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Bremer: Saddam Gone, Won't Return; Bush Travels to Africa

Aired July 8, 2003 - 18:00   ET


ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, July 8. Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, CNN GUEST HOST: Good evening, everyone.

Hunting Saddam Hussein. The top U.S. official in Iraq today said that Saddam Hussein's days in Iraq are finished. He made his comments as Arab television networks aired another audiotape attributed to Saddam Hussein. The recording told Iraqis that covert attacks are the best way to force coalition forces out of Iraq. Seven U.S. soldiers were wounded in the latest attacks.

Senior Pentagon correspondent, Jamie McIntyre, joins me now -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Jan, there were no U.S. soldiers killed in Iraq today, but that does not mean that all is calm. There were a series of attacks against U.S. forces, including one instance in which a homemade bomb was dropped from a bridge on a passing military vehicle. Another incident, a Humvee hit a land mine. U.S. military says seven U.S. troops were injured in those and other attack attacks in Iraq today.

A sign the U.S. Is increasingly concerned about the attacks: the provisional U.S.-led authority has announced a $2,500 reward for information leading to the arrest of anyone responsible for killing a member of the coalition forces or the Iraqi police who are helping them. That's in addition to the $25 million bounty on the head of Saddam Hussein, whose voice was heard on yet another audiotape exorting the Iraqi people to oppose the U.S. occupation force. But once again, it's not clear if this latest tape is really new.


PAUL BREMER, CIVIL ADMINISTRATOR: I would be much happier if Saddam Hussein were demonstrated to be dead or alive in our custody. We have said before that we think the fact that his fate is uncertain enlivens the Ba'athists, Fedayeen Saddam, the people I spoke of earlier, to make the assertion, which is completely without foundation, that Saddam will come back. He's not going to come back. He's finished here. We will eventually capture or kill him.


MCINTYRE: The Pentagon says 80 percent of Iraq is stable and that most of the resistance is in an area dubbed the Sunni Triangle, an area stretching from Baghdad north to Tikrit and west to Fallujah. The U.S. continues to insist that it's not facing an organized guerrilla campaign, but rather a series of random attacks from different groups each with a different motive for opposing the United States.

Now the Pentagon is expecting a review of force requirements in Iraq to be completed sometime either this week or next. It is not expected to call for an increase in U.S. troops. But it is expected to start giving a date certain for some of the troops that have been there the longest, a time when they would be coming home. The troops there in Iraq have consistently said the hardest that thing about serving there now, aside from the fact they're trying not to get killed each day, is not knowing when they are going home. And this new plan is expected to try to end that uncertainty for the troops that have been there the longest. The 3rd Infantry Division, the commander of that division told his soldiers yesterday they would be going home but he hasn't been able yet to give them the exact date -- Jan.

HOPKINS: So Jamie, a date that they'll be going home. But then what happens? More troops to replace them? International troops coming in? Or what?

MCINTYRE: Well, there will be rotating -- U.S. troops will be rotating with fresh troops coming in as they work out this rotation plan. The overall number of troops probably won't rise. And as international troops are being added, they will be added to that group. It may result in an overall increase in number of troops in Iraq, but only by a small amount. Those troops are not expected to arrive for a couple of months yet.

HOPKINS: Jamie McIntyre at the Pentagon.

A reminder today of politics of intelligence. At issue, what President Bush said about Iraq's nuclear program in his State of the Union address. The White House says the president was incorrect when he said that Iraq tried to buy military material in Africa.

White House correspondent Dana Bash has that story.


DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Bush, in his State of the Union address six months ago, aggressively building a case for war against Saddam Hussein.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

BASH: Senior Bush officials have acknowledged for months intelligence Iraq was trying to buy nuclear material from the African nation Niger was false, but did not admit the president's statement was wrong until now.

"The other reporting that suggested Iraq tried to obtain uranium from Africa is not detailed or specific enough for us to be certain that such attempts were in fact made," said White House spokesman Michael Anton. "Because of this lack of specificity, this reporting alone did not rise to the level of inclusion in a presidential speech."

Secretary of State Colin Powell told reporters last month he chose not to use the information in his U.N. speech because it -- quote -- "wasn't solid enough." White House officials say the president would not have knowingly cited false intelligence, saying they didn't learn of the error until after the State of the Union.

Democrats are demanding:

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: Why? Why didn't they know? I mean, all 14 intelligence agencies basically work for the president. He is the final receiver of intelligence and analysis. Now they give him the best analysis they have. They have fairly much broadly discounted this whole Niger problem.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: I think it's all the more reason why a full investigation of all of the facts surrounding this situation be undertaken.

BASH: White House officials are, however, standing by the claims Saddam Hussein was trying to reconstitute his nuclear program, saying other classified intelligence still supports it.

Public opinion polls show most Americans are increasingly concerned about the post-war effort but not as worried weapons of mass destruction haven't been found. Republicans are banking that could help here.

