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PAULA ZAHN NOW

Economic News Good For President Bush?; United States Any Closer to Finding Saddam Hussein?

Aired October 31, 2003 - 20:00   ET

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

PAULA ZAHN, CNN ANCHOR: "In Focus" tonight: the economy, record growth, but no one's buying anything. What do these conflicting numbers meaning? And what will it mean to President Bush's reelection campaign?
Reports that Saddam Hussein may be behind the guerrilla attacks in Iraq, as the U.S. moves in to seal off his hometown. Will the crackdown finally net Iraq's most wanted man?

And a Halloween visit from the master of fright, Stephen King.

Good evening. Welcome. Happy Halloween. Glad to have you with us tonight.

Also ahead, Jeffrey Toobin reports from Modesto, California, on testimony today in Scott Peterson's preliminary hearing -- and an exclusive interview with the man in charge of the FBI's hunt for al Qaeda terror cells right here in the United States.

Plus, the Middle East new tourist draw. Would you believe dolphins?

Also, Princess Diana's butler under fire for his tell-all book. What will he say when he meets Prince William man to man?

But first, let's get you up to date on some of the other stories you need to know right now.

Sophia Choi is standing by at CNN Center in Atlanta.

SOPHIA CHOI, CNN ANCHOR: It was a wild day outside the Los Angeles area courthouse, where proceedings were under way in the Robert Blake murder case. But the most compelling action had nothing to do with the case itself.

Charles Feldman joins us live from Los Angeles with that -- Charles.

CHARLES FELDMAN, CNN CORRESPONDENT: Sophia, it is shocking video captured by CNN cameraman John Sandoval (ph). And it happened, as you said, right outside the courthouse in Los Angeles that was handling the Robert Blake case.

According to the Los Angeles Police Department, the man that you're seeing now in the tan jacket was trying to kill the man behind the tree, who is an attorney here in Los Angeles. He shot him several times in the torso, although we are now told that he's in stable condition and none of the gunshot wounds, we are told, are life- threatening.

Now, that man calmly, as you can see, walks away from firing the gun at the attorney, only to be shortly later tackled by members of the Los Angeles County Sheriff's Department. There you can see them in hot pursuit. Now, we are told by police that what happened was, the attorney was representing the sister of the man who allegedly shot him. There was a probate case in court this morning. It didn't go well, and that's what happened -- all of this, of course, against the backdrop of the Robert Blake case -- Sophia.

CHOI: Charles Feldman in L.A. tonight, thank you.

Firefighters in California say cool air and winds are finally helping them make some headway against those massive wildfires there. Governor Gray Davis says the worst fires probably will be contained in another week. They firs have so far scorched nearly 750,000 acres and destroyed more than 2,700 homes.

That's the latest from Atlanta. Let's go back to Paula Zahn now.

ZAHN: There are signs that the U.S. economy may be picking up. President Bush is beaming over numbers out yesterday that show record growth in the economy, 7.2 percent in the third quarter of this year. But today, we learned of a slowdown in personal spending, falling 0.3 percent just last month.

Let's put this into "Focus" tonight with Lou Dobbs.

Always good to see you, Lou. Welcome.

LOU DOBBS, "LOU DOBBS TONIGHT": Good to see you, Paula.

ZAHN: Can you make any sense of these numbers?

DOBBS: I think so.

Good news on GDP growth for the third quarter, the best news, in fact we've had in 19 years, and welcome news certainly for the GOP, looking for a turnaround in this . Certainly, there's still significant issues in this economy, but this is just about the best news that the administration possibly could have hoped for. And it is certainly good news for all of us who are working, who are looking for jobs, who are investing and driving this economy.

ZAHN: But we can't ignore the fact that, still, 6 percent of the work force is out of work tonight, even as we speak.

DOBBS: Absolutely. And 1.5 million people are long-term unemployed in this country. And we are not seeing job creation at a rate that would in any way suggest things are going to improve quickly and, unfortunately, soon.

ZAHN: We also need to make it clear, I think, that these growth rate numbers that came through are in fact preliminary estimates. DOBBS: Sure.

ZAHN: What do you think the chance is that the number will be revised?

DOBBS: Well, remember, we're dealing with the United States government. And this looks like it will be close enough for government work. We've seen significant revisions before. I don't think we're going to see anything that will change the overall trend. But, again, it is the federal government at work.

ZAHN: And what is your belief, that we have to look to the Christmas shopping season to tell us whether this growth rate has any legs at all?

DOBBS: Certainly, the holiday shopping season is extraordinarily important. In retailing, it will reflect the strength of consumer spending.

But I believe that we see a base here that is going to be far more positive than anything we have seen for the past three years. We've just gone through, Paula, the greatest market break in the country's history. We have just sees the Nasdaq recover 45 percent year to date from its extraordinary losses. The Dow Jones industrial is up almost 20 percent.

Everything is positive right now. But after we have been through all that we've been through over the past few years -- a recession, a remarkable market break, as I said, the worst in our country's history, in fact -- it is -- it's a little difficult for everyone to just start popping open the bubbly and start a celebration.

