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CNN Live Event/Special

America's New War: President Bush Moves to Freeze Terrorist Assets

Aired September 24, 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.
JOIE CHEN, CNN ANCHOR: Is it a message from the terror mastermind? New words of warning and what danger they may spell for U.S. forces. Cutting off one of the terrorists' most important supplies: money.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will starve the terrorists of funding, turn them against each other.

(END VIDEO CLIP)

CHEN: And what's next for the mayor?

(BEGIN VIDEO CLIP)

MAYOR RUDY GIULIANI (R), NEW YORK: It is true that I have a future. I don't know what it is yet.

(END VIDEO CLIP)

CHEN: Good afternoon. From CNN Center in Atlanta, I'm Joie Chen. Thanks for being with us.

We begin this hour with Bill Hemmer in New York with the latest developments in "America's New War" on terrorism -- Bill.

BILL HEMMER, CNN ANCHOR: Joie, hello again.

Concern appears to be growing over the Bush administration's call for expanding laws to fight terrorism. Attorney General John Ashcroft saying Congress should quickly approve legislation that would ease limits on wiretaps, search warrants, and the detention of suspected terrorists. Some Democrats and some conservative groups say those measures, though, go too far.

Stocks surged today on Wall Street, in a big way, too. Bargain hunters jump in, helping that market rebound from one of its worst weeks ever. The Dow closed up more than 360 points. And the Nasdaq, up about 75 point as well today.

President Bush striking terrorism on the financial front. Mr. Bush freezing the assets of 27 individuals and organizations that he says are suspected of financing terrorism. He also is calling on international banks to follow his lead.

For much more on this, let's go to the White House and pick things up with CNN's John King.

John, how significant is this move today?

JOHN KING, CNN CORRESPONDENT: Well, Bill, the significance depends on how much cooperation the administration gets overseas. As you noted, Mr. Bush signing an executive order. He did it just after midnight this morning, Mr. Bush saying that is the first shot, if you will, in the war on terrorism. Freezes the assets of 27 entities and individuals here in the United States. Any of their assets in U.S. banks beginning first order of business this morning were frozen. Osama bin Laden on that list, his Al Qaeda organization on that list, several non-profit groups the administration says are little more than fronts for terrorism.

But U.S. officials, Bill, also acknowledge very modest holdings of all these companies and individuals in the United States. The key test is whether banks overseas cooperate and do the same thing, and Mr. Bush served blunt notice today to other governments and international banking systems that if they don't comply, if they don't follow the U.S. lead, they will be punished.

(BEGIN VIDEO CLIP)

BUSH: We have developed the international financial equivalent of law enforcement's most wanted list, and it puts the financial world on notice: If you do business with terrorists, if you support or sponsor them, you will not do business with the United states of America.

(END VIDEO CLIP)

KING: The Canadian prime minister, Jean Chretien, on hand at the White House today, a public show of support with the president. Mr. Chretien saying Canada stands by to do all it can to help in the campaign against terrorism. That public praise, both men praising each other.

In private, we are told U.S. officials are pressing Canada. They believe the Canadian government and law enforcement agencies can do a bit more to keep track of terrorist cells in Canada.

And Bill, before tossing it back, I want to note one bit of new information from our military affairs correspondent, Jamie McIntyre. He says as the United States tries to tighten the financial noose on the terrorists, the Pentagon is considering whether to use military assets to target drug production facilities in Afghanistan. According to the United States, those facilities a key source of money for Afghanistan's ruling Taliban -- Bill.

HEMMER: John, quickly here, just to go back to the financial front, tell us this: Is this an indication there's progress in identifying groups and possibly individuals, or is this information today what they knew already? KING: Some of it they knew already. They say they are learning more as they go through the evidence, the personal effects of the suspected hijackers that have been gathered by investigators. Most of all, though, Bill, this is a sign the administration believes that this time there will be international commitment, international wherewithal, the stomach if you will, to do these things.

