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CNN LOU DOBBS MONEYLINE
More Than Dozen Children May Be Infected With Monkeypox; Senators Disclose Assets; Editor's Circle
Aired June 13, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JAN HOPKINS, GUEST HOST: Tonight, a shocking new development in the monkeypox scare, more than a dozen children at a child care center may have been infected by the virus. Medical correspondent Elizabeth Cohen will report.
The most exclusive millionaire's club in America; Senators are richer than nearly everyone they represent. Kathleen Koch will report the numbers.
And our "Editor's Circle," Steve Forbes of "Forbes" magazine, Rik Kirkland of "Fortune" will discuss the first jail sentence in the crackdown on corporate crime, an accounting scandal at Freddie Mac, the market, and lots more.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Friday, June 13, sitting in for Lou Dobbs, Jan Hopkins.
HOPKINS: Good evening, everyone.
More Israeli air strikes on Gaza today as Israel promised to target Hamas leaders. One person was killed, 25 wounded in the first attack. Israel said the second strike destroyed a Palestinian weapons factory. They were the latest attacks in a week of violence that has claimed the lives of more than 50 Israelis and Palestinians.
Kelly Wallace joins us live from Gaza -- Kelly.
KELLY WALLACE, CNN CORRESPONDENT: Jan, these latest Israeli air strikes came within hours of each other, the most recent one just about two hours ago. Israeli helicopter gun ships firing on a Hamas weapons warehouse according to Palestinian sources. No one was killed or injured in that attack, Israeli military saying that warehouse also contained other weapons in addition to homemade rockets.
Hours earlier Israel Apache helicopters in the skies again. This time the Israeli military saying the target was a car, one person killed, a member of the Hamas military wing, who Israeli military sources say was getting ready to fire homemade rockets at Israel. Now, senior Israeli officials say they are going to keep up the pressure on Hamas but Hamas is vowing to keep up the pressure on Israel as well.
(BEGIN VIDEOTAPE)
WALLACE (voice-over): Thousands of Palestinians buried the victims of Thursday's punishing air strikes including a Hamas leader, his pregnant wife, and his one-year-old daughter.
It was also a day of tearful goodbyes in Israel as some of the 17 people killed in Wednesday's suicide bus bombing by Hamas were laid to rest. Many here fear there are likely to be more of these scenes with Israel and Hamas now saying they are in an all out war.
But why now, just after the smiles in Aqaba? Israeli officials say they came up with the plan to target Hamas leaders months ago but they implemented it only after deciding that Hamas was planning to scuttle the Mid East road map with more attacks against Israelis and Israel, analysts say appears to be getting a green light from the White House.
LESLIE SUSSER, ISRAELI POLITICAL ANALYST: President Bush is very critical of Israel but within 24 hours this had totally turned around and the signals that Sharon was getting from Washington was that, yes, in order for the road map to go ahead Hamas must be brought to heel.
WALLACE: Hamas is now warning that the Jerusalem attack is just the beginning. Some Palestinian observers say Hamas was about to agree to a cease-fire but that the Israeli air strikes made the group reverse course. Hamas will only lose its power, says this political analyst, when Israel leaves the West Bank and Gaza.
EYAD AL SARAI, PALESTINIAN POLITICAL ANALYST: Wherever there is hope there is less support of (unintelligible) and violence. Wherever there is the spirit there is more popular support to (unintelligible) and violence. So, here you have it. End the Israeli occupation. There would be no Hamas. We don't need it.
WALLACE: The new war between Israel and Hamas may not have killed the Mid East road map but left it in critical condition. It now needs intensive care to survive.
(END VIDEOTAPE)
WALLACE: And there is still diplomacy going on behind the scenes, a Palestinian source telling CNN there is a possibility of a high-level meeting of security officials from both the Israeli and Palestinian sides as early as tomorrow -- Jan.
HOPKINS: Despite all the violence and the attacks?
WALLACE: Despite all the violence which is a very positive development indeed and, Jan, there is something else. Senior Israeli officials saying there is also the possibility that sometime soon the Palestinians might be willing to take control of security in the northern Gaza Strip. If that's the case, Israelis say they would pull their forces out of that area -- Jan.
HOPKINS: That's significant. Kelly Wallace in Gaza, thank you.
A new opinion poll suggests that most Israelis oppose the air strikes on Palestinians. The poll found that 58 percent of Israelis believe that Israel should temporarily halt the attacks to give the new Palestinian prime minister a chance to establish himself. Nine percent said the strikes should be stopped all together. Thirty percent said the attacks should continue.
Secretary of State Colin Powell today said it's time for Hamas and other Palestinian terrorist groups to abandon violence. President Bush is monitoring events from Kennebunkport, Maine, where he is spending Father's Day weekend with his family.
White House correspondent Chris Burns joins us live from Kennebunkport -- Chris.
CHRIS BURNS, CNN WHITE HOUSE CORRESPONDENT: Yes, hi, Jan.
Well, the president spending today golfing and fishing with the family, including his father, former President Bush, although of course his attention also is fixed on the Middle East situation. He was getting briefings, talking with Condoleezza Rice, the National Security Adviser, and his lieutenants were busy doing the footwork today and the phone work.
