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CNN LOU DOBBS MONEYLINE
A Large U.S. Operation in Iraq Underway; A New Threat to Space Shuttles Found; Search Warrants in Laci Peterson Case Could be Made Public
Aired June 12, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(AUDIO GAP)
JAN HOPKINS, CNN ANCHOR: U.S. troops in Iraq today ended one of their biggest (AUDIO GAP) since the end of long (AUDIO GAP) and seized numerous weapons. But in other operations, a U.S. helicopter was shot down west of Baghdad and an F-15 fighter jet crashed because of technical problems. None of the crewmembers was injured.
Ben Wedeman has a report from Baghdad.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN CORRESPONDENT (voice-over): American forces in action in the air, in the water, on the ground in one of the most extensive operations in Iraq since the fall of Saddam Hussein's regime.
Up to 4,000 U.S. soldiers descended upon an abandoned Tigris River 45 miles north of Baghdad searching for hard core loyalists to the deposed Iraqi leader. In the course of the operation, dubbed Peninsula Strike, the Americans rounded up hundreds of men, women and children.
UNIDENTIFIED MALE: We're just not taking any chances. We're not going to approach them lightly. It's going to be - it's going to be force, has to be. People are coming up with suicide bombs and weapons and drive-bys.
WEDEMAN: By mid week U.S. troops had detained nearly 400 men, none from their most wanted list. They also managed, however, to arouse a fair amount of resentment.
"The Americans are occupiers" says this man. "They have no manners or ethics. One of them grabbed a Quran and threw it to the ground."
This operation comes at a time when attacks against U.S. forces are on the increase raising suspicions among some U.S. officers that resistance to the American presence is becoming more organized and more lethal.
LT. GEN. DAVID MCKIERNAN, GROUND FORCES COMMANDER: There have been some handbills that we have found that offer monetary rewards for attacks against coalition forces. (on camera): On Thursday for the first time since the fall of Saddam Hussein's regime, hostile fire brought down an American aircraft, an Apache helicopter 90 miles west of Baghdad. The war may have ended but troubles for the Americans in Iraq may be only just beginning.
Ben Wedeman, CNN, Baghdad.
(END VIDEOTAPE)
HOPKINS: Defense Secretary Donald Rumsfeld reopened some old wounds from the war against Saddam Hussein today. He said the United States may refuse to attend NATO meetings in Belgium because Belgium allows lawsuits against U.S. officials for alleged war crimes in Iraq and other countries.
Senior Pentagon Correspondent Jamie McIntyre has the report from Belgium.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): By all accounts this meeting of NATO defense ministers was historic as the alliance completely revamped its organization and mission, but it may also be one of the last the U.S. attends in Belgium, which has been hosting the alliance's headquarters since it left France in 1967.
At least that was the clear impression left by U.S. Defense Secretary Donald Rumsfeld who is furious about Belgium's (AUDIO GAP).
DONALD RUMSFELD, DEFENSE SECRETARY: Until this matter is resolved we have to oppose any further spending for construction for a new NATO Headquarters here in Brussels.
MCINTYRE: Rumsfeld's bombshell threatened to overshadow significant progress in ending the divisions among the allies over the U.S.-led war in Iraq. For instance, NATO agreed to support Poland's intention to lead a peacekeeping division in Iraq and several NATO countries, including Spain and Hungary pledged troops.
And, NATO ministers approved a major overhaul of their military organization consolidating operations under a single commander, approving the next phase in creating a rapid reaction force, and acquiring much needed heavy lift transport aircraft.
(on camera): Before the war in Iraq, NATO, in the words of one U.S. diplomat suffered a near death experience when a divided alliance hesitated in providing defensive forces requested by Turkey.
But now the U.S. feels NATO is back on track moving surely, albeit slowly, to remake its military along the American model of lighter, faster forces capable of hunting terrorists or enforcing peace.
Jamie McIntyre CNN, NATO Headquarters, Brussels.
(END VIDEOTAPE)
HOPKINS: Tonight, there is a new threat to the nation's space shuttle fleet. Investigators say that they have found a dangerous flaw that could lead to yet another disaster. It could also keep the remaining three shuttles grounded a lot longer than expected.
Kathleen Koch reports.
(BEGIN VIDEOTAPE)
KATHLEEN KOCH, CNN CORRESPONDENT: The two foot-long bolts fasten the solid rocket boosters to the shuttle's external fuel tank. Investigators say radar the day of the launch picked up debris falling away from the Space Shuttle Columbia seconds after the bolts separated freeing the boosters. They warn the 40-pound bolt fragment could cause catastrophic damage to a shuttle, though they don't believe Columbia was struck.
