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CNN LOU DOBBS MONEYLINE

President George W. Bush Unswayed by Protests; Turkey Negotiating with U.S. About Allowing Troops; International Support on Iraq is Essential; East Coast Digging Out from Weekend Storm; Storm Has Little Effect on Economy

Aired February 18, 2003 - 18:00   ET

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

JAN HOPKINS, HOST: Good evening. President Bush today issued a defiant message to millions of people who protested against a possible war against Iraq.
The president said America's security should not be dictated by protesters.

Today the United States and Britain worked on a new U.N. resolution that would back the use of force against Saddam Hussein. White House correspondent Chris Burns has the story -- Chris.

CHRIS BURNS, CNN CORRESPONDENT: Jan, President Bush saying democracy is a beautiful thing but he is unswayed by those protests.

He said he's going to forge ahead with trying to secure a new U.N. resolution against Iraq, of course being very sensitive to the predicament of his chief ally, British Prime Minister Tony Blair.

Here's what he had to say.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Anytime somebody shows courage when it comes to peace that the people will eventually understand that. First of all, you know size of protest, it's like deciding, well, I'm going to decide policy based upon a focus group. The role of a leader is to decide policy based upon the security, in this case the security of the people.

(END VIDEO CLIP)

BURNS: But here's another difficulty, too. Turkey is now balking at agreeing to let U.S. forces inside Turkey, that being very important for any deployment against Iraq. Turkey is on the northern edge of Iraq, and that would be part of the offensive.

The U.S. officials here are saying that they are still confident there could be some kind of agreement. Reportedly, Turkey is holding out for Billions more in U.S. aid before they do agree.

U.S. defense officials are looking at a plan B just in case -- Jan. HOPKINS: Chris, the White House saying tonight about North Korea's threat to scrap that truce that ended the Korean War in 1953?

BURNS: Well, U.S. officials here saying that they are seeing that as more strident rhetoric, that Korea, North Korea, has done this repeatedly over and over again, declaring that it is no longer part of the non-proliferation treaty, going ahead with this nuclear reactor they're starting up.

These are things that the U.S. officials here are saying, that North Korea is just trying to score points, trying to get more aid, trying to blackmail the international community, and Bush says he'll have no part of that -- Linda.

HOPKINS: Thanks. Chris Burns at the White House.

The United States and Britain faced more criticism in the United Nations today. At least 70 members of the non-aligned group of countries are giving their views to the U.N. Security Council.

Many expressed doubts about the need for quick military action against Iraq. They said that weapons inspections should continue for now.

And as Chris Burns just reported from the White House, U.S. hopes of winning the support of Turkey for military action suffered a major setback today.

Turkey's parliament refused to vote on the issue of basing U.S. troops in Turkey. Turkey, quite simply, wants a lot more money before it will agree.

Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Turkey is saying double or nothing, asking for some Billions of dollars more in exchange for allowing U.S. ground troops to be stationed there.

The White House today reminding Turkey about alliance obligations while Turkey plays hardball about the money.

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: The United States and Turkey have a long history going back decades of being strategic partners, and we will see ultimately what Turkey decides and what the final outcome is.

PILGRIM: The negotiations have been dragging on.

The United States is reportedly offering $20 Billion in loans and $6 Billion in grants on top of that. Turkey reportedly wants double that.

Strategically a deal is vital. Turkey shares a 220-mile border with Iraq. Basing troops in that area would be an optimal northern front against Iraq.

At Incirlik, U.S. and British planes start patrols over the no- fly zone already.

But Turkey is worried a full-out war would cripple its economy. Turkey argues it lost some $40 to 60 Billion in trade and tourism because of the first Persian Gulf War. Iraq was a main trading partner.

Protests against the war have been building. Some 90 percent of Turkish citizens are against the war.

Some experts think the money will help sway public opinion.

RICHARD MURPHY, COUNCIL ON FOREIGN RELATIONS: It's sweetening the deal. It would help with public opinion. But there's also the conviction that Turkey got shortchanged on commitments made to it back in 1990-91, that the United States, that the European Union, Japan, nobody fully honored their commitments to make good Turkey's losses in trade.

(END VIDEOTAPE)

PILGRIM: Most experts think Turkey will go along in the end. Turkey very much needs U.S. help in economic matters, and it depends heavily on loans from the IMF and is looking to join the European Union.

But that does not mean that negotiations will be any easier -- Jan.

HOPKINS: Thanks, Kitty. The Pentagon says it has at least two backup plans if Turkey does not allow U.S. troops to use its bases.

Senior Pentagon correspondent Jamie McIntyre has that story -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Jan, the Pentagon does say that it has a backup plan, but it doesn't really like the options.

The first one would be to simply move troops from the south up into the north to control the oil fields up there. That would mean a drive of more than 600 miles, or approximately the distance from Washington to Florida, over some pretty bad territory.

The other option would be to secure bases in northern Iraq, particularly areas controlled by the Kurds, and then leapfrog troops in by flying them in to those bases. Again, you still have to have a pretty high number of sortees to do that.

So the U.S. is still hopeful that it will win permission from Turkey to base up to 40,000 troops there. This is a crucial week, a senior defense official said today, in expecting that decision from Turkey. And there are signs that the war is drawing closer.