ED ROGERS, REPUBLICAN STRATEGIST: The fact that they had to put out a retraction, the fact we're having to sit here and talk about it now, it's not a positive thing. But between one and 10, this is a one. Other issues are more important.


BASH: Even some Democratic presidential candidates voting for the war in Iraq see an opening here, calling this a credibility issue -- Jan.

HOPKINS: Thanks. Dana Bash at the White House.

And later in the show, I'll talk about Iraq's nuclear program and the future of Iraq and the role of U.S. troops with Senator Carl Levin of Michigan. He is ranking Democrat on the Senate Armed Services Committee and he has just returned from a three-day visit to Iraq.

President Bush has just arrived in South Africa on the second stage of his visit to Africa. Earlier, the president visited Senegal and spoke about the evils of slavery. He called it one of the greatest crimes in history.

Charlayne Hunter-Gault joins us live from the South African capital, Pretoria -- Charlayne.


President Bush and his entourage arrived in this chilly South African night just a very short while ago. They were met by an honor guard of 12 members and South Africa's foreign minister, Nkosazana Zuma. There were no speeches, no ceremony at the airport. Indeed, the president and his group went straight to the hotel. He has a long day ahead of him tomorrow.

He will not be meeting South Africa's first citizen, Nelson Mandela, who has had words about the president and criticized his position on Iraq and the attack on Iraq. So he is out of the country and many people are seeing that as a not very good signs of his visit.

On the other hand, the South African president, Thabo Mbeki, spoke with me earlier today and said that they are looking forward to strengthening bilateral relationships with the United States. They will be discussing at lunch tomorrow and in a one-on-one with the president -- the two presidents a number of issues. There won't be a state dinner because the South Africa president has to hurry off to Mozambique for the African Union, the largest gathering of African leaders on the continent.

But one of the things they will be discussing is the $15 billion the United States president has pledged for AIDS. It is a very urgent matter, as the president indicated.


THABO MBEKI, SOUTH AFRICAN PRESIDENT: It is urgent. It's urgent. We thank the United States for that decision. And it is important that the bilateral directions start to define the precise nature of the possible uses of that money.


HUNTER-GAULT: Following the meeting with the president, after the president's departure, President Bush will be meeting with business leaders here in South Africa. The South African government is very eager to increase the amount of investment in this country and is looking to President Bush to send the positive signal in that regard -- Jan.

HOPKINS: Thank. Charlayne Hunter-Gault in Pretoria, South Africa.

Teenage gunmen in Liberia today prevented a team of U.S. military experts from visiting a refugee camp outside the capital, Monrovia. Earlier, huge crowds of Liberians cheered the experts as they left on their mission.

Jeff Koinange reports from Monrovia.

(BEGIN VIDEOTAPE) JEFF KOINANGE, CNN CORRESPONDENT: A dramatic first day for the humanitarian assessment survey team here on the ground in Monrovia, and also one that showed a bit of diplomatic bungling between the governments of the U.S. and Liberia.

Here's how events unfolded. Their first port of call: a local hospital, where they were mobbed, literally, by tens of thousands of Liberians welcoming the Americans on the ground saying, "We love you, George Bush. No more war. We want peace," waving American flags. It was a dramatic scene. Tens of thousands of Liberians. The Americans left that scene, proceeded out of town about five miles or so, got to a government-run check point. The entire convoy slows down. Embassy officials got out. They engaged in conversation with the troops. A phone call was made. All of a sudden, the entire convoy turned right around and headed back for Monrovia, along the way, tens of thousands of Liberians mobs the Americans. Welcoming them and even more chanting and singing as they went along, virtually grinding the convoy to a stand still.

Then shots rang out in the air one after the other and the crowd dispersed. So used to gunfire, they dispersed immediately. U.S. Marines engaged looking to see what was going on. They saw the firing was only in the air. They got back in the convoy and sped right out of there. These were government troops. I guess in their version of crowd control. This happened very dramatically. Even the Liberian President Charles Taylor, did have a reaction calling for some kind of diplomatic bungle.

CHARLES TAYLOR, LIBERIAN PRESIDENT: Sometimes we have diplomatic boo-boos. We welcome the troops here. We will take them wherever they want to go. Since their arrival, the embassy near this capital has not organized any movement or liaison activities with any agency of this Liberian government. The area they were going into, there are troops in the field that do not know what's going on.

KOINANGE: At the same time, the u.S. Embassy did release a press release later in the afternoon and they called -- they did admit they were denied permission to go beyond that check point. But they also insisted after negotiations with the Liberian government, they were not allowed to go through any check points without any problems.

Jeff Koinange, CNN, Monrovia, Liberia.


HOPKINS: U.N. Secretary General Kofi Annan said today he's preparing for the return of international aid workers to Liberia. U.N. staff were withdrawn because of the security situation there. There are about a million refugees in Liberia. Many have fled to Monrovia.

Turning to news in this country, five people are dead after a shooting at a Lockheed Martin plant in Meridian, Mississippi. Police say a worker armed with a shotgun and a rifle opened fire during an employee meeting. Eight people were injured, some of them are in critical condition. The gunman also killed himself. Authorities are not sure what sparked the rampage.