Secretary Powell speaking with a number of officials including now the Syrian Foreign Minister Farooq Al-Sharaa encouraging him to cut off any ties or any support for Hamas.
This appears to be part of the government strategy here is to isolate and cut off any militant groups to empower the Palestinian Authority to help do that and to offer a bit of telegraphed message to the Israelis to do a little bit of restraint.
Here's Secretary Powell.
(BEGIN VIDEO CLIP)
COLIN POWELL, SECRETARY OF STATE: We all are anxious to see restraint and we understand that it's important to get the terror down and if the terror goes down then the response to terror will no longer be required, so we have to get moving and bring the terror down. All of our efforts are focused on Hamas and persuading Hamas and Islamic Jihad and other terror organizations that this is the time to abandon terror.
(END VIDEO CLIP)
BURNS: Now, at the same time we heard some words from Ari Fleischer the White House spokesman here saying, and I quote: "Everything begins with security, but everything ends with a vision." He's talking about peace. "Security is required for the vision to be achieved."
And, he went on later during the press briefing today to say that: "Israel needs to take actions" to defend itself, but to keep -- "be mindful of the fact that they have to keep the overall vision alive, the vision that is laid out in the road map."
So, telegraphed restraint, at the same time a lot of diplomacy that will be going on. Secretary Powell will be going to the Middle East in a couple of weeks and just this weekend there will be a troubleshooting team headed by John Wolf, the Assistant Secretary of State. He'll be talking to both sides as well -- Jan.
HOPKINS: Chris Burns in Kennebunkport, Maine, thanks.
U.S. troops in Iraq launched a fierce counterattack today after a tank column was ambushed near Baghdad. Twenty-seven attackers were killed. No Americans hurt.
Also today, more details released about a U.S. operation that killed 70 gunmen in a training camp yesterday and the Pentagon released video of a sweep north of Baghdad this week that led to the arrest of 400 suspected loyalists to Saddam Hussein.
Ben Wedeman has that report from Baghdad.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Another day in which the evidence mounts that the combat in Iraq is far from over. Two major incidents, the first 45 miles to the north of Baghdad around the predominantly Arab Sunni town of Balad where according to U.S. officials there was an organized ambush on a U.S. tank patrol, but obviously not too well organized because that left 27 Iraqis dead according to U.S. officials. No word on any American casualties.
Now, that ambush took place in the same area where a massive operation involving 4,000 U.S. troops took place earlier this week in which they were involved in a sweep through an area in which, according to U.S. officials, there were frequent sniper attacks on American troops and in an area they believed there were many holdouts to the old regime of Saddam Hussein.
The second incident took place northwest of Baghdad. According to U.S. officials 70 individuals were killed there in a joint air and ground operation involving troops from the 101st Airborne Division.
Now, they were focusing their attentions on a training camp, a terrorist training camp to use the description of U.S. officials. Those 70 individuals killed, they said, were they believe in addition to Iraqis, also Arab volunteers who flocked to Iraq before and during the U.S.-led invasion to fight alongside Iraqi forces.
Now, it is believed that this attack -- rather, this operation took place around the predominantly Arab Sunni town of el Haditha (ph). Now, U.S. forces put out a statement in which they said that they found 70 to 80 surface-to-air missiles, around 75 rocket- propelled grenades, as well as in their words, scores of AK-47 assault rifles.
This was also in the area where yesterday a U.S. Apache helicopter was brought down by hostile fire, the first U.S. aircraft to be shot down in Iraq since the fall of Saddam Hussein's regime two months ago. That regime fell but obviously there is still a good deal of resistance to American forces still here in Iraq.
I'm Ben Wedeman, CNN, reporting from Baghdad.
(END VIDEOTAPE)
HOPKINS: The war on terror continues in Southeast Asia as well. Today, anti-terrorist police in Thailand arrested a man who allegedly tried to sell material that could be used to make a radioactive dirty bomb. Officials said that there is no information linking the man with the terrorist group. Police made the arrest after receiving a tip from U.S. authorities.
A travel warning tonight for Americans planning to visit another Southeast Asian country, Indonesia, the State Department says that U.S. citizens should stay away from Indonesia because extremists may be planning more attacks against U.S. interests. The possible targets include hotels, shopping centers, places of worship, and schools.
Still ahead tonight, a monkeypox scare threatens children at a Midwest daycare center. We will have a live report.
And, much more on the escalating violence in the Middle East, Israelis and Palestinians vow to fight on. Former Defense Secretary William Cohen will tell us what lies ahead for the elusive road map to peace.
(COMMERCIAL BREAK)
HOPKINS: Millions of Americans could soon have help in paying their prescription drugs. On Monday, the Senate is expected to begin debate on a Medicare reform bill that already has received a warm welcome on Capitol Hill. One question about the bill, however, is how Congress plans to pay for it.
Louise Schiavone has that report.
(BEGIN VIDEO CLIP)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Congress and the president appeared determined to enter the 2004 election year with a Medicare prescription plan signed, sealed, and delivered, good news for Medicare's 40 million beneficiaries, but with Medicare already on course to go broke, most in Congress seem to be ignoring the financial realities.