One of them is the Pentagon's plan to send reporters along with the troops. News organizations, about 200 of them, are supposed to get back to the Pentagon this week.

Next week the units are supposed to find out which reporters are going with them. And by another week or so those reporters should be joining the troops in the field -- Jan.

HOPKINS: Jamie, what's the latest on the troop deployment to the Persian Gulf?

MCINTYRE: Well, it continues at a pretty steady pace with over 180,000 troops in the Persian Gulf region now. Still more troops leaving all the time.

At this point the Pentagon says it is ready to carry out any war plan if President Bush orders it. It would still probably take a week or so once the -- a week or two, rather, once the orders are given, but meanwhile, more troops are continuing to move.

HOPKINS: Jamie McIntyre at the Pentagon. Thanks.

The United Nations today said that there will be more U-2 surveillance flights over Iraq.

The first U-2 reconnaissance mission took place yesterday. The U-2 plane was flown by a U.S. crew on behalf of the United Nations.

Weapons inspectors have also been continuing their work on the ground. Today they visited five sites involved in the production of a banned missile.

President Bush says a coalition of the willing will disarm Iraq if necessary, but U.S. efforts to create that coalition are looking more complicated every day.

I'm joined now by William Cohen, a former defense secretary and now a MONEYLINE contributor.

Welcome.

WILLIAM COHEN, FORMER U.S. DEFENSE SECRETARY: Good evening.

HOPKINS: Now, what about the protests over the weekend? The president says he's not going to make policy based on a focus group.

But what impact do these protests really have for the U.S. and around the world?

COHEN: Well, I think they do have an impact, notwithstanding any decision by the president that they don't count.

I think that they have an impact in terms of showing that there is division in this country, division around the world, and that must be taken into account by a number of leaders.

The president's correct that he as the elected leader of this country must act based on what he sees and recommends to Congress, which has given him approval to date at least. What's in the best interests for our national security.

So it's important to take it into account. He cannot measure his decisions based upon the volume of the rhetoric or the numbers necessarily, but an important factor, not to diminish or it discount it altogether.

HOPKINS: We were hearing about the problems with Turkey agreeing to have U.S. forces based there.

What -- how significant is this? And do you think that increasing the amount of money to Turkey is going to solve the problem?

COHEN: Well, it may help some. I think they're still subject to negotiation.

Turkey, as was pointed out by your previous piece, feels that it did not get what it was due by virtue of its support during the '91 war. They have suffered economically over the years by virtue of losing a good amount of trade with Iraq.

And so I think it's understandable they don't want to find themselves in a similar position and are doing whatever they can up- front to try to leverage their position to get more economic assistance.

Ultimately, though, Turkey has to understand the United States has been perhaps its strongest supporter. It wants to get into the E.U. The United States has been a leading advocate in supporting that aspiration on the part of Turkey.

And so I think that ultimately Turkey will find that it's in its national security interests as well as economic interests to support the United States.

But some more negotiation, no doubt, will be underway in the next few days.

HOPKINS: There's a lot of negotiation going on at the U.N. How important is it for the U.S. to win a resolution before the Security Council, an additional resolution on Iraq?

COHEN: Well, I think it's important to try again to see if we can't persuade the council to support the United States.

I was reading earlier today some old clips, going back to Dec. 20, 1998, and it was interesting because the headline said that the U.N. inspectors indicate that Saddam Hussein is the master of concealment.

We have been talking about his ability to conceal now for so many years, 12, 13 years, going on 13 years. And what I think has to happen is that we have to bring the focus back to what is required by the inspectors.

The inspectors are not there to search and discover. It really -- the inspectors are there to demand and for Saddam Hussein to declare what he has done.

And that I think -- that argument has been losing some of its focus, so that now it looks as if the burden of proof is on the United States to show there's a, quote, "smoking gun" or show that there's an opportunity for the inspectors to search and discover. And I think that's the wrong test.

The real test is they must demand and he must disclose, and to bring that focus back to the Security Council, which has been basically dealing with Saddam since 1991 and basically his conduct has been the same.

HOPKINS: There is quite a disagreement within Europe at this point. How significant is it, do you think?

COHEN: Well, I think, again, the public opinion is very important in the sense that we've always believed, certainly since Vietnam, that you don't commit your forces to a major conflict unless you have a superior force, you have a well-defined mission, that you go in with overwhelming numbers, you have an exit strategy, all of the above. And that you have public support for your decision.

The last thing you want to do is find yourself involved in a major conflict and then have a dissipation of public support. We don't want to put our military men and women in that kind of position again.

So it's important that the United States go to the U.N. to try to make its case, to remind the Security Council what has happened in the past, what continues to take place, and to see if we can't build an international condemnation of Saddam to persuade him that the game is up, that he must in fact disclose and destroy those weapons or face the international consequences.

That would be important to avoid the kind of fragmentation of support and dissipation of that support for the men and women who we are asking to fight and conceivably die in numbers that we don't want to foresee at this point.

So very important to get public support if we can.

HOPKINS: Thanks very much. William Cohen, former defense secretary.

And still to come on MONEYLINE: the hospital mistake that left a teenager fighting for her life after a transplant operation. We'll have full details.