The Clinton administration tried this very same thing. They said many governments overseas did not want to cooperate at the time. The pictures of devastation from New York creating new momentum the Bush administration hopes not only to crack down and freeze those assets in the United States, but to get other banks, especially in the Middle East region, Saudi Arabia and others, to do so as well. They have been reluctant to do so in the past -- Bill.

HEMMER: Clarification well-note, John King at the White House. John, thanks to you.

Back here in New York now, CNN's Gary Tuchman just on a tour, returning now from inside the area, known as the zone or ground zero.

Gary, hello to you. What did you see inside?

GARY TUCHMAN, CNN CORRESPONDENT: Bill, hello to you, and for the first time, they allowed our cameras right into the crater where the worst damage happened. We just brought the tape back a minute ago. We want to show it to you right now.

You see as you're standing there right next to the crater literally of the so-called "voids" that people are looking for. These voids are where they think survivors could possibly be. There's been no evidence whatsoever of these voids. However, it's thought that if there were survivors, they would be in these holes.

Now, right now, we don't have the video. We should have it any moment, though, we're hoping, for you.

But what we are being told by the authorities on the scene -- and here are the pictures now. These are feeding live as we talk. They are not edited, because they are -- they have just come from the scene. What you see right there are people passing buckets. That's what they've recovered. And these are things they sift through later to see if they have any evidence in those buckets.

But underneath the rocks and underneath the rubble inside this cater -- and this cater, it looks like a meteor hit it. It's about a fifth of a mile long from one direction to the other. They hope they find people in those voids underground.

And they say there are literally thousands. They have search dogs going through the area looking for the possibility of survivors.

But we must emphasize to you there has been no indication whatsoever that anybody is alive under that rubble that you're looking at right now. No indication at all. There's been no visual evidence of that, and there's been no sounds. But they are still searching. They still have search experts out there.

So we want to make it very clear: They're still hosing down the fire. It's still very smoky, and they're working very hard on the scene.

Back to you, Bill.

HEMMER: Gary, quickly here, you describe one-fifth of a mile. That must be an enormous tract of land that you're watching.

TUCHMAN: I know. You were there too, Bill, and you saw how big it is. But when you get right into that crater and you look from one end to the other, it's four city blocks here in New York City. It's 20 blocks to a mile, so it's four clocks and that's about a fifth of a mile. It's huge. It's depressing. It's something that we hope we never see again.

HEMMER: And Gary, also here just from a first count experience last Friday, we could note the measure of progress inside, although the videotape may not lend itself toward that. Could you see the same today?

TUCHMAN: Bill, it's interesting, I was there the second day, on Wednesday, the day after this tragedy happened. And what I see is the streets are much cleaner. Much of the debris in the 10-block area surrounding where we saw debris and dust is clean. But I'll tell you, looking very close up at the rubble, it looked exactly the same to me. I know they have taken hundreds of tons away, but there is no way for me to tell the difference. There is still an awful lot of rubble and wreckage. And if it takes six months, I'd be amazed that's all it would take. It seems like it would take much longer than that.

HEMMER: Yeah, and From the videotape, Gary, we see the sign so evident: We will never forget. That banner has been flying there rather for days.

Gary, thanks. We'll check back a bit later.

Now to Atlanta and more with Joie -- Joie.

CHEN: Bill, it was a very firm line and words that came today in a letter by someone who at least claims to be Osama bin Laden. The accused terror mastermind hasn't been heard from since the day after the September 11th attacks when he denied responsibility for them. In this latest message, the writer shows no sign of backing off his mission, if, that is, the message is really from Osama bin Laden.

(BEGIN VIDEOTAPE)

CHEN (voice-over): First, consider the proof of that. The fax was received at the Kabul office of "Al-Jazeera," a responsible news organization. It's something like the CNN of the Arab world.

It has heard from Osama bin Laden in this way before, though the dispatches are usually unsigned. But comparing the signature on this message with the document bearing his authenticated signature introduced at the embassy bombings trial, even an amateur could see similarities.

As for the message itself, in it the writer sends a strong warning to fellow believers. "It's not a surprise that many Muslims in Pakistan will die defending Islam. It is considered on the front line of defending Islam."