The shooting in Mississippi is the second shooting in a manufacturing plant in a week. Last Tuesday police in Jefferson City, Missouri, say an employee at a Modine Manufacturing killed three co- workers and later shot himself.

Earlier this year, police in Huntsville, Alabama, say a man shot and killed four people at a temporary employment office in Huntsville, Alabama. The last office shooting before that was two years ago in suburban Chicago. A worker at a Navistar plant killed four people and then himself.

Police in Bakersfield, California, are searching for an elementary school vice principal as a possible suspect in another shooting. Authorities found five people shot to death in a home in Bakersfield, three were children. One of the victims is the former wife of the vice principal. There is no word on when that shooting took place.

Still's head tonight, "Going Broke in America," our series of special reports continues. Tonight, states facing financial disaster.

Casey Wian will have a report.

And later, flood intelligence has Senate leaders calling for an inquiry. Senator Carl Levin, ranking Democrat member of the Armed Services Committee recently visited Iraq and he'll join us.


HOPKINS: The Japanese continue to make the highest quality cars, that's according to the latest J.D. Powers survey. But while Toyota, Nissan, Honda dominated, General Motors made a surprisingly good showing. Buick, jumped from seventh last year to third. On the other end of the spectrum South Korea's Kia ranked dead last, just slightly below Volkswagen, Suzuki, Daewoo and Land Rover.

On Wall Street today, stocks edged higher following yesterday's blockbuster rally. The Dow was up another 6 points, the Nasdaq added another 26, and the S&P added nearly 3.5.

Christine Romans is here with the market -- Christine.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: After a pretty choppy morning, stocks built on yesterday's gains helped by more merger news. Today it was a hostile bid and two takeovers. Computer related stocks rose after EMC said it will buy Legato. Yellow will acquire Roadway in a friendly deal there, that sparked a transportation rally. And auto part stocks jumped on news ArvinMeritor will launch a cash bid for it's rival Dana Corp.

Now volume at the big board topped 1.5 billion shares, 2 billion shares traded over the Nasdaq. Advancers beat decliners by two to one, evidence the tech rally is leading this market as it has all year. The Nasdaq at the highest level since last May, and up 39 percent since the March low of this year. The S&P and Dow each up at least 20 percent since March, just about a percent or so off the highs from two weeks ago. After the bell Microsoft announced it will no longer give its employees stock options but instead stock awards that will be expensed according to generally accepted accounting principles. Also Alcoa was the Dow stock to announced earnings for the second quarter. Now those shares are up about a dollar after hours, Jan. Now (UNINTELLIGIBLE) profit fell but not as badly as many feared and actually revenue grew slightly.

HOPKINS: Very interesting. So Microsoft is going to get rid of stock options, basically.

ROMANS: Absolutely. Also said they're going to try to come up with a way to address the stock options the employees have that are under water as well, maybe selling those off to a third party. Some interesting compensation issues going on over there.

HOPKINS: Another day of rally on Wall Street. Another day, quite impressive.

Thanks, Christine.

Still ahead tonight, fighting West Nile. Steps can you take to protect your family this summer.

Then your e-mails. Many of you wrote in about Spam, both the canned variety and the unwanted e-mail variety. We'll share your thoughts.

And "Going Broke in America." Our series of special reports continues tonight with Casey Wian on the financial crisis crippling states across the country.


HOPKINS: California Governor Gray Davis is a step closer to facing a recall vote tonight. Anti-Davis organizers have ended their petition drives. They say they have nearly 1.5 million signatures, well above the 897,000 needed to force a recall vote.

Former Maryland Police Chief Charles Moose has settled an ethics battle with Montgomery County. Moose will be allowed to publish a book an last year's sniper shootings, but he will have to forfeit a movie consulting fee.

Forecaster say that Tropical Storm Claudette could become a hurricane storm in a day or two. Claudette is churning in the Caribbean, moving toward Jamaica and the Cayman Islands with winds of about 50 miles an hour.

The first human case of West Nile virus this year has been confirmed in South Carolina. Last year, more than 4,000 cases -- 4,00 people contracted the virus. Nearly 300 of them died. This year, health officials have been working hard to prevent a repeat.

Keith Oppenheim has that story.


KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): They strap on backpacks loaded with insecticide, head into swampy grasses and spray. The goal of this abatement crew near Chicago is to prevent larvae from growing into adult mosquitoes, specifically the culex pipians, the common carrier of West Nile virus that infected more than 4,000 people in the U.S. last year. Illinois had more cases than any other state.

(on camera): And when you consider the long-range weather forecast at this point in the Midwest is a summer with above normal temperatures, you have potentially ideal conditions for the spread of the mosquito and West Nile virus.

MICHAEL SZYSKA, NORTHWEST MOSQUITO ABATEMENT DISTRICT: July is a very critical month and it's reason we urge people to inspect their backyards for standing water. There will be a lot of these mosquitoes present.