SEN. DON NICKLES (R-OK), BUDGET COMMITTEE CHAIRMAN: We have a $13.3 trillion unfunded liability on Medicare today, two or three times the size of the unfunded liability on Social Security.
This bill is going to make it a lot worse. I'm afraid we've got to -- we're creating and building a system that may not be financially affordable for future generations.
SCHIAVONE: Off the record, even congressional budget staffers are appalled at their boss' willingness to pass a largely unfunded $50 million per year drug program. The demographic and financial forces are daunting.
Today there are 41 million beneficiaries. By 2030, that will jump to 78 million. But while the population grows, the Medicare trust fund shrinks. Today, the trust fund stands at $235 billion. By 2013, the fund starts to shrink as more cash goes out than comes in, and by 2026, the fund will be depleted.
And, remember, that's before adding the new prescription plan which is expected to add $50 billion a year. And remember, the trust fund only pays for things like hospital costs. Doctor visits and testing come mostly out of the regular federal budget about a third of Medicare costs today.
ROBERT BIXBY, THE CONCORD COALITION: So, there is no plan to pay for this. The only way you can do it is deficits and eventually it will have to be paid for by higher taxes, much higher taxes.
RUDOLPH PENNER, FMR. CEO DIRECTOR: It's not responsible but it seems very effective politically.
SCHIAVONE: The political push for a prescription drug benefit is clear, older people vote, and both Democrats and Republicans know it.
(END VIDEOTAPE)
SCHIAVONE: Jan, many on Capitol Hill think the drug benefit is a good idea but as happens so often in Washington, it's easy to spend money if you're not paying attention to where that money will come from and a lot of the people who may have to foot the bill for this are still in school -- Jan.
HOPKINS: And, election year though just around the corner so that might be on the minds of those in Congress.
SCHIAVONE: Very much so, Jan. This was a campaign promise back in the year 2000, and the president and members of Congress are trying to get ahead of the curve, so it's not a big problem when the election year 2004 rolls around.
HOPKINS: Louise Schiavone in Washington thanks.
And now our nightly check on the national debt, tonight it stands at more than $6,602,000,000,000. It's up more than $20 billion from last night.
Seventy-three executives in all of corporate America have been charged with crimes, 16 of them from Enron. Sam Waksal is the only executive to be sent to jail. It has now been 557 days since Enron filed for bankruptcy.
New worries about consumer confidence sends stocks tumbling today, the Dow industrials fell almost 80 points. They closed at 9117. The NASDAQ lost 27 points. The S&P 500 fell about ten.
Christine Romans has a full report on the market -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, you know, Jan, the S&P closed higher for the week, third week higher in a row but barely, one point higher. The NASDAQ was down about one point for the week, so pretty flat overall but some movers for you. Freddie Mac gained more than six percent today but it's still down sharply for the week as you can see. Guidant added to yesterday's steep losses. It's still grappling with the fallout from its settlement of charges that it misstated the safety of one of its products. And, Intel got hit by a downgrade today. Semiconductors in general were weak this week.
But, this has been a stellar second quarter so far, the Dow up 14 percent, the S&P 500 up 16 percent, the Nasdaq and the Russell 2000 adding better than 20 percent each.
But, Jan many think that this market is ready for a break and the third quarter historically provides one. We're not done with Q2 yet, but it's looking pretty good so far.
Now Sam Stovall at S&P says that since 1945, the third quarter has been the weakest quarter on average for the S&P adding 0.3 percent compared with two percent gains in the first half and four percent gains for Q4. Sam Stovall is among the many strategists who say this market could easily take a breather -- Jan.
HOPKINS: But it just hasn't. I mean it did today but it really hasn't in the last couple months.
ROMANS: And people have been calling for a breather for the past 500 points for the Dow, so at this point the momentum is still in the favor of those bulls who keep buying.
HOPKINS: Thanks, Christine Romans.
ROMANS: Sure.
HOPKINS: Coming up it's the ultimate golf championship but this year's U.S. Open features a sentimental favorite who has already won the hearts of the fans.
And, a schoolyard scare, children believed to have contracted monkeypox. Medical correspondent Elizabeth Cohen will have the very latest when we come back.
(COMMERCIAL BREAK)
HOPKINS: There is a disturbing new development tonight in the monkeypox outbreak. More than a dozen children in Indiana may have contracted the disease.
Medical Correspondent Elizabeth Cohen joins us from CNN Center in Atlanta with the latest -- Elizabeth.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Jan, this is all taking place at a daycare in a private home in Indiana. What happened is that at this daycare they decided to buy two prairie dogs for the children to play with.
Now, we've been hearing a lot about these prairie dogs and these prairie dogs came from the same pet shop where other infected prairie dogs have come from. So, the children played with them and then the prairie dogs got sick and they died. There are 19 children at this daycare center and they believe that as many as 16 of them might have had monkeypox.
Now, what happened is that one child in particular is, I'm told, extremely ill and is in the hospital. The other children never got so sick that they ended up in the hospital. They all recovered. Their lesions are healing and they are being tested to see if they actually did have monkeypox.
