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PAULA ZAHN NOW

Iraq Contract Decision Creates Controversy; Interview With Accuser of Arnold Schwarzenegger

Aired December 10, 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: anger, as the White House excludes French, Russian, and German companies from competing for contracts to rebuild Iraq. Critics say it's all about politics and payback.
Plus: a problem for the new California governor that won't go away. In an exclusive interview, we'll be talking with the Hollywood stuntwoman who is suing Arnold Schwarzenegger, claiming his campaign spread lies about her after she accused him of sexual harassment.

And the flu and the fear of it run rampant, as a severe strain of the virus sweeps the country and vaccines run short. How worried should you be?

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

Also ahead: Is the company running the rebuilding of Iraq gouging the U.S. government for gas? We're going to look at whether Halliburton is justified in charging twice as much as others supplying fuel to Iraq.

And I'll be talking with two of the students targeted in that controversial drug raid in a South Carolina high school. Some say the raid was timed to single out black students.

Plus, with names like Intifada and Mujahideen, Muslim football teams in California have a community in an uproar. Are they just harmless team titles or political statements that inspire hate?

Plus, we'll bring you up to date on the Michael Jackson case and the investigation that, months ago, concluded the allegations against him were unfounded. We'll talk with famed defense attorney Gerry Spence.

First, though, here are some of the headlines you need to know right now.

A Florida court says a boy sentenced to life in prison for a crime committed when he was only 12 years must get a new trial. Lionel Tate is now 16. He was convicted of murdering a 6-year-old girl. The court says he wasn't tested to see if he was competent to stand trial. A little bit later on tonight, we'll be talking with Tate's attorney, Richard Rosenbaum.

Sources tell CNN a man with alleged ties to al Qaeda training camps is now under arrest in Minneapolis. The suspect may have information in the case of Zacarias Moussaoui, an admitted al Qaeda operative who has been held since 2001.

And the search continued today for three crewmen from a Dutch cargo ship who are missing in the icy waters off the Hudson River near Albany, New York. The ship rolled over on its side yesterday as it was being loaded with tons of machinery.

We're going to start with Iraq tonight. A big story making headlines and involves Halliburton, how much the company is billing the U.S. and, by extension, taxpayers for its work in Iraq.

Joining us from Washington is regular contributor, former Pentagon spokesperson Victoria Clarke. Joining me in the studio tonight, back from a cold New Hampshire, another regular contributor, "TIME" magazine columnist, Joe Klein.

Welcome to you both.

VICTORIA CLARKE, CNN CONTRIBUTOR: Hi, Paula.

ZAHN: Torie, help us understand how is it that Halliburton is charging about $2.64 cents a gallon to truck gas in from Kuwait, about twice the going rate of other companies? Is there any justification for that?

CLARKE: Well, I'm sure Halliburton will put some of them forward.

But, I'll tell you, the real crime in all of this, in terms of who's doing the work, who gets the big contracts in the rebuilding of Iraq, is the fact that it is so hard to do business with the federal government. Is it so hard to do business with the Pentagon. Because of the bureaucracy, the red tape, the rules and regulations that are involved, there are very few companies that can or will do business with the Pentagon.

(CROSSTALK)

ZAHN: Are you saying that justifies charging twice as much as another company?

CLARKE: I'm not saying it's justifying it at all. And I'm sure that this deal, like all the others, will get the intense scrutiny it deserves. And the taxpayers will get every penny's worth of their money.

But I'm saying, instead of people using this to take political shots and once again try to make some vague connections, they ought to do something constructive. And they ought to look at why is it that only a small handful of companies can or will do business with the Pentagon in a situation like this?

(CROSSTALK)

ZAHN: You raise an interesting question.

(CROSSTALK) ZAHN: Joe Klein, though, let's talk about this vague connection.

Dick Cheney, the vice president of the United States, was the former CEO of Halliburton. Does this, on the surface, look bad?

JOE KLEIN, CNN CONTRIBUTOR: Well, of course it looks bad. We have a thing in politics called the appearance of impropriety, which is the testing level for domestic politics. And this gives the world a sense that we're in this for the money, which is not a very good thing to be.

As far as Dick Cheney is concerned, this goes back to the time when he was secretary of defense in the first Bush administration. He decided -- and it was a very popular movement and remains a popular movement in government -- to start privatizing a lot of the functions of the Pentagon.

