAUER: Justice Souter, writing for the Court's 5-to-4 majority ruling on a Colorado campaign, said: "Donors give to the party with the tacit understanding that the favored candidate will benefit."

Independent expenditures to focus on issues or get out the vote are okay. But Justice Souter added: "If suddenly every dollar of spending could be coordinated with the candidate, the inducement to circumvent would almost certainly intensify."

Campaign limits are a Watergate legacy, designed to curb the corruption potential of unlimited funds and keep the party from being a direct funnel to the candidate. A donor may contribute up to $2,000 to a single candidate in any election cycle, and up to $20,000 to the party in support of the candidate. The Court's dissenters argue there's no proof such limits are necessary to prevent corruption.

Justice Thomas: "If indeed $20,000 is enough to corrupt a candidate, the proper response is to lower the cap."

The court has not addressed the unlimited soft money that may be given to political parties, and that is the keystone of campaign finance reform efforts.

SEN. MITCH MCCONNELL (R), KENTUCKY: This bill doesn't deal with hard money at all. It has no impact on what you can give to candidates directly, parties directly. It's apples and oranges.

BIERBAUER: And critics of the ruling add, what "coordinated" means is still a gray area.

(END VIDEOTAPE)

BIERBAUER: Campaign finance reform still has to clear Congress, and the setting now is that opponents are saying this doesn't mean anything, and proponents are saying this will provide impetus. What is clear is that the justices still feel that there is a significant concern about too much money being too corrupting, and that that argument, at least in their minds, outweighs the free speech argument in terms of people having the opportunity to spend their money where they want to -- Judy. WOODRUFF: Charles, how does this square with previous Supreme Court statements about campaign spending?

BIERBAUER: I think it's consistent. I think they have said all along, going to Buckley-Valeo, that there is a reasonable limitation that can be placed on the amount of money that is contributed. And if you didn't put this limit on the coordinated spending, you would really have a side channel into the candidates from the party, and that would amount to a -- a campaign contribution.

So what they've done is they've really sort of turned spending into a contribution in this context, but they have done that in several other instances, including a ruling just last year, which said it is permissible to limit the amount of money that comes in.

WOODRUFF: All right, Charles Bierbauer, thanks very much. Our man at the Supreme Court.

Now a discussion of today's High Court ruling and the political debate over campaign finance limits. We'll talk with Democratic National Committee chairman Terry McAuliffe in just a moment.

But first, I spoke a short while ago with Republican Senator Mitch McConnell, a leading opponent of fund-raising reform. I started by asking him if the Supreme Court decision hurts Republicans more than Democrats.

(BEGIN VIDEOTAPE)

SEN. MITCH MCCONNELL (R), KENTUCKY: I think Senator McCain had it right when he said on one of the weekend shows yesterday, this decision was unrelated to the current debates here in the Congress over soft money. This was a hard money decision. Frankly, all it did was uphold the status quo. I can't see how it alters the playing field one way or the other, in favor of the Democrats or the Republicans.

WOODRUFF: Well, whatever Senator McCain said over the weekend, he is now saying -- quote -- "Clearly, this decision demonstrates the McCain-Feingold restrictions on campaign contributions are constitutional."

MCCONNELL: Well, that's an interesting observation. It's at variance with what he said yesterday and of course, at variance with the case. The case was about what parties can do on behalf of their candidates in coordination with them. The Court had ruled five years ago it can do anything it wants to in expenditures of hard dollars without coordinating with candidates. So as a practical matter, there are no restrictions on what candidates can do -- on what parties can do on behalf of candidates in hard dollars. There weren't before today's decision and there aren't after today's decision. It really just upholds the status quo.

WOODRUFF: Let me also quote to you, Senator, something from Fred Wertheimer, who is the head of something called Democracy 21. I know you're familiar with them. They've been a major proponent of campaign finance reform.

Among other things, they're saying the Court has upheld the constitutionality of a campaign restriction enacted to prevent the evasion of federal contribution limits, and that is precisely what the soft money ban is. They go on to say a campaign restriction to prevent the evasion of existing federal limits on contributions.

MCCONNELL: Well, as I'm sure Fred Wertheimer knows, the Court has never restricted the use of soft money, which finances issue advocacy in this country. And since this case was not about soft money, it's about hard money, it really has no implications whatsoever for the debates we had here in the Senate earlier this year with regard to soft money -- and the debate coming up in the House, which is also a soft money debate.

WOODRUFF: So when Justice Souter writes, among other things he says, "We hold that a party's coordinated expenditures, unlike expenditures truly independent, may be restricted to minimize circumvention of contribution limits." You're saying you don't read that at all beyond what he's saying here?

MCCONNELL: Nor did Justice Souter. All of the kinds of expenditures he's talking about are hard money. Independent expenditures are hard money. Coordinated expenditures on behalf of -- for parties on behalf of candidates is hard money. All of the terms used in the Supreme Court decision, and the substance of the case, was about hard money. The debates we've been having here in the Congress this year have to do with the possibility of Congress restricting the use of soft money, an entirely different subject. Soft money has never been restricted by the Supreme Court in any way, going back to the Buckley case. And so, if and when that ends up in court, Judy, that will be a whole different kind of litigation.

WOODRUFF: Were you surprised by this ruling?

MCCONNELL: Not particularly. It upholds the status quo. And really, it doesn't inconvenience parties anyway, because the Court ruled five years ago that parties in hard dollars could spend anything they wanted to independently of the candidates, to benefit those candidates. That's -- that was the law before today, and that's the law after today.

WOODRUFF: I hear what you're saying about the -- in your view, it has no connection to the role of soft money. But let me just finally ask you: Does this not weaken the role overall of political parties by -- in other words, suggesting making it more likely now that candidates are going rely either on their own money or on completely independent contributions?

MCCONNELL: I think not. The parties will be able to do the same thing next week as they were able to do last week, which is to spend, independent of the candidates, as much hard dollars on behalf of the candidates as they choose. They just can't coordinate it with the candidate, so I think it will be hardly an inconvenience at all. And that's why I say, Judy, this essentially upholds the status quo under which parties for the last five years have been able to engage in independent expenditures, which are 100 percent hard dollars, on behalf of their candidates, as long as they don't coordinate it with them.

WOODRUFF: All right, Senator Mitch McConnell.

MCCONNELL: Thank you, Judy.

WOODRUFF: We appreciate it. Good to see you again.

MCCONNELL: Good to see you.

WOODRUFF: Thank you.

And now, as promised, we're joined by Democratic National Committee Chairman Terry McAuliffe.

Terry McAuliffe, I think you just heard Senator McConnell saying this really doesn't change a thing. It doesn't give either party an advantage or disadvantage.

TERRY MCAULIFFE, DNC CHAIRMAN: Yes, I clearly don't know what Supreme Court he was listening to, but this is a major blow to the Republican Party. They are now limited on the amounts of money they can give to the Congressional candidates. They are going to pour millions of dollars into those races. In fact, when the lower court ruled, and they struck down the limits, they called it a huge boost to their opportunity to go out and pick up more Congressional seats.