ZAHN: Well, we appreciate your trying to cut through some of the contradictions here this evening. Come back and spend more time with us, Lou.

DOBBS: Always a pleasure, Paula.

ZAHN: Have a good weekend.

DOBBS: You, too.

ZAHN: And a bit later, we'll look at the political fallout from the economic news. Can the president take full credit for what's going right?

Turning now to Iraq, U.S. officials are denying a report in today's "New York Times" that says Saddam Hussein may be directing attacks against U.S. troops in Iraq. The news comes as U.S. troops ratchet up their hunt for Saddam and his supporters in the Tikrit area and as coalition officials warn of the possibility of widespread attacks over the weekend.

Ben Wedeman has the very latest from Baghdad for us now -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Paula, Baghdad is bracing for a fresh wave of attacks following warnings from the U.S. Consulate and other sources that an unspecified group is planning what they're calling a day of resistance on the 1st and 2nd of November.

Now, security has been dramatically heightened around Baghdad, with more checkpoints and patrols in the streets. Now, meanwhile, north of Baghdad, troops of the 4th Infantry Division have strung razor wire around the town of al-Awja. That is Saddam's birthplace. The town is now effectively cordoned off, with only one exit point manned by American soldiers and Iraqi security.

No such measures are in place anywhere else in Iraq. The coalition has also identified -- rather, issuing identifying cards to Awja residents 18 years and older, something also that hasn't been done anywhere else in the country. Only those with these newly issued cards will be allowed in and out of the town. Now, these extraordinary measures come at a time when American officials are trying to sift through contradictory reports about what Saddam Hussein is up to at the moment.

Now, some of those reports suggest he's helping plan and coordinate attacks on coalition forces. Others say he's too busy trying to avoid capture to do anything else -- Paula.

ZAHN: Ben Wedeman, thanks for the late update.

So, if Saddam is in Tikrit, how will the U.S. find him?

To help answer that question, I'm joined from Atlanta tonight by retired Army command Sergeant Major Eric Haney. Haney is a founding member of Delta Force and author of the book "Inside Delta Force: The Story of America's Elite Counterterrorist Unit."

Thanks so much for being with us tonight.

RET. CMD. SGT. MAJ. ERIC HANEY, U.S. ARMY: It's a pleasure, Paula.

ZAHN: Give us a sense of how U.S. troops will go about the business of trying to snuff Saddam Hussein out?

HANEY: Well, if the man is alive -- and we do believe that he is -- you can liken it to a police operation in a large city here in the U.S., where we're trying to apprehend gang leaders and gang members, the hierarchy of these criminal elements.

And it's the same thing. Saddam and his henchmen are swimming in the sea of the people. They're within a population that's supportive and sympathetic of him, either Tikrit or around that area, the Sunni triangle as we know it. And you have to go about gaining good, decent intelligence, sifting that through the mass of information that you take in. And most of that information is erroneous. It's very poor or it's misleading.

So you put your pieces of the puzzle together. And then you launch operations. You go into those neighborhoods where you think there's a good chance he may be or some of his upper-level lieutenants, move in when the time is right for you. You pluck certain people out. And you're always gaining intelligence, even when you hit those dry holes, which happens over and over and over.

ZAHN: And what percentage of the intelligence that you gain is actually legitimate?

HANEY: You really don't know.

Intelligence is a commodity that you buy on the open market. And you pay for it. The question is, do you get what you pay for and do you know the currency that you need to exchange for the information that you gather? And human beings, as what we are, the human intelligence is the toughest that we have to work with. People lie to you. People give you things that they think you want to hear.

They'll rat out their neighbors, because their neighbor has a piece of property that they'd like to take over if that person goes to jail. So, percentage-wise, you can almost never say. But we have good intelligence analysts. We have people with some great experience on the ground now. And Task Force 20, which is -- has the task of finding Saddam and his upper-level lieutenants, is working diligently, very diligently.

ZAHN: So you're basically saying Saddam's cronies can be pretty easily bought, but I would guess that for...

HANEY: Maybe.

ZAHN: ... the special forces in place, the bigger challenge is trying to figure out when the guys are going to turn on them.

HANEY: Well, that is also part of it. A whole lot of that falls back on to the commanders of the conventional forces, the commander of the 4th Infantry Division.

As we've seen in all of the news, that's the division that's taking most of the casualties, the reason being they're in the toughest neighborhood. They're in that Sunni triangle, tasked with maintaining order and also coordinating operations to try to get their hands on the resistance. And you can go after the foot soldiers out there, the guerrillas who are perpetrating these acts. And that's a good thing.

But the biggest payoff is when you can pull in those upper-level commanders. Saddam's second and third and fourth levels down, these are the men that are out there sponsoring these acts and coordinating the various patrols and ambushes that we see that are taking place.

ZAHN: Well, Command Sergeant Major Eric Haney, thank you for helping us better understand that process tonight.

HANEY: Certainly.