Millions of people are digging out after the worst winter storm in years. Local government counting the cost. Bill Tucker has the story -- Bill

BILL TUCKER, CNN CORRESPONDENT: It was money that, like it or not, had to be spent. But Jan, as it turns out, it may be the worst of our troubles are still to come.

HOPKINS: Thanks, Bill.

The Dow closed 132 points higher today. Investors tried to balance the various forces rocking the economy. Peter Viles has that report -- Peter.

PETER VILES, CNN CORRESPONDENT: Jan, the American economy is buried right now under worries about war, under anxieties about terrorism, and yes, as Bill Tucker said here in the east, under a whole lot of snow -- Jan.

HOPKINS: Thanks, Pete.

And you may want to check your credit card account. A hacker has breached security measures and gained access to millions of accounts. All of that and more when MONEYLINE returns.

(COMMERCIAL BREAK)

HOPKINS: Police in California today returned to the Modesto home of Laci Peterson, the pregnant woman who disappeared on Christmas Eve.

Police are calling it a follow-up search and say that Laci's husband, Scott, is not a suspect, but he has not been eliminated from the investigation, either.

Twenty-seven-year-old Laci Peterson was expected to give birth to her son just over a week ago.

In other news across America tonight, a judge today rejected criminal charges against the owners of a Chicago nightclub where 21 people died Monday morning. The city claimed the club was operating illegally. The judge said more evidence is needed to justify the charges.

Twenty-one people were killed in a stampede after a security officer fired pepper spray into the crowd.

A Mexican teenager is in critical condition tonight after she mistakenly received organs with a different blood type. The 17-year- old girl is listed in critical condition at Duke Hospital in Durham, N.C. She received the transplant a week and a half ago.

Duke Hospital says it regrets the mistake and is doing everything possible to save the girl's life.

And a possible -- a popular tourist area in Hawaii's Volcanoes National Park was reopened after a fire was brought under control. The fire was caused by molten lava spewing from Kilauea volcano. Kilauea is the world's most active volcano.

For some areas across the country it was the worst winter storm in decades. Up to four feet of snow still covers areas from the plain states to New England. Roads remain unplowed in many areas. Airports in Washington, Philadelphia, and New York City are slowly returning to normal. Commuters may face delays for days to come. And cleaning up this winter mess won't be easy or cheap. And that is not good news for state and local governments already facing huge budget challenges.

Bill Tucker has the report.

(BEGIN VIDEOTAPE)

TUCKER (voice-over): The morning after was a mess. The headache befitting a storm which dumped a record snowfall on Boston, caused a quarter of a million homes to lose power, shut down airports from Washington, D.C., to Massachusetts, and killed at least 37.

It added stress and strain to people, businesses, and to state and local budgets.

MAYOR THOMAS MENING, BOSTON, MASS.: There is no budget. We went through the budget two storms ago, and this storm caused us $68,000 an hour.

TUCKER: New York City says the cleanup will cost about a million dollars per inch of snowfall, or about $20 million.

The state of New Jersey spent roughly $150,000 an hour plowing its highways. It all adds up to a lot of money, money that, well, had to be spent.

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: In the end minor things like a snowstorm really aren't that big a deal. I wouldn't suggest you throw a snowball at somebody but, you know, have a little bit of fun, go to the parks and build a snowman would be a great thing to do.

TUCKER: And for the most part people did find fun in the snow and in the end took the storm in stride.

UNIDENTIFIED MALE: I don't live in Hawaii. So this is a part of life out here in the northeast.

TUCKER: But it's not just snow. Weather forecasters say rain and floods are very possible within a couple of days.

JACQUI JERAS, CNN METEOROLOGIST: And the rain could be very heavy. If we get a good inch of rain or so on the ground on top of the snow that's been melting over the last couple of days, we're going to see more dramatic melting this weekend, that flooding is going to be a very significant concern.

TUCKER: The storm that's expected to bring all of that rain is currently in the Rockies. It has a projected path, Jan, across the southern plain states and then onto the east coast, where we could see that rain this weekend.

Jan, back to you.

HOPKINS: So a mixed blessing...

TUCKER: Yes.

HOPKINS: ... this warm weather. Thanks very much. Bill Tucker, out in the cold in New York.

Winter storms, terrorist threat alerts, the economy has been lurching from one high-profile event to another for months.

Peter Viles now on the event-driven economy.

(BEGIN VIDEOTAPE)

VILES (voice-over): The blizzard of '03 only the latest and probably the least of the events rocking the American economy.

Business decisions frozen by the prospect of war against Iraq. Heightened security means heightened anxiety. And there's certainly not enough money in duct tape and bottled water to boost consumer spending.

So on first blush it sounded like bad news when Alan Greenspan said these fears are in fact holding the economy back.

ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: The path of capital investment will also depend on the resolution of the uncertainties surrounding the business outlook.

VILES: It sure sounds bearish, but that argument is actually somewhat optimistic. It says the economy is poised for a post-Iraq bounce.

MICHAEL HOLLAND, HOLLAND & COMPANY: We could have a slow or negative first quarter here, which would make a potential pop-back in the second and third quarters, if we get Iraq behind us of major proportions in economic activity.

VILES: The bearish case is that it's not anxiety but deeper fundamental problems that are weighing on the economy.

