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Aired January 16, 2002 - 04:30   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: Seen in classrooms the world over, this is CNN NEWSROOM.

SUSAN FREIDMAN, CO-HOST: Welcome to CNN NEWSROOM. I'm Susan Freidman.

MICHAEL MCMANUS, CO-HOST: And I'm Michael McManus.

U.S. forces are on a heightened state of alert at Kandahar Airport after finding a large stash of weapons just a thousand yards away. U.S. Marines plan to extend the off-limit zone around the airport, which has been serving as a detention center for al Qaeda prisoners.

FREIDMAN: In the U.S., fallout from the Enron collapse is growing. Accounting firm Arthur Andersen says it's firing the lead auditor of the energy giant. It is also putting three other workers on leave as part of its probe into the destruction of documents related to the case. On top of all this, another major hit against Enron at the New York Stock Exchange.

CNN's Peter Viles has details.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): The world's biggest stock market yanked the welcome mat out from under Enron, moving to delist its battered stock, citing, quote, "the expected protracted nature of the company's bankruptcy process." Those still holding Enron shares took it on the chin once again. The stock had already fallen 99 percent in a year to just 67 cents last Thursday. It was quoted this afternoon to 30 to 35 cents a share in its likely new home, the over-the-counter market.

WILLIAM LERACH, MILBERG WEISS: There's always some sort of a market available for a delisted stock, whether it's over the counter, under the counter, pink sheets. All the delisting really does is prove that the stock is essentially worthless.

VILES: Wall Street pros said the main trading in Enron lately had been by those treating it as a, quote, "lottery ticket," cheap but with little chance of paying off.

ARTHUR CASHIN, UBS PAINEWEBBER: We've seen time and time again many of these things, when they get to this level, they get delisted because just being listed sometimes allows for a little bit of false hope, and you don't want to encourage that.

VILES: If and when it is delisted, Enron will join this list: Polaroid, Sunbeam, Reliance Group Holdings, Fruit of the Loom and Planet Hollywood. And by revenue and market value and by the sheer velocity of its collapse, Enron's is the biggest bankruptcy ever. But by assets, it does have competition. Texaco, when it filed in 1987, listed assets of $35 billion. Adjusted for inflation, that's $56 billion. Enron listed assets of $49 billion. Penn Central, when it filed in 1970, listed $6.8 billion in assets. That's $31 billion in current dollars.

VILES (on camera): Enron has two options now regarding its stock and neither one is particularly good. It can try to fight the NYSE and try to stay on the big board, but the NYSE almost always wins these fights. Or it can voluntarily apply for delisting and try to get on with what's left of its corporate life.

Peter Viles, CNN Financial News, New York.

(END VIDEOTAPE)

FREIDMAN: Also Tuesday, news that an Enron executive warned Chairman Kenneth Lay about improper accounting practices in a letter last August. Enron also pleaded for U.S. government intervention to stave off a collapse, but the government declined.

CNN's Tim O'Brien reports on the government's role in the case and how Enron's collapse could affect deregulation.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Congressional investigators spent much professor the day sifting through the first 10,000 documents that have been turned over by officials at Enron and Arthur Andersen, 10,000 of an estimated two million documents requested. Investigators also released a copy of the seven-page memo from a former Enron vice president to CEO Kenneth Lay alerting Lay to what she called a "wave of accounting scandals."

Meanwhile, Paul Sarbanes, chairman of the Senate Banking Committee, suggested that allowing the accounting profession to essentially regulate itself might be part of the problem. He called on the General Accounting Office to "evaluate the governance system of the accounting profession" to determine if it contributes to what he called "a proliferation of accounting irregularities." The Bush administration and others have suggested the SEC consider restricting the amount of company stock employees may contribute to their own 401(k)s, and rules governing pension funds may also be reassessed. But would greater regulation have prevented the Enron mess?

JOHN SAMPLES, CATO INSTITUTE: There's a tendency in Washington to have a pattern of simply getting excited about something when a big, bad thing happens in the economy. And then it's looked into more closely, and it turns out that not much can be done one way or the other. I think this will follow that pattern.

O'BRIEN (on camera): That won't help those who lost their life savings, but the entire Enron incident could be an object lesson for both corporations and their investors, an object lesson that at least those who favor limited government believe may, in the end, be far more effective than any new federal regulations.