ZAHN: And testimony today continued in Scott Peterson's preliminary hearing from the sister of Laci Peterson. Our Jeffrey Toobin will have more news on that. And Princess Diana's butler joins us, as he gets ready for a possible meeting with Prince William over the tell-all book that has riled the royal family.

And we'll have a Halloween visit from one of the America's most popular writers, Stephen King.

(COMMERCIAL BREAK)

ZAHN: Welcome back.

Two of the people closest to Laci Peterson took the stand today in the preliminary hearing for Scott Peterson, the man accused of killing his wife and their unborn son.

Legal analyst Jeffrey Toobin has been in the courtroom all day long. He joins us now from Modesto, California.

Always good to see you, Jeffrey.

JEFFREY TOOBIN, CNN LEGAL ANALYST: Hi, Paula.

ZAHN: Let's start off with the testimony of Scott Peterson's father. What did he say?

TOOBIN: Well, it was really a poignant, heartbreaking moment, here the prosecution calling Scott Peterson's father to testify against his own son. He took the witness stand. He said: Yes, I'm proud to be Scott's father.

And it was a very narrow area of questioning, but an important one. You'll recall that Laci Peterson disappeared on December 24, Christmas Eve. And Scott Peterson said he took this now rather mysterious fishing trip in San Francisco Bay. Well, Scott Peterson's father, Lee Peterson, testified that Scott called him between 10:00 and 2:00 on Christmas Eve, and they spoke about their Christmas plans, but he did not say where he was. He did not say he was on that fishing trip, a rather significant omission, at least according to the prosecution.

Also, he testified that he did not know that Scott had bought this boat in which he had gone fishing. Again, mysteriously, why didn't he tell anyone that he had purchased this boat? The prosecution puts a sinister interpretation on why he didn't tell anyone: because he was using it to dispose of his wife's body.

ZAHN: And let's also talk about how many feel the prosecution's case was bolstered by the testimony of Laci Peterson's mother and her sister today.

TOOBIN: Well, again, more heartbreak in the courtroom. I remember, Paula, you and I sitting there listening to Laci Peterson's mother, Ms. Rocha, when she held that press conference, just her incredible rage and pain.

A very different Sharon Rocha in court today, very composed, rather restrained. And she testified about Scott Peterson, being actually close to him, that she didn't know of any problems in the marriage. She didn't know of any affair with the other woman. And she said she did not know that he had purchased this boat.

Her sister, Laci's sister, testified that, on the day before Christmas Eve, December 23, she had given a haircut to Scott, and Scott had promised the following day to pick up a gift for their grandfather. Scott never picked up that gift, again, mysteriously going on that fishing trip. That was what the prosecution wanted out of Laci's sister.

ZAHN: And isn't it really next week when the fireworks are really supposed to begin, when Scott Peterson's former girlfriend, Amber Frey, is expected to testify? What do you think she's going to say?

TOOBIN: I think she's merely expected to acknowledge this affair took place. That gives the prosecution the motive for this murder, the fact that he wanted to get out of his marriage and take up with this woman.

I have to tell you, Paula, sitting in the courtroom, though, watching the evidence come in, I kept thinking, boy, there better be something more to the prosecution's case than this, because, sure, there's suspicious aspects of his behavior, but this is very far from a smoking gun, any of this. There are still no witnesses to Scott Peterson's alleged murder of his wife.

There's no guaranteed cause of death. So, though there is circumstantial evidence coming in and there is the motive evidence that will come in next week, in terms of the kind of evidence that gets convictions, I haven't seen it yet. But there is plenty more to come.

ZAHN: Well, you're certainly the man we're going to rely upon in the weeks to come to track this case for us. Jeff Toobin, always good to see you. Thanks.

TOOBIN: OK, Paula.

Still to come, we're going to be talking with the FBI counterterrorism chief, the man leading the hunt for bombers in Iraq and al Qaeda cells in the U.S. in an exclusive interview.

We'll be back.

(COMMERCIAL BREAK)

ZAHN: Well, it's only Halloween, but it's never too early to start thinking about your next summer vacation. In fact, at least one Persian Gulf nation is getting ready to make a case for your tourist dollar. And it's all because of dolphins.

Senior international correspondent Nic Robertson reports.

(BEGIN VIDEOTAPE)

MOHAMMED AL RIYAMI, DOLPHIN EXPERT: There are quite a lot of dolphins right in front. They're coming this way.

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT (voice-over): Hundreds in fact. But in typical Omani style, dolphin guru Mohammed Al Riyami is understated.

(on camera): How many dolphins would you say we're looking at here?

AL RIYAMI: The rule of thumb says, what you see at surface, multiply by four. So I would say around 200, 300 dolphins.

ROBERTSON:(voice-over): Barely 10 minutes out to sea from the capital, Muscat, and his boat literally surrounded by spinner dolphins.

AL RIYAMI: We let them pass through and then we'll go behind them and follow them quite gently. They're here.

ROBERTSON: Once a government spokesman, Mohammed is now a driving force behind this Persian Gulf sultanate's steady move into dolphin tourism.