"We hope that these brothers will be the first martyrs in the battle of Islam against the new Jewish and Christian crusade, campaign, led by the chief crusader, Bush."

A final note from the writer: "We ask God to make us defeat the infidels and the oppressors, and to crush the new Jewish-Christian crusader campaign on the land of Pakistan and Afghanistan."

And it is signed Osama bin Mohammed bin Laden.

(END VIDEOTAPE)

CHEN: Now bear in mind that the Taliban has previously said that they cut bin Laden off from communicating, even by fax, with the outside world, though this weekend they said they had lost track of where he actually is now.

There were more tough words today from the supreme leader of the Taliban, Mullah Mohammed Omar. Omar dismissed the notion the United States can win a war on terrorism by killing him or Osama bin Laden. Instead, Omar listed three steps. It says the United States must take, if it wants to end what he calls "this conflict": one, the United States must remove all its military forces from the Persian Gulf. Two, stop its involvement in the Palestinian crisis. And three, he tells the United States to, quoting here, "leave Islam alone so Islam can be expressed freely, and don't get involved in Islamic or Muslim affairs."

The United States responded quickly, saying it wants action, not more words, from the Taliban.

The Taliban, though, continues to claim it has no idea where bin Laden is or if he is still in Afghanistan, as we noted a moment ago.

CNN's Nic Robertson, just across the Afghan border in Quetta, Pakistan, with more on that.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN CORRESPONDENT: Here in Pakistan an Islamic party, a fairly prominent Islamic party aligned with the Taliban issued a fatwa today saying that if the United States puts troops on the ground in Pakistan, it would start a jihad, a holy war against them.

Now, this party won about 5 percent in the national elections about three years ago, but in this region of Pakistan, on the border with Afghanistan, Baluchistan, northwest frontier province, they are quite influential and do have a fair amount of political power. Now, contrary to that, however, the United States senior military officials were -- did go ahead with meetings with Pakistani government officials here. And in other meetings, Wendy Chamberlin, the U.S. ambassador here, had meetings with Pakistani government officials, giving debt relief to the Pakistani government, $396 million debt relief.

However, the international debt that Pakistan owes to the United States is some $3 billion. Pakistan's total international debt, some $40 billion. So quite a small amount, but it's necessary and helpful relief, officials here believe, for General Musharraf's government as he aligns himself with the United States' effort to combat terrorism in this region.

Nic Robertson, CNN, Quetta, Pakistan.

(END VIDEOTAPE)

CHEN: In the face of the Taliban's defiance, President Bush gaining more support for his new war on terrorism. Today, Pope John Paul II denounced in the clearest terms yet those who use Islam to justify murderous acts. The Vatican said: "The United States has the right to apply self-defense in response to terrorist attacks."

But a Vatican spokesman said the holy see would prefer a nonviolent response to the September 11th attacks -- Bill.

HEMMER: As we mentioned, the Bush administration is asking Congress to pass new anti-terrorism laws. When we come back here, does Washington need new weapons to fight "America's New War" and what's the potential on the downside of civil liberties? We'll have a look at that.

Also, some say the U.S. could learn something from the French. That and more when our coverage continues.

(COMMERCIAL BREAK)

HEMMER: Jane Garvey, FAA administrator, speaking now at JFK Airport. We'll listen.

(JOINED IN PROGRESS)

JANE GARVEY, FAA ADMINISTRATOR: ... dedicated countless hours in the last two very, very difficult weeks. Their professionalism, their dedication, I think, is something that is nothing short of extraordinary. And I wanted to thank them personally for that.

Secondly, I wanted to see how the system worked. I wanted to see if the security measures that we talked about, that we put in place are really being implemented, if there are any difficulties. And I'm happy to say and very pleased to say that I'm encouraged by what I've seen today.

We had a wonderful flight up, and I'm looking forward to the flight going home as well. It was good to see with the Port Authority some of the security equipment that's in place, good to see the increased law enforcement presence here. Good to see that the screeners were taking extra time to look at some of the bags, to talk with some of the passengers. So I'm encouraged by what I've seen.