So, now a lot of things that the Pentagon did for itself, like food service, is being done by private contractors. The question is whether Cheney tailored a lot of that bidding to meet the needs of Halliburton. It was a resolving-door situation. He started as the secretary of defense. He went right to Halliburton thereafter. And now he's back in government again.

(CROSSTALK)

ZAHN: You're not suggesting that he personally profited from these business moves, or are you saying that, by extension stockholders, and friends of the V.P.?

(CROSSTALK)

KLEIN: I'm suggesting that it is unseemly for someone to move so quickly from government and changing the contracting rules of the agency he was working for, then to move to the contractor and then to move back to government.

ZAHN: What about that, Torie?

CLARKE: Paula, well, there's absolutely no solid evidence at all that the vice president or then secretary of defense in any way tailored this to benefit a particular company.

It's absolute common sense that the private sector can do many things better than the government does it, such as food service. That's a really smart thing to do.

(CROSSTALK)

CLARKE: What people should look at -- and this is not any particular official of any particular administration -- it has built up over the years -- is, the bureaucracy has become such that we are really hurting ourselves and we're really hurting the taxpayers, because there are so few companies that will do business. That's the problem. ZAHN: Let me put a statement up on the screen tonight from Halliburton, of course, denying that there is any excessive markup -- quote -- "Transporting fuel from Kuwait costs more for a variety of reasons, including subcontractor costs, the number and availability of transportation vehicles and security."

Do taxpayers have a right to feel ripped off here or not?

KLEIN: Well, especially since another aspect of the Defense Department is importing fuel for half the cost. This is a very unseemly situation.

And Torie is right. There are a lot of things in government that need to be privatized, that can be done more efficiently by the private sector. The question is whether the rules were tailored -- Torie talks about the bureaucracy. But there are very specific rules for contracting with the government that are written by people in the government. Dick Cheney supervised that process.

That is why these rules are as they are. But the most important thing about this is the message that it sends to the rest of the world at a moment when we want the rest of the world to come and help us in Iraq and we want the rest of the world to think well of us.

ZAHN: Joe Klein, Torie Clarke, got to leave it there this evening.

CLARKE: Thanks, guys.

ZAHN: As always, thank you for joining us tonight.

Now, tonight, the White House is facing some angry criticism from around the world for banning countries that opposed the war in Iraq from bidding on reconstruction contracts. The decision means France, Russia and Germany cannot share in the $18.6 billion rebuilding costs. And late word tonight that President Bush is working the phones, promising the countries that he will keep the lines of communication open.

Joining us from Washington, Peter Beinart, the editor of "The New Republic," and Frank Gaffney, the president of the Center For Security Policy.

Welcome to you both.

(CROSSTALK)

ZAHN: First off, Peter, smart policy or retribution?

PETER BEINART, EDITOR, "THE NEW REPUBLIC": Actually, astonishingly dumb.

It was bad enough that we were sewing ill will with these countries right at the beginning of the occupation, when things looked better. Now we desperately need them. We need them to write off Iraq's debt. Colin Powell has just said he wants NATO to come in there and do more militarily. And we're doing that at the exact same moment we're sticking our finger in their eye by not being willing -- by banning them from this contracting business. I'm actually astonished by this.

ZAHN: Are you just as astonished, Frank? Or do you think this is as damaging as Peter suggests here tonight?

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: No, I don't think it's damaging.

I think, if anything, it's an incentive for these countries to change from what has been to this point their very strong position. Let's remember, they were, frankly, supporting keeping Saddam Hussein in power. They were, frankly, opposing us at every turn in the run-up to the liberation of Iraq and, for that matter, to this moment.

The problem we've got is, if you want to give them incentives to really help us, make it painful for them not to be in this game. If you want to reward them for their very bad, very counterproductive, in fact, destructive behavior, give them American taxpayer money, on top of this bad behavior. I think that's crazy.

(CROSSTALK)

BEINART: The problem with this logic is that it's been exactly what the Bush administration has been doing ever since the last fall. And it's failed dismally. And there's every reason to believe it's going to fail again, because these are democracies. These are countries that have the right to choose their own policy.

And when we sew incredible ill will toward this administration in those countries, we're creating a political environment in which they can never help us in the way in which we desperately need help now. The policies that Frank Gaffney is proposing have been a dismal failure. They're the reason we're in terrible shape in Iraq. I can't believe people are still clinging to these.