Tim O'Brien, CNN Financial News, Washington.

(END VIDEOTAPE)

ANNOUNCER: CNN NEWSROOM will become CNN Student News. Beginning on January 22, CNN NEWSROOM and CNNfyi.com will be renamed CNN Student News and CNNstudentnews.com. The name will change and the format will be modified slightly, but users of CNN NEWSROOM and CNNfyi.com will continue to see the same quality resources you've come to expect.

In the next few months, we'll continue to make changes to the format. We hope you like what you see. For more information or if you have questions, comments or suggestions, please visit CNNfyi.com or call 1-800-344-6219. And be sure to keep watching.

MCMANUS: News in our military segment today deals with the American Taliban and American heroes. The Justice Department announced that American Taliban fighter John Walker will be handed over by the military for trial in the U.S. He is charged with four criminal counts and could face life in prison.

Attorney General John Ashcroft believes Walker knew exactly what he was getting himself into when he joined the Taliban and began fighting in the civil war in Afghanistan.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, U.S. ATTORNEY GENERAL: The criminal complaint filed today describes a series of crossroads John Walker Lindh encountered on his way to joining not just one but two terrorist organizations. At each crossroad, Walker faced a choice, and with each choice, he chose to ally himself with terrorists.

(END VIDEO CLIP)

MCMANUS: And it was an announcement of a different sort today at Fort Campbell, Kentucky, where commanders awarded the Bronze Star to 11 Green Berets for bravery in battles against the Taliban as well as al Qaeda during a prisoner revolt. The military also awarded the Purple Heart to 13 soldiers and 2 airmen wounded in Afghanistan.

A relative peace has settled in Afghanistan, but it's far too early to forget the human costs of war in what is one of the most heavily mined countries in the world. Experts say it will be nearly a decade before the country is completely demined. Still, the people of Afghanistan have managed to find opportunity in the nation's recovery.

Lisa Rose Weaver filed this report from Kabul.

(BEGIN VIDEOTAPE)

LISA ROSE WEAVER, CNN CORRESPONDENT (voice-over): At an old military base on the outskirts of Kabul, these detonations are part of the world's largest munitions disposal program. Coalition bombing targeted this ordinance, but didn't destroy it all. This is the final send-off.

Moving tank shells and other deadly remnants where it can be safely destroyed is up to these men. Most had been deminers for years, with the Halo Trust, an international program. Now they are in training to learn to direct others in the dangerous business of post- war cleanup.

(CROSSTALK)

WEAVER: The $100 per month deminers earn is no fortune, certainly not enough to compensate for the risks they take. Four men have died on the job in the past few weeks. But something inspires them to take their life into their hands everyday, aware that their every heartbeat could be their last.

This man says helping to insure others won't be hurt in the future, is what he focuses on. That feeling is stronger than his fear.

(on camera): It is Afghanistan's twisted fate that the mines and ordinance which were left behind created jobs, not only for people in the field, but for war's victims as well.

(voice-over): Here, the work is recreating what's been lost for an estimated 50,000 amputees nationwide. Most of the employees are amputees themselves, mostly civilian victims of a war that reached their village in their city streets.

Depression is common for amputees, but this job helps pull Abdullah (ph) through.

He says he is satisfied helping others who have suffered as he has. Besides, he adds, it's not easy to find jobs elsewhere.

Afghans say they want peace now, and a future where children get toys, not prosthetic limbs. Bob Gannon says he has seen one sign of change in frequent tours to Afghan villages -- people are not hoarding munitions any more.

BOB GANNON, HALO TRUST: They are coming to us when we go to the villages. They are actually bringing things us to, which wasn't happening in the past, but is happening more now, and I think it is just because they see peace is around the corner.

WEAVER: Afghanistan's track record may lead doubt about the power of good intentions to overcome the patterns of history. Still, those tired of war seem determined to leave it in the past.

Lisa Rose Weaver, CNN, Kabul, Afghanistan.

(END VIDEOTAPE)

MCMANUS: Schools, too, are trying to put the war in the past. Bullet holes and shrapnel from bombs litter the campus of Kabul University, but as Michael Holmes reports, it's not stopping education.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (voice-over): After 23 years of invasion, civil war and Taliban rule, the campus of Kabul University is slowly coming back to life. But peaceful scenes can be deceiving.