What this does is limit the amount of money in the political system, which is good. When you can take money out of system and take it back to the issues, take it back to the grassroots operations, we, the Democrats, do better. We do better when it's a discussion on the issues, and not because the Republican Party is going to spend millions of dollars out there to try and defeat a Democratic candidate. So it's a major blow to the Republican Party.

WOODRUFF: Well, how do you account for Senator McConnell's comment that when it comes to the main sources of money, this really does not change anything?

MCAULIFFE: Well, clearly, it's a limit on what the NRCC can spend on hard money for their congressional candidates. So I just don't understand where he's coming from.

WOODRUFF: Hard money, but it says nothing about soft money?

MCAULIFFE: Yeah, but it limits the amount of hard money. That's the first step. Next we'll move to the soft money. And I think Senator McConnell's trying to say that this was not an important decision because he does not want McCain-Feingold to go through, and he's sort of using this to say it's not a big deal. It is a very big deal today.

So here we are first today keeping the limits on hard money. Next, we'll move to McCain-Feingold, which, as you know, the Republicans oppose. They do not want to put a bill through. Trent Lott would not send it over to the House, but McCain-Feingold will be here.

We want to take the issue discussion to the American people. We want to talk about a patients' bill of rights. We want to talk about a prescription drug benefit, an increase in the minimum wage. Let's get money out of the system and take it back to the people through grassroots efforts. And when we do that, we do well.

If you look, Judy, they have spent millions of dollars, the Republicans have, over the last few years. Since 1994, they have not netted one House seat. Since 1996, they have not netted a Senate seat. And as you know, the Democrats have gotten more votes for their presidential nominee since the 1980s than the Republican candidate, because we're better on the issues.

So this is the beginning of the move for the Democratic Party. We've had a great year so far this year and we're going to continue along that path.

WOODRUFF: Do you think it's more likely that soft money limits, if not bans, are now more likely to be upheld as constitutional by the courts?

MCAULIFFE: I think there's no question about it. I think the Supreme Court ruling today clearly says that limits are fine and that we can put limits on hard money, but we can also get rid of soft money. It's good for the system. It allows us to go back and build the grassroots of our parties up and take it to the issues.

We always get outspent by the Republicans. By hundreds of millions of dollars over the last six years, we have been outspent by the Republican Party. We have done well with our candidates on a congressional, senatorial, presidential and local level because it's been an issue discussion. And now with Tom Daschle leading the Senate up there and fighting for those issues that affect families at their kitchen table every night, we're going to continue to do well.

WOODRUFF: How -- can you quantify how much it's worth to the Democratic Party?

MCAULIFFE: Well, I believe that the Republicans -- and they said it themselves last year with a lower court ruling -- that they were going to go out and spend millions of dollars against us in these congressional races around the country. So I think it takes anywhere from 50 to 100 million dollars out of the system. I think it's great for the system. I think it's great to take these races back out to the people.

WOODRUFF: All right, Terry McAuliffe, chairman of the Democratic National Committee, thank you very much. Appreciate you joining us.

MCAULIFFE: Thank you.

WOODRUFF: Well, President Bush tried today to revive one of his top legislative goals with help from a somewhat surprising ally. Mr. Bush announced the endorsement of his faith-based initiative at a mayors' conference in Detroit. Our Major Garrett was there.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN CORRESPONDENT (voice-over): President Bush turned to an American civil rights icon to boost his struggling faith- based initiative.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm extremely proud to announce that Rosa Parks, a monumental figure in the civil rights movement, has endorsed the initiative.

GARRETT: Parks refused to give up her bus seat to a white passenger seat in Montgomery, Alabama in 1955: the first of many decisive blows against Southern segregation.

In a letter from Parks' Institute for Self-Development, parks called the president's initiative to provide direct federal subsidies to support faith-based social services, quote, "a good beginning and one that we can support." And another key endorsement from the U.S. Conference of Mayors, most of whom are Democrats, like Marc Morial of New Orleans.

MAYOR MARC MORIAL (D), NEW ORLEANS: This president talked about an area with some passion of common ground: that is to enhance, to strengthen, to lift what mayors are already doing.

GARRETT: Critics say sending federal dollars to religious institutions erodes the constitutional wall separating church and state.

ELLIOT MINCBERG, PEOPLE FOR THE AMERICAN WAY: It would say that government can provide funding to organizations that use their government funds to discriminate on the basis of religion or other grounds, and to proselytize, to promote their religious views with government funding.

GARRETT: To address these concerns, the president said funds will be spent on social services, not religious ones. And he also pledged to create secular alternatives to faith-based social programs.

Still, the initiative is bogged down in Congress, and Mr. Bush asked the mayors to help him break the logjam.

BUSH: And I hope you'll make your support of this legislation known to the skeptics in the United States Senate and United States House.

GARRETT: Recruiting Rosa Parks and the nation's mayors is part of an emerging White House strategy to win the support of African- Americans in Congress.

(on camera): Next, the president will try to mobilize minority voters and those who represent them in Congress by reminding them that faith-based groups could well-use extra federal funds to feed, cloth and house the poor in cities across America. Major Garrett, CNN, Detroit.

(END VIDEOTAPE)

WOODRUFF: Raising a question: What happened politically to the president's faith-based initiative? That's a question for our senior political analyst Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: What happened is it never got off the ground. It has been declared dead, at least in its current form, for this Congress.

The fact is there's been a problem of what I'd call benign neglect. The administration never bothered to build a political coalition behind it, because the White House was preoccupied with other priorities like the tax cut and the education bill.

The American public is actually split on this issue. Here's the evidence. When we asked about it back in February, 48 percent favored using government funds to help religious organizations provide social services, 44 percent were opposed.

The issue clearly touches a political nerve. Republicans and conservatives favored it by better than 2 to 1, Democrats and liberals opposed it by about 2 to 1. When an issue is that controversial, members of Congress don't want to touch it. So the president has to figure out a way to ratchet up public pressure.

WOODRUFF: So is that what the president was doing in Detroit today?

SCHNEIDER: That's exactly what he was doing and he was trying to expand his coalition. Now, what other constituency besides Republicans and conservatives supports the president's faith-based initiative? The answer is churchgoers.

Now, at the major -- the mayor's conference in Detroit, President Bush was hoping to find a lot of voters who have not been friendly to him, but who might be friendly to his faith-based initiative.

Here's the evidence: Bush got wiped out in the cities last year. Only 35 percent of urban voters voted for him, but 42 percent of urban voters attend church regularly. Inner-city churches provide a lot of social services. They are desperate for money and so are the mayors. Most mayors are Democrats. Only 11 percent of Democrats voted for Bush last year, but 39 percent of Democrats go to church.

Imagine! Democrats in church!

Bush wants to ratchet up pressure on those Democrats in Congress to pass this thing.

And finally, African-Americans: They certainly didn't vote for George Bush. But most African-Americans are regular churchgoers. And now that Bush has Rosa Parks' endorsement, maybe blacks will be friendlier to his proposal. WOODRUFF: Well, Bill, what does the president have to do to his proposal to bring it back to life?