(CROSSTALK)

ZAHN: Frank, what is it that you think these countries have to do?

(CROSSTALK)

ZAHN: Well, Frank, hang on one second.

What is it you think these countries have to do to change their position with the way the Bush administration perceives them and their actions in the run-up to war?

GAFFNEY: Look, the countries in question can today have their subcontractors participate in competitive bids on these kinds of infrastructure, oversight, military modernization programs.

The question is, if we want them in on the ground as people really running these operations, not just providing services to them, but really running them, it seems to me there has to be a course correction from the policies these government have pursued. Peter lays this all off on the Bush administration. The French, the Germans and the Russians have deliberately tried, at every turn -- and I think his own magazine has been critical of them for this reason.

(CROSSTALK)

BEINART: The war is over. They can't change their position on the war. It's over.

(CROSSTALK)

GAFFNEY: Has, at every turn, opposed this action and has impeded the reconstruction.

(CROSSTALK)

BEINART: Frank, you're still debating the war. The question is, are they going to reduce the debt?

(CROSSTALK)

ZAHN: OK. Hang on, gentlemen. We can't understand both as you talk over here.

(CROSSTALK)

ZAHN: Peter, let me ask you this question.

Peter, Frank was just talking about the issue of how these countries probably shouldn't have had the right to express the opposition to the war. But he said, through the subcontracting version of how you get on the ground in Iraq, they do have an opportunity to invest there. Is that true or not?

(CROSSTALK)

BEINART: Yes, they have the opportunity.

But the governing council has said they want to give most of those subcontracts to Iraqi companies. And, in fact, if we are going to give them subcontracts, it makes it even dumber that we would go out of our way to stick our finger in their eye and not give them the contract itself, since that has created a huge media firestorm in Europe at precisely the moment we sent James Baker out there.

The Bush administration sent him out there to try to get France and Germany and Russia, precisely the countries we're alienating, to reduce this debt. Two Republican congressmen yesterday said this was a stupid idea. And I'm waiting for the Bush administration to back off it.

GAFFNEY: Well, Paula, may I just address this point of Peter's?

ZAHN: Quickly here, Frank. GAFFNEY: The idea that these countries are going to not cooperate in rescheduling debt that the Iraqis are in no position to pay is just ludicrous.

They're going to cooperate in rescheduling this debt whether they have a piece of this action or not. And my bet is, we're going...

BEINART: They said they're going to take a very hard line.

GAFFNEY: They were taking a hard line before, Peter.

But the point is that we're going to have to give them powerful incentives to change their course of action. And that's what I think this policy is calculated to do.

ZAHN: All right, gentlemen, we're going to have to leave it there. Peter Beinart, Frank Gaffney, thank you both for joining us tonight.

GAFFNEY: Thank you.

BEINART: Thanks.

ZAHN: And first, she accused Arnold Schwarzenegger of sexual harassment. Now a former Hollywood stuntwoman is suing the California governor for allegedly spreading lies about her. We're going to hear Rhonda Miller's story in an exclusive interview.

Caught on tape: A new video of a controversial drug raid in a high school raises question about whether it, in fact, was racially motivating.

And the Mujahideen and the Intifada and the Soldiers of Allah, the names of amateur Muslim football teams that are causing a big controversy in California.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: And I will well and faithfully discharge....

UNIDENTIFIED MALE: The duties upon which I'm about to enter.

SCHWARZENEGGER: The duties upon which I'm about to enter.

UNIDENTIFIED MALE: Congratulations, Governor Schwarzenegger.

SCHWARZENEGGER: Thank you.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

ZAHN: Arnold Schwarzenegger may have hoped taking the oath as California governor would put the issue of his bad behavior with women behind him, but the controversy is not going away.

A woman who says Schwarzenegger sexually harassed her is now suing the governor for defamation, claiming his staff before the election went on a smear campaign against her by portraying her as a felon with a long criminal record.

Joining us from Los Angeles for this exclusive interview is Rhonda Miller, joined by her attorney, Gloria Allred.

Welcome to both of you.

GLORIA ALLRED, ATTORNEY: Thank you, Paula.

ZAHN: Rhonda, let's talk about the serious allegations you made against Arnold Schwarzenegger, that he pulled up your shirt, took a photograph, and then allegedly groped you on two other occasions. All of this happened, allegedly, more than 10 years ago. Why did you just come forward with the charges this year?