AL RIYAMI: Oman, I would say probably the best in the area, simply because you have to look at our coastline and look at the continental shelf. We do have enormous drop-offs very, very close to the shore.

ROBERTSON: That remarkable drop-off, where the sea floor falls to half the depth of the world's deepest ocean, draws cold-water current rich with plankton to the surface, creating near-perfect conditions for the dolphins, who gorge on the plentiful sardines attracted to the plankton.

But the near perfect conditions for the dolphins are also near perfect for the tuna. Perfect, too, for the local fishermen, who, for centuries, have been using the dolphins to track their prey, the tuna.

UNIDENTIFIED MALE: Dolphins are mammals. So they come up to the surface to breathe. Under the dolphins, there are tunas, with both tunas and dolphins are feeding on the same thing, sardines.

ROBERTSON: With recently imposed conservancy laws to protect dolphins by banning tuna nets, pressure is now on for the old industry of fishing to coexist with the new one, tourism.

Despite the new law, nets can still be seen in some boats. And near where tuna are unloaded, young boys display a dead dolphin, discarded on a rubbish heap. For now, at least, with the Mohammed Al- Riyami keeping a careful eye on the sea, chances look good.

AL RIYAMI: Beautiful. It will do it again. Beautiful. It will do it that time, a small one. Thank you. This is a special show for CNN.

(LAUGHTER)

ROBERTSON: The fact is, this show is for anyone who comes.

Nic Robertson, CNN, off the coast of Oman.

(END VIDEOTAPE)

ZAHN: And, changing our focus, how much credit does President Bush deserve for the record economic growth in the third quarter of this year?

And Princess Diana's butler, under fire for a tell-all book, joins us as he gets ready for a possible confrontation with Prince William.

(COMMERCIAL BREAK)

ZAHN: In just a moment, we'll look at the record growth in America's economy and how much credit goes to the White House.

And a Halloween visit from best-selling suspense writer Stephen King.

First, though, let's get you up to date on the stories you need to know right now.

We go straight to Sophia Choi at the CNN Center in Atlanta.

CHOI: A dramatic scene caught on videotape today outside a courthouse where proceedings were under way in the Robert Blake murder case. The video we're about to show you is graphic. A man armed with a pistol opened fire on a lawyer as he was leaving the building. Authorities say there is no indication that the shooting had anything to do with the Blake case. The shooter was tackled by security personnel and then taken into custody. The attorney was wounded several times and is now in stable condition.

The massive wildfires in California have now scorched almost 750,000 acres. And questions are now being raised about whether two of the largest fires could have been brought until control days ago.

For the latest on that, let's go to national correspondent Frank Buckley, who is in Lake Arrowhead, California -- Frank.

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Sophia, the first fire we're talking about is the Old Fire. That's the one that ravaged San Bernardino County. Four deaths are attributed to this fire; 850 homes were destroyed.

Last April, California Governor Gray Davis appealed to the federal government for $430 million to clear away dead trees in the forest areas where fires were likely to occur, to try to reduce the severity of the fires. FEMA just recently turned down the request. Today, Governor Davis appeared with governor-elect Arnold Schwarzenegger at a FEMA assistance center. Both said it was not time to ascribe blame. (BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GOVERNOR-ELECT: I don't think it's the time now to point fingers at anybody. I think we have to -- as soon as this is over, I think then there will be enough fingers being pointed. So I think then we can evaluate if there was anyone at fault, if there should have been more money coming through.

(END VIDEO CLIP)

BUCKLEY: Now, federal officials say that California was already receiving money to deal with the bark beetle problem. That's what's caused the devastation and caused the dead trees in this forest.

Meanwhile, the other fire that's being questioned is the Cedar Fire in San Diego County, helicopters pilots saying that they had had a chance to drop water early on in that fire -- Sophia.

CHOI: Frank, thanks so much for that.

And that is all from the CNN Center in Atlanta. Let's go back to Paula Zahn now.

ZAHN: Is the U.S. economy really on the mend? If so, how much credit goes to President Bush? As we just saw earlier, the signs are intriguing and hopeful, with record growth in the third quarter of the year.

We're going to hear from both sides, starting in Washington with the Club for Growth president, Stephen Moore. He's a contributing editor at "The National Review."

Thanks for joining us tonight.

STEPHEN MOORE, PRES., CLUB FOR GROWTH: Hello, Paula. Happy Halloween.

ZAHN: To you as well. Let's, first of all, try to put some perspective to this number. On its surface, the number sounds terrific, but with six percent of Americans out of work in the workforce, can you sustain this growth rate?

MOORE: Well, this was a terrific number for the American economy. You know, we haven't seen a growth rate like this in 20 years, Paula. And it really, I think, is a very positive sign for the president's tax cut, because the tax cut that the president just passed started to take effect in July of 2003, which was the start of the third quarter. Since then, we've seen very strong economic growth. We've seen the stock market on a rip roaring tear. We've seen consumer spending up. We've seen personal income up, which was reported today. So so far, so good for this tax cut. The only people who I think aren't too happy about these numbers are people like Howard Dean and Paul Krugman, who have been railing against the advisability of cutting taxes.