WILLIAM DUDLEY, CHIEF ECONOMIST, GOLDMAN SACHS: The big debate is about -- on capital spending, are businessmen holding back on capital spending because of the risk of a war with Iraq; or are they holding back for other reasons, excess capacity, worries about, you know, generating more free cash flow to satisfy investors.

My own view is that capital spending's weak for fundamental reasons having to do with the economy, not geopolitical uncertainties.

(END VIDEOTAPE)

VILES: Against a backdrop of global tension and uncertainty about the underlying health of American business the snowstorm that hit the east coast is a major inconvenience but it is probably a minor economic event -- Jan.

HOPKINS: That's good.

VILES: It's good news, yes.

HOPKINS: Coming up on MONEYLINE: a computer hacker breaks into a company which processes major credit cards. Fred Katayama has that story -- Fred.

FRED KATAYAM, CNN CORRESPONDENT: Well, Jan, 8 million credit cards were possibly compromised. One in every 100 Visa and Mastercards -- Jan.

HOPKINS: Thanks, Fred.

Also tonight, there's a new sheriff in town in Miami, and he's facing one of the biggest police scandals ever. We'll have a special report on some of the challenges that he faces.

And Israeli forces tonight launch another offensive in Gaza. Israel has vowed to crack down on Palestinian terror groups. That and a great deal more straight ahead.

(COMMERCIAL BREAK)

HOPKINS: Coming up on MONEYLINE: new violence tonight in Gaza. Kelli Wallace will have the very latest.

Also tonight the death toll rises in South Korea's subway fire. Rescue workers have now given up searching for survivors. That and much more straight ahead.

(COMMERCIAL BREAK)

HOPKINS: Tonight Israel launched a huge offensive in Gaza. Dozens of tanks were backed by Apache helicopters.

It is the latest of several Israeli raids aimed at Hamas.

Kelly Wallace reports now from Jerusalem -- Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Jan, this major Israeli operation appears to be part of Israeli -- Israel's response to the killing of four Israeli soldiers Saturday morning, when their tank ran over an explosive device in Gaza, a device the radical Islamic group Hamas claims to have planted.

Palestinian security sources tell CNN that more than 30 Israeli tanks have been firing shells and at least two Apache helicopters have been firing rockets as they moved into Gaza late Tuesday.

Our producer on the ground, Talal Abu Rakmai, tells us that the incursions are taking place in neighborhoods known for Hamas activity and for Islamic Jihad activity.

Palestinian sources say as least five Palestinians have been injured, and Hamas sources also say that at least one Hamas activist has blown himself up in the area of an Israeli tank.

Now, the Israeli defense forces, they are not commenting formally, but military sources are telling me this is all part of a targeted mission meant to go after, in the words of these sources, the terrorist infrastructure in Gaza.

It was just Sunday when Israel's defense minister, Shaul Mofaz said that the Israeli forces would severely damage the Hamas infrastructure in Gaza, and since then eight members of Hamas's military wing have been killed.

Now, the backdrop to all this, this comes as Israelis and Palestinians are in London meeting with the so-called quartet, the United States, the European Union, the United Nations, and Russia, all talking about Palestinian reform and that so-called road map for Middle East peace.

But what we're seeing tonight is likely to fuel the anger even more, likely to lead to vows of revenge by Hamas and Islamic Jihad, and likely not to help those talks under way in London -- Jan.

HOPKINS: Thanks, Kelly Wallace in Jerusalem.

And now for some of other news stories that are making headlines around the world. We begin with a fire that burned two subway trains in South Korea.

The fire in the city of Taegu killed about 120 people. Dozens more are missing. The two trains were carrying 400. A man with a history of mental illness is suspected of starting that fire.

Police in Belgium still do not know the value of the diamonds that were stolen in a multimillion-dollar robbery over the weekend. Thieves emptied more than 120 vaults at a diamond trading center in Antwerp.

In London officials say that traffic levels in the city center dropped by 25 percent after the introduction of a controversial new charges for motorists. Drivers with being charged $8 to enter central London.

Coming up next: eight million credit card accounts were hacked yesterday. We'll tell you what to do to protect your cards.

Harris Miller, the president of the International Technology Association, will be my guest.

We'll also have a special report on the man who will try to clean up one of the nation's most corrupt police departments, in the city of Miami. Those stories and more when we come back.

(COMMERCIAL BREAK)

HOPKINS: It's a hacking case with a twist.

A hacker has gained access to more than eight million credit card accounts. The accounts are with Mastercard, Visa, American Express, and Discover. The hacker breached the security system of a company that processes credit card transactions. Fred Katayama reports.

(BEGIN VIDEOTAPE)

KATAYAMA (voice-over): Nearly 9,000 credit card holders of Citizens Bank could not use their plastic to stock up for the storm. The reason: Citizens Bank canceled their Mastercards. A hacker had broken through the security of an unidentified company that processes credit cards on behalf of merchants.

But that's just part of the story. It turns out the processing firm handles Visa, American Express, and Discover cards as well as Mastercards. Eight million cards were possibly compromised.

Mastercard said in a statement, "Investigations are underway. We have notified our member financial institutions of the accounts involved."