SCHNEIDER: Well, I'd say there're, right now, there are three sources of opposition to the president's initiative: civil rights groups, who are concerned about discrimination; civil libertarians, who are concerned about the separation of church and state; and Christian conservatives, who are concerned about government restrictions on their activities.

Now, President Bush has to reassure civil rights groups that the money will not be used by religious groups that discriminate. In fact, today he talked about ending discrimination against religious group. He's got to reassure civil libertarians that the money will not be used to subsidize religious activities. And he's got to reassure Christian conservatives that the money won't come with too many strings attached. That is what I'd call a really political balancing act.

WOODRUFF: All right, Bill Schneider, thanks very much.

The daily routine of a Washington intern. The unsolved mystery surrounding Chandra Levy and the latest on the police investigation, coming up.

Also ahead, the big money battle over the patients' bill of rights as lobbyists on both sides begin an all-out advertising offensive.

Plus, Janet Reno and the Democratic contenders: a look at Florida's would-be challengers to Governor Jeb Bush. This is INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: For once, the boxing metaphor is apt. The New Jersey Republican gubernatorial primary turned into a literal brawl yesterday, as supporters of Jersey City Mayor Bret Schundler fought backers of former Congressman Bob Franks on a street corner in Union City. The Schundler campaign says that Schundler himself helped break up the fight. The candidates themselves are going at it in TV ads, with Franks accusing Schundler of improperly using money for a kids charity to pay for campaign spots, and Schundler accusing Franks of lying.

(BEGIN VIDEO CLIP, "FRANKS CAMPAIGN AD")

NARRATOR: The $885,000 Schundler spent promoting himself was as much as the charity spent in five years educating children. Schundler cheated kids out of a better future and instead promoted himself. Schundler calls himself a courageous reformer, but taking money from needy children isn't courageous, it's just wrong.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP, "SCHUNDLER CAMPAIGN AD") NARRATOR: Bob Franks is losing, so he's lying. "The New York Times" calls the ads "misleading" and "brutal." "The National Review" calls Franks' attacks "insulting" and "dishonest." "The Star Ledger" says "Franks veers toward the sensational." WNBC says "the ad is not true." The truth: Bob Franks offers only lies and attacks. Republican Bret Schundler offers tax cuts and real reform.

(END VIDEO CLIP)

WOODRUFF: According to the most recent polls, Franks is behind, despite the fact that he has the backing of the state Republican Party establishment. A short time ago, I sat down with CNN political analysts Stu Rothenberg of "The Rothenberg Political Report" and Charlie Cook of "The National Journal." I asked them how this primary got to be so hot.

(BEGIN VIDEOTAPE)

CHARLES COOK, "NATIONAL JOURNAL": I think a lot of us may have forgotten that the base turns out in primaries, and that Bret Schundler, the conservative of the two, appeals to the party base and particularly in a hot summer primary, those are the people that are most likely to turn out in a primary.

WOODRUFF: Does that explain it?

STU ROTHENBERG, "ROTHENBERG POLITICAL REPORT": Well, I mean, that's part of it. I think Bob Franks got on the defensive and decided he had to attack Schundler, I think Franks doesn't come across well on the attack. I think he appeared negative. I think he also appears to be the career politician.

And Schundler is attractive, you know, kind of tall and articulate. He's more of an outsider, and I think he's created the impression that he's got some new ideas, he's dynamic, and Bobby Franks is old hat.

COOK: Also I think you can say Schundler has got this sort of positive economic growth message that is really sort of upbeat, can- do. The guy is very, very impressive in a meeting.

WOODRUFF: But how conservative is he? I mean, and -- and conservative on what issues? Charlie, you were talking before this interview about that?

COOK: He's pretty conservative across the board, but when you talk to him with economic issues, you can tell he feels it, he pushes it, he lives and breathes economic revitalization, those kinds of things, as he did in Jersey City. And while he takes conservative positions on the social and cultural issues, I tried to give an opportunity to really kind of take the ball and run with it. And you could tell that, yeah, that's the position he has, but he didn't seem to have the zeal for that, for the social cultural side that he had for the economic message.

ROTHENBERG: I think Charlie is right on this, that he is quite conservative across the board -- on guns, and abortion, and school choice, for example -- but he's not trying to run on that. Having said that...

WOODRUFF: You think he is deliberately staying away from it?

ROTHENBERG: Having said that -- well, I think he understands that in races you talk about what voters are interested in, you try to win an election. I'm not suggesting that he is running away from his positions, but it's not his No. 1 item to communicate.

Having said that, I'm going to throw some red meat out to the conservatives who are always complaining: I think his problem, in this primary and in general, is that for the Jersey and the New York/New Jersey media, every time he's described it's extreme conservative, radical conservative. So I don't think they are letting him run as a more -- as just an anti-tax conservative. They are trying to paint him as an extremist.

COOK: It kind of reminds me of a Senate race a few years ago in Illinois with Peter Fitzgerald and Carol Moseley-Braun, where Fitzgerald was sort of painted as a candidate who was to the right of Attila the Hun, where actually he turned out to be fairly moderate. When we met with him, we thought, hey, this is a pretty sane candidate, but to you hear people talk, you know, he was like foaming at the mouth.

WOODRUFF: Stu, Bob Franks, choice of the establishment, is this going to be an embarrassment for the Republican establishment in New Jersey if Franks doesn't win this primary?

ROTHENBERG: Oh, my goodness, it will be both a huge embarrassment to the establishment and a blow, because their political power is based on nominating candidates like this and controlling the organizations, and if they can't control it, the power of the New Jersey Republican Party is dramatically eroded, or at least cast in doubt.

So, this is both inside and outside. In the inside, it's the power of the county Republican organizations. In terms of the outside, it's Bret Schundler running for governor. Those are two separate aspects, but they are related.

COOK: And then it relates to the Senate race next year, to take -- you know, who's going to take on Bob Torricelli, which is definitely a nomination worth having. Is it that nomination with Bob Franks for the asking, and frankly, I think sort of his blandness but widely acceptable image that he projects would have been perfect for that, where "I'm not controversial like this guy, elect me, I'm not threatening," that's the race he should have been in.

WOODRUFF: Just quickly, let's move to Virginias, that special election, Virginia's 4th Congressional district last week, Louis Lucas, the Democrat, defeated by the Republican Randy Forbes. Many people are saying this was a referendum on Social Security and the president's ideas on Social Security. Is that what we had here, Charlie? COOK: You had 90-something percent of the whites voting for the Republican candidate, 90-something percent of the blacks voting for the Democratic candidate. This race never moved beyond race, and that's unfortunate and it's too bad. You know, we'd like to be beyond that, but the race never -- the contest never moved beyond race, and it wasn't about any issue, and I think a lot of these are self-serving arguments.

ROTHENBERG: I think Charlie's right. I mean, in theory, if Social Security and HMO reform and the like had taken hold as issues, that well might have produced a Louise Lucas win. Having said that, this election was overwhelmingly about race. I don't see any huge national implications, but that won't stop people from claiming there are some.