I will also, though, tell you that while I think these are the right measures, they are not the only measures. And every day we're looking at additional security measures. Every day we're asking ourselves and asking our colleagues and asking other who have spent so much time in aviation what are some additional steps we ought to take.

Secretary Mineta has put in place two rapid response teams. They are working hard and have worked all through the weekend to come up with recommendations that they expect to forward to the secretary even before October 1st.

So while I do think these are the right measures, there is still more to be done. There is still more measures that we will continue to put in place to ensure the safety of both the passengers and the flight crew.

Thank you. I'm going to ask Bill (UNINTELLIGIBLE) if he'd like to say a few words and then we'll certainly take your questions.

UNIDENTIFIED MALE: Well, first of all, as director of aviation for the Port Authority, I would like to thank the administrator for coming up here.

HEMMER: Jane Garvey indicating that she was checking the security measures out at JFK Airport here in New York City, saying she wanted to see how the system works. In her words, she is encouraged, rather, to see the upgrade, the ramping up of security measures, but she says they will not be the only measures: clearly an indication that more is to come and possibly she says in the coming days.

You know, European have lived with terrorism for years. Time.com has been checking in to France's efforts to help fight terrorist attacks. The French measures could prove very controversial, though, if they were enacted here in the U.S.

Tony Karon of Time.com joins us now with more on this. Tony, hello to you.

TONY KARON, TIME.COM: Good afternoon, Bill.

HEMMER: Let's get the law straight first in France. I understand you can be arrested or apprehended just based on suspicion. Is that right?

KARON: Well, they have a provision in their law that says anybody arrested for a minor offense, but that is suspected of what they call "association with law-breakers related to a terrorist enterprise" can be held on a long-term basis. In other words, if you're held for a minor offense, a little robbery or something that would result in you being released on bail, if the French anti- terrorism squad believes you're in some way associated with any terrorist groups or (UNINTELLIGIBLE) known terrorists, you can be held for a very long time.

HEMMER: So you're saying the threshold is not as high based on law in France?

KARON: The threshold is a lot longer, and obviously, even in France, it raises the hackles of a lot of civil libertarians.

HEMMER: Yeah, how do the French people react to this?

KARON: Well, that -- I think civil liberties groups have definitely raised a lot of problems with it. But the government's answer -- and I think it's accepted by the population, because France has suffered quite extensively under terrorist attack -- is essentially they can't protect people without these laws.

HEMMER: Tony, how long has it been this way? You mentioned France. We could probably talk about other European countries. How long?

(AUDIO GAP)

(COMMERCIAL BREAK)

HEMMER: On the political front here in New York City: do not write him in, but do not count him out. There was not a yes or no given, but Rudy Giuliani telling New Yorkers not to write his name on tomorrow's primary ballot. However, he has not ruled out finding a way around the two consecutive term limit that prevents him from running this time.

There have been reports about possibly extending Giuliani's term, rather than have him seek a third term for four more years. For his part, Giuliani says he's been too busy to consider such things.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, MAYOR OF NEW YORK: Until I have time to think about it, I really can't talk about it. And I really -- my concentration has been on these things, not on that. And as soon as I have time, I will think about it and I'll talk to the people that I trust the most and get their advice, and then I'll make a statement.

(END VIDEO CLIP)

HEMMER: A poll by the Marist Institute of Public Opinion showing New Yorkers nearly evenly split on whether the November election should be postponed for a year. Fifty-seven percent of those polled who were opposed rather to eliminating the existing two-term limit.

From politics now to the economy and Wall Street, in a significant turnaround today. Sighs of relief, temporarily, anyway, from investors as the markets closed higher today in a big way.

At the close, the Dow closed up 367 points and the Nasdaq up about 76 points today. And that big bounce today quelled some fears from last week's sell-off. That's when the Dow lost nearly 1,400 points, its biggest weekly loss since the Great Depression.

Today's significant turnaround spread across almost all market sectors. The airlines and insurance stocks bounced back a bit. They were hammered last week because of the terrorist attacks, and time to talk more about it. Peter Viles with us, as he has been recently, to talk about what happened today.