ALLRED: Actually, Paula, she just didn't come forward. She also made a complaint to the Screen Actors Guild. And that was before Governor Schwarzenegger even declared that he was in the race for governor.

ZAHN: But there still is a perception, Rhonda, that you waited a long time to go forward with these charges.

RHONDA MILLER, SUING ARNOLD SCHWARZENEGGER: In fact, that is not true. I've tried to come forward a couple of times. And nobody wanted to listen.

ZAHN: When you finally came forward, you became the subject of a memo from the Schwarzenegger campaign that led to this lawsuit. Tell us what happened.

MILLER: It was so upsetting to me that somebody would try to ruin my reputation like that as a criminal felon.

I couldn't even believe this would happen to me. I've been a law-abiding citizen all of my life. I've done the right things. And here was these felony charges that I couldn't even believe, a long list. That was shocking.

ZAHN: All right, Rhonda, here's what I want to know. Do you believe there was actually a conspiracy on the part of Arnold Schwarzenegger or members of his team to knowingly or purposefully spew out lies about you?

ALLRED: Paula, what we have alleged in the lawsuit is that Governor Schwarzenegger and his campaign either knew or should have known that the e-mail that they sent which suggested to reporters and editors that they check the criminal L.A. County Superior Court criminal Web site for a Rhonda Miller, then, the -- of course, that brought up pages and pages of a Rhonda Miller who had been convicted of numerous felonies, but not this Rhonda Miller -- that, when they did that, they knew or should have known that it was not the same Rhonda Miller that held the news conference with me that day and who made allegations of sexual misconduct against Mr. Schwarzenegger.

ZAHN: Let's talk about what Arnold Schwarzenegger confirmed last night in an interview with Judy Woodruff. He said he will not pursue an investigation into some of these allegations, as he promised to do during the campaign. He also denied he had any knowledge, Rhonda, of your accusations. Let listen now to some of what he said.

(BEGIN VIDEO CLIP)

SCHWARZENEGGER: I have to find out more about it, because this is all news to me. I really don't know anything about that case.

JUDY WOODRUFF, CNN ANCHOR: So -- but, if it did happen, would you act?

SCHWARZENEGGER: I will look into it, yes, absolutely.

(END VIDEO CLIP)

ZAHN: Are you satisfied, Rhonda, by the second part of that answer?

MILLER: No.

ZAHN: Why?

MILLER: Because it's -- the damage is done. And my reputation cannot be restored after that. And by looking into that, it doesn't mean anything to me, not at all.

ZAHN: And you say the damage has been done. What have been the consequences of this memo having been made public?

MILLER: Well, I've tried repeatedly to get work in my industry, and I haven't been able to do so, despite my best efforts.

ALLRED: And, Paula, Rhonda has been in the entertainment industry for approximately the last 13 years. And she worked on two films with Mr. Schwarzenegger over a period of two years.

So we think that he knew or should have known that she was not a person who had ever been convicted of any crime. She's never even been arrested for anything in her life. And this has been very damaging to her economically and emotionally.

And we wonder, was this part of a scorched-earth type of campaign policy where anything goes, just a win-at-all-costs type of philosophy, where they felt that they could maliciously or recklessly try to ruin or discredit a woman who made allegations of sexual misconduct against Mr. Schwarzenegger. If that's what they thought, we think that they were wrong. And that's why we filed this defamation lawsuit.

(CROSSTALK)

ZAHN: Once again, Mr. Schwarzenegger saying he's not aware of the specific allegations against him.

Rhonda Miller, Gloria Allred, We appreciate your stopping by tonight. Thank you.

ALLRED: Thank you.

ZAHN: And after serving two years of a life sentence, a new trial for a boy accused of killing his playmate.

And then three retired high-ranking military officials reveal that they're gay.

(BEGIN VIDEO CLIP)

RET. REAR ADMIRAL ALAN STEINMAN, U.S. COAST GUARD: I couldn't have the same kind of normal life that everybody else had. But I was willing to pay that price in order to serve in the Coast Guard.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAHN: Welcome back.

Stunning revelations today from three retired American military men. They became the highest-ranking officers ever to admit they're gay. Virgil Richard and Keith Kerr were brigadier generals in the U.S. Army. Rear Admiral Alan Steinman is retired from the U.S. Coast Guard.