COOK: There may not be a single race next year that replicates -- a hotly contested, major race that replicates this contest in terms of close race, big stakes, black/white, like this.

WOODRUFF: Quickly, the Supreme Court ruling today to uphold limits on spending by the political parties in coordination with the campaigns of congressional candidates. What does this say about McCain-Feingold, if anything, Stu?

ROTHENBERG: I was a little bit surprised by the decision, but I think it says almost nothing about McCain-Feingold. We were expecting all of this to be blown for there to be the wild, wild west in campaigns where anything goes, any spending goes. The court said that's not the case, in terms of coordinated expenditures by the NRSC and the DSCC.

But I think we still have great uncertainty about limits on soft dollars until Supreme Court Justice Sandra Day O'Connor tells us what the law is, and apparently she's going to be deciding all these cases by herself, so we just have to look to her, forget about the rest of the court.

WOODRUFF: She certainly had a say in this one.

COOK: And the good thing is that she's the only member of the Supreme Court that's ever been elected to anything, so if one of them is going to be the swing vote, better her. I was surprised, I kind of thought that they were just going to throw out limits altogether, but it shows that rather than the wild, wild west, as Stu described, maybe it's just the wild west. There aren't many limits, but there are going to be a few.

WOODRUFF: All right. Well, everything is wild, and we have Charlie Cook and Stu Rothenberg. Thank you both. We appreciate it.

(END VIDEOTAPE)

WOODRUFF: Natural disasters in two different parts of the world have taken dozens of lives and forced thousands of people from their homes. The death toll from Peru's massive earthquake continues to climb, and the number of Filipinoes chased from their homes by an erupting volcano could also rise. We'll bring you a news update when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

WOODRUFF: We will have more of the day's political news coming up, but now a look at some other top stories.

There's another indication today that accused terror-mastermind Osama bin Laden is planning to attack Americans. A television network in Saudi Arabia quotes an aide to bin Laden as saying strikes will occur within the next three weeks. The report is being denied by another bin Laden aide, but it echoes a recent warning by the U.S. State Department, of potential attacks against U.S. citizens by militants linked to bin Laden.

In Houston, a mother accused of killing her five children is said to be in a deep, psychotic state. Her lawyer says he is considering an insanity plea for Andrea Yates. But while he has met with her on several occasions, he has not been able to have, what he calls, "a rational conversation" with her.

(BEGIN VIDEO CLIP)

GEORGE PARNHAM, DEFENSE ATTORNEY: She is suffering at this moment, from the depths of an acute psychosis, she is being treated mentally by the staff's psychiatrist, and I am certain receiving anti- psychotic medication, she is on a 24-hour acute suicide watch. There is a qualified mental health person with her 24 hours a day.

(END VIDEO CLIP)

WOODRUFF: Last week, police say she systematically drowned her five children, who ranged in age from 6 months to 7 years.

British officials are preparing to release two teenagers convicted in the 1993 death of a toddler, but concealing their identities to protect their safety is turning out to be much harder than first suspected. ITN correspondent Helen Wright has this report.

(BEGIN VIDEOTAPE)

HELEN WRIGHT, ITN CORRESPONDENT (voice-over): Time has done little to lessen Denise Fergus' pain. She says her life is consumed with hatred and anger, (UNINTELLIGIBLE) newspaper interview since her sons' killers were granted their freedom, she also says they will always be in danger.

"I believe they will die because people are going to ensure that is what will happen. And if somebody does kill them, I'll be by their side in court."

But the father of 2 year-old James, who was abducted and killed eight years ago, says he doesn't want any vigilante campaign. In a separate interview, Ralph Bulger says, "We do not to see the wrong people hunted and attacked, because at the end of the day, that would be in James' name." But fears are growing that when Robert Thompson and Jon Venables are freed, their whereabouts and new identities will be revealed. And legal experts say a high court injunction protecting their anonymity can be breached from abroad.

DUNCAN LAMONT, LEGAL EXPERT: If the foreign press is as interested as it seems that they are -- and there's a lot of interest at the time -- and the photographs are made available, I think that there is a strong chance that they will publish them. And that cause them real problems in keeping that information out of Britain.

WRIGHT: One paper, "The Manchester Evening News," has published some information that has caused some concern. The paper says that it would never knowingly breach any injunction but is waiting to hear if the attorney general will take any action.

Helen Wright, ITN.

(END VIDEOTAPE)

WOODRUFF: A freeze is being predicted tonight in parts of Peru, where an earthquake hit. Relief officials are trying to rush blankets and tents to the tens of thousands of families left homeless by the quake, and the American Red Cross is sending a team of experts, expected to arrive tomorrow. At least 78 people died in the quake Saturday. More than 1,000 were injured.

In the Philippines today, government officials warned evacuees that an erupting volcano continues to pose a threat. Despite those warnings, a number of residents reportedly returned to villages inside a government-declared danger zone. Experts say the eruption that started yesterday could last up to two weeks.

Congress forges ahead crafting the patients' bill of rights. Should workers be allowed to sue their employers in health care disputes? The battle lines are drawn on Capitol Hill.

(COMMERCIAL BREAK)

WOODRUFF: The Senate opened a second week of debate today on patients' bill of rights legislation. Senate Democrats hope to push through some changes to their bill as soon as tomorrow to bolster its prospects for passage and to make it tougher for President Bush to veto. CNN's Patty Davis has more on the Senate battle.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): Lobbyists from the National Federation Of Independent Business are trying to cement the opposition to the Democratic-backed patients' bill of rights. And in its war room, the group is preparing to send letters to Capitol Hill from small business owners worried the bill's impact.

DAN DANNER, NATIONAL FEDERATION OF INDEPENDENT BUSINESS: We believe it will increase the cost and therefore cause more people in the small business community to lose their coverage. DAVIS: The American Medical Association and other groups are also working Capitol Hill hard to make the case that a broad patient protections bill is needed now.

RON POLLACK, FAMILIES USA: We're trying to make sure that there is no confusion about this legislation. If everybody understands this legislation, this thing is going to pass.

DAVIS: As the Senate this week moves toward a final vote on a patients' bill of rights, Capitol Hill is under siege. This is the biggest health care lobbying effort since President Clinton's failed health care plan in 1994. In this fight, some of the nation's largest and most powerful trade groups are going head to head.

Opponents include major business groups -- the National Federation of Independent Business and the U.S. Chamber of Commerce, the HMO's trade group, American Association of Health Plans and the Health Insurance Association of America. They worry it will spark frivolous lawsuits against employers and others, and would allow big damage awards.

The bill's supporters include the American Medical Association, or AMA, Association of Trial Lawyers of America and consumer groups such as Families USA. They argue more patient protections are needed, including the right to sue. Both sides have launched an advertising war.

(BEGIN VIDEO CLIP, "HEALTH BENEFITS COALITION AD")

NARRATOR: It allows lawsuits against employers.

UNIDENTIFIED MALE: That could cost me my business.