ZAHN: Hang on a minute, though, Stephen, because it's -- the United States' own Commerce Department would suggest that there was a dip in consumer spending in the month of September by .3 percent. Does that trouble you at all?

MOORE: Well, the main thing is, though, that we see consumer confidence very strong, investor confidence is up. I've always argued that if we're going to get the economy really roaring again, you have to get the stock market up. And, you know, the Dow Jones has been up 16 percent, the Nasdaq is up 20 percent just since we did the capital gains and dividend cut. So I think a lot of this growth is really attributable to President Bush's tax cut.

ZAHN: Do you think we'll see job growth?

MOORE: I hope so. You know, we're starting with 6 percent unemployment, which is still too high, but, you know, when you compare that with other countries, Paula, we still have the lowest unemployment rate in the industrialized world. So if we can bring that rate down to 5.5 percent or so, it will be terrific. Usually, you see jobs coming in once economic growth accelerates, so you would anticipate a pretty healthy jobs numbers coming up in future months.

ZAHN: Stephen Moore, thanks so much for dropping by. Appreciate it.

MOORE: Thank you, Paula.

ZAHN: Now we can go on to a frequent critic of the Bush administration's policies. Joining me from Princeton, New Jersey is "New York Times" columnist Paul Krugman. He also happens to be the author of "The Great Unraveling, Losing Our Way in the New Century."

Always good to see, Paul. Welcome.

PAUL KRUGMAN, "NEW YORK TIMES" COLUMNIST: Glad to be on.

ZAHN: Do you think we are in the middle of a full-blown recovery?

KRUGMAN: The answer is, I don't know and neither does anyone else. You know, I think the word for everybody is, "Calm down." It's one quarter. In fact, it's two good months, because the month of September, as you said, doesn't look all that great. Gosh, we don't know. It's actually kind of funny. You know, people like Stephen Moore spend eight years in the Clinton administration denying that sustained, very good news had anything to do with Clinton's policies, and now we've got two or three months of good news, and it's a vindication of Bush. The truth is, we don't know how it's going. For what it's worth, this quarter was very good. I was surprised. I think everyone was surprised. It was a much better growth than we expected. It was driven almost -- the bulk of it was a huge splurge by consumers. People bought cars, they bought washing machines, and they bought houses. That splurge was driven partly by the tax cut. Got to give some credit where it's due. It was driven to a much greater extent by mortgage refinancings, which is a wave that's mostly over. It was driven by low-interest loans from automobile companies, which are mostly over. And it remains to be seen. And we have no idea.

ZAHN: But is it sustainable?

KRUGMAN: It's not sustainable at this rate, because a lot of this wasn't -- it was huge, 27 percent increase in spending on consumer durables. That's not going to happen a second time. It's probably, if anything, going to be a slight decline in the next quarter in that purchases. If the business investment rises a lot, and it has to rise a lot, much more even than it did -- it was not bad in the third quarter, but has to rise a lot -- it's sustainable. But, you know, if the jobs don't come along -- this is the third time we've declared our troubles over. First quarter of 2002, big number revised downwards, and then it went flat the next quarter. Pretty good number the third quarter of 2002, much bigger job growth than we've seen so far, went flat, things went sour. Now we're declaring victory again. Maybe third time lucky, but it's certainly, you know, calm down. For once, I think the stock market had it exactly right. Basically, nothing happened to stocks, because they said, "All right, that's the past. What about the future?" And we don't know yet.

ZAHN: Finally, did it hurt for you to have to say tonight that you give this Bush tax cuts partial credit for these large numbers this month?

KRUGMAN: No, I mean -- of course, if you let me run a $400 billion-plus deficit, I think I could create a lot more jobs than Bush has. But, no, there's no question that putting -- I think it was Dick Berner (ph) at Morgan Stanley who said that we're not getting much bang for the buck here, but it's an awful lot of bucks.

ZAHN: Paul Krugman, always good to see you. Thank you, again, for spending a little time with us tonight as we head into the weekend.

KRUGMAN: Great.

ZAHN: Now to the man who, for the past year, has been the FBI's point man on terrorism. Larry Mefford is stepping down today to head into private industry, but before he left his post, he gave an exclusive interview to Justice correspondent, Kelli Arena.

(BEGIN VIDEO CLIP)

KELLI ARENA, CNN CORRESPONDENT (voice-over): In his final interview before retiring, the FBI's counter terrorism chief spoke exclusively to CNN about Al Qaeda and the threat it poses.

LARRY MEFFORD, EXEC. ASSISTANT DIRECTOR, FBI: We've seen in our view about 21 terrorist attacks worldwide since September 11 of 2001 connected to Al Qaeda operations. So they've been busy overseas for a number of different reasons. They have not attacked us in the homeland, but we're very concerned about that.

ARENA: Al Qaeda, its activities, and how it's adapting have all but consumed Larry Mefford. He says the organization has changed the way it raises money, the way it communicates, even the way it recruits.