The card associations say the hacker accessed 2.2 million Mastercards and 3.4 million Visa cards, or roughly one of every 100 of their cards in the United States. American Express and Discover would not reveal how many of their cards were impacted.

Security experts say credit card breaches involving merchants are rather common, such as the 300,000 cards stolen at the Web site CD Universe two years ago. But the current breach involves a processor. So, the number of victims is much greater.

IRA WINKLER, SECURITY STRATEGIST: The processor takes care of many, many vendors. So, there's many, many more credit card numbers available to a potential hacker at this site. So, again, something like this is very rare, because it's not a site which is very commonly known to the public, as well as hackers.

KATAYAMA: Experts surmise that the hacker is rather advanced because it takes more know-how to identify and break through a merchant processor.

(END VIDEOTAPE)

KATAYAMA: Visa, American Express, and Discover said that, so far, they have not seen any evidence of fraudulent use of the stolen numbers. The card companies said they are working with authorities, including the FBI. Calls to the FBI were not returned -- Jan.

HOPKINS: So, Fred, if you suspect that your credit card was hacked, what do you do?

KATAYAMA: Well, you should, in the case of Visa or MasterCard, call the bank that issued the card. In the case of American Express or Discover, call the card companies themselves, because if you report any possible fraudulent use right away, you are not held liable for any of those charges. But if you wait until more than 60 days after the statement was sent out to you, then you are liable for every cent.

HOPKINS: But it does mean getting a different card and changing the numbers and notifying everybody, right?

KATAYAMA: In the case of the accounts at Citizens Bank, 8,800 accounts were canceled over the weekend and new cards are on the way.

HOPKINS: But that means you have a new number that you have to get used to, right?

KATAYAMA: That's right, starting all over again.

HOPKINS: Thanks very much, Fred Katayama.

My guest says that this case demonstrates that there is no sure way to guarantee total security in cyberspace. I'm joined now by Harris Miller, the president of the Information Technology Association. It represents 500 companies.

Harris, what do you think that the consumers should do to protect themselves from this kind of thing?

HARRIS MILLER, PRESIDENT, INFORMATION TECHNOLOGY ASSOCIATION: Well, the good news is, as Fred reported, they're not liable for any dollar loss if they report to their credit card company if there's a fraudulent use. And all the credit card companies are saying they haven't seen a fraudulent use.

But this just points out, Jan, this incident, the recent Sapphire worm, how dependent we are on our cyber-security system and how the cyber security is still far from perfect. We need to spend a lot more time and resources. The president's plan, which was released last Friday, put out a road map for every business, every individual and government itself. And we all have to pay attention to that road map and implement it effectively.

HOPKINS: But that's kind of the macro picture. What about the consumer? What can we each do to safeguard our -- all of this information?

MILLER: To safeguard information, individuals have to take part in the solution. No. 1, of course, if they have a credit card, they want to make sure they're dealing with a legitimate credit card business.

Secondly, they never want to give out their pin numbers. Thirdly, when they're on the Internet, they want to make sure that they're dealing with legitimate businesses. There are a lot of frauds out there on the Internet, millions of reports to the Federal Trade Commission each year. So, don't do business with someone you don't know and trust.

The other thing is, you have to make sure that you have your own systems protected, you have your own cyber security, your own anti- virus software. It doesn't cost very much. In fact, many companies give it away for free. But you have to maintain it and make sure it's current and up to date.

HOPKINS: But this does point to how vulnerable we all are, is that right?

MILLER: Absolutely. We don't live in a paper world anymore. We live in a digital world. And just like in the old paper world, where we had banks with big granite buildings, and then they had physical security guards, and then they had vaults and all the redundancy on top of redundancy, we're going to have to develop that same redundancy in our new cyber world.

For example, it's possible that that processing company -- I don't know which one it is -- but it's possible, perhaps, they should have had all of that information encrypted, which means coded. If they'd done that, then the person who hacked into it, unless he or she had the decryption code, couldn't have read the information anyhow. So, that may be a new feature.

Again, you might say, well, that's redundant; that's unnecessary. But what we're learning is, because the hackers are getting so smart and so clever, we have to be very, very vigilant and we're going to have to add layer of security on top of layer of security.

HOPKINS: Now, how vulnerable are we for terrorists hacking the system?

MILLER: I think that's one of the things that really keeps me and others in Washington who are concerned about terrorism up at night, which is the perfect storm, where we have a physical attack -- heaven forbid that that should happen again. I know that the president and Governor Ridge and others are working against it.

But should that occur, and if that were coupled with a cyber attack, for example, an attack which, through the Internet, were able to bring down the 911 response system, which has happened, by the way, or someone who could bring down the telecommunications system through the Internet, which again, has happened, that would be the worst of all possible worlds, where you'd both have a massive physical destruction caused by terrorists; plus, the communications needed to respond and react would also be knocked out.

So, that's why the president himself, Governor Ridge, and other people are spending so much time focusing on cyber security.

HOPKINS: But what needs to be done to make that system safer?

MILLER: What needs to be done is, No. 1, attention must be paid. Frankly, cyber security still does not get the kind of attention that physical security or concerns about bioterrorism bring about. It's going to take resources.