MARK BAKER, FIELD OPERATIONS CHIEF: And the mosquitoes don't care if they come from this guy's property or the next guy's. Here we go, yes. This is the type of thing.

OPPENHEIM: The jackpot: a mucky tarp found on private property covered with stagnant water where mosquitoes can breed like crazy, all which means spraying on public land can only do so much. The public cleaning up on private land can probably do much more to slow down a spreading sickness.

Keith Oppenheim, CNN, Wheeling, Illinois.


HOPKINS: In addition to hot weather and mosquitoes, many states are battling huge budget deficits this summer. In the next part of our series, "Going Broke in America," we examine the states' financial crisis. Many states are cutting services and raising taxes to try to balance their books.

Casey Wian has the story.


CASEY WIAN, CNNfn CORRESPONDENT (voice-over): From Maine to California, state revenues have suffered their biggest drop since World War II. The soft economy has reduced tax receipts, while dramatically rising costs for health care, law enforcement and education have states struggling to balance budgets.

SCOTT PATTISON, NATL. ASSOC. OF STATE BUDGE OFC.: Fiscal year 2004, which begins this month for most states, is going to be a very, very difficult time for states. They're going to see some of the worst budget cuts simply because they were able to use things like rainy day funds to buffer some of the most painful cuts. A lot of those actions have been used up and now they have to do some of the more harder choices. WIAN: Thirty-seven states cut spending by a total of $14.5 billion this year. For fiscal 2004, states have proposed a total of $17.5 billion in tax increases and fee hikes.

California is the poster child for state budget problems. Huge revenue gains during the '90s stock market boom allowed the state to spend lavishly. Then came the energy crisis, a recession and rising social services costs that in just three years have turned a $7 billion surplus into a $38 billion deficit.

Governor Gray Davis faces a recall campaign, one reason state lawmakers have failed to pass a budget two weeks into the fiscal year.

GOV. GRAY DAVIS (D), CALIFORNIA: We need to find a way to do the people's business and allow every one else in this state who depends on us, including schools, cities, counties -- they depend on us for direction. We need to get our work done as soon as humanly possible.

WIAN: Like many cities nationwide, Long Beach, California, is bracing for the impact of state budget deficits. The city expects to lose money from the state and it already faces a $97 million three- year budget shortfall.

So Long Beach is preparing a wide range of service and staff reductions, from closing its main library on Sundays to subcontracting park maintenance work, to a hiring freeze that could leave ten percent of city jobs unfilled.

(on camera): The biggest chunk of Long Beach's proposed budget cuts will come out of the pockets of city employees. The city hope to cut its employee compensation costs by 27 percent through changes in work rules and benefits.

MAYOR BEVERLY O'NEILL, LONG BEACH, CALIFORNIA: We have a three- year plan and it's going to be hard to do. But at least we have a plan. I don't feel the state governor -- government has a plan to get out of their crisis except looking at the cities.

WIAN: A few states have managed to avoid serious budget problems, mostly smaller states such as Vermont and Delaware that did not benefit as much from the boom times, or those with significant energy revenues such as New Mexico, Wyoming, Louisiana and West Virginia.


WIAN: State and local governments have so far received $4 billion from the federal government to help pay for the added costs of homeland security and more is coming to cover other so-called unfunded mandates. The budget officers worry the money won't be enough to cover the actual extra costs -- Jan.

HOPKINS: Casey, the difference between the states and the federal government is that the states have to balance their budgets every year. The federal government doesn't, right? WIAN: Absolutely. It's been a tough lesson for the states in fiscal discipline. And a lot of people saying that by 2005, things are going to be turning around for the states. But for the next couple of years, it's going to be real difficult because, as you know, they are required to balance the budgets.

HOPKINS: Casey Wian in Los Angeles, thanks.

Tomorrow in our special series "Going Broke in America," we'll examine bankruptcy and small businesses. Peter Viles will report on what it takes for small businesses to get in and out of bankruptcy.

Now for a look at some of your thoughts. Michael Fitzsimmons of Laguna Beach, California, wrote about illegal workers, "I doubt many Americans would choose the type of labor that illegals, migrant and guest workers undertake while in the United States. Not only is the work extremely physically straining, but their wages are often below national minimum wage. Americans should worry more about high paying jobs being exported to other countries."

David Bidlack from Lansing, Michigan, wrote about our poll question last night, asking if you're a bull, bear or a chicken when it comes to the stock market. He said, "I'm not a bull; I'm not a bear or even a chicken. I'm an investor waiting to see if the federal government is going to put at least someone in jail."

Well, David since Enron's collapse, one person has been sentenced to jail, Sam Waksal. But he's the only executive out of 73 that has been criminally charged.

Eric Eaton of Windsor, Ontario wrote about the fight over the name Spam, "Whoever started using the word spam for undesirable e-mail surely must have coined it from the luncheon meat. Hormel shouldn't complain, however, as I suppose it should be considered excellent publicity, considering every time I hear or use that word, I get hungry."