(on camera): Less than 10 years ago, this campus was quite literally the front line in the country's civil war, fighting all around here. It took two years to just get rid of the mines in this place.

ABDUL SALAM AZIMI, AFGHAN EDUCATION MINISTER: Everywhere I go and I see the face of the war, that's very depressing.

HOLMES (voice-over): Dr. Abdul Salam Azimi was a student here many years ago. A student, too, in the United States: The University of Arizona. Today, he's his country's new education minister, touring a library without electricity and stripped of its books and history.

There were 35,000 books here before the Taliban. Today, just a few hundred; some with shrapnel damage. Obsolete text books and no shortage of irony, Milton's "Paradise Lost" is here; "Don Quixote", too. Although Dr. Azimi isn't tilting at windmills, he's determined to see the rebirth of this place.

(on camera): You know what I see in you? I see huge optimism.

AZIMI: Oh, yes. I have to be optimistic. And I am optimistic and I'm hoping that things are going to change.

HOLMES (voice-over): The doctor puts enormous faith in the promises of the West. To not forget Afghanistan again; to help rebuild places like this. Trusting in those governments to come good on those words. He also needs text books, advice from his old colleagues overseas. He needs computers; he needs help.

AZIMI: What really depresses me most is that I'm alone. I don't have a good team.

HOLMES (on camera): You don't have a team.

AZIMI: I don't have a team.

HOLMES (voice-over): The minister for education, in fact, doesn't even have a telephone. And yet this month and next he plans to distribute 30,000 entrance exam papers around the country, and promises to have Kabul University open to perhaps 20,000 students by March. Today, the teachers are slowly returning. Especially women, like Assistant Professor of Pharmaceutical Science, Gulalau Babak, ordered home by the Taliban; proudly back at her post today. Despite ruined laboratories, ancient bottles of chemicals and drugs the staff can't bear to throw away, because it's all they have. Still, again, optimism.

GULALAU BABAK, ASSISTANT PROFESSOR: I was so happy because I come back here and I want to teach the students.

HOMES: And, as words spread, the students returns, too. This lecturer tells of watching a teenage girl sign up for class today.

UNIDENTIFIED MALE: For me, it's really amazing. They come with hope and -- yes, happiness.

AZIMI: We would like to have, really, a resurrection, with the spring coming. And I would like to see Kabul University change into a very prestigious university in Afghanistan, and possibly in the region.

HOLMES: Michael Holmes, at Kabul University, Afghanistan.

(END VIDEOTAPE)

ANNOUNCER: Teachers, make the most of CNN NEWSROOM with our free daily classroom guide to the program. There you'll find a run down of each day's show so you choose just the program segment that fits your lesson plan. Plus, there are discussion questions and activities, and the guide highlights key people, places and news terms. Each day find hot links to other online resources and previews of upcoming desk segments.

It's all at this web address where you can also sign up to have the guide automatically e-mailed directly to you each day. It's easy. It's free. It's your curriculum connection to the news. After all, the news never stops and neither does learning.

FREIDMAN: In the expanding war on terrorism, President Bush has said repeatedly the U.S. will pursue terrorists wherever they may hide. U.S. troops are in the Philippines for joint maneuvers with the Philippine military. The training exercise is designed to help the Philippines upgrade its counter terrorism capabilities. Many experts say Somalia could be the next country to receive deployments. The concept of Somalia as a potential battleground, however, has many Somalis very nervous.

Our Joel Hochmuth reports on the reasoning behind sending the U.S. troops to Somalia.

(BEGIN VIDEOTAPE)

JOEL HOCHMUTH, CNN CORRESPONDENT (voice-over): There's speculation that the African nation of Somalia could be the next target of the U.S.-led war on terrorism. The U.S. Navy is patrolling the Somali coast by aircraft looking for any signs Osama bin Laden or other al Qaeda leaders may be trying to make their way there. But why Somalia?

On the surface, at least, there are plenty of reasons. First of all, Somalia is relatively close, less than 2,000 miles across the Arabian Sea from Afghanistan. It sits along what's called the Horn of Africa. Politically it would make sense, too. The government there is weak and has little control over large parts of the country. Anarchy has prevailed in this land for more than a decade. The 15 million Somalis are sharply divided by clan loyalties and ruled largely by individual warlords.

Most people here are Muslims. Among them, the U.S. charges, extremist groups linked to Osama bin Laden's network. But Somalia's interim president denies there are any terrorist bases here.