MEFFORD: They're not operating in community centers, and they're not recruiting in mosques and even in prisons, which we're looking into. We don't see the significant efforts that potentially existed historically.

ARENA: Still, Mefford rates Al Qaeda the number one threat to the United States.

MEFFORD: I believe that they will not give up in their efforts to attack us, particularly in the homeland domestically, and they're continuing to plan and maneuver so that they can be in a position to do that.

ARENA: As a result, much of Mefford's and the FBI's focus has been on finding potential sleeper cells in the United States like the men who carried out the September 11 attacks. One way to tackle that has been to set up a new program called Operation Trip Wire.

MEFFORD: I'll give you an example. We have gone out to every single crop dusting company in the United States, and we've established direct connections with that industry. And obviously, if anything suspicious occurs with that industry, whether somebody's trying to acquire equipment or access to aircraft, or spraying equipment, or whatever, we ask that they contact the nearest JTTF.

ARENA: Mefford also recently set up a weapons of mass destruction unit. Al Qaeda's continued interest in WMD is one of his biggest concerns.

MEFFORD: The threat of weapons of mass destruction will be with us for a long time to come, because it is the great equalizer between desperate people and large governments.

ARENA: As he heads into private life, Larry Mefford predicts the war on terror will last for at least a generation and urges the colleagues he's leaving behind to never let their guard down.

Kelli Arena, CNN, Washington.

(END VIDEO CLIP)

ZAHN: We'll be talking with Princess Diana's butler facing royal anger and a possible complication with Prince William over that tell- all book. Also, it's Halloween, so what better time for a visit from Stephen King, the master of scary storytelling. And Monday, our exclusive interview with NFL star Warren Sapp and why he has lashed out at the NFL comparing it to slavery.

(COMMERCIAL BREAK)

ZAHN: Princess Diana's former butler is now facing the prospect of a heart-to-heart with an angry Prince William. Paul Burrell's latest book has infuriated the royal family. Diana's sons have called it a betrayal. And all of that is probably great publicity for the book, "A Royal Duty," and Paul Burrell joins us tonight in New York. Good to see you. Welcome.

PAUL BURRELL, AUTHOR, "A ROYAL DUTY": As you, Paula.

ZAHN: When's this meeting going to take place?

BURRELL: It's going to take place in the near future. It's going to be a very private meeting, and no one will know what's said or when it takes place.

ZAHN: Can you characterize for us whether you expect it to be a nasty meeting? Prince William has made it very clear he's not at all happy about what you revealed about his mother. He is really mad at you.

BURRELL: Yes, he is. But, you know, but that was a statement issued after a sensational serialization and anti-press in Britain, and he has every right to voice his opinion. But what I want to tell him is, "Read the whole book, because this is a tribute to your mother." This is from her friends, too. They've told me I have done justice to the princess's memory, and I would do nothing to hurt those boys. You know, I saw those boys grow up from babies, and I love them. They're part of my family, too.

ZAHN: I know you say you're trying to do justice to her memory, but you can't escape the fact that a lot of her friends out there are saying you're shameless. And here's one quote from a friend: "Paul, more than most, knew how hounded the princess was in her life, and yet now, he joins the rest of the vultures in picking over the bones of her existence in his book."

BURRELL: Well, yes.

ZAHN: These people loved Diana, they knew Diana. Do you have any regrets at all about revealing some of these more intimate moments of her life?

BURRELL: No, you know, that quote came from a lady whom I know very well, but other friends of the princess have rung me up and said, "Paul, we are a hundred percent behind you." That's just one quote. That particular person should think very carefully about our intimate relationship with the princess, because I do not tell all my secrets. I only tell them when it's appropriate to tell them.

ZAHN: Does that one quote shake you at all?

BURRELL: Well, I know who gave that quote, and perhaps there's just a little bit of jealousy there.

ZAHN: Jealousy about what?

BURRELL: About my unique relationship with the princess, about my closeness with her. I wasn't the most popular person in the world, you know, at times, because I did share a very intimate time with the princess, and other people were very jealous. ZAHN: But there are so many people questioning your intentions, particularly when it came to this letter that you released where Diana basically predicted her own death, naming the person she thought was trying to kill her. Don't you understand while turning that letter over six years later would have people say that -- accuse you of cashing in?

BURRELL: I do. I understand that, but I'm constantly criticized and misrepresented myself. You know, you have to look back. I take you back into that time when we were all grieving the loss of the princess, and I had to go to Paris and be with the princess to protect her. I brought her home and looked after her. And I was in grief, too. I remember the queen asked to see me at Buckingham Palace, and she warned me about the forces at work in the country, dark forces. I'm thinking, I'm frightened here, you know. This is my security, too, thinking what about my family? What about me? What's going to happen to us? And I had to think very seriously waiting for that inquest to happen. Six years on and still no inquest, waiting for the official line, waiting for the proper authority to give it to.

ZAHN: But had you turned that letter over six years ago, might it have spurred an investigation earlier?