Elaine Quijano has their story.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): For years, retired Admiral Alan Steinman kept his homosexuality a secret, knowing it could destroy his career.

STEINMAN: I couldn't have the same kind of normal life everybody else had, but I was willing to pay that price in order to serve in the Coast Guard.

QUIJANO: But now Admiral Steinman and two other retired high- ranking officers have came out in a "New York Times" article, outlining their belief that the militaries don't ask/don't tell policy has failed and that the Pentagon and Congress should revisit it. The policy was enacted under President Clinton, allowing homosexuals to serve in the military, as long as they didn't disclose they were gay.

(BEGIN VIDEO CLIP, 1993)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I strongly believe that our military, like our society, needs the talents of every person who wants to make a contribution and who is ready to live by the rules.

(END VIDEO CLIP)

QUIJANO: It was considered a small, but significant step forward then.

STEINMAN: For the first time in anybody's memory, the military now allowed lesbians to serve honorably in the military, so long as they were silent and celibate.

QUIJANO: But now critics, including the admiral and a gay rights group, believe the policy does not work and say it has forced too many qualified men and women out of the military. They also argue, it's the policy, not gay men and lesbians, that have hurt military readiness.

C. DIXON OSBURN, SERVICEMEMBERS LEGAL DEFENSE NETWORK: We're losing critical talent, like the Arabic linguists.

QUIJANO (on camera): The Pentagon would not comment directly on the article. Instead, officials said they remain committed to treating all service members with dignity and respect, at the same time, making clear they will continue to enforce the law and, in their words, separate those who violate don't ask/don't tell.

Elaine Quijano, CNN, Washington.

(END VIDEOTAPE)

ZAHN: New videotape not only with the sights, but the sounds of a high school drug raid that some say was racially motivated. We're going to talk about two students -- or with them -- who happened to be there.

Plus, new information that, months ago, authorities called allegations of child molestation against Michael Jackson unfounded. We'll talk with famed defense attorney Gerry Spence about how it will affect the prosecution's case.

And tomorrow: Internet gambling, how simply logging on can lead to addiction.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I could have spent eight, 10, 12 hours right in my own bedroom sitting on the Internet gambling and have no problem with it. The time went just like that.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ZAHN: Officials say they were just trying to clean up a school drug problem, but was racism involved? A look at that in a moment.

First, here's what you need to know at the bottom of the hour.

A Florida Court of Appeals is giving a second chance to the youngest person ever to be sentenced to life in prison without parole. Lionel Tate now 16 years old will get a new trial. The court says that's because his competency was not evaluated before his first trial. Tate was just 12 when he killed a 6-year-old girl while supposedly imitating pro-wrestling. He was convicted two years later.

I'm joined now from Tallahassee Florida by Tate's attorney Richard Rosenbaum. Welcome Richard.

RICHARD ROSENBAUM, LIONEL TATE'S ATTORNEY: Good afternoon.

ZAHN: What do you believe will happen in this retrial?

Do you think your client will walk away free?

ROSENBAUM: Well, he claimed from the very beginning this was an accident. I never believed the wrestling bogus defense. That just didn't seem to fit to me. But the one thing we've been able to do is develop additional facts about what happened. We talked to a number of experts, we've talked to forensic pathologists and I believe this was an accident and that we'll be able to establish that.

ZAHN: I'm fascinated by what you said, you never really believed the bogus wrestling defense.

Was that a mistake on the defense's part to use that strategy?

ROSENBAUM: Well, obviously, in hindsight it was a mistake because it didn't work. But I think what was really going on here is you had a 12-year-old child who didn't know what sounded good, what sounded bad. What facts to reveal to his lawyer. He was afraid to reveal facts that he thought made it sound that he stepped on the girl as he was running down the steps. So, there are new facts that I think will come out. Ultimately, the state offered a plea offer of three years in the juvenile facility followed by 10 years probation. Next year Lionel will have been in three years. So if that offer is still something that's on the table, it would be in essence a time served deal for him.

ZAHN: Why do you think a jury would be any more sympathetic to his defense than they were during the last trial?