But technology is not the only part of the solution. You also need to have better processes in place. For example, if you buy an anti-virus software, but you never update it, you're not really doing anything. And, thirdly, it has to be the people. Too many of us walk into companies and see the so-called daisy-chain computer screens, where they've got all their yellow stickies all over the monitor with all their passwords. Well, that's not a secure system. In fact, ITA is about to launch a program which will enable companies to work with their employees by giving them an actual online test to see whether they have good cyber sense, to make sure that they are behaving and not giving away information which can actually be the keys to the kingdom.

If someone called up their employee and said, come and unlock the front door and let me in, I don't belong there, the employee would never do that. Yet employees give away all kinds of information about their information technology systems that they shouldn't, because they don't realize the vulnerabilities involved.

HOPKINS: Thanks very much, Harris Miller of the Information Technology Association. Thanks for joining us.

MILLER: Thank you for having me, Jan.

HOPKINS: Thank you.

And that brings us to tonight's MONEYLINE poll: Do you feel your credit cards and personal information are safe online, yes, no, or uncertain? Cast your vote at CNN.com/MONEYLINE. We'll bring you preliminary results later in the broadcast.

And coming up on MONEYLINE: Miami has a new top cop. John Timoney has taken on the challenge of cleaning up Miami's troubled police department. We'll have a special report.

And another chief today charged with cleaning up massive scandals, this time in corporate America: William Donaldson sworn in as the new chairman of the SEC. Tim O'Brien has that report from Washington -- Tim.

TIM O'BRIEN, CNN SPACE CORRESPONDENT: Jan, more than three months after Harvey Pitt announced his resignation, the SEC finally does have a new chairman. We'll tell you about William Donaldson and the challenges he faces.

HOPKINS: Thanks, Tim.

"Daredevil" sets a new record at the box office this Presidents Day weekend.

We'll have those stories and more.

(COMMERCIAL BREAK)

HOPKINS: Eleven police officers are on trial in Miami for allegedly planting guns at the scenes of four shootings. The case has put Miami on the list of cities with the most corrupt police departments. And it drew one of the country's most respected top cops to Miami to clean up the department. John Timoney, a former police chief of Philadelphia, came out of retirement last month to take on the job.

Susan Candiotti has the report. (BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): When to shoot and when not to, making split-second, potentially fatal decisions, the kinds of decisions that landed 11 of their fellow Miami police officers on trial, charged with breaking the law and covering it up. Two more pleaded guilty.

GUY LEWIS, FORMER U.S. ATTORNEY: They lied about what they saw. They falsified reports. They tampered with crime scenes. They stole money, personal property, and guns from people being arrested.

CANDIOTTI: Into the maelstrom: new Miami Police Chief John Timoney.

JOHN TIMONEY, MIAMI POLICE CHIEF: I knew what I was getting into. Some friends of mine questioned my sanity.

Good to meet you. How are you?

UNIDENTIFIED FEMALE: Fine. And you?

TIMONEY: Terrific. Terrific.

CANDIOTTI: Now on the job a few weeks, just as a federal corruption trial began, no comment on the case expected to last months, but Timoney is addressing the problem.

TIMONEY: I won't wait for that trial to end. We've begun already to deal with the issue of police use of weapons, the issue of deadly physical force.

CANDIOTTI: The controversial shootings go back to 1995, including one with 123 bullets fired, eight hitting 73-year-old Richard Brown. Cops claimed he shot at them, the gun allegedly planted.

(on camera): Do you have a sense, Chief, that people on the street trust Miami police officers?

TIMONEY: It's hard to tell for me so far.

CANDIOTTI:(voice-over): Some African-American community leaders say there is a problem. All but one of the shooting victims were black.

BISHOP VICTOR CURRY, NEW BIRTH MINISTRIES: There are some police officers who are literally out of control.

CANDIOTTI: Bishop Victor Curry hosts a daily radio talk show.

CURRY: We're not against police. We're against police brutality.

CANDIOTTI: Timoney says race relations will be better addressed in training. TIMONEY: For their own safety, they shouldn't make certain assumptions: the notion that every white guy with a gun is an off-duty cop, every black guy with a gun is a perpetrator.

CANDIOTTI (on camera): According to the chief himself, the average job expectancy of any big-city police chief can be as little as two to three years. No matter how long Chief Timoney stays on the job, he remains optimistic, not surprisingly, that he'll be able to make a positive impact here in Miami.

TIMONEY: We're going to get over this hump. We're going to improve this department and really create a model police department for the rest of the country.

CANDIOTTI (voice-over): Susan Candiotti, CNN, Miami.

(END VIDEOTAPE)

HOPKINS: Still ahead: William Donaldson takes over as the new chief at the Securities and Exchange Commission. We'll bring you a report on the challenges ahead for Donaldson.

And "Joe Millionaire" lives up to his name, making a million total for himself and his date, but a much bigger payoff for Fox.

And our Jeanne Moos found out, the frightful weather that has covered the Northeast in snow hasn't frightened some.

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN CORRESPONDENT: One of the best things about a New York blizzard is that, for a brief time, pedestrians, rather than cars, rule the streets. How often can you do this in the middle of 5th Avenue?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HOPKINS: William Donaldson was sworn in today as the chairman of the Securities and Exchange Commission. Donaldson replaces Harvey Pitt more than three months after Pitt resigned. Donaldson takes over the SEC following some of the biggest corporate scandals ever, including Enron, WorldCom, and Tyco.