(END VIDEO CLIP)

DAVIS: This AMA radio ad made its debut Monday.

(BEGIN VIDEO CLIP, "AMERICAN MEDICAL ASSOCIATION AD")

NARRATOR: When voters go the polls, they will remember whether you voted for patients or for HMOs.

(END VIDEO CLIP)

DAVIS: The HMO trade group is budgeting $3 million to $5 million for its lobbying effort this year, saying it will spend as much of that as it takes to defeat the patients' bill of rights.

(END VIDEOTAPE)

DAVIS: Now, Judy, with most Americans supporting some type of patients' bill of rights, both sides are lobbying intensely to try to get lawmakers to come over to their point of view -- Judy.

WOODRUFF: Patty, tell us what is the status of efforts to modify the language with regard to the liability of employers? DAVIS: Well, as you know, that Phil Gramm amendment is expected to come up for a vote tomorrow. That's the one that exempts employers from litigation, that exempts them from being sued on this issue.

Now that's expected to be a very key issue, all of these sides are lobbying very heavily on it, but Republican moderate Senator Olympia Snowe from Maine is trying to work up some middle ground. She's working on a compromise. In fact, Olympia Snowe went to the White House today, talking with Andrew Card, the chief of staff for President George W. Bush. Sources however say that this compromise is not a done deal yet. It's still works in progress -- Judy.

WOODRUFF: All right. Patty Davis at the Capitol, thanks.

Newly-independent Senator James Jeffords of Vermont has signed a two-book deal with Simon & Schuster to tell his story. The first book will be called "My Declaration of Independence," and it will deal with Jeffords' switch from the Republican Party last month which gave Democrats control of the Senate. The second book is said to be a broader work which will include Jeffords' views on politics in America. According to some reports, the advance is believed to be in the, quote, "low six figures."

Florida Democrats turn out in force and get an early look at potential party candidates for governor. Up next, Janet Reno and others help to raise money and rally the faithful for the upcoming race against Jeb Bush.

(COMMERCIAL BREAK)

WOODRUFF: Former Attorney General Janet Reno took phone calls today on a Spanish-language radio program in Miami. Reno, who is considering a run for governor against the incumbent, Jeb Bush, took a number of calls from the area's Cuban exile community. Many of the callers said they were still angered by Reno's handling of the Elian Gonzalez case.

Reno is one of several potential Democratic candidates for Florida governor who attended a weekend fund-raiser. CNN's Mark Potter has more on the event and the potential candidates.

(BEGIN VIDEOTAPE)

MARK POTTER, CNN CORRESPONDENT (voice-over): At a crowded fund- raiser in Miami Beach, Florida Democrats still smarting from last year's election, set their sites on Republican Governor Jeb Bush. The event raised $750,000, and allowed six potential Democratic challengers to make their pitch.

JANET RENO, FORMER ATTORNEY GENERAL: Hello.

UNIDENTIFIED FEMALE: Hi.

RENO: How are you? I'm so glad you could be here tonight.

POTTER: Best known by far is former Attorney General Janet Reno, who already appears to be campaigning, but says she is still undecided about entering the race. Before her address, Reno drew enthusiastic applause and chants of "run, Janet, run."

RENO: The voices of every single Floridian should be heard, not just the voices of the rich and well-connected. The voices of everybody should be heard in government at every level.

POTTER: State Senator Daryl Jones, an announced candidate, was more to the point.

DARYL JONES (D), FLORIDA STATE SENATOR: And if you don't fight for what you want, then you deserve exactly what you get. Make me your governor, and I will make you proud.

POTTER: Others attacked Governor Bush. Among them, Congressman Jim Davis from Tampa.

REP. JIM DAVIS (D), FLORIDA: In the spirit of possibility rather than mediocrity, my fellow Democrats, can the state of Florida do better than Jeb Bush?

UNIDENTIFIED CROWD: Yeah!

MAYOR SCOTT MADDOX (D), TALLAHASSEE, FLORIDA: I'm sick and tired of a governor who never went to public schools telling me how to fix them, it's to take the money out, put it in private school.

POTTER: Other potential candidates include Pete Peterson, U.S. ambassador to Vietnam, Lois Frankel, Florida House Democratic leader, and Bill McBride, the managing partner of a law firm. Political analysts warn Democrats should not sell Jeb Bush short.

MARK SILVA, POLITICAL EDITOR, "ORLANDO SENTINEL": Day in and day out, they are underestimating the governor. He is popular, he is a strong campaigner, he's got a record to run on now. He's going to raise a lot of money. He'll be a formidable candidate.

POTTER: The evening was about more than just gubernatorial politics. The keynote speaker, Senator Joe Lieberman, has visited Florida three times since he and Al Gore lost the presidential election and the state's controversial recount. Lieberman is said to be looking seriously at the 2004 presidential bid, using Florida as a key electoral base.

SEN. JOE LIEBERMAN (D), CONNECTICUT: I know there are some people who say that your governor deserves to lose just because of what he did to Al Gore and me last fall. But I'll tell you, the truth is he deserves to lose because of what he's done to the people of Florida for the last three years.

POTTER: And election day is still a year and a half away.

Mark Potter, CNN, Miami.

(END VIDEOTAPE) WOODRUFF: And new stirrings on the presidential campaign trail. Massachusetts Senator John Kerry was in Iowa over the weekend, the state which is home to the first of the nation's presidential caucuses. Senator Kerry attended a fund-raiser for Democratic Governor Tom Vilsack. Kerry said he was in Iowa simply because the governor invited him, and that he has not made up his mind about a possible presidential run in 2004.

Former senator and presidential candidate Bill Bradley was also in Iowa this weekend. Bradley attended two fund-raisers for state Democrats, and called on the National Democratic Party to stand up to President Bush. As for a possible second run for the party's nomination, Bradley said that he was in Iowa to -- quote -- "maintain friendships."

The latest on efforts to preserve some forgotten chapters in American history, when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RICHARD MOE, HISTORIC PRESERVATIONIST: Not every community has an Independence Hall or a Mt. Vernon, but every community has something, some landmark that makes it unique and special. These places really tell America's story. Losing them would be unthinkable.

(END VIDEO CLIP)

WOODRUFF: The truth is, many people are thinking the unthinkable. In their fight to save landmarks across the country, success may hinge on getting on a special list for endangered historic sites.

CNN national correspondent Eileen O'Connor has an inside view of one struggle here in the nation's capital.

(BEGIN VIDEOTAPE)

EILEEN O'CONNOR, CNN NATIONAL CORRESPONDENT (voice-over): This run-down row house in Washington, D.C.'s Shaw neighborhood is just one site both honored -- and shamed -- to be included on the 2001 list of the 11 most endangered historic sites, according to the National Trust for Historic Preservation.

PETER BRINK, HISTORIAN: It has to be a historic place that's really special -- special in terms of history, architecture, the way people feel about it -- and it has to be threatened.

IRENA WEBSTER, PRESERVATIONIST: This is the Carter G. Woodson Home, that has been...