The CDC has those specimens and is doing it now. The answers on that may not be available for several weeks. But, again, the children would have gotten the monkeypox from the prairie dogs that they were given to play with in the daycare center -- Jan.
HOPKINS: Elizabeth has there been any cases yet of human-to- human transfer from one person to another?
COHEN: There might possibly have been three cases in Wisconsin. What happened is that two patients went to go get care for their monkeypox. One went to a hospital. One went to a dermatologist's office, and two workers there are believed to have possibly contracted monkeypox from their patients, and in addition, the boyfriend of one of those health care workers.
However, it's important to point out that this is possible. In fact, the state of Wisconsin said today they kind of doubt that these people had monkeypox but they're checking it out. Monkeypox can be transmitted person-to-person but it's much less likely than animal to person transmission.
HOPKINS: The CDC has results tomorrow, I think, is that right?
COHEN: Yes, the CDC should have some of those results tomorrow, and let's talk actually a little bit about the CDC and about smallpox numbers in general. The CDC says that 72 cases are under investigation. That doesn't mean 72 people have it but they're being investigated. Thirteen of those have been laboratory confirmed, so those 13 do have monkeypox. There have been no deaths so far.
In Africa, where this disease has been around for decades up to about ten percent of the people die; however, in the United States the mortality rate is probably going to be considerably lower than that and that's because people who have been infected are being offered the smallpox vaccine. I know that sounds strange, smallpox vaccine for monkeypox.
The reason for that is that the two diseases are related and it's believed that the smallpox vaccine can be very, very effective, even if given up to two weeks after infection with monkeypox.
HOPKINS: Thanks, Elizabeth Cohen at CNN Center in Atlanta.
In other news across America, the U.S. Army is 288 years old today. There was a big celebration at the Pentagon. Vice President Dick Cheney and Defense Secretary Donald Rumsfeld joined the party, offering words of praise for those who serve.
(BEGIN VIDEO CLIP)
DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: President Bush and I would like to thank every member of the United States Army for what you do for all of us, for the great honor you bring to your uniform, to our flag, and to our nation. Wherever you go you bring justice and freedom and the hope for a better day and always you make America proud.
(END VIDEO CLIP)
HOPKINS: Western droughts have produced a new problem, swarms of Mormon crickets. The insects have already destroyed millions of acres of rangeland and crops in several states and officials say the infestation could be the worst in decades.
Thunderstorms have been plaguing Texas this week. Today they produced some amazing pictures. The lightning bolts appear to be striking that high rise building but they didn't and no one was injured.
Veteran golfer Tom Watson continues to turn heads at the U.S. Open golf tournament. After two rounds of play, the 53-year-old Watson is tied for fourth place.
Josie Karp joins us now from the U.S. Open in Olympia Fields, Illinois with more -- Josie.
JOSIE KARP, CNN CORRESPONDENT: Jan, it wasn't the 65 that Tom Watson shot yesterday but it was two over par 72 today and he is definitely in the hunt. Right now he is four shots behind the leaders and all day today he felt the support of the crowd that was so awed by his performance yesterday for a number of reasons.
One, because he's 53 years old, he's 21 years removed from his last U.S. Open title and here he is beating up on the young kids on the PGA Tour. He plays regularly now on the senior tour.
But the other reason he was feeling so much support was because the story became well known about his long-time caddy Bruce Edwards. This pair has been together for the better part of 30 years and Edward in January was diagnosed with Lou Gehrig's disease or ALS.
These two don't know how long they'll be able to navigate courses together, so everywhere they went today there was a show of support for the entire Watson team.
(BEGIN VIDEO CLIP)
TOM WATSON, PROFESSIONAL GOLFER: The galleries were loud and they were genuine. They were pulling for not only me but also Bruce, a lot of comments about Bruce today.
(END VIDEO CLIP) KARP: It's hard to believe going into this U.S. Open, it's hard to believe that there were -- seemed to be a (unintelligible) of stories that really look like Tiger Woods going for his second consecutive title would be the only story.
But now you have Tom Watson and there's a developing story right now with Vijay Singh. He's just finishing up. He could shoot a 63. Nobody has ever shot better than 63 in a single round at any major. He's done it once before.
But the other part of the story is earlier in the round on the 14th hole, it appears that he was being heckled by someone who brought up Annika Sorenstam and you might remember that he had some very controversial comments to make about Annika Sorenstam. Sing then had that patron removed and this is something that we'll be following -- Jan.
HOPKINS: Thanks, Josie Karp.
And, coming up, more deadly strikes in Gaza as Israel promises a fight to the bitter end, former defense secretary and regular contributor to this broadcast William Cohen will join us.
And, then our CEO of the week is a pet's best friend. In fact, shareholders in his company are pretty happy with him as well.
(COMMERCIAL BREAK)
HOPKINS: The Senate has long been called the millionaire's club and with good reason. Today, all 100 Senators were required to disclose their financial wealth and there were some surprises.
Kathleen Koch has the story from Washington -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Well, Jan, in looking over the numbers today it's clear that there are plenty of people who walk these halls who are not just politically but are very financially successful.