ABDIQASSIM SALAT HASSAN, INTERIM SOMALI PRESIDENT: We are saying to the Americans, welcome. Let us see if there is any such camps, we will lead you there and we will fight.

HOCHMUTH: Even if Osama bin Laden were to find a way here, locals say as a former Saudi, he'd have trouble fitting in. Many say he would not be welcome.

UNIDENTIFIED FEMALE: So do Somalis think Osama bin Laden could find a hideout here, a chorus of no from these men. "Not with a $25 million reward on his head."

HOCHMUTH: Just the prospect of U.S. troops returning to Somalia brings back bad memories for many Americans. In the early 1990's, drought and civil war led to famine that killed more than 300,000 people.

In December 1992, U.S. Marines landed in a U.N.-sponsored effort to end the anarchy and relieve the starvation that gripped the land. But while the U.S. presence ensured relief supplies could be safely distributed, little was done to settle feuds among the various clans. The mission quickly turned tragic.

In October 1993, 18 U.S. Army troops were killed in a battle with forces loyal to local warlord Mohammed Fara Aidid (ph). The mission had begun as an attempt to seize some of Aidid's key aides but went bad when Aidid's forces shot down a U.S. helicopter. Aidid supporters dragged the body of a U.S. soldier through the streets of the capital city of Mogadishu. One captured soldier was shown being interrogated by his captures. As a result of that incident, the U.S. pulled out in March 1994, ending a frustrating mission that once included 28,000 U.S. troops.

Today, the situation isn't much better. There is an interim government in place called the Transitional National Government, or TNG, but it controls less than half of Mogadishu. The U.S. doesn't support it, and Ethiopia, the closest U.S. ally in the region, charges that TNG itself has ties to the al Qaeda terrorist network.

Should the U.S. locate any suspected al Qaeda cells or camps here, experts say rooting them out could be a bigger challenge than in Afghanistan because it would require urban combat. GENERAL WESLEY CLARK, CNN MILITARY ANALYST: And that's the challenge in Somalia. And one of the real luxuries we had in Afghanistan was that, for the most part, we weren't fighting in cities. Even in Mazar-e-Sharif and Konduz, the fighting seemed to be on the outskirts of the city.

HOCHMUTH: Surprisingly, many in Somalia don't dread the prospect of U.S. troops returning to their country, they welcome it.

For more on that, we go to Christiane Amanpour.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

AMANPOUR (voice-over): Mogadishu knows a thing or two about being bombed by the United States. In 1993, the ill-fated hunt for warlord Mohammed Fara Aidid (ph) destroyed buildings, killed hundreds of Somalis and about 20 U.S. soldiers, but never snared Aidid.

Today, people read newspapers and listen to a swirl of rumors and threats with a sense of panic.

UNIDENTIFIED FEMALE: I'm not only me, all the people is afraid.

AMANPOUR: They are afraid Somalia will be next on the U.S. bombing list.

This man says, "The Americans can come here to check for Al Qaeda or other terrorists. But if they find nothing, they must stay to help."

Although the U.S. says Osama bin Laden sent fighters to attack American soldiers during Operation Restore Hope, Somalis insists they have long gone, and bin Laden could never find safe haven here.

"I'm a hundred percent I against the attacks in New York," says this man, "because those people did nothing wrong."

Incredibly, he and his friends were reading English-language newspapers dated September 12th, filled with images of the attacks on the World Trade Center.

They say they're just trying to improve their language skills. But one man in the crowd tells us, Somalia should join the war on terror.

UNIDENTIFIED MALE: This is the time to join in the international community of war.

AMANPOUR (on camera): Some cynics and columnist have suggested that Somalia might welcome some well-targeted U.S. bombing as a way out of its current predicament. And surprisingly, despite all of the bad blood that is thrown between these two countries, and many people we spoke to here say they would welcome American troops back again.

(voice-over): They don't want the bombing, but they do want help. A way out of endless war and warlord-ism.

"We have been killing each other for 11 years and we've been terrorizing each other," says this man. "I am requesting America not to bomb us, but to come and help us."

UNIDENTIFIED MALE: I warmly welcoming the Americans and the Western to come in Somalia and to intervene.