O'CONNOR: Known as the father of black history, Carter Woodson founded the first publishing company to accept African-American authors, the first to chronicle African-American culture and history. WILLIAM SIMONS, PRESERVATIONIST: The capital was built by slave labor. Carter G. Woodson knew that, and he wrote about that in many of his works. But to the rest of the people, they were totally ignorant of that fact.

O'CONNOR: Irena Webster wants to renovate these crumbling walls and use Woodson's home as an office for the association he founded to study black history. She also wants to buy two adjoining buildings for an education center.

WEBSTER: He started the Associated Publishing Company right here. And this is history, and the students, the youth, need to know that. The community needs to know the value of what this man has done.

O'CONNOR (on camera): So it's not just a building?

WEBSTER: No, it's just not a building, it's an institution.

O'CONNOR (voice-over): Along with Woodson house, the list for 2001 includes a Chinese temple in California, buildings in Texas from early Spanish settlements, the Telluride Valley in Colorado, and a barn in Indiana. Over the last 14 years, 120 historic sites like the Woodson House have been listed. Only one has been lost.

(on camera): Renovations are estimated to cost $700,000. To build the Carter G. Woodson educational center, 5 million. The hope is that by designating this site as one of the most endangered historic sites, this project will get the spotlight and the funds it needs.

Eileen O'Connor, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Beware: drivers in one state, get those hands off the cell phone and back on the wheel -- or else! The story coming up later on INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Hold the phone! New York state is poised to put the brakes on dialing and driving.

Also ahead: New haggling over California's big power bills, and demands for a refund.

And later: The life Chandra Levy led before the former government intern vanished eight weeks ago.

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

WOODRUFF: Welcome back to INSIDE POLITICS. New York is about to become the first state to ban handheld cell phones on the road, paving the way, it seems, for a national political trend. The state assembly is expected to give final legislative approval to the bill this evening and to send it on to Governor George Pataki.

CNN's Jason Carroll has more on the measure and how it gained momentum.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT (voice-over): The movement to ban handheld cell phones in New York began on 4th Avenue in Brooklyn. And that's where, back in 1996, Felix Ortiz saw an accident. A woman had just crashed into a pole, a minor local accident that would inspire a major change in state law.

FELIX ORTIZ, N.Y. STATE ASSEMBLY: And I asked, "Are you drunk?"

And the person said to me, "I am not drunk. It was because of this cell phone."

CARROLL: The state assemblyman sponsored a bill to ban the use of handheld cell phones while driving. Governor George Pataki has said he would sign the bill, making New York the nation's first state to pass such a law.

GOV. GEORGE PATAKI (R), NEW YORK: We hope that people have enough respect for the law that they stop now because it is a danger; it is a distraction.

CARROLL: The April accident involving model Niki Taylor was the most publicized recent example. The driver later said his cell phone had distracted him. Taylor is still hospitalized.

Sharon Arnett has used her cell phone while commuting to work, but admits the ban is a necessary inconvenience.

SHARON ARNETT, DRIVER: I think it's terrible, but I think it's needed.

CARROLL: The cell phone industry has spent millions on ads opposing a ban, calling for education, not legislation.

(BEGIN VIDEO CLIP, CELLULAR TELECOMMUNICATIONS & INTERNET ASSOCIATION AD)

UNIDENTIFIED MALE: Ask yourself: Is this call necessary?

(END VIDEO CLIP)

CARROLL: This spot promotes hands-free phones, which are acceptable under New York's new law. But they are not acceptable to the AAA.

MANTILL WILLIAMS, AAA SPOKESMAN: So we need to be very clear that going from a handheld device to a hands-free device does not eliminate the danger of talking on a phone while driving.

CARROLL: Sales rep and avid hands-free user Joanne Aizen explains why. JOANNE AIZEN, HANDS FREE USER: It's not going to make that much of a difference.

CARROLL (on camera): It's still a distraction.

JOANNE: Still a distraction. Your cell phone is a distraction in the car, no matter what.

CARROLL (voice-over): Even Ortiz would like to see a total ban on cell phone use in cars, but he said that legislation would not have passed. And his bill, at least, heads in the right direction.

ORTIZ: It's a public-safety, quality-of-life type of legislation that we must pursue.

(END VIDEOTAPE)

CARROLL: And the assembly should take a vote on this by early evening, possibly even within the hour. This bill should become law and then go into effect some time in November. That's when police are going to start handing out tickets, and a ticket could cost upwards to $100 -- Judy.

WOODRUFF: Jason, at this point, are there other states considering similar legislation?

CARROLL: Well, Judy, we've been told that there are at least two dozen other states that are considering similar types of legislation. And Congress, as you know, is considering a nationwide ban as well.

WOODRUFF: All right, Jason Carroll, reporting from New York. Thanks.

Here in Washington, closed-door talks got under way today, to hash out what could be billions of dollars in overcharges and and unpaid bills in California's energy crunch. Meantime, in the GOlden State, Governor Gray Davis met with people he has characterized as heroes of the power struggle.

We have a report now from CNN's James Hattori.

(BEGIN VIDEOTAPE)

JAMES HATTORI, CNN CORRESPONDENT (voice-over): California Governor Gray Davis publicly thanked three former workers at a San Diego area power plant. Whistle-blowers who allege the plant owner, Duke Energy, reduced operations during a statewide power alert, used a high-cost gas turbine generator as much as possible, and threw away spare parts which increased maintenance downtime.

GLENN JOHNSON, FORMER PLANT WORKER: I have never, ever been told to deliberately take a piece of equipment out of service to limit the load. But I have been told to take pieces of equipment out of service to work on when they knew that I did not have the parts to repair them. HATTORI: They're the first workers to publicly question plant operations which, according to state officials, resulted in higher electricity prices. North Carolina based Duke Energy says it was operating the plant, ramping up and down, based on orders from state officials, and that the workers may not have been privy to why the company did what it did.

Still, Governor Davis lauded the workers as heroes.

GOV. GRAY DAVIS (D), CALIFORNIA: They're fighting back. We're fighting back, and the fact that they have come forward today allows us to make even a stronger case.

HATTORI: That fight has shifted to the Federal Energy Regulatory Commission, where California officials began a 15-day settlement conference demanding the $9 billion refund, for what the state claims are overcharges by power companies and utilities.

DAVIS: They're going back there for one reason: to bring $9 billion home. That's their mission. They're not coming back until their mission is completed.

JEN SMUTNY-JONES, INDEP. ENERGY PRODUCERS: California right now has generated a lot of heat, not a lot of electricity out of this debate, and it's important to sell these issues.

HATTORI: A spokesman for private power companies in California says if the state won't back down from its $9 billion refund demand, a quick settlement is unlikely.

JONES: This raises three questions. One is: refunds for what? Because thus far, no one has proven anyone's done anything wrong, certainly not in a general manner.

Secondly, it's a little hard to get refunds if people haven't been paid.

And thirdly is the amount, and as I said, I don't -- I would not expect the settlements to result in a refund of $9 billion.