MAJ. JOHN BARRY, COLUMBIA ACCIDENT INVESTIGATION BD.: Long story short is, you know, this thing can cause some serious impact damage if, in fact, it did but there's no indication that it's hit the orbiter.
KOCH: But investigators do have evidence the bolts could threaten future space shuttles. They tested the dome that's supposed to catch the bolt when it comes apart. They found it wasn't strong enough and was never properly tested.
BARRY: The top of that dome actually fractured in the static test that we did on the ground.
KOCH: Investigators continue to believe the foam that struck the Columbia 81 seconds after takeoff is the most likely primary cause of that disaster. They showed new photos from a Friday test where a chunk of foam was fired at a mockup shuttle wing damaging the leading edge.
The photos show cracks were longer and more widespread than initially thought. Still, investigators stopped short of declaring with absolute certainty that such damage brought the Columbia down.
UNIDENTIFIED MALE: We don't know yet what the potential would be for this crack growing and for hot gas penetrating into the rest of the leading edge.
(END VIDEOTAPE)
KOCH: Investigators plan more tests on different shuttle wing panels starting on Monday. They'll be lowering and changing the angle of a trajectory, the accident investigation board now closing in on the cause of the Columbia disaster and with this new discovery helping prevent future tragedies -- Jan.
HOPKINS: But, as we were saying at the beginning, it could also delay things much longer. KOCH: Certainly could. They have called this a return to flight issue and until it is resolved they do not believe that it is safe to put anymore shuttles into orbit.
HOPKINS: Thanks, Kathleen Koch in Washington.
And that brings us to tonight's poll question. "What should be done with NASA's shuttle program, suspend indefinitely, terminate immediately, or repair and expand"? Cast your vote at cnn.com/moneyline. We'll bring you preliminary results later in the broadcast.
We have the final results of yesterday's poll. We asked: "Who should be most responsible for resolving the crisis in the Middle East"? Twelve percent of you said the United States, 28 percent said the United Nations, 46 percent said Israelis and Palestinians, and 15 percent said the Arab states.
Still ahead tonight, defending Martha, high profile support for the queen of domesticity, we will tell you who's leading the pro- Martha lobby.
And then, escalating violence in the Mid East creating a rocky road to peace, Middle Eastern studies professor Fawaz Georges (ph) will join us.
(COMMERCIAL BREAK)
HOPKINS: Three former Dynegy executives today charged with conspiracy, securities fraud, mail fraud, and wire fraud. Gene Foster, Jamie Olis, and Helen Sharkey were indicted for their role in a series of complex energy trades named Project Alpha. They were also slapped with civil charges by the Securities and Exchange Commission.
Seventy-three executives have now been charged, 18 of them from Enron. ImClone's Sam Waksal is the only executive sentenced to jail. It's now been 556 days since Enron filed for bankruptcy.
The United States versus Martha Stewart is shaping up to be an unusual legal battle. It's unusual in part because Stewart is fighting so publicly to clear her name and the Martha lobby is picking up some noteworthy support.
Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): When you can get Democrat Hillary Clinton, the conservative "Wall Street Journal" editorial page, and right-leaning "New York Times" columnist Bill Sapphire to agree on something, you've got a coalition worth noting, and right now all three are joining the Martha lobby, defending Martha Stewart.
"Martha is a friend of mine" Senator Clinton told "TIME" magazine. "I have no information about what she's charged with but I think there's more at work than meets the eye."
Stewart herself is leading the charge with this website, marthatalks.com, and unusual, perhaps unprecedented strategy. But fighting the government is not a fair fight especially during a time of renewed patriotism.
RUSTY HARDIN, ATTORNEY: They'll announce these things in front of the American flag and the eagles. I mean the American flag and the eagles indict more people I think than any official in America.
Every one of these press conferences, they will demonize the defendant. They will announce on behalf of the eagle and the flag why they're doing this, and I think the defendant has to be able and willing to fight back to try to level the playing field.
VILES: Stewart has a personal reputation and a business reputation to protect. She's also now at war with a presidential appointee, U.S. Attorney James Comey.
JOE LOCKHART, GROVER PARK GROUP: All prosecutors are politicians too. They respond to public pressure because ultimately they're trying to move up a career path that politicians have a big say in. So, I think the more you can bring pressure on them about their motives, the more you equalize the leverage between a defendant and a prosecutor.
VILES: For the record, Comey's office has no comment on the Martha Talks website.
(END VIDEOTAPE)
VILES: Now, the government has essentially indicted Martha Stewart because they think her alibi is a lie and, if you look closely at this website, she's no longer repeating that same exact alibi but you can't really blame her because if she did repeat it logically the government would have to indict her all over again. It's a crime once. It's a crime twice.