Let's start with the leadership. First of all the Senate Majority Leader Bill Frist a very successful heart surgeon from Tennessee, his family also founded the Hospital Corporation of America. It's one of the largest for profit hospital chains in the country. He's estimated to be valued at between $15 million and $42 million.
Now, his Democratic counterpart, Senate Minority Leader Tom Daschle of South Dakota is a man of more modest means, estimated to be worth anywhere between $416,000 and $1.2 million. Next, Senator Hillary Rodham Clinton, who has been in the news quite a bit lately with her new book that's out, "Living History." She got an $8 million advance for that, but her total assets at this point are estimated by CNN to be at only $352,000 and $3.8 million. That is her net worth, I should say. That because a lot of that $8 million book advance is canceled out by some serious outstanding legal debts. Now, as far as who is on the top of the heap, who is the wealthiest U.S. senator. Well, again, John Kerry of Massachusetts takes that honor. He is estimated to have a net worth of between 163 and $221 million. Now, coming up a close second is Herb Kohl of Wisconsin. His net worth, an estimated $111 million. And then bringing up the -- and winding up the top three, Senator John J. Rockefeller of West Virginia with an estimated net worth, about $81 million.
Now, if you want to look at the bottom of the heap, according to CNN estimates, it's another senator from Wisconsin, the junior senator, Russ Feingold. While he has a net worth between of between 60 and $65,000, it's canceled out by some serious debt, putting his net worth at a negative $185,000.
Experts that we spoke to said that exercises like this -- personal disclosures, financial disclosures like this are very important to a democracy.
(BEGIN VIDEO CLIP)
LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Well, they matter because they give the public a good insight into the people who are making the laws, into who their representatives are, what interests they have. They matter in terms of ethics because when a senator is making a decision, you would you like to get an idea where their investments are, what financial interest they have. So they're an important aspect of judging your senators.
(END VIDEO CLIP)
KOCH: Now, these are actually -- we, CNN, has to say -- believed to be underestimations of the actual net worths of this -- the members, the 100 members of the U.S. Senate, because according to the 1978 Ethics in Government Act, which required these regular, annual disclosures, they only have to give a ballpark estimate of what an asset is worth. They're -- you know, between 1 and, say, $5 million. So therefore, these are only our best guesstimates, and it's believed that the senators are actually worth a good bit more than this, Jan.
HOPKINS: Pretty broad range. Thanks, Kathleen Koch, in Washington.
KOCH: You bet.
HOPKINS: In news "Around the World" tonight, the SARS travel ban has been lifted for most of China. World Health officials say they're satisfied with China's efforts to control the spread of SARS. However, travelers are still advised to avoid Beijing and Taiwan.
Anti-American sentiment in the streets of South Korea. Thousands of protesters rallied, demanding punishment for two U.S. soldiers. Those soldiers were acquitted of accidentally running down and killing two school girls a year ago.
Violence in Venezuela as well. Police and troops battle supporters of President Hugo Chavez as they try to disrupt an opposition rally. No injuries reported.
Violence marked the fourth night of protests in Iran. Security forces battled anti-government protesters with gunfire and tear gas.
Shirzad Borzogmehr joins us now from Tehran with the latest.
SHIRZAD BORZOGMEHR, CNNI CORRESPONDENT: Jan, this is the fourth consecutive night that university students in Tehran demonstrated and a large number of people either -- sympathizers gathered around the university dormitory. And for the first time in the last four nights, police stood by and allowed the militia, the hard line (UNINTELLIGIBLE) Hezbollah to get close enough to the students to attack them and there were many fights, street battles between the students.
And so -- and the level of violence was much higher than the nights before. This was, in effect, a turning point in these series of demonstrations and eyewitnesses told me that the Ansar Hezbollah (ph), the militia, were really aggressive. They attacked the people with belts, with stones, with sticks and pursued the students on motorbikes and ordered the people who were for the most part caught in the traffic -- ordered them to move and if they didn't, they broke their windows and attacked them.
So they -- the characteristic -- the character of the demonstrations have changed. The level of violence has escalated and it is not like what it used to be. This is a new leaf (ph) -- Jan.
HOPKINS: Shirzad Borzogmehr, thanks very much for joining us.
The escalating violence between Israelis and Palestinians threatens to sweep the road map to peace away. Both Israel and Hamas say that they are prepared to fight to the finish.
Joining me now is former defense secretary and regular contributor to this broadcast, William Cohen. Bill, if in fact both sides say that they're going to fight to the finish, how can you have peace?
WILLIAM COHEN, FMR. DEFENSE SECRETARY: Well, I think the peace plan so to speak, or the road map, is really on life support now and hopefully, it can be revived by the efforts of Assistant Secretary John Wolf and later, Secretary of State Powell.
But I think that, as you reported earlier, just as the violence is escalating, there is also some talk of the parties getting together tomorrow in a series of meetings. So there is still a glimmer of hope, but it's going to require the president to stay very much involved. I know there is some within the administration who are cautioning the president to back away and not get too deeply involved and not at all be critical of either Israel or Ariel Sharon for fear of jeopardizing his election chances next year. But I think that the president is involved now and it would be the worst thing to back away and I don't think he'll do that. So hopefully, this will help energize the effort. But it's going to take, as we talked last week, a lot of cold showers along the way. And also, I would point out, Jan, that Mahmoud Abbas really is the best hope for the Palestinians and also for the Israelis, because if he is undermined either by Palestinians or by the Israelis, then you have -- you're back to Mr. Arafat and Hamas. And that can only lead to more and more violence. So we need to do what we can to bolster his ability to gain control over the terrorist operations, and I think it's going to require some effort on the part of the Israelis to help bring that about as well.