And Scott Kawamoto of Lake Oswego, Oregon wrote, in response to the viewer who wants to see a law barring third-class junk mail. He said, "I just put the advertisement back in the postage pre-paid envelope without the application, of course."

Send us your thoughts at

Coming up, inside Iraq and a grow controversy over Saddam's weapons. Senator Carl Levin is the ranking Democrat on the Armed Services Committee. He's just returned from Iraq and he'll join us next.

Then, a tragic ending for two sisters. We'll have their remarkable story when we return.


HOPKINS: Returning to one of our top stories, the White House today acknowledged that part of President Bush's State of the Union address was incorrect. The president said that Iraq was trying to buy uranium for nuclear weapons, but at the same time the intelligence community believed that information was false. My next guest is calling for an investigation of the matter. Senator Carl Levin is ranking Democrat on the Senate Armed Services Committee. He joins me now from capitol hill.

First of all senator, how disturbed are you about the retraction basically from the White House today?

CARL LEVIN (D-MI), SENATE ARMED SERVICES COMMITTEE: Well I'm glad that the retraction came, but what is deeply troubling, of course, is now the fact that the intelligence community kept to itself, apparently, because that's what Condi Rice said, critical information for almost a year, which was then used, first by the state department, then by the president in the State of the Union Address, to give the impression that Iraq was creating this nuclear program. Condi Rice just said not too much months ago that the information was kept in the bowels of the CIA. That is deeply troubling because this information was known to the CIA about nine or ten months before the state department at the end of the year 2002 used it, misused it, misstated it, and then the president repeated that misstatement.

HOPKINS: So what do you hope to find from the investigation?

LEVIN: As how the CIA and why the CIA or the intelligence community did not make known to the policy makers the information that they had that this purported uranium sale was a bogus issue.

As Condi Rice said, she said we did not know at the time -- no one knew at the time in our circles -- maybe someone knew down in the bowels of the agency -- but no one in our circles knew there were doubts and suspicions that this might be a forgery. It's incredible that the CIA --

HOPKINS: Does that smack of incompetence or political maneuvering?

LEVIN: It smacks to me that someone down in the bowels of the CIA or someone at the CIA decided for whatever reason -- and that's what the inquiry is about -- that this information should not be made available to the policy makers. That's what the inquiry is about, to find out how is this possible because that is apparently now what's happened.

HOPKINS: It's too late for Iraq, but how can this information be used perhaps in the future? Iran, for example?

LEVIN: We have to be able to rely on our intelligence community and their findings, because lives are at stake. For instance, if in fact there was an exaggeration about the relationship between Iraq and al Qaeda, and there is some evidence that there was an exaggeration by the intelligence community about that relationship, then the next time the intelligence community tells us something like that, for instance, apparently they now say there is a relationship between Iran and al Qaeda. There is going to be real doubt as to whether or not the intelligence community's finding is real, whether it's honest or whether it's exaggerated. We need them to be credible. That means no exaggeration. That means they have to give the unvarnished facts to the policy makers.

HOPKINS; You just came back from Iraq and you have some advice about what should happen with troops.

LEVIN: We're going to be there for a long time with a significant number of troops. Finally the president acknowledged as much last week. It took a long time for that acknowledgement to come but it's very important that the administration make that point to the American people. But that means, we have got to reach out to the international community. We've got to solicit the support of NATO and the United Nations so that countries such as Germany and France and India and Egypt will support us with troops.

This feud with Germany and France has got to end. The stakes here are too great. Everyone has a stake in stability in Iraq. The whole world has that stake. We ought to reach out to NATO and the U.N., to internationalize this effort.

HOPKINS: How dangerous was it for you, personally, and your group? I mean, how were you protected?

LEVIN: It wasn't dangerous for us at all. We had, you know, very strong security. So the dangers to our troops there, particularly in the middle part of the country, Baghdad in the area north and west of Baghdad, the so-called Sunni Triangle are where the dangers are. We personally were not in he any danger at all.

HOPKINS: Senator Carl Levin, Democrat of Michigan, thanks for joining us.

LEVIN: Good to be with you.

HOPKINS: That brings us to tonight's poll, what do you believe is needed most to stabilize Iraq, more U.S. troops, fewer U.S. troops, troops from other countries or trained Iraqi troops? Cast your vote at

We'll bring you the preliminary results later in the show.

And now the final results of yesterday's poll. We asked when it comes to the stock market, are you a bull, bear or chicken. Twenty- five percent of you said bull, 17 percent said bear, and 58 percent said chicken.

Tonight's quote on the importance of the U.S. presence in Liberia. "It's symbolic of our recognition of the importance of Africa that we do help bring stability to Liberia. And I think bring in a small but significant American military force, together with the West Africans to stabilize that situation, sends a very strong signal to the whole continent." That is from Princeton Lyman, he's former U.S. ambassador to Nigeria and South Africa.

Lawmakers in the House are taking aim at spam. Unwanted e-mail was the focus of a House subcommittee hearing today. Commerce experts testified that spam costs businesses billions of dollars by making Americans less trustful of the Internet.