HOPKINS: Oh, that's interesting. So, what's next in the legal process?
VILES: A week from today the lawyers will be back in court for a pretrial conference. It would be unusual for the defendant to go to such a conference. So, if Martha Stewart does show up in court next week, she doesn't have to, but if she does that would be considered part of her strategy to be a defendant in public, unlikely you'll see her in court next week.
HOPKINS: Unlikely. Peter Viles.
Martha Stewart's reputation has taken a hit right along with her company's share price. In the last year a majority of Americans have come to an unfavorable opinion of Martha Stewart, a dramatic shift from her pre-scandal ratings, there is no doubt linked to the fact that an overwhelming majority of Americans believe that the charges against Stewart are true. Three executives ousted from Freddie Mac over accounting questions will have to wait for their termination packages. The federal agency that oversees the mortgage company has told Freddie Mac to hold off on paying those executives while the packages are reviewed. Freddie Mac had said that former chairman and CEO Leland Brendsel would receive $24 million in total compensation, no word on how long the review will take.
A third straight gain for stocks lifted the major market gauges for new highs for the year, the Dow Industrial up 13 points, that new high 9196, the NASDAQ up almost eight points, and the S&P 500 adding a point.
Christine Romans is here with a full market report - Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: And, Jan, Freddie Mac again the most actively traded stock on the big board, down another five percent. It's now lost a fifth of its value in less than a week.
Two other movers today Guidant shares were halted and them tumbled. Guidant will plead guilty and pay $92 million for misleading regulators about 12 deaths and thousands of injuries linked to one of its heart devices. That stock really got hammered.
And, Dynegy rallied five percent, as you know, three of its former employees now on our criminal scoreboard.
As for the averages, new highs for the move but barely down, it was a very mixed day, half the Dow stocks up, half of them down, nearly as much volume at lower prices as higher prices. Three hundred forty-four stocks hit fresh highs for the year at the big board on volume of 1.5 billion shares. That's about six percent above the year's average.
A weak spot today was semiconductors again. Still, this rally is now three months and a day old. Since March 10th, the Dow is up 27 percent, so is the S&P, and the NASDAQ is up a whopping 30 percent. And, Jan, bond prices rose again today, lukewarm economic data stoking those convictions that the Fed might have to cut rates again (unintelligible).
HOPKINS: Close to three percent for a ten-year.
ROMANS: It's really amazing.
HOPKINS: But we have to put it in perspective, 20 percent just since March.
ROMANS: Yes, absolutely.
HOPKINS: Thanks, Christine.
Now, our nightly check on the national debt, tonight it stands at about $6,580,000,000,000 and it's down slightly from last night.
Coming up, a sudden about face in the prescription drug battle paves the way for a breakthrough in Medicare legislation that could affect millions of Americans.
And, committed to peace, Bill Schneider on the considerable challenges that President Bush faces on the road to a peaceful Middle East.
And then, Middle Eastern expert Fawaz Georges will join us.
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HOPKINS: A hundred twenty-seven Air Force promotions are moving forward tonight. Republican Senator Larry Craig of Idaho bowed to White House pressure today and agreed to allow the promotions to go through; however, 85 promotions are still on hold.
Craig had been holding them up until the Air Force delivered four promised C-130 transport planes to the Air National Guard in his state. No word on when or if those planes will be delivered.
After an intense partisan battle over his tax cut plan, President Bush is receiving more cooperation with his latest legislative proposal. The president wants to make prescription drugs more affordable for millions of Americans. His plan would include a Medicare benefit for prescriptions, and it would prevent drug makers from delaying generic alternatives.
Jonathan Karl reports.
(BEGIN VIDEOTAPE)
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): With the kind of zeal he put into the tax cut fight, the president is stomping for his Medicare prescription drug plan.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Congress must understand we've got a problem with Medicare. They should not politicize the issue. They ought to focus on what's best for our fellow Americans and get a package done and the House needs to get it done and the Senate needs to get it done prior to the Fourth of July break.
KARL: It looks like that may happen. Unlike the bitter and drawn out fight over taxes, a modified version of the president's Medicare plan is flying through Congress with relative ease. Even Democrats are saying nice things about it.
SEN. TOM DASCHLE (D), MINORITY LEADER: This is an historic moment and I, too, commend our distinguished leaders.
UNIDENTIFIED MALE: This proposal is a major step in the right direction.
KARL: Just days ago, Democratic Leader Tom Daschle slammed the compromise.
DASCHLE: We think that it is flawed, seriously. We think that there are many improvements that must be made in order for it to be acceptable to seniors.
KARL: Now, Daschle has done a virtual about face and the bill's supporters think it will ultimately pass with as many at 75 votes, including a majority of Democrats.