(END VIDEOTAPE)

HATTORI: If, after that 15-day settlement conference, an agreement is not reached, and it looks like there's a good possibility of that, then the administrator law judge overseeing the case will make his own recommendation. Last week he said he thought the overcharges amounted to several million dollars.

And, Judy, just to put this in perspective, the governor today here in California said he thought that the state would end up paying somewhere around $47 billion for emergency power in 2001 -- Judy.

WOODRUFF: James, we know there's a lot of politics associated with all of this. There have been a number of television ads running in the state recently paid for by Republicans, criticizing the governor, now the governor using this news conference today. How is the public separating what's real from the politics?

HATTORI: Well, clearly the governor is under a lot of pressure to look as though he's doing something. And he's trying to sue the energy companies, now he's going before the regulatory commission. But the energy companies themselves also have an incentive to try and end this debate. They don't want a lot of investigations in doing what they're -- how they operate their businesses.

What the public decides -- the public will be happy just to get something settled and get some money back, some of the charges that were levied by these eneryg companies, I'm sure. But it's hard at this point because the talks are going on, as you say, behind closed doors.

WOODRUFF: All right, James Hattori. Thanks very much. Appreciate it. Also in California today, the world's biggest annual biotech conference opened in San Diego with a panel on genetically altered food.

That is one of several contentious issues facing the industry, issues that sparked protests over the weekend as CNN's Frank Buckley reports.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT (voice-over): Loud and sometimes colorful protesters took to the streets in downtown San Diego to demonstrate against Bio 2001, billed as the world's largest biotech event.

Demonstrators billing their counterconvention as Bio Devastation 2001. Inside the convention hall, developments and genetic research to be discussed. Francis Collins and Craig Venter, involved in the mapping of the human genome, to serve as featured speakers.

CARL FELDBAUM, BIO 2001 ORGANIZER: So, a great deal of the work here, that the talks, the workshops, the seminars will involve how to use that genetic information to provide new therapies and cures for people who have life-threatening diseases.

DENY GRADY, CANCER PATIENT: Thirteen years ago at the age of 29, I was battling for my life trying to make my 30th birthday. And due to accessing cutting edge technology and biotech technology, I'm here.

BUCKLEY: But protesters say genetic information can also hurt patients through potential discrimination in employment and insurance. Critics of the biotech industry also arguing against what they see as a corporate globalization of food and medicine.

BRIAN TOKAR, PROTEST ORGANIZER: We don't believe that the corporations that have brought us 60 years of chemical disasters should be trusted with the future of our food and our health.

BRIAN LEAHY, ORGANIC FARMER: I want to know what's going on in my body and my daughter's body when they feed corn to us that's been genetically altered. They don't know. They can't tell you.

BUCKLEY: But industry spokesmen say their products receive close scrutiny from government agencies.

FELDBAUM: The Food and Drug Administration, the FDA is the platinum standard globally, and biotech foods and biotech drugs are the most regulated and this is the most regulated industry in the world.

BUCKLEY (on camera): San Diego officials, meanwhile, are concerned that protesters may attempt to disrupt the sunny calm of the city with more demonstrations. Protesters have promised acts of civil disobedience. Police have promised to maintain a large presence on the streets through the rest of the convention.

Frank Buckley, CNN, San Diego, California.

(END VIDEOTAPE)

WOODRUFF: The staggering human cost of AIDS, and what it will take to reverse the worldwide epidemic. Just ahead, Secretary of State Colin Powell joins discussions at the first U.N.-sponsored conference on AIDS.

(COMMERCIAL BREAK)

WOODRUFF: Secretary of State Colin Powell begins a three-day trip to the Middle East this week. The visit will follow Powell's meeting tomorrow here in Washington with Israeli Prime Minister Ariel Sharon. Also on the Israeli prime minister's Tuesday agenda: a White House meeting with President Bush. Here's CNN's State Department correspondent Andrea Koppel.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT (voice-over): President Bush has a dual purpose in meeting with Prime Minister Sharon on Tuesday: to publicly praise him for Israel's recent military restraint, while at the same time to privately encourage Sharon to show more flexibility in his negotiating position with the Palestinians.

EDWARD WALKER, MIDDLE EAST INSTITUTE: It could blow up any day. Another incident or two that -- you got to remember that Sharon's supporters are pushing him real hard to do twice as much as he's doing, and you can only hold off your supporters so long and survive politically.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Welcome, Mr. Prime Minister.

KOPPEL: U.S. officials say Sharon's second trip to the White House could give him a boost back home, but they question whether Sharon will be ready to soften his position on two key issues by the time Secretary Powell arrives in the region later this week. Those issues include his demand for zero Palestinian violence in order for Israel to go forward with implementing confidence-building measures, for instance, permitting Palestinians to return to their jobs in Israel, and his refusal to freeze future growth of Israeli settlements.

Powell has said he believes the purpose of his trip is to connect the dots between the Israeli-Palestinian cease-fire, brokered by CIA Director George Tenet, and the Mitchell Committee report which recommends specific steps to move the parties back to the peace table.

COLIN POWELL, SECRETARY OF STATE: At some point, a time table will be necessary. Otherwise, you won't have a road map to follow. But it is not a condition of my trip, and it is not something that I find I have to have in place before I make the trip or before I arrive.

KOPPEL (on camera): But U.S. officials tell CNN when Powell arrives in the region on Wednesday, he does plan to present both sides with what one official described as quote, "a loose timeframe" for moving quickly forward from the cease-fire into confidence-building measures and ultimately back to the peace table.

Andrea Koppel, CNN, the State Department.

(END VIDEOTAPE)

WOODRUFF: Today, Secretary of State Powell was at the United Nations, attending the first-ever U.N. conference on AIDS, meetings focused on a proposed global AIDS fund, among other issues. But discussions broke down at times over disputes that were more political than medical. Here is CNN senior U.N. correspondent Richard Roth.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT (voice-over): There were the familiar signs of an AIDS conference: a quilt for the 22 million dead and the 36 million now infected, AIDS ribbons in the hallways, even one illuminated on the exterior of the building. It is the first time the General Assembly has held a special session on a health crisis.

KOFI ANNAN, U.N. SECRETARY-GENERAL: Up to now, the world's response has not measured up to the challenge, but this year we have seen a turning point.

ROTH: But this global response against AIDS didn't take long to begin showing cracks. A last hurdle to agreement on an AIDS plan of action, whether to list drug users, prostitutes and gay men as vulnerable groups to AIDS.

KARYN KAPLAN, INTL. GAY AND LESBIAN COMM.: Without being able to name or state particular groups and vulnerable populations, you are reinforcing stigma and thereby making people even more vulnerable.

ROTH: Emotions spilled into a lengthy General Assembly debate: should a gay and lesbian group participate in a U.N. discussion?

UNIDENTIFIED FEMALE: We believe that this proposal detracts from the importance of the issue for which the special session has been convened.

ROTH: Bitter divisions between mostly Islamic and conservative nations against Western European and Latin countries.

UNIDENTIFIED MALE: This is really about -- Mr. President -- it's a fight about the soul of the United Nations.