Tim O'Brien has the report.

(BEGIN VIDEOTAPE)

WILLIAM DONALDSON, SEC CHAIRMAN: I, William Henry Donaldson, do solemnly swear.

O'BRIEN (voice-over): The ceremony took less than 50 seconds, but repairing the damage to investor confidence brought on by corporate greed and a failure of enforcement, some say could take years. DONALDSON: We will demand responsible corporate governance throughout the business and financial world. We will strengthen our market structure, making the markets more efficient, more transparent and friendlier to all investors.

O'BRIEN: Frightened investors are not likely to accept anything less. The president renewed his pledge, the money will be there, $842 million.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In the 2004 budget, I'm asking Congress to increase SEC funding by 73 percent over the year 2002. We want to make sure the SEC has the tools necessary to pursue its important mission.

O'BRIEN: Donaldson brings a wealth of experience to the job and a lot of other wealth as well, net worth placed at around $100 million, which puts him on the wrong side of the street with some skeptics.

WILLIAM PATTERSON, INVESTMENTS DIRECTOR, AFL-CIO: I think there's concern that he's been associated with some of the excess on Wall Street, executive pay, clubby boards of directors. He has a strong resume, but a mixed past.

O'BRIEN: Former Chairman Richard Breeden tells MONEYLINE that Donaldson must also commit himself to repairing the SEC's tarnished image, which, he added, shouldn't be hard given recent enforcement failures.

In fairness to Harvey Pitt, the SEC's enforcement actions did hit an all-time high last year, and Pitt has been aggressively implementing the reforms mandated by Sarbanes-Oxley. Donaldson, his friends, and his foes all seem to agree that selecting a chairman for the new Public Accounting Oversight Board will be an important first test.

(END VIDEOTAPE)

O'BRIEN: And sources tell MONEYLINE the SEC has already been vetting potential candidates for several weeks to lead that oversight board. Donaldson reportedly has the short list in hand -- Jan.

HOPKINS: So, he's officially on the job at this point, Tim?

O'BRIEN: He's officially on the job. And this is a big step, this oversight appointments board -- the chairman to lead that board. It could be in the next couple of weeks.

HOPKINS: Thanks very much, Tim O'Brien in Washington.

On Wall Street, stocks rallied for the second straight session: the Dow, Nasdaq, and the S&P 500 all up about 2 percent.

Christine Romans is here to tell us about the gains today.

Christine, impact of the protests over the weekend? CHRISTINE ROMANS, CNN CORRESPONDENT: A little bit, but, mostly, folks saying that they're going to look beyond what's happening right now and that maybe growth stocks are going to be a place to play again. And that's why technology really led this.

Jan, the Nasdaq is higher for February and also now higher for the year. Take a look at markets year to date. You can see barely the Nasdaq is positive, up eight-tenths of a percent. S&P 500 still down, Dow still down, and, of course, the bonds still benefiting overall. But this was the second lightest day of the year for the Big Board, so very light volume on this rally, GM and Alcoa up. EMC was the most actively traded stock.

You also had GE quite strong, but some folks saying it felt a little bit like short covering, the oversold bounce. That's sort of trader talk for no real impetus behind the buying overall.

HOPKINS: So, stocks went up. Does that mean that things like gold and oil went down?

ROMANS: Well, this is the conundrum, which is one reason why people think that maybe the whole Iraq worry is not necessarily in the rearview mirror, because bonds were mixed to higher. You'd like to see those fall when the stock market rallies. But you did see crude up just 15 cents and gold come back, come lower. And in terms of stocks, gold and defense stocks both retreated. So, that was sort of the trend we saw there.

HOPKINS: Wal-Mart had earnings. And they had good earnings as a result of people stocking up for terrorist threats.

ROMANS: Yes. Lingerie and duct tape apparently were very good sellers, interestingly enough.

HOPKINS: Valentine's Day.

ROMANS: Yes, I guess -- a 16 percent profit surge. The stock closed slightly lower, though, because there was overseas strength and there was some weakness in the Sam's Club earnings. Overall, the retail sector did well today, but Wal-Mart was down a little bit. It had risen for about a week coming into this report, so, maybe taking a little bit off the table there.

HOPKINS: Thanks -- Christine Romans.

ROMANS: Sure.

HOPKINS: And from the markets to movies: Fox's "Daredevil" was No. 1 at the box office over the holiday weekend. The action movie, which stars Ben Affleck as a blind superhero, took in $45 million over four days. That set a new record for the Presidents Day holiday, beating out last year's drama "John Q," starring Denzel Washington. "How to Lose a Guy in 10 days" fell to second place. "Chicago," "Jungle Book 2" and "Shanghai Knights" rounded out the top five.

On the small screen last night, Fox's "Joe Millionaire" was the big winner. An average of 35 million people watched the two-hour special. The audience jumped to 40 million viewers when Evan Marriott chose Zora for his girlfriend and revealed that he lied about his finances. Not even the king of pop could compete. NBC and ABC's Michael Jackson specials were watched by a fraction of Joe's audience.

Still to come: the results of tonight's poll; plus, your thoughts; and having a ball in the snow.