BURRELL: Paula, who would I give it to? Would I give it to the queen who would probably archive if for the next 15 years and we would never know? Would I give it to the Spencers who I saw shredding the princess's personal documents in her room. I couldn't give it to William and Harry, because they were grieving the loss of their mother. There's no one to turn to, so I thought it's safe with me; it's a secret that is safe with me, and many secrets are safe with me.

ZAHN: You mention the queen.

BURRELL: Yes.

ZAHN: And I know you have said that, "A cup of tea at High Grove would have stopped me." High Grove, of course, the place where Prince Charles lives. What do you mean? That you might not have revealed all this stuff in the book if you had been allowed access to the two young princes?

BURRELL: No. You know, this book is about the truth. It's about turning around those lies, myths, and misrepresentations, which have been spun from the anti-Diana camp. It's important to go out there and say, "This is the truth. I was there. I witnessed it. It's part of my life." No, the truth would have come out eventually, but it would have helped if someone, anyone from in the royal household had said during those six years, "Hey, Paul, you know, we're here, and you're still part of us, and we appreciate what you're doing."

ZAHN: You were really in love with Princess Diana, weren't you?

BURRELL: I think love is a very small word that means a lot of things to different people. I love my little West Highland white terrier. I love my football team. I love my wife and my children. Yes, I loved the princess in a very caring way. I looked up to her.

ZAHN: Paul Burrell, thank you for joining us to talk a little bit more about your book.

BURRELL: It's good to see you.

ZAHN: Appreciate it. Thanks for coming by in person.

BURRELL: Thank you.

ZAHN: We'll take a quick break here. Thousands of people will be running this weekend in the New York marathon. We're going to meet one woman who's overcome incredible odds to get there. And author, Steven King, who knows a few things about scaring people joins us on this Halloween night.

(COMMERCIAL BREAK)

ZAHN: This weekend, 30,000 runners will take part in the New York City marathon, and 30,000 runners mean about 30,000 different stories, but it's likely none of them is as inspiring as that of Hillary Trish Merritt.

(BEGIN VIDEO CLIP)

ZAHN (voice-over): It was a clear Colorado day, August 1997. Hillary Trish and two climbing buddies scaled the summit of one of the Rocky Mountain's jagged peaks, an adventurer's dream: rugged terrain and gorgeous vistas, but also dangerous, an area notorious for loose rocks. On the descent, Hillary lost her footing and fell 500 feet down the steep, icy slope, landing on a ledge no bigger than a couch. With a fractured skull, clavicle, hip, and pelvis, as well as torn muscles and three thoracic vertebrae, it took 24 hours before the rescuers could even bring her badly injured and hypothermic body down the mountain.

In the months after the near-fatal accident, Hillary underwent extensive physical and mental therapy. Today, she's exceeded all expectations and is climbing a whole new set of peaks.

(END VIDEO CLIP)

ZAHN: And Hillary Trish Merritt will run the marathon Sunday with her two sisters, and she joins us now to talk about her amazing survival story.

Thanks for spending a little time with us tonight and congratulations.

HILLARY TRISH MERRITT, NYC MARATHON RUNNER: Thanks.

ZAHN: When you laced up those sneakers today, what sense of gratitude do you have?

MERRITT: Well, I'm very lucky that I able to get through this accident. ZAHN: Get through? Survive, period.

MERRITT: Absolutely.

ZAHN: Do you think about that on a daily basis?

MERRITT: You know, I really don't. It was enough to just get through it that I don't really think about it on a daily basis. I know it's inspiring for other people, and it's sort of, you know, I definitely don't.

ZAHN: With any recovery, though, there are peaks and valleys. How desperate were you when you really had very little control over your body, and you didn't know whether you were going to come out of the darkness?

MERRITT: It was extremely frustrating. I definitely didn't want to be bound in the hospital, didn't want to be bound by crutches. I was ready to get up and go and kind of get back to my normal lifestyle of being active.

ZAHN: What is to be learned from your recovery? I know you don't look at yourself as, you know, special, but we certainly do. You did what your body knew to do.

MERRITT: Well, I think that when you listen to sort of what the doctors say and your worst-case scenario, it makes it difficult, because if that's what you're believing and you don't believe that you can get through something, many times you won't be able to. So I think just knowing that you can overcome will get you through.

ZAHN: Project yourself right know to that finish line on Sunday.

MERRITT: Absolutely.

ZAHN: It's a heat wave we're going to have. It's going to be close to 65 degrees.

MERRITT: Yeah.

ZAHN: How do you think you're going to feel?

MERRITT: Well, I'm sure I'll be a little bit tired, but I'll be ready at the finish line to be just done and getting there and seeing my family and my sisters.

ZAHN: And we'll all be rooting you on.

MERRITT: Thank you.

ZAHN: What a triumph. Hillary Trish Merritt, good luck to you.

MERRITT: Thank you.

ZAHN: All the eyes of New York will be on you on Sunday.

MERRITT: All right.