A big bounce: will it last?

PETER VILES, CNN CORRESPONDENT: Well, that's the big question on the Street today. No real way to tell, other than this is a healthy sign. Markets often move two steps forward and one step back, or two steps back and one step forward, so it does show there are buyers, that it's a real market. There's a real conversation in the market about where stocks should be.

A lot of folks felt today that stocks had gotten too low by the end of Friday, and there was some bullish comments buy a lot of prominent Wall Street folks that stocks are simply too cheap. Whether this bounce lasts is just something we can't tell.

HEMMER: The well-respected adages of Cohen during the bull running, said indeed, they were too cheap to pass up at this time. But still, though, you have consumer confidence numbers out tomorrow, Peter. And when you consider the consumer is largely given credit for driving this economy, what can we look for tomorrow morning?

VILES: Well, that's a big cause for concern in the market. What will those numbers be? They would expect it to be somewhat lower. If they're sharply lower, that could cause some selling. And again, if they're in the range of expectations, perhaps even a little bit better. That could give the market some solace.

The more important thing that what consumers say, though, is what they actually do, and they don't always move hand in hand. So as we go forward over the next days and weeks, we'll get signs of what consumers are really doing out there -- voting with their wallets, as they say. And I think that will be a bigger market factor going forward than tomorrow's report.

HEMMER: And quickly, Peter, we talk about it all the time, about uncertainty. Markets do not like uncertainty, but there is nothing but uncertainty at this point.

VILES: Yes, uncertainty not just on the economic front, but of course on the geopolitical front. What will the United States response be, will there be some sort of further terrorist acts here in this country or perhaps abroad? So way too much uncertainty in this market for the pros to say: "We think this is what's going to happen over the next week or two."

HEMMER: Guess we'll take it for a day, won't we?

VILES: Sure will.

HEMMER: Thank you, Peter. Peter Viles here. Up next as America's new war continues, here on CNN, fighting and freezing the financial assets. The White House takes a step. We'll talk more about it when we come back here.

(COMMERCIAL BREAK)

CHEN: We were telling you earlier that President Bush has signed an executive order today freezing U.S. assets of 27 people and groups suspected of supporting terrorism. But can this latest effort to move against terrorists through their pocketbooks actually work?

President Clinton did try something similar, but it was successful, his attempt to freeze Osama bin Laden's bank accounts, in 1998. Joining us from Washington to talk this afternoon about the latest attempt to stop the flow of money is Richard Wolfe of the Financial Times."

Richard, I don't imagine that Osama bin Laden and I bank at the same bank, so I am wondering if it's a bigger strike against the terror network, or is it a bigger hit for the banking system at large?

RICHARD WOLFE, "FINANCIAL TIMES": Well, certainly the banking system really is feeling pressure today. You know, this has been built up as a strike against the terrorist assets, but as you say, what they're doing here is really wielding a big stick to foreign banks and foreign governments, saying, you can get onboard with this war against terrorism and terrorist finances, or you'll end up in the same situation as the terrorists, at least with regard to your own assets.

In other words, if they don't cooperate, foreign banks could have their assets blocked, their transactions frozen and to all intents and purposes, their business in the United States stopped. That's pretty Draconian. That was the word the president used today.

CHEN: It is a global economy in fact. But let's note this: as we mentioned earlier, the Clinton administration did try to make a move against bin Laden's assets, late 1990s. How difficult a trail is it to follow, and how difficult a trail is it to cut off?

WOLFE: Well, no question it's difficult. For a start, we're not talking about huge amounts of money. Intelligence sources have told the "Financial Times" that the attacks on September 11th cost no more than $2 million. That sounds like a lot, but when you trace it through the international system, it's really quite hard to find.

What they're really doing here is it's kind of a big fishing expedition -- going to foreign banks, foreign governments and saying: Give us your information.

Treasury officials said today that the information could be as valuable as the assets, if not more so, because what they're trying to do is establish that paper trail that could eventually lead to the supporters behind the Al Qaeda network.