AMANPOUR: Not everyone is happy to see Westerners on their streets. But the hostility is quickly contained, and the crowds are mostly good natured. Civil war has raged here since 1991, the country is divided into fiefdoms by weapon-wielding plans. Insecurity, joblessness, and poverty reign. Today, people tell us they see what the U.S. is doing in Afghanistan, and they want the same: a broad- based government, warlords disarmed and weapons taken off their streets.

Christiane Amanpour, CNN, Mogadishu.

(END VIDEOTAPE)

FREIDMAN: While many Somalis long for peace, the rocky political landscape may make it difficult.

CNN's Catherine Bond explains.

(BEGIN VIDEOTAPE)

CATHERINE BOND, CNN CORRESPONDENT (voice-over): The political patchwork that is Mogadishu, part controlled by Somalia's fragile government, the TNG or Transitional National Government, and part controlled by a warlord still holding out against it, because, he says, the government is composed of Somalis from outside the city.

"They want," says Moussa Sudi Alahu (ph), to take the property we own."

This is Moussa Sudi's home turf in north Mogadishu. South Mogadishu is government's terrain. So why, after 11 long years of fighting, is the city still divided? One reason, many say, is neighboring Ethiopia, which supports Moussa Sudi (ph) and other warlords, like these men, assembled in Baidoa (ph), 160 miles or 240 kilometers northwest of the Somali capital.

They warlords say they won't join the government, because the government should join them.

UNIDENTIFIED MALE: We extend this hand to them to join us, because they are very much artificial in nature and in organization. Is there any institutional services working in Mogadishu, except the name of the TNG?

BOND: But services can't work without money, and back in Mogadishu, the government says it ran out of money months ago.

(on camera): Are you broke as a government? UNIDENTIFIED MALE: We did not inherit a bin, you see. We came here empty handed. We borrowed from business people.

BOND (voice-over): It's 17 months since the government was elected by a Congress of Somalis, and the government says the only money the international community has come up with is $13 million from Saudi Arabia, and $3 million from Qatar.

(UNINTELLIGIBLE) the Christian-dominated government of Ethiopia, may feel suspicious of. From the United States' perspective, though, how did the case against Somalia as a possible terrorist haven come about? Partly in letters like this one, from a Somali warlord Houssein Aidid to U.S. President George W. Bush, accusing this man, Abraham Desuki (ph), of manufacturing explosives for terrorist groups in the office of his printing press.

Terrorists groups including Al-Ittihad, a Somali group which Ethiopia says was behind attacks against it, and is now on the Bush administration's black list.

Ironically, three years ago Desuki (ph), a known peace activist, actually became a target of Al-Ittihad.

(on camera): You say you have to hire security to protect yourself against Al-Ittihad, because they issued a fatwah against you?

UNIDENTIFIED MALE: Yes.

BOND: How active are Al-Ittihad today in Mogadishu?

UNIDENTIFIED MALE: Al-Ittihad (UNINTELLIGIBLE) they are not -- but they are probably -- I don't know one by one, nobody knows because I have never been in their organizations, but I think there are some individuals in Mogadishu.

BOND (voice-over): Desuki (ph) is also a member of Somalia's Transitional Parliament. The government's opponents perhaps hoping that creating links between the Mogadishu administration and Al- Ittihad could draw U.S. support.

(on camera): And do you have political ambitions? I mean, in year's time, would you like to be in Mogadishu?

UNIDENTIFIED MALE: Yes, we would like to go back to Mogadishu, because Mogadishu is our capital. After all, we are not going to remain on the peripheries of Mogadishu. One day, we have will to be there. But how, that is the question.

BOND (voice-over): How is one issue that's come to the fore. Ethiopia denies is has troops in Somalia. But the coming and going of Ethiopian soldiers, apparently to help train and to equip militiamen like these, have been confirmed by residents, leading the United Nations to state that the real problem here is the wrong kind of intervention by Somalia's neighbors.

So if the United States really wants to see stability in Somalia, wouldn't it, some of its critics say, publicly pressure Ethiopia to end support for Somalia's warlords, and help the very fragile Somali government get on its feet.

Catherine Bond, CNN, Mogadishu.

(END VIDEOTAPE)

FREIDMAN: Our survey of Somalia continues in cyberspace. Head to CNNfyi.com for more.

MCMANUS: And for more of us, catch us back here tomorrow. Until then, I'm Michael McManus.

FREIDMAN: And I'm Susan Freidman. Have a great day.

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