UNIDENTIFIED MALE: The motion is not adopted.

ROTH: General agreement here: the fight against AIDS will take money, but the response to the U.N.'s call for a $7 billion to $10 billion annual fund has been lackluster. The largest current donor of international AIDS funding, the United States, pledged $200 million.

PAUL DAVIS, HEALTH GAP SOLUTION: $200 million is shameful. In fact, what it did was derail momentum toward adequate funding.

POWELL: We hope this seed money will help generate billions more from donors all over the world, and more will come from the United States, as we learn where our support can be most effective.

ROTH: While the U.S. sent its most senior diplomat, most other nations sent lower-level functionaries. Only African nations, where AIDS is rampant, sent heads of state.

PRES. OLUSEGUN OBASANJO, NIGERIA: The future of our continent is bleak, to say the least, and the prospect of extinction of the entire population of the continent looms larger and larger.

(END VIDEOTAPE)

ROTH: Now, some officials think and fear that the divisions expressed to the General Assembly will spill over in the formation of this U.N. global fund to fight AIDS. Others said that in effect, there might be these fights here, the three-hour debate, but will have no real effect in getting prevention and treatment programs in action on the ground.

It was the debate over inclusion of a gay rights group that really took away the spotlight that Secretary-General Annan and others would have liked to have had on the final document that is still being worked on, setting up targets and timetables to curb the spread of AIDS -- Judy.

WOODRUFF: Richard, what are the prospects that the U.N. can raise the dollars that they say they need to raise for this?

ROTH: It was not exactly music to the years of Secretary-General Annan and U.N. AIDS leadership, the fact that on this day one, only one country, Uganda came up and announced some new money, $2 million. Norway hinted and said it was ready to give money, but it didn't say that it was ready to put it into the fund. A lot of countries are worried about the management of the fund and just when it's going to start. And until then, people will still be a little bit hesitant. Secretary-General Annan, with that in mind, sent a note to the G-8 industrialized nations who are meeting later this summer in Genoa, saying the world is looking to you, the world has its eyes on you, hoping for a lot of money from them, from the developed countries meeting there -- Judy.

WOODRUFF: All right, Richard Roth, reporting from the U.N. in New York.

And one more note on world affairs: Yugoslavia's justice minister today asked a court to allow the extradition of former Yugoslav President Slobodan Milosevic. The justice minister took the first legal step required for Milosevic to eventually face the U.N. War Crimes Tribunal in The Hague. Lawyers representing Milosevic vowed to fight the legal move. Over the weekend, Yugoslavia's cabinet approved the decree that sets the terms for extradition of war crimes suspects, including Milosevic.

As police continue their investigation into the disappearance of intern Chandra Levy, we'll show you what life in Washington was like for the 24-year-old former intern, coming up next.

(COMMERCIAL BREAK)

WOODRUFF: Over the weekend, Washington police met for a second time with California Congressman Gary Condit concerning the case of missing former intern Chandra Levy. Police say that Condit is not a suspect and that he was responsive to their questions as they tried to learn more about Levy, who now has been missing for eight weeks.

CNN national correspondent Bob Franken takes a look at a typical day in the life of Chandra Levy before her disappearance.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN CORRESPONDENT (voice-over): On a typical workday, Chandra Levy would take the Metro subway to her paid internship at the Bureau of Prisons headquarters, a few blocks from Capitol Hill. She worked from 9:00 to 5:30 in the public affairs office, dealing with calls from the news media. She told friends she was interested in a career in government.

She began last October, but in April, after she mentioned in passing she had actually graduated from college in December, her internship ended. To her surprise and some say chagrin, she was told that at the bureau she was no longer eligible more than 120 days beyond graduation. This is the kind of detail that investigators are evaluating and re-evaluating.

TERRANCE GAINER, EXECUTIVE ASSISTANT POLICE CHIEF: We're really trying to continue to paint that picture of Chandra Levy. You know, what was she thinking, what was she doing, what was her lifestyle.

FRANKEN (on camera): It seemed to be the lifestyle of the thousands of interns who come to Washington every year to work for government agencies, law firms, special interest groups, news organizations.

(voice-over): Chandra levy spent a lot of time with a good friend from hometown Modesto, California: Jennifer Baker, often visiting Baker where she interned, at the office of Congressman Gary Condit.

JENNIFER BAKER, CHANDRA LEVY'S FRIEND: Both of us spent a lot of time going to all the tourist sites when we were in Washington, and we tried to go out socially on election night and other nights to try to get a feel of Washington, D.C. in its entirety.

FRANKEN: There is certainly no shortage of places for the over- 21-year-old intern to go out socially in Washington. Chandra is 24.

A friend at the Bureau of Prisons who spoke to CNN but who did not want to appear on camera says Chandra Levy spent a lot of time engaged in conversations also typical of the ambitious 20-something, conversations about what she would do with the rest of her life, what career moves she would make. And friends would give varying accounts about conversations she had regarding her love life, some saying she talked about a romance with a person in the FBI, others describing someone connected to Congress, and some -- particularly family -- saying that someone connected to Congress was Congressman Gary Condit, which Condit's spokesmen repeatedly deny.

No one denies she has been into physical fitness. A vegetarian, friends say. And sources at the Washington Sports Club, an exercise facility, say that Chandra worked out at about 6:00 p.m. several times a week, and then walked home a few blocks away to her apartment in an upscale urban neighborhood.

On April 30th, she stopped by the gym to terminate her membership. That was the last time we know of that anyone reports seeing her before she disappeared.

Bob Franken, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: More trouble today for the embattled mayor of York, Pennsylvania, who has been indicted for murder. Three co-defendants in the case agreed to plea bargains in which they will testify against two-term Mayor Charlie Robertson and five others. Robertson is accused in the 1969 murder of a young African-American woman when he was a York police officer. One defendant says Robertson encouraged him to kill blacks during race riots in the community 32 years ago.

Robertson does not plan to run for a third term.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: There were riots today in the capital of Macedonia, Skopje, as sparked by some 5,000 Slavs angry at a NATO-sponsored peace deal that had been aimed at reducing tensions between government forces and ethnic Albanian militants. We're told that a few police and journalists were wounded in the fighting, including some who were sent to hospitals after being badly beaten by the crowds. The crowds smashed windows of the parliament building, demanding the resignation of President Boris Trykowski.

The demonstrators were protesting what they said was the president's bowing to international pressure by allowing rebels to take their weapons with them as they pulled back from a town which is a suburb of Skopje.

The president has not issued any statements since the demonstrations began.

CNN will continue to follow that story and bring you updates as we have them.

That's all for this edition of INSIDE POLITICS, but of course, you can go online all the time at CNN's Allpolitics.com. AOL keyword: CNN. Our e-mail address is insidepolitics@cnn.com.

This programming reminder: The case of missing former intern Chandra Levy will be the topic tonight on "CROSSFIRE" with assistant Washington Police Chief Terrance Gainer among the guests. That's at 7:30 p.m. Eastern.

I'm Judy Woodruff. "MONEYLINE" is next.

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

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