What happened? The Kennedy factor in part explains the dramatic turnaround. Ted Kennedy praised the plan as a major breakthrough even as Democratic leaders attacked it. At a closed door meeting of Democratic Senators on Tuesday, Kennedy made an appeal based on pragmatism, saying this was the best chance of getting seniors drug coverage.
There will continued resistance from other liberal Democrats who don't want to hand the president a political victory on such a hot button issue, and some conservatives, including former leader Trent Lott, argue the plan costs too much and reforms too little, but most conservatives are jumping on the prescription drug bandwagon.
SEN. JIM BUNNING (R), KENTUCKY: Seniors across the country are tired, believe me I've heard from them, are tired of politicians promising a prescription drug benefit year after year only to be let down year after year.
(END VIDEOTAPE)
KARL: And, Jan, there's been development on another issue up here, you know, the issue regarding the child tax credit that low- income families were not eligible for under the tax cut that just passed up here.
Well, the House of Representatives has voted to pass an $82 billion bill that would extend the child tax credit to low-income families that missed out in the last tax cut but also would extend it for middle and upper-middle income tax families as well.
Jan, this is a much different bill than what passed over in the Senate. The Senate passed a $3.5 billion fixed that would target simply low-income families so this sets the stage for a showdown on the issue between the House and the Senate.
HOPKINS: Jonathan Karl in Washington, thank you.
Checking on the U.S. trade deficit tonight, it stands at more than $226,000,000,000.
When we return, more deadly strikes rock the Middle East and the delicate peace process. Can the road map survive? We'll talk to a leading expert on Middle Eastern studies.
And, revolution from the ground up in Iran; students shake the establishment and call for change.
(COMMERCIAL BREAK)
HOPKINS: A California judge has ruled that eight search warrants in the Laci Peterson murder case should be made public; however, he postponed their release until an Appeals Court makes its own decision about the warrants. The delay gives both the prosecution and the defense time to appeal the order. Scott Peterson has been charged with the deaths of his wife and unborn child.
A disturbing development tonight in the monkeypox outbreak, a Wisconsin nurse may have contracted the virus from a human patient. If confirmed, this would be the first known case of the disease spreading person-to-person. Monkeypox first jumped to humans last week from infected prairie dogs. There are 12 confirmed and 54 suspected cases of monkeypox in the country.
Homeland Security Chief Tom Ridge today promised to deliver $170 million to improve port security in this country.
(BEGIN VIDEO CLIP)
TOM RIDGE, HOMELAND SECURITY SECRETARY: The port security measures we are putting in place, both here and abroad, are about building capacities, building new capacities, strengthening a vitally important system with additional layers of defense, information sharing, inspections, presence, technology, funding, and, of course, vigilance at every turn, at every port, every day.
(END VIDEO CLIP)
HOPKINS: Ridge will also send more American inspectors to foreign ports, to prevent dangerous cargo from coming to America.
The oldest Concorde in the Air France fleet came to America this morning, touched down at Dulles International Airport. The Concorde will become part of the Smithsonian Institution's exhibit this December.
As reported, Israel today launched its third missile attack in Gaza in the last 24 hours. The situation in the Middle East is now starkly different than it was just last week, when President Bush met with Israeli and Palestinian leaders. And the president faces new challenges to keep his road map for peace alive. Senior political correspondent Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The defining quality of President Bush's leadership is relentless determination. When he commits himself to an objective, whether it's regime change in Iraq or a tax cut at home, he sticks with it, shrugging off criticism from political opponents.
The Middle East road map appears to be that kind of commitment.
BUSH: All here today now share our goal. The holy land must be shared between the state of the Palestine and the state of Israel.
SCHNEIDER: Now just one week later, the road map is in danger and President Bush's commitment is being tested. The tragic violence in the Middle East this week followed a predictable script: Palestinian terrorism, Israeli retaliation, more terrorism. Is there anything new?
Yes. Two things.
A new Palestinian voice of moderation:
MAHMOUD ABBAS, PALESTINIAN PRIME MINISTER (through translator): Our suffering needs a solution, and not incitement.
SCHNEIDER: And criticism of Israel by President Bush.
BUSH: I'm concerned that the attacks will make it more difficult for the Palestinian leadership to fight off terrorist attacks. I'm also don't believe the attacks help Israeli security.
SCHNEIDER: To save the road map, President Bush is going to have to show the same relentless determination in the Middle East that he showed in Iraq and on the tax cut.
AARON MILLER, PRES., SEEDS OF PEACE: He's got to have very frank conversations with the Israelis and the Palestinians at a personal level.
SCHNEIDER: He has to tell the Israelis to give the new Palestinian leadership a chance.