JOE RUIN, U.S. CHAMBER OF COMMERCE: Increasingly, consumers are getting inundated with pornographic or false and misleading e-mail that overshadows the online communication efforts of legitimate companies. It has to be understood, however there is a clear distinction between legitimate companies and those who attempt to use fraud and deception to rip off consumers.


HOPKINS: The House Subcommittee hopes to vote soon on a bill that would let Americans opt out of receiving spam. A similar measure preventing unwanted telemarketing calls has been hugely popular. So far nearly 20 million Americans signed up for the national do-not-call list.

One of Congress's biggest victories so far this year has been passing a Medicare prescription drug benefit. However, merging the House and Senate versions of the bill into one has sparked intense battles on Capitol Hill and it could be a sign of things to come as Jonathan Karl reports.


JONATHAN KARL, CNN CORRESPONDENT (voice-over): Seniors shouldn't count on help paying for prescription drugs yet, as talks begin on resolving the differences between House and Senate bills, the battle lines are drawn, especially in the Senate which passed the bill by an overwhelming 76-21 margin.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Don't be deceived by the overwhelming margin here. As Senator Kennedy lays out in his letter, we have some very significant concerns.

KARL: Senate Democrats have written a letter to President Bush warning they will strongly oppose any compromise that includes provisions passed by the House to give private insurance companies a larger role in providing Medicare. They expect more than 40 Senate Democrats to sign the letter. Enough to block a bill they don't like.

A final compromise on the issue is still seen as more likely than not, but it is no longer considered the slam dunk it seemed to be just two weeks ago. The wrangling over prescription drugs is a sign of things to come.

STU ROTHENBERG, POLITICAL ANALYST: We're at the point in the political cycle, if we're not there we're almost there, where every issue is being regarded in partisan terms, in political terms, really in terms of the 2004 elections.

KARL: Back when Congress passed its last big tax cut and began charging ahead on prescription drugs, the president basked in his party's legislative victories. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The vice president and I came up to congratulate the Speaker and the Leader on a season of accomplishment.

KARL: Six weeks later that season of accomplishment is starting to look like a season of political discontent. Case in point, the Senate is now debating a bill to limit medical malpractice awards, a priority for the White House and a red flag to most Democrats. It'll be argued vigorously but it has virtually no chance of passing. One of the few Republicans against the bill chided his party for playing politics.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: They're bringing this bill up to get most of my Democratic friends to vote against it. A handful of Republicans to vote against it and they're going to take it on the campaign trail.


KARL: Republican leaders acknowledge they cannot pass medical malpractice reform. But at this point with an election just a little over a year away, the politics is more important than the policy, as Senator Rick Santorum the No. 3 Republican in the Senate said, they want to force a vote on this issue so they can turn the heat up back home on Senators who vote against the bill -- Jan.

HOPKINS: Politics, the season. Thanks, Jonathan Karl.

Coming up, the war on terror is being fought on many fronts. Under Secretary for Homeland Security, Asa Hutchinson, will join us on a new intiative to protect countries financial system from sabotage.

And then the art of the deal returns to Wall Street. Bill Tucker reports on a heartening trend taking hold and what that trend signals about the budding market recovery.


HOPKINS: New efforts tonight to protect this country's financial system. The Department of Homeland Security launched operation corner stone, an project designed to fix flaws stemming from money laundering. It also expands the departments Computer Labs Unit to four additional cities.

Joining us now is Asa Hutchinson, he's under secretary for Borders and Transportation at the Department of Homeland Security. Welcome.

We're talking not only about terrorists but also money laundering and a whole lot of other things that might be involved in using computer systems and banking systems for fraud and crime, Right.

ASA HUTCHINSON, DEPT. OF HOMELAND SECURITY: Absolutely. There is tremendous expertise in the Department of Homeland Security, the secret service historically investigating counterfeiting, electronic crimes, credit card fraud. We have got the Bureau of Immigration Customs Enforcement that's historically investigated money laundering. And the financial systems, whether they are life insurance or banking, those systems can be abused by the criminal enterprises to flow cash, laundered money. And so this initiative is to help in investigations but also sharing information with the financial community about ways systems can be abused, patterns of abuse to help them to prevent the abuse.

HOPKINS: How vulnerable is the system at this point?

HUTCHINSON: Wherever whenever you look at billions of dollars flowing through our financial systems overseas in terms of cash, in terms of money remitters, in terms of laundering money going to the Middle East, going to South America for drug transactions, it is abused in that sense. And so the terrorists, the criminal organization, have to use the financial systems. Our job is to detect that and it is the private sector, the financial community's job, to detect that as well. We want to work in partnership with them, sharing information with them, patterns of abuse to help them to identify those wrong doers.

HOPKINS: You had some examples of life insurance being used to launder money.

How does that work?