HOPKINS: Should the Israelis be withdrawing from Gaza?
COHEN: Well, of course, that's up to the Israelis to determine whether it's secure enough for them to do so. But I think what the Israelis have to do is to understand they have criticized Abbas for being too weak and cracking down on Hamas. The Palestinians have criticized Mr. Abbas for being too weak in dealing with the Israelis. If the Israelis are unable to show the Palestinians through some gestures, whether it's from withdrawing somewhat from Gaza Strip or making some gesture, then Mr. Abbas is not going to be able to show there's any benefit to his leadership and it will be undermined.
So whatever steps they can take under very extraordinary circumstances right now have to be calibrated to see can it help him in the short term so he can gain some support within his own Palestinian community?
HOPKINS: What about the situation in Iran? The violence is escalating. Should we really be watching this? And what's likely to happen?
COHEN: Well, I think we should be watching it. In fact, I think we watch it with some note of optimism that there is within Iran a revolt against the clerical domination, a state that has so suppressed the effort to modernize that state and bring it into the 21st Century that we're seeing the younger people rebelling against that. And so it's -- actually while it appears to be somewhat violent right now, nonetheless, it is a fairly positive sign that they want change and they want to break free from the domination of the clerical regime.
HOPKINS: Thanks very much. William Cohen, former defense secretary.
And that brings us to tonight's poll: "Should Israel stop its attacks on targets in Gaza? Yes or no?" Cast your vote at cnn.com/moneyline. We'll bring you preliminary results later in the broadcast.
Now the final results of yesterday's poll. "What should be done with NASA's shuttle program?" Eleven percent of you said suspend indefinitely, 12 percent said terminate immediately, 76 percent of you said repair and expand.
And that brings us to our "Quote of the Day" from a U.S. official who today urged Palestinian militant groups to end their attacks: "We all are anxious to see restraint and we understand that it's important to get the terror down. And if the terror goes down, then the response to terror will no longer be required. So we have to get moving and bring the terror down. All of our efforts are focused on Hamas, persuading Hamas and Islamic Jihad and other terrorist organizations that this is time to abandon terror." That is from Secretary of State Colin Powell.
A programming note to tell you about. Beginning Monday, LOU DOBBS MONEYLINE becomes LOU DOBBS TONIGHT. We'll come to you at the same time from our new state-of-the-art studio. You're looking at it right now. We'll have the same broad focus on the most compelling stories of the day, from the global economy to interviews with leading newsmakers. Lou will be back to kick that off on Monday at 6:00 p.m. Eastern, right here on CNN.
And when we come back, the business of man's best friend. Our "CEO of the Week" has led his company to impressive gains by boosting your pet's quality of life. And the editors of two of the nation's leading business magazines will join to talk about corporate misconduct, prescription drugs and more.
We'll be back right after this.
(COMMERCIAL BREAK)
HOPKINS: You may not know it, but pet care is a $30 billion industry, and it's growing at about 6 percent a year. The leader of the pack is PETsMART, with revenue of $2.7 billion for 2002. There are 600 stores now. and the company hopes to double in size.
The alpha in charge at PETsMART is Philip Francis, and he is our "CEO of the Week."
(BEGIN VIDEOTAPE)
HOPKINS (voice-over): Phil Francis faced a serious challenge when he joined PETsMART in 1998. The company was faltering, and so was the stock price, at just over $2. Francis changed the business plan, adding new services for pets and their owners. Shareholders have noticed the change. The stock is now above $17.
PHIL FRANCIS, CHAIRMAN AND CEO, PETsMART: What we've done so far in the turnaround is fixed the things. We fixed distribution. We fixed people, we fixed staff, we made the store better. We are writing the book on taking what was a product-driven business model, pet foods and supplies, and adding on top of that or into it services.
HOPKINS: PETsMART now beats its competitors in services by a three-to-one margin. Among the new offerings, training.
FRANCIS: In the case of training, one of the dirty little secrets of unwanted pets in our country is about 20 percent of pets are turned into shelters just because of a behavioral problem.
HOPKINS: New services include grooming and boarding.
FRANCIS: Pets hotel is our experiment at this point in the high end boarding or kenneling. We have filtered air, filtered water. And you can select from a room, a double room or a suite.
HOPKINS: Suites come with TVs and access to playrooms. For cats, there are aquariums. An onsite Banfield pet hospitals provide veterinary care.
PETsMART charities will donate over $5 million this year to various animal not-for-profits. Local humane societies are given adoption center space in PETsMART stores.
FRANCIS: We are not selling dogs and cats, because there are too many, and we don't want to add to that problem, but we are saving a life and creating a customer at the same.
HOPKINS: For than 1.5 million animals have found homes through PETsMART adoption centers.