CHEN: Is there a clear indication -- for those of you who follow the investigative trail on this thing -- how much Osama bin Laden is actually worth today, and where he gets new infusions of capital from?

WOLFE: Well, that's a really big question and frankly, nobody really knows. That's why they're going out there and looking for the information right now. Whatever's happened over the last few years, we know that bin Laden has much less money than he did to start off with, but he has tried to inject new cash into his network by establishing a whole series of businesses.

We know, for instance, that he had a whole network of businesses in Sudan, operating as he drew up the plot against the U.S. embassies in east Africa in 1998. So we know he's had new injections of cash from business. We know that he's also channeled money through relief organizations and NGAs, charitable organizations. So the have been new flows of money, but putting a finger on it is very difficulty.

CHEN: Charity organizations -- that's hard to believe. Richard Wolfe is with the "Financial Times." We appreciate your insight today. More now from Bill on "America's New War" -- Bill.

HEMMER: Yes, Joie. Fighting the Taliban today, Afghan rebels reporting progress. CNN's Chris Burns is there. His report is next when we continue here.

(COMMERCIAL BREAK)

CHEN: Looking now inside Afghanistan: Russia says its troops will not take part in any attacks on Afghanistan, although it said it will open its airspace to humanitarian flight. Russian President Vladimir Putin says that Russia will increase its support for anti- Taliban forces, and even supply them with arms.

The allies controlled about 5 percent of Afghanistan up in the northeast. CNN's Chris Burns reports to us from that corner of the country. He tells us the opposition has apparently there gained some grounds.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT: After a night of bombardment by Northern Alliance tanks against the Taliban, the Alliance claims to have seized about three checkpoints in an area south of here, about 40 kilometers of here, and that's 30 kilometers north of the capital, Kabul.

The Northern Alliance is within range of taking Kabul, but they are still facing very fierce fighting by the Taliban. We watched from a mountaintop, as we saw in no-man's land valley, river valley, between the two forces, as they fought with artillery fire and machine gun fire. A Taliban jet flew overhead and dropped a bomb not far from the village where we were visiting just minutes before that.

So the fighting does go on and it does appear, however, that the Taliban are putting up a fight in that area. The Taliban are trying to seize those three checkpoints that the Northern Alliance are claiming. We talked to one Northern Alliance commander who says that they would hope to reach Kabul by winter, but they're going to need U.S. air power if they want to get it any sooner than that.

(END VIDEOTAPE)

HEMMER: Coming up here, back to the scene of terror. Residents in lower Manhattan return home. Their story in a moment.

(COMMERCIAL BREAK)

HEMMER: Little by little, people who live in New York's Battery Park City -- that's the southern end of Manhattan Island -- they're being allowed to go home. They've been refugees, if you will, since the attack back on September 11th.

And for those headed home, the homecoming, as you might imagine, is bittersweet.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's so good to get off at my old stop, you know, and I was walking, I was smiling, going, yeah, I'm finally going home. But then I look back there and it's not so happy anymore.

UNIDENTIFIED FEMALE: I think just the memory of the event that to be there when it happened, and I'm still a little bit shaky. I'm still afraid that something will happen. We may move out for a little while, but we both love New York and we want to come back here. We just don't know, with a baby, about the air quality and all that.

UNIDENTIFIED MALE: I always thought when I was in the service, we had an expression, was "Illegitimus non Carborundum." That's, "don't let the bastards grind you down." So I don't think I sent anybody in here quitting.

UNIDENTIFIED MALE: Give me a high-five. Good girl!

Everyone was cool with the dog, yeah. In fact, even today a policeman -- you know, you're supposed to take your dog in a kennel on the subway. We're going home.

(END VIDEO CLIP)

HEMMER: Slowly, little by little here in New York.

Two more Battery Park buildings also reopened today -- Joie.

CHEN: Bill, we will continue our coverage back with you in New York tomorrow.

Right now, it's time for us to go ahead to look at the nation's economy. Indeed, the world economy a very important part of the story. "LOU DOBBS MONEYLINE" now.

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