MILLER: If, in fact, Abu Mazen really is prepared to act, will you give him the political and security time and space?
SCHNEIDER: He has to tell the Palestinians to take that chance and act forcefully against the terrorists.
MILLER: If I can get you the political time and space from the prime minister, will you create a moment of truth for yourself to reassert your monopoly over the forces and sources of violence in your society, Hamas and Islamic Jihad?
SCHNEIDER: It cannot happen without President Bush.
MILLER: What they need, essentially, is a full-time, 24/7 partner to help them get out of this. Now, the primary responsibility rests with him.
(END VIDEOTAPE)
SCHNEIDER: Conservatives were fully behind President Bush on Iraq and on the tax cut. But they have deep misgivings about the road map, a policy that requires the U.S. to pressure Israel. Now, President Bush has stood up to opposition from Democrats on the tax cut and from the whole world on Iraq. The big test is whether he's willing to stand up to conservatives on the Middle East -- Jan.
HOPKINS: Bill, what are the first issues on the road map in your view?
SCHNEIDER: Well, I spoke to Aaron Miller, who was in that piece just now, about this, and he said that the first issues on the road map in his view are actually the easier issues. They're easing restrictions on the movements of Palestinians, economic restrictions, releasing prisoners in Israeli jails, dismantling at least the outposts of the settlements.
His view was, those are the easy issues, they're not tough issues like Jerusalem, like the final status, like borders, like the right of return for Palestinian refugees. So it ought to be fairly easy to get these issues negotiated.
On the other hand, my view is, if these are the easy issues and it takes so much trouble to get to those, how are we going to have any hope for those tough issues down the road?
HOPKINS: That's right. Bill Schneider, thank you.
For more on the challenges that President Bush faces in the Middle East, I'm joined by an expert on the region, Fawaz Gerges. He's professor of Middle Eastern studies and international affairs at Sarah Lawrence College. He's author of "Islam and the West in the Modern World."
The first question is, is is the road map for peace dead or on life support at this point?
FAWAZ GERGES, SARAH LAWRENCE COLLEGE: Well, Jan, I think the road map was born with some major handicaps. And I think now it is really on very shaky grounds. I mean, let's remember that Mahmoud Abbas, the new Palestinian prime minister, faces some very difficult internal obstacles in his efforts to really end the armed intifadah. And there is a great deal of opposition in Palestinian societies. And let's remember that Israeli Prime Minister Ariel Sharon himself offered what they call conditional acceptance of the road map, and he leads one of the most hard-line Likud governments in history, some members of whom are very much opposed to giving the Palestinians their state.
So you some major obstacles on the Palestinian side and, of course, you have a highly conservative right wing government.
HOPKINS: But we're right back where we were several weeks ago, when there wasn't a road map. You have attacks and then attacks back. How do you get out of this kind of action and reaction?
GERGES: Jan, that's the big point is the following. I think the attacks, the Israeli attacks on some Palestinian posts in the last few days have not only weakened the new Palestinian prime minister, but in fact have augmented that of Arafat, that he's the Palestinian leader. In fact, they have provided more ammunition to militant groups like Hamas and Jihad in their opposition to Mahmoud Abbas. And I would go further to say that if the current cycle of violence continues, the first casualty of the cycle of violence would be Mahmoud Abbas. And in fact, some rumors have it that he has already threatened to resign. And this is why I think...
HOPKINS: Is he really the choice of the Palestinians? He's the choice of Israel and the U.S., but is he the choice of the Palestinians?
GERGES: Another great question. I mean, I think Mahmoud Abbas remains a figurehead with a great deal of potential. He not only does not possess, you might say, the legitimacy and the clout, but also the power base to challenge other Arafats, or the militants. And this is why I think what we need to understand is that really he faces some very serious opposition, and many Palestinians, not just the militants, Jan, perceive Abbas to be imposed on them by the Americans and the Israelis.
And the big question is, how do you empower Abbas? How do you empower mainstream Palestinian society in order to isolate the militants like Hamas and Jihad? You do it by showing the people, the Palestinians that Abbas will make a marked improvement in the daily lives, that the end of the Israeli military occupation is near, to empower Abbas by showing the Palestinians there is an alternative to violence.
HOPKINS: And who does that? Is that President Bush? Is that Secretary of State Colin Powell? Who?
GERGES: The international community as a whole. And here I think what we need to do is the United States and the international community is not only to exert pressure on Mahmoud Abbas, who does not really have neither the legitimacy nor the power base, but also to really provide them with concrete initiatives, to show mainstream Palestinian society, 75 percent of which believes in a peaceful settlement, based on international consensus, two states living side by side, in peace, and of course, not only exerting pressure on Abbas, and also on Ariel Sharon to show restraint, and that restraint not only serves American and Palestinian interests, but also Israeli vital interests in the long term.