(END VIDEOTAPE)
HOPKINS: PETsMART's Phil Francis, our "CEO of the Week." Congratulations.
And turning now to our "Thought of the Day," in honor of dads, ahead of the Father's Day holiday weekend this weekend.
"By the time a man realizes that maybe his father was right, he usually has a son who thinks he's wrong." That is from clergyman Charles Wadsworth.
And turning to a CEO who has earned a dubious distinction this week -- former ImClone chief Sam Waksal became the first executive to be sentenced to prison in the wave of corporal scandals that began with Enron. Joining me now to talk about this and all the major news of the week are the editors of the leading business magazines. First, let's look at their latest editions. "Forbes" magazine examines where blockbuster medicines come from. And "Fortune" profiles Smith Barney CEO Sally Krawcheck.
Joining us now is Steve Forbes, the editor-in-chief of "Forbes," and Rik Kirkland is the managing editor of "Fortune." Welcome, both of you.
Let's return to Sam Waksal, the request to go to Club Fed in Florida, is he likely to get that request? Either of you?
STEVE FORBES, "FORBES" MAGAZINE: I think it's unlikely, simply because they threw the book at him and want him to be a standout example. So I think it is going to be tough for him, at least initially. When people aren't looking, they may transfer him, but initially they may just put him in a more normal prison.
RIK KIRKLAND, "FORTUNE" MAGAZINE: Sam was, unfortunately for him, one of the ones they could get. I mean, a lot of these crimes are -- as we are learning, really tough to prosecute. His was pretty blatant. And as Steve said, they threw the book at him, and I don't think they're going to cut him any breaks here.
HOPKINS: Is this really sending a message to corporate America that insider trading will not be tolerated?
KIRKLAND: I would think if you're looking at a guy doing that much time, definitely that's what's called deterrence. You're going to think twice about Sam Waksal.
FORBES: There was no question here as there was in the Martha Stewart case. Waksal had the trust, he had the position. He grossly betrayed it. This was open and shut of what insider trading was all about going back to the Great Depression when that kind of behavior put the first laws on the books.
HOPKINS: Let's turn to Martha, because she's involved in this case. The allegation is that he -- or their broker in common notified her that he was selling his shares. Is she also sending some kind of message to corporate America, and if so, what's the message?
FORBES: Well, in her case I think this is almost a case of prosecutorial abuse. They want to burn her at the stake, they are going to try to do anything to do it, but they couldn't even indict her on insider trading. And so they're trying to say, well, you may not have committed the crime, but we're going to get you anyway. I think that's one -- that's a case where the overreaction is going to hurt, I think, future prosecutions.
KIRKLAND: It's hard to argue with that. I think that clearly, she -- I mean, she looks guilty of obstruction. That seems to be her crime. But it's not -- it's nothing on the scale of what Waksal did, and the stretch to create this fraud charge does look like overreaching.
HOPKINS: Well, it's interesting that she now has a fan club and a Web site where she's putting across her point of view. Is this likely to help her or backfire?
FORBES: Well, if overdone, if it looks like the witch from the East is going to manipulate people, the answer is it's not going to help. But I don't think she's going to do that. I think the prosecutor overplayed their hand, and she's probably going to beat the rap, and rightly so. Waksal is truly guilty. That's what the insider laws are aimed at, not Martha Stewart getting a tip from the broker.
KIRKLAND: I'm not sure she'll beat the rap, though. I think they may be able to get her on obstruction.
FORBES: I think on appeal, she'll win on appeal, even if she doesn't win the first round.
HOPKINS: She has a good legal team, so clearly they're going to fight it. I mean, that's the strategy at this point. I guess they could settle. Any bets?
KIRKLAND: I don't think so. She didn't seem to want to settle before. She's going to play it her way. Martha does that.
HOPKINS: We had another case this week that's interesting, which is Freddie Mac, where you have some pretty bad behavior on the part of the executives. Also, huge exit compensation packages. What impact might this scandal have?
FORBES: I think it's going to have a couple of things. One is it's going to bring real congressional scrutiny of those two giants, Fannie Mae and Freddie Mac, which have had a virtual semi-monopoly for a number of years. That may start to change, reform may come there.
And the other thing is it's also going to put the spotlight on grossly overpaid executives and put more pressure on boards, don't let this happen. Congress is not going to let this stand. They can't in an election year coming up.
KIRKLAND: They definitely -- they clearly need better regulations. This outfit, it's part of the housing urban government that regulates Freddie and Fannie is arguably the worst -- one of the worst regulated in Washington, after the Federal Election Commission. They had a study -- in 1992, they were going to study risk, and they wrapped it up last year. That's a little late if there was an actual risk. So clearly, we need to put these important bodies under something like the Fed or the comptroller of the currency or a really competent regulator. And they ought to disclose -- there is no reason for lack of full disclosure on anybody's part in the current environment.
FORBES: Treat them like anyone else, and perhaps remove the implied government guarantee so we get real competition again.
HOPKINS: That might have an impact on bonds, though.
KIRKLAND: It might. The markets can handle it. But that's an interesting one. I'm not sure if it's going to go that far.