ZAHN: From "Carrie" to "The Dead Zone," "The Shining" and so many more, Stephen King is America's master of fright. He joins us for a Halloween interview.

(COMMERCIAL BREAK)

ZAHN: OK, I'm scared. Simply the fact that it's Halloween is enough reason to listen to a tale or two from Stephen King, but today, there's also some controversy. Some critics question whether a horror writer deserves the National Book Foundation's 2003 medal for distinguished contribution to American letters. He also has a new book out on November 4, "Wolves of the Calla." It's the fifth installment of his "Dark Towers" series. Lots to talk about. And Stephen King joins us tonight in this exclusive interview.

Happy that we're in your Halloween plans.

KING: Yeah, well, it's good to be here rather than handing out candy at home.

ZAHN: Do you trick or do you treat?

KING: A lot of people show up at the house usually, so, either we do it all-out or we just close the house down, and this is a close- the-house-down year.

ZAHN: Let's talk a little bit about how long it took you complete "Dark Towers." You've been working on this since your college days?

KING: Yeah. I started it when I was 22, and I just actually finished college, and the first installment was published almost by accident as a series of short stories in the magazine of "Fantasy and Science Fiction." And people kind of turned on to it, so I kept on working on the thing. I knew it was going to be really long. And every four or five years, I would pop another one. And then I had this road accident in 1999 where a guy hit me and almost killed me, and I thought to myself, you know, you better hurry up and finish this thing, because you never know what's going to -- I was doing an autograph session in Dearborn, Michigan and these two college kids got up to the head of the line, and one of them said to me, "Man, we heard about the accident, and the first thing we said is the 'Dark Tower' will never get finished now." And I'm, like, thanks for the sympathy, guys.

ZAHN: Well, it did get done.

KING: Yeah, it did.

ZAHN: Did that change anything with the use of your imagination? Do you see darker now? You came from a really tough period there.

KING: Yeah, but I did get through, and that's the kind of uplifting side of it.

ZAHN: What scares you?

KING: What scares me? God, TV interviews, I think.

ZAHN: Are you frightened now?

KING: Well, I think there's always in the back of your mind, you're thinking, "Well, what if I drop dead while I was doing this?," or what if you did, you know? So there's always something to be afraid of.

ZAHN: Let's talk a little bit about what's going to happen on November 19. You'll receive the National Book Foundation medal for Distinguished Contribution, American Letters. That puts you in some very distinguished company: Toni Morrison, Arthur Miller, Phillip Roth. Were you surprised when you found out you got the award?

KING: I was delighted. Yeah, I was floored. Yeah, surprised is a mild word for it. But I was also -- I'm kind of applauding and thinking, "Way to go, guys," because it takes a certain amount of courage to give that sort of award to a popular writer, because this sort of automatic prejudice kicks in where there's a mindset that says, if millions of people are reading this guy, he really can't be any good.

ZAHN: Well, let's show to our audience now what one of your critics had to say. He said, "The decision to give the National Book Foundation's annual award, Distinguished Contribution to Stephen King is extraordinary, another low in the shocking process of dumbing down our cultural life. I've described in the past as a writer of penny dreadfuls, but perhaps even that is too kind. He shares nothing with Edgar Allan Poe. What he is is an immensely inadequate writer on a sentence-by-sentence, paragraph-by-paragraph, book-by-book basis.

KING: Ouch. Yeah., well...

ZAHN: Does that sting, or does that make you more emboldened to write books so millions of more people get into reading?

KING: No, that doesn't sting particularly. That's Harold Bloom, and Harold Bloom has never been very interested in popular culture, and he has no real grasp of popular culture, popular writing, or the places where what we call pop cult crosses what you would call higher culture. So that, you know, what I would really like to do is see Harold Bloom given an injection of sodium pentothal so that he had to tell the truth and say, "Now, Harold, how much Stephen King have you actually read?" And I think that the answer would be probably less than one whole book. My guess is he's dipped a few times, and you come to the table with certain prejudices, and naturally you're going to see those prejudices fulfilled.

ZAHN: I would love to try to live in your head one day. What do you see the rest of us don't see? I mean, do you see doom everywhere when you wake up?

KING: No.

ZAHN: No.

KING: Of course, I don't. If I saw that sort of thing, I don't think anybody would read my books, because they'd be so bummed out. Most of the books, there's a really cheerful outlook, you know. I like to use the line Robert Bach used to use. I have the heart of a small boy. It sits in a jar on my desk.

ZAHN: Well, you have us all hooked. Stephen King, thank you for coming back out on a night when people are dressed very strangely in Central Park. We've seen a couple of them today.

KING: I came out of my hotel and there were a couple of witches pushing babies in prams, yeah.

ZAHN: And all look so sweet, didn't they?

KING: They do.

ZAHN: Stephen King, congratulations on your award and on your book. Glad you finished it. Way to go.

KING: Yeah, it's cool.

ZAHN: And we want to thank you all for being with us tonight. We hope you have a good weekend. "LARRY KING LIVE" is next. We'll be back same time same place Monday night.

Good night.

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