HOPKINS: Because at this point, you have the militants really derailing the peace process, which is, in fact, what they want to do.
GERGES: Absolutely.
HOPKINS: And they're being successful. The peace process is not.
GERGES: Absolutely. Let's remember that despite everything that has happened in the last 32 months since the outbreak of the Palestinian intifadah, major majorities in those societies, in Israel and the Palestinians, believe in a settlement based on international consensus, two states living side by side in peace. And then your point, as you said, there are dissatisfied groups in both camps, Hamas and Jihad, and of course the settlers and the right wings in Israel who basically are deeply opposed to this vision of peace between the two societies.
HOPKINS: At this point, they have the top hand and a major voice.
Fawaz Gerges, thanks for joining us.
GERGES: Pleasure.
HOPKINS: And that brings us to our "Quote of the Day." An Israeli official speaks out on how the recent bombings could affect the road map to peace. Quote: "This government will not march of walk in two tracks in the same time in parallel. I mean, terror by day and negotiation by night. If these terrorist contacts will continue, I think that we will not be able to continue at the same time with the peace process." End quote. That is from Israeli Foreign Minister Silvan Shalom.
And still ahead, technological advances in the search for the truth have revealed cracks in the justice system. Bill Tucker reports on DNA justice.
And things get hostile in Silicone Valley. Oracle's Larry Ellison will join us on the company's $5 billion bid for PeopleSoft, and Oracle's quarterly results.
(COMMERCIAL BREAK)
HOPKINS: Modern science has run headlong into the country's legal system. Three New York men who spent 18 years in prison for rape have been freed because of DNA evidence. Increasingly, DNA is being applied to older cases, often with startling results, as Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNNfn CORRESPONDENT (voice-over): DNA evidence set these men free. It also set 130 other prisoners free, prisoners who all, as it turned out, spent years in jails for crimes they were convicted of but did not commit, according to the crime scene DNA evidence.
PETER NEUFELD, THE INNOCENCE PROJECT: DNA testing has actually caused a revolution in the criminal justice system. On the one hand, the debate on capital punishment has been dramatically transformed. It's no longer people arguing politics or philosophy, but they're wondering whether or not we can allow the ultimate punishment in a system that is so unreliable and so vulnerable.
TUCKER: Neufeld currently has 200 pending cases and 4,000 letters asking for help. All of the case reversals so far involve cases before the early 1990s, after which DNA collection and testing became a common crime scene practice. And there have been some very high profile case reversals.
The five men convicted in the rape and beating of New York's Central Park jogger free on the basis of DNA evidence. DNA evidence also cleared 13 prisoners on death row in Illinois of crimes that they were waiting to die for, prompting the state's then-governor to commute the death sentences of all 166 prisoners on death row.
GOV. GEORGE RYAN (R), ILLINOIS GOVERNOR: There is no margin for error when it comes to putting a person to death.
TUCKER: The recent spate of DNA cases are enough to raise the question: is the American justice system broken?
LOCKE BOWMAN, MACARTHUR JUSTICE CENTER: I wouldn't say that our system is broken. I would say that it is imperfect and that we have a time and an opportunity here to examine ways in which specific reforms should be enacted in order to begin to correct a problem.
TUCKER: Reforms are being put into place. For example, the state of Illinois now has a statute requiring that all confessions be videotaped.
(END VIDEOTAPE)
TUCKER: In a study by the Justice Department of 19 labs, showed by the mid 1990s, 23 percent of suspects were being excluded from further suspicion because of DNA evidence, making wrongful convictions less likely, Jan.
HOPKINS: But what about the people that have been released on this kind of new evidence? Are they eligible for some kind of compensation.
TUCKER: They are, and it varies widely.
For example, down in Alabama, you can get a minimum of $50,000 a year for each year of wrongful incarceration. New Hampshire you get a cap of $20,000. The worst is the feds, you get $5,000 max, end of story.
HOPKINS: Per year.
TUCKER: No. Total.
HOPKINS: Oh, period.
TUCKER: Period.
HOPKINS: Bill Tucker, thanks.
A reminder now to vote in tonight's poll. "What should be done with NASA's shuttle program? Suspend indefinitely? Terminate immediately? Or repair and expand?" Cast your vote at cnn.com/moneyline. We'll bring you preliminary results a little later in the broadcast.
In new "Around the World" tonight, Moscow's Red Square, the scene of a celebration reminiscent of the Cold War era. Russia was commemorating its independence and the collapse of Soviet rule. Interestingly, the event was closed to the public.