HUTCHINSON: Well, of course, if you're in the drug business, you're generating huge volumes of cash. How do you get that money into a legitimate form. They would purchase out of Miami overseas life insurance policies, $80 million of life insurance. Then after they purchase the life insurance, they would cash it in even at a loss but they would get clean money back that they could use for other businesses. It would be clean money that they laundered their drug money for.

In your office of Homeland Security, there are some reports out today of vulnerability to bioterrorism. What -- I mean you see these reports.

How vulnerable are we to bioterrorism at this point?

HUTCHINSON: Well, it's a great concern. I mean the fact that biological agents are difficult to detect. They have -- they could be in the environment, it might be two or three days before they come up in terms of reporting. And so whether it is terrorist cause or otherwise, it is a problem you have to look out for.

We're trying to increase our capability to detect bioterrorism, both intelligence wise but also technology. So it is a point of emphasis and that along with other perhaps weapons they might use or something we're guarding against.

HOPKINS: Lot of fronts have you to watch things.

It's interesting, 4 of July passed. The terrorism threat level was not raised. We made it through the holiday. I traveled on the holiday and the worst problem was the weather, actually. That was what caused slight delays basically.

Are we really making progress on the fight against terrorism and protecting our boarder?

HUTCHINSON: Every day. Absolutely. We're safer today than we were a year ago. And we'll be safer tomorrow. We're making progress on intelligence and apprehending those people that would do us harm, but also in our protections and our systems, in sharing information. So we're making progress every day. The 4 of July I think is a good example of the maturity of our systems. We rely upon I intelligence. We don't raise a threat level unless we have the intelligence that supports that. We know what it costs America. Intelligence was not there. The people are careful anyway. And so we're getting better and safer.

HOPKINS: Thanks. Asa Hutchinson, thanks for joining us.

A flurry mergers and would-be takeovers announced today from auto parts to software. Over the last several days, about $4.5 billion put on the table.

Bill Tucker reports.


BILL TUCKER, CNNfn CORRESPONDENT (voice-over): Suddenly, trucks are hot. Yellow announcing it wants to buy competitor Roadway and that it's willing to pay a premium to get it.

BILL ZOELLERS, CEO, YELLOW CORP.: We really believe this is the right strategy with the right partner at the right time.

TUCKER: The attention grabber is Yellow is hardly alone. So far this week, five deals of note have been announced, nearly $9 billion on the table. That activity following on the heels of the hottest month for mergers and acquisitions this year. Eighteen deals, each worth $1 billion or more were announced in June.

GARY FINGER, HOULIHAN LOKEY HOWARD & ZUKIN: You've got a few basic drivers here in the current, M and A market. One, improving equity environment. Two, very cheap money in terms of debt financing, both high-yield and bank. Three, the economy is not falling off a cliff. And four, more confidence on the part of CEOs.

TUCKER: What has bankers really excited is the number of hostile deals. PeopleSoft/Oracle, Alcan/Pechiney, ArvinMerito/Dana, all hostile and all actively being fought. Hostile deals mean people are getting aggressive. Hostile deals agitate the water.

MICHAEL PELOQUIN, FACTSET MERGERSTAT LCC: There is a little bit of fear as to if we don't do this, then what happens?

And I think a lot of the corporate boards are saying let's get back to business and focus on getting some acquisitions and assets that make sense for our business model.

TUCKER: While the pace of the deals has picked up, nobody is ready to declare a comeback just yet.

(on camera): According to Factset Mergerstat, the overall activity in the M and A sector fell in the first half of this year as compared to the first half of last year. Still, if as Wall Street likes to say, the trend is your friend the trend favors the pick-up in take-over activity.

Bill Tucker, CNN, New York.


HOPKINS: Now "Tonight's thought" on mergers. "I always said megamergers were from megalomaniacs." That's from businessman David Ogilvy.

A reminder now to vote in "Tonight's Poll."

What do you believe is needed most to stabilize Iraq?

More U.S. Troops, fewer U.S. Troops, more troops from other countries, or trained Iraqi troops. Cast your vote at

In "News Around the World," 13 people are dead and more than a million are stranded in Eastern China. The worst flooding in that region since 1999 -- 1991 has submerged entire villages and caused nearly $1 billion in damage.

A 2-year-old boy is the only survivor of a plane crash in Sudan. One hundred 16 passengers and crew died when a Boeing 737 went down shortly after takeoff.

A pair of conjoined twins from Iran are dead. The sisters died as doctors tried to separate them. More on the story from ITN's Lawrence McGinty.


LAWRENCE MCGINTY, ITN CORRESPONDENT (voice-over): It's impossible to imagine what life was like for these Laden and Laleh. Never being able to go anywhere on your own, never being able to have a private moment. Never being able to look your sister in the face without using a mirror. For 29 years they bore their tragedy with good nature, but always they wanted to be separate individuals. That's why they were willing to risk all in the operation that proved fatal.

DR. LOO CHOON YONG, RAFFLES HOSPITAL, SINGAPORE: Their wishes were to be separated under all circumstances.

MCGINTY: So what did go wrong during the operation?