(CROSSTALK)
FORBES: The real thing here is there is something that we don't know about with these derivatives, real, real scandal brewing there.
HOPKINS: You'll come back in a couple of minutes, so we'll continue the conversation.
A reminder now to vote in tonight's poll. Should Israel stop its attacks on targets in Gaza, yes or no? Cast your vote at cnn.com/moneyline. We'll bring you the preliminary results in just a few minutes.
And when we come back, we'll have much more with our "Editors' Circle" with all the issues moving your money, and many of you wrote in with your thoughts on the space shuttle program. We'll share some of those e-mails. That and more still to come.
(COMMERCIAL BREAK)
HOPKINS: Joining me once again is Steve Forbes, the editor-in- chief of "Forbes" magazine and Rik Kirkland, the managing editor of "Fortune."
We were talking about Freddie Mac, Fannie Mae, any impact on the housing market?
FORBES: Unless it blows up in an Enron type scandal, I say no. The markets are very liquid. Institutions are national wide. They can provide the liquidity and spread of the risk with mortgages. It hurt mortgages in the past, it was too localized. When there was down turn there housing came first. In this recession, amazingly housing grew during the recession. It has never happened before.
KIRKLAND: We really need these guys and the auditors to hurry up and tell us what happened because it's still a little unclear what went wrong. And how it could have gone wrong and what the controls were. As soon as that information comes out the markets will relax. They seemed to feel better today because the stocks were up above. So far, so good.
HOPKINS: Lets move on to something else. Prescription drug coverage. It looks like Congress after many years of talking about it is actually going to get something.
What's the reason?
What, is it the voters that are really being heard.
FORBES: 2004 is coming on the horizon and the White House wants this issue off the table. They'll take anything, and that's what's got people worried. They may do a short-term election cover and have a huge entitlement that could bankrupt the system down the road. And I don't know why they don't push for what everyone in Washington has and if you work for the government and that is a choice of a dozen or so insurance providers. You make the choice of what plan you want instead of one size fits all.
KIRKLAND: The reason is it's too -- there is a large group in Washington that worries about too much of a role for the private sector. This compromise allows a little bit but I don't think nearly enough.
FORBES: Almost a fake.
KIRKLAND: Almost a fake. Given the risk of what Steve's suggesting I think that you do have another example of the Alfred Newman (ph), what, me, worry fiscal irresponsibility. Huge potential costs from this. And if you're going to do that, make a serious reform. And I think it's a very minor reform pour a big entitlement.
HOPKINS: We have some more time between now and 2004.
How many other things are we going to get from a Congress that's eager to please?
FORBES: Well, certainly the tax credit business certainly is going to be dealt with. But the White House right now wants to get as much as they can off the table so the Democrats don't have a stick to beat them next year.
KIRKLAND: And it's true. Interesting, politically, if you're a Democrat, you kind of have to have a certain -- you're for this on the one hand. On the other hand it's a huge issue to beat Republicans up with and it really is gone. So they're going to miss it.
HOPKINS: Right.
KIRKLAND: On the campaign trial trail.
HOPKINS: Lets talk about the market. I remember you, Steve, saying the market was going to go up 40 percent.
The techs are up 30 percent, how much more can we go?
FORBES: I think even though there is going to be a lot of back and forth as we saw today, the market still has a lot of juice in it. What this tax bill did was absolutely enormous on what it did on the dividend and capital gain side.
KIRKLAND: I would love to see us hold on to just a little bit better where we are now at the end of the year. I think that will be great. I think we're predicting that recovery but the profits aren't come through yet, and I hope the market stays up for this year. We could use that one.
HOPKINS: Thanks, Rik Kirkland and Steve Forbes.
And when we come back the preliminary results of tonight's poll and share your thoughts on Sam Waksal's sentence and much more. (
(COMMERCIAL BREAK)
HOPKINS: Checking the preliminary results of the poll, "should Israel stop its attacks on targets in Gaza?" 65 percent of you say, yes, 35 percent say no.
Now for a look at some of your thoughts. Many of you wrote about NASA and what should it do with its shuttle program.
Patrick Hanson of Cedar Rapids, Iowa, wrote, "NASA's aging fleet has needed upgrading for decades now. If the fleet is terminated, the deaths of those on Columbia were a total and complete waste."
And Jorge Devila from Puerto Rico said that, "The NASA shuttle program, as much as I like it, should be phased out. It takes up too much money and there are better and less expensive ways to send astronauts up."
Ted Hunsberger from Fort Wayne, Pennsylvania suggested an alternative punishment for Sam Waksal. "A more appropriate punishment would be to freeze his assets and use that money to pay back those who were robbed. Then get him a job at McDonald's to earn his keep. Instead of getting us to support him in a fancy prison in Florida."
We love hearing from you. Please send us your thoughts at loudobbs@cnn.com. Don't forget to include your name and your hometown. Thanks for joining us. Monday Lou will be back and we'll be on our new set. And we will begin a series of new reports on emerging diseases. Health and Human Services Secretary Tommy Thompson will join us. Homeland Security Secretary Tom Ridge will also be here. I am Jan Hopkins in for Lou Dobbs. Have a great weekend. For all of us here good night from the New York.
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