Tens of thousands of public workers in Brazil took to the streets today to protesting plans to reform Brazil's pension system.
After two days of protests in Iran, students have been warned that they could face government backlash.
Ralitsa Vassileva reports. (BEGIN VIDEOTAPE)
RALITSA VASSILEVA, CNN INTERNATIONAL CORRESPONDENT (voice-over): What started as a small student demonstration against university privatization two nights ago, quickly grew into the largest protest in six months against Iran's entire establishment, both the hardline clerics that have stifled reform and Iran's moderate President Khatami were the targets. The estimated 3,000 protesters called for the popular elected Khatami to resign and chanted death to Iran supreme religious leader, Khameni.
About two-thirds of Iran's population is under 30. Many of its young are losing patience with the slow pace of Khatami's reforms. They want political change. Their frustration is fueled by continuing high unemployment and strict Islamic laws.
UNIDENTIFIED MALE (through translator): Students are right because there are events at the moment against which only students can show reaction.
VASSILEVA: The top cleric, Khameni, blames Washington for stirring up trouble. Some analysts say the Bush administration is encouraging regime change by encouraging protests by Iran's young. U.S.-based Iranian opposition TV stations have called for more demonstrations.
Despite warnings from Iran security officials that more demonstrations will not be tolerated, the students vow to continue protests ahead of next month's fourth anniversary of the student demonstration against media restrictions which was brutally suppressed.
So far authorities have arrested at least 80 protesters and prevented the demonstrators from reaching the campus itself.
Ralitsa Vassileva, CNN.
(END VIDEOTAPE)
HOPKINS: The U.S. treasury undersecretary for international affairs is expected to travel to Afghanistan in the next week-and-a- half. Undersecretary John Taylor will meet with Afghan officials about the rebuilding of Afghanistan, which despite recent violence, is moving forward.
(BEGIN VIDEOTAPE)
HOPKINS (voice-over): Despite continued violence in Afghanistan, scores of U.S. companies are looking to the future.
In Chicago, more than 100 companies are vying for 3 to $4 billion in World Bank projects. Hyatt signed up to manage a new hotel in Kabul, but still has concerns.
PETER WALLISON, AMERICAN ENTERPRISE INSTITUTE: I think everybody's concerned about security in the short and medium term. I think that we're concerned about the lack of infrastructure resources.
HOPKINS: Lawyer Russ Dean (ph) helped Estonia get on its feet and is helping Afghanistan.
UNIDENTIFIED MALE: What we believe is necessary for the economic prosperity of Afghanistan is approximately 25 to $30 billion of direct foreign investment in the country over the course of the next five years.
HOPKINS: Before investors consider putting money in Afghanistan, the country needs some basics.
UNIDENTIFIED MALE: As a businessman, I know that no businessman will invest in a country unless there is rule of law and investment law and security of investment.
HOPKINS: So the ambassador set up a task force to tap American expertise. A team of 100 lawyers are donating their time to help out.
One group recently traveled to Kabul.
UNIDENTIFIED FEMALE: My hope going back is to be able to do something positive to help the country that I left as a child.
HOPKINS: The Afghan finance minister lived in the United States for 24 years. He understands the key to the future is investment, not handouts.
UNIDENTIFIED MALE: Foreign investments, absolutely crucial to our future because economic assistance will undergo tests to some extent.
HOPKINS: In addition to the task force of volunteers, the U.S. Agency for International Development is paying the consulting firm Bearing Point $40 million to help set up policies and reforms in Afghanistan to pave the way for investment there.
(END VIDEOTAPE)
HOPKINS: But systems and laws may not be enough to attract investors. They first need to feel that it is safe to do business in Afghanistan.
When we return, playing hardball over software. A hostile takeover bid is rejected. Will Oracle's Larry Ellison up the ante for PeopleSoft? He'll join us next.
And we'll share your thoughts; one viewer's intriguing idea for punishment for Enron's Ken Lay coming up.
(COMMERCIAL BREAK)
HOPKINS: In a moment, we'll be talking with Oracle's Larry Ellison. First, we'll check the preliminary results of tonight's poll. What should be done with NASA's shuttle program? 12 percent of you say suspend it indefinitely, 11 percent say terminate it immediately, and 78 percent of you say repair and expand.
The board of PeopleSoft has rejected a more than $5 billion takeover offer from its software rival, Oracle. Oracle shocked the market with the unsolicited offer last week.
For more on Oracle's next move, I'm joined by the company's CEO, Larry Ellison. He joins us from the company headquarters in Redwood Shores, California.
Welcome, Larry.
LARRY ELLISON, CEO, ORACLE: Good to be here.
HOPKINS: So are you going up the ante? You going to increase your bid?