The twin sisters were joined at the skull, but their brains were separate. Those stuck closely together. Surgeons always knew bleeding would be a problem because the twins shared only one vein draining blood from their brains. Laleh kept that vein and doctors gave Laden a vein taken from her leg. That bypass became blocked. After consulting relatives, they pressed ahead, putting in another bypass and successfully separating the brains. But the complex network of blood vessels between the brains couldn't be teased apart without heavy bleeding.

Ladan died from severe blood loss at 7:30. Her sister Laleh survived only until 9:00 a.m.

YONG: We knew that one of the problems (ph) was that we may lose both of them. Ladan and Laleh knew it too. We were hoping and trying to do better than the worst odds. But, alas, we didn't make it. We knew that one of the problems was we may lose one of them.

MCGINTY: But should the operation have gone ahead in the first place? Grieving relatives, friends and well wishers in Singapore had no blame for the international team of surgeons.

For Ladan and Laleh, continuing as they were was no option. They were willing to risk their lives to lead separate lives.

Lawrence McGinty, ITV News.


HOPKINS: When we return, nations in decline. Why much of the African continent is worse off than a decade ago. Kitty Pilgrim reports as President Bush travels through Africa.

And then, good humor, a camp that teaches kids why laughter is the best medicine for any ailment.


HOPKINS: Tonight, President Bush is in South Africa, the richest country in Africa. But many African countries are poorer now than they were 10 years ago. A new United Nations report explains just how bad conditions are in the world's poorest nations.

Kitty Pilgrim reports.


KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): As the saying goes, the rich got richer and the poor got poorer. The latest United Nations development report, released today in Dublin, made the point and drew the participation of Irish rock star Bono, who's been active in Africa.

According to the UNDP, more than a billion people live in extreme poverty and living standards are getting worse. More than 50 countries are worse off than 10 years ago.

DAVID STEWART, U.N. DEVELOPMENT PROGRAM: These are countries that are both poor to begin with, but also are failing to make progress, or even moving backwards.

PILGRIM: Half those countries are in Subsahara Africa, where HIV-AIDS has devastated life for a large percentage of the population.

And half the countries in Latin America and the Caribbean made the list also. Eastern Europe and central Asia also suffered declines in per capita income. Ukraine, Tajikistan and the Russian federation, to name a few.

One reason is countries suffered as priced dropped for commodities. Subsidies to farmers in developed countries drew the rage of the United Nations. One official pointed out, every European cow receives farm subsidies of $3 a day, while 40 percent of Africans live on less than $1 a day. Subsidies to farmers in developed countries are at $150 billion, triple the current aid programs to poor countries.

KEITH STOCK, CAP GEMINI ERNST & YOUNG: There is a big movement afoot right now to try right now to try to get the developed countries to look at reducing, if you will, the tariffs and the barriers they have to trade with developing countries.

PRINCTEON LYMAN, FMR. AMBASSADOR TO NIGERIA AND SOUTH AFRICA: Africa has not participated actively enough -- excuse me -- in the world trading system and if we're going to have another round of world trade, we have to bring Africa into it.


PILGRIM: Now the report is an indictment of the industrialized world for not sharing the wealth generated during the 1990s, during the tech booms. And it charges them with taking care of their own, buying their own commodities from other industrialized countries. Suggestion is developing countries deserve the benefits of trade.

HOPKINS: Thanks, Kitty. Kitty Pilgrim,

And when we return, teaching kids the healing power of humor.


HOPKINS: Finally tonight, summertime means summer camp for millions of American kids. But camp isn't just about sing-alongs and marshmallows anymore. The Kid Komedy Camp teaches children how to have the last laugh, even when things get tough.

Denise Belgrave reports.


UNIDENTIFIED MALE: My dad's a lawyer. And a guy once asked him, is it true you answer two questions and charge $100? My dad says, yes. Now what's the second question?


Budding Jay Lenos, they're not. At least not yet. But stardom's not the main focus of Kid Komedy Camp. Founder Janet Schultz says the one-week program, where kids write and deliver their own joke, builds self confidence and develops public speaking skills.

JANET SCHULTZ, FOUNDER, KID KOMEDY CAMP: We're helping the kids to learn to see humor in any situation, so no what life throws at them, they will be able to laugh in a good-natured way.

UNIDENTIFIED MALE: Here comes the sun, and I say (UNINTELLIGIBLE)....

BELGRAVE: Even though they might not realize it, the kids come for the same reason.

BEN REECE, STUDENT: And I came to this camp so I could think I'm funny too.

BELGRAVE: The kids watch classic masters like Abbott and Costello and the Marx Brothers, many for the first time.

UNIDENTIFIED MALE: Marriage is a wonderful institution. But who wants to live in an institution?

BELGRAVE: In the end, it may be the most valuable lesson of this unique camp is the simplest of all.

MAYA TURNER, STUDENT: I like making people laugh a lot and I think it feels good.

BELGRAVE: Denise Belgrave, CNN, Atlanta.


HOPKINS: That's our show tonight. Thanks for joining us. For us all here, good night from New York.


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