(COMMERCIAL BREAK)

HOPKINS: Coming up next tonight: People are still digging themselves out from the snow blanketing the Northeast. Our Jeanne Moos braved the storm and found plenty of people who were enjoying the snow and taking advantage of a slowdown in the city that never sleeps.

(COMMERCIAL BREAK)

HOPKINS: Now the preliminary results of tonight's MONEYLINE poll. We asked you: Do you feel your credit cards and personal information are safe online? Twenty-two percent of you said yes, 55 percent said no, and 23 percent said uncertain.

Now for a look at your thoughts.

Judith Seay from Washington state writes: "I wouldn't base the effectiveness of the United Nations on one incident. It is like any large body of people. They all want to input their opinion and it takes a lot of debate and negotiation to get anything done."

Mike Kirk from Nevada had this thought: "Since NATO no longer has a mission, we need to pull our troops out of Germany and have them guard our borders. After all, our military commitment to NATO shouldn't exceed France's."

From North Adams, Massachusetts, Chris writes in to say: "I believe that the only time the people of Europe will stand behind any resolution of war will be when they experience their own 9/11."

And Roger from Michigan says: "Since we came to France's rescue in World War I, World War II, Vietnam, and the Cold War, we shouldn't be surprised at their ingratitude and jealousy. France, a third-rate power with a socialist economy, continues to wait for Napoleon's return. He's not coming home."

Send your e-mails to MONEYLINE@CNN.com. Please include your name and address. Those were your words.

Now: "In Their Words."

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: There are no choices. There are no options. There's only one way, unless the word of the United Nations has absolutely no value. After all, if the United Nations finds that you can have prescribed missiles and get to keep them, because they don't do anything about them, then is the United Nations really the instrument of disarmament anymore?

TONY BLAIR, BRITISH PRIME MINISTER: People who want to pull Europe and America apart are playing the most dangerous game of international politics I know. If Europe and America stand together, we can solve the problems of the world. If you set up these rival poles of power, where people are being pulled one way or another way between the two, between Europe and America, I sincerely believe that is so dangerous for the security of our world.

RICHARD M. DALEY, MAYOR OF CHICAGO: This tragedy is especially heartbreaking, first, because the victims were so young, as you read in newspapers and read about these young men and women and their lives and their families and their dreams and ambitions, and; secondly, because it was a disaster that absolutely should never have happened.

(END VIDEO CLIP)

HOPKINS: Finally tonight, yes, the snowstorm that hit the Northeast was a huge hassle for many. But take a step back and it really is a thing of beauty.

Jeanne Moos checked out New York in its winter whites, even finding something hot in all the cold.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Seeing New York in a blizzard is one thing, but imagine seeing it in a blizzard if you're from Florida and...

UNIDENTIFIED FEMALE: We've never seen snow before.

MOOS (on camera): You've never seen snow before?

UNIDENTIFIED FEMALE: Uh.

MOOS (voice-over): From Central Park to Times Square, folks fell for the snowfall.

UNIDENTIFIED MALE: This is wonderful.

UNIDENTIFIED MALE: I'm loving it, yes.

UNIDENTIFIED FEMALE: Absolutely fabulous.

UNIDENTIFIED FEMALE: It's quiet, it's sweet, everybody's pleasant to each other.

UNIDENTIFIED MALE: Well, this is one of the things you dream about, getting to go cross country skiing up and down Fifth Avenue.

MOOS: One of the best things about a New York blizzard is that, for a brief time, pedestrians rather than cars rule the streets. How often can you do this in the middle of Fifth Avenue?

UNIDENTIFIED MALE: This is unbelievable. MOOS: So is this guy.

UNIDENTIFIED MALE: Like a naked cowboy...

MOOS: Sure, the naked cowboy is old hat, posing with passersby in Times Square.

UNIDENTIFIED MALE: Naked cowboy sandwich, meat in the middle.

MOOS: But you appreciate him all over again when you see him in his snow white Skivvies out in the snow.

(on camera): He's got nerve.

UNIDENTIFIED PEOPLE: He does have nerve.

MOOS (voice-over): Not to mention goose bumps. As for that other imposing New York landmark, the Empire State Building observation deck was closed to the public and we can see why. Eighty- six stories up, the flakes don't always seem to know which way to go.

(on camera): They say that snow only goes up.

(voice-over): Things were looking up for the naked cowboy. He makes a blizzard of tips.

UNIDENTIFIED MALE: In a minute. In a minute. There's no room in the underwear.

MOOS: Anywhere from $100 to $1,000 a day. Out of modesty he wears two pairs of underwear. And to keep warm...

UNIDENTIFIED MALE: I am wearing two pairs of socks.

MOOS: This storm brought out flakes of all shapes.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

HOPKINS: Oh, New York.

That's MONEYLINE for this Tuesday evening.

Join us tomorrow, when Brigadier General David Grange will be here to talk about whether or not troops in the Gulf are properly prepared for a chemical or biological attack.

Thanks for joining us. I'm Jan Hopkins, in for Lou Dobbs. For all of us here, good night from New York.

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



Negotiating with U.S. About Allowing Troops; International Support on Iraq is Essential; East Coast Digging Out from Weekend Storm; Storm Has Little Effect on Economy>


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