ELLISON: Well, I think our $16 offer is a very safe alternative to what PeopleSoft management is proposing. They're proposing to merge their company with J.D. Edwards, which is a company that lost money in its previous quarter. PeopleSoft's management has not done a very good job for the PeopleSoft shareholder.
Their stock is down almost 30 percent over the last 12 months. And in their last quarter, their new license sales were down 40 percent to $80 million. So PeopleSoft, a company in distress, is merging with a company that is losing money. The $16 looks pretty good from where I sit.
HOPKINS: But why do you want PeopleSoft? Apparently you don't want to sell the company's software. Why do you want it?
ELLISON: Well, they've got some very clever developers. We're very interested in picking up members of their development team. They've got some fine support engineers. So we're very interested in part of their staff. We'd like to- we think we could do a very good job of supporting their customers and make it easy for their customers, if they choose, and I emphasize, if they choose, make it easy for those customers to move to Oracle applications if they want to.
Lots of Oracle customers are former PeopleSoft customers. Just this last quarter, Merrill Lynch decided to move from PeopleSoft, turn off PeopleSoft and turn on Oracle.
HOPKINS: But this sounds like an anticompetitive move. You want to shut down the company, basically.
ELLISON: No, we absolutely do not want to shut down the company. We wouldn't pay over $5 billion for a company we wanted to shut down.
Keep in mind that a year ago, Craig Conway approached me about putting the PeopleSoft application business together with the Oracle application business. It was his idea to put the two companies together. A year ago, he saw no anticompetitive problems at all, so long as he was running the company.
Now that our proposal doesn't have him running the combined company, guess what? All of a sudden, it's anticompetitive.
HOPKINS: But you're making a hostile bid in an industry that hasn't seen this kind of action. What's happening here?
ELLISON: Well, "hostile bid" is an interesting term. What we're doing is, we're bypassing PeopleSoft's management and board and going directly to the shareholders.
Our bid is not hostile to the shareholders. Our bid gives the shareholders a choice between management's plan to buy J.D. Edwards, or our plan to merge with Oracle.
It may be hostile to management. It is not certainly hostile to shareholders. Shareholders should have the right to choose the future of the company that they own.
HOPKINS: Now, what does this say about technology? Are we finished with kind of the bloody past and moving on with consolidations? You have earnings, they're good.
ELLISON: Yes, I think we are going through a consolidation phase. I think you'll see the strong companies getting stronger, and the weak companies getting weaker.
Take a look at PeopleSoft's last quarter, down 39 percent in new application sales, ours up, our application sales up. They did $80 million in application sales. We did $246 million in application sales. Mr. Conway says we're interrupting their momentum. Their momentum is down.
HOPKINS: Larry Ellison, the CEO of Oracle, thank you for joining us.
ELLISON: Thank you.
HOPKINS: And when we return we'll share some of your thoughts on the road map to peace and more.
But first, tonight American mourns the loss two of well known performers from different fields. Academy award winning actor Gregory Peck ,died last night at his home in Los Angeles. The star of "To Kill a Mockingbird," "Roman Holiday," and many other films was 87. And legendary television journalist, David Brinkley died last night in Houston. Brinkley rose to prominence as the co-host of NBC's "Nightly Huntley-Brinkly Report." And continued his distinguished career at ABC news. David Brinkly was 82.
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HOPKINS: Now for a look at some of your thoughts.
Debra Perry from Grand Blanc, Michigan, wrote about the search for Iraqi weapons of mass destruction quote, "What everyone seems to be overlooking is terrorists and dictators are weapons of mass destruction."
Answering our poll question yesterday as to who should be most responsible for resolving the Middle East crisis, John Beato, from Middle Island, New York said quote, "The United Nations made Israel. Why don't they solve the problems they have made. Why should it be the responsibility of the United States?"
Many of you wrote about the researches of corporate crime.
Don Schoemann, from San Francisco asked, "So the CEO of Freddie Mac is fired under a cloud of controversy and still receives 24 million dollars for what may involve fraudulent activity? Only in America."
And Kevin of Chicago wrote, "If the common person robs a bank they would get 10 to 15 years. Maybe the rule should be wait to become a CEO and you will get a slap on the wrist and a vacation at club fed at taxpayers expense."
And last night we read an e-mail that said it was more likely that we will discover life on Mars before charges are filed against Ken Lay.
Well, John Whitten ask "Why not just send Ken Lay and the rest of the Enron crowd to Mars and do both at the same time?"
We love hearing from you. You can e-mail us your thoughts at loudobbs.cnn.com.
Thanks for joining us. Tomorrow editors from the top business managers join us for our weekly editors circle. And for all us here good night from New York.
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