ROSENBAUM: Well, first of all, no defense experts who ever said that this was an accident. It's devastating when your own defense expert said, no, this was something that was intentional. There were a number of key facts not known at the time such as what Lionel was doing, he went upstairs, he went to the bathroom. Tiffany had gone upstairs and she came down and she was laying down. There were some other things going on that caused a number of the injuries. But what actually killed her was the lacerated liver. And believe that happened when Lionel got bottom of the spiral stair case. And those last few steps, like our kids always do, he jumped and he forgot that Tiffany was down there. I think he was afraid to tell him lawyer that is what had happened.

ZAHN: Richard, I am really having trouble cutting through your argument. Are you saying your client didn't get a fair trial because of a bad defense -- that's the way you're making it sound now. He didn't get the best representation from his defense.

ROSENBAUM: I didn't believe the defense. The defense attorney was somewhat hampered when you have a child who's not in a position to tell you what's going on and what happened. Then you don't know how to develop additional forensic evidence. There's a lot that goes into it. There are still some unexplained injuries and we need to bring the forensic people back. We hadn't developed this yet as a defense in the trial, we given this as part of the clemency attachments to the governor so he can see maybe this wasn't an intentional act. But from the very beginning we have stuck with our legal arguments, the lead one being Lionel Tate was not competent to go forward. That the court had an obligation on his own because of his age, because of his low IQ, because lack of experience in the criminal justice system, the court had an obligation to order a competency evaluation. Then when I came into the picture, which was after he had already lost, but before sentencing, one the first things I did was start complaining that we needed a competency evaluation. We needed doctors to be appointed. And I even filed a written motion. And the judge at one point said if I don't grant you a competency hearing this is going to be reversed by 4th District Court of Appeal and we're going to come back in three or four or five months.

ZAHN: Well, you got your appeal. Richard Rosenbaum, attorney for Lionel Tate, thank so much for taking some time out to talk about the case tonight.

ROSENBAUM: Thank you, Paula.

ZAHN: And no parent wants illegal drugs in their children's high school, but when police staged a raid last month at a high school in a suburb of Charleston, South Carolina, many parents there were appalled at what happened.

(BEGIN VIDEOTAPE)

(voice-over): A shocking surveillance tape has set off a firestorm of controversy. On the early morning of November 5, police, searching for drugs, conducted a raid at the Stratford High School in Goose Creek, South Carolina. No drugs were found on the 107 students searched.

The police used force. Weapons were raised and students were handcuffed throughout the school. Perhaps most controversial, the raid happened at 6:45 AM, a time when only the earliest buses had arrived, buses transporting primarily African-American students.

These facts have left the community fractured. The school system denies allegations of racial profiling. A class action suit has been filed, and in addition, the ACLU will file individual lawsuits on behalf of 20 students. Last week, the Reverend Jesse Jackson led a rally denouncing the ring and plans another one for next week.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: This was, like, a big letdown to everybody. And I mean, just not here in South Carolina or Goose Creek, it's just something that shouldn't have happened and should never, ever happen to any student ever again.

(END VIDEO CLIP)

ZAHN: As you might imagine, the drug raid at Stratford High School has created a wave of controversy for the school, the police and the community. With us now live from South Carolina are three guests. De'Nea Dykes and Carl Alexander, students at Stratford. They are in Charleston. They were there in school the day of the raid. And Denyse Williams joins us from Columbia, South Carolina. She's the executive director of the state ACLU office and is representing 20 of those students we just talked about. Welcome to you all.

Carl, take us back to that morning. You were searched. You had a gun pointed at your face. How afraid were you?

CARL ALEXANDER, STRATFORD H.S. STUDENT: I was very frightened. You know, it's not every day, like, someone points a gun at your face, you know? And it's just something that, like, just shakes you a bit. And you know, just to think that if the gun would have went off, you know, you would have lost your life, or whatever. And it was just frightening.

ZAHN: Carl, what did you think was going to happen to you?

ALEXANDER: I thought I was going to get shot, you know? Because, you know, not everybody's perfect. You know, the cop could have just slipped his finger or whatever and the gun could have went off. It just would have been over then.

ZAHN: De'Nea, is there a drug problem at your school?

DE'NEA DYKES, STRATFORD H.S. STUDENT: I really don't know if there's a drug problem. I know that I'm not involved with drugs and with the drug trade that goes on. So I really don't know whether there's a drug problem or not.

ZAHN: Do you feel those students that got to school early that morning were targeted because of their race, because they're black?

DYKES: I feel that that subject had something to do with it.

ZAHN: And why do you feel that way?

DYKES: Because I feel that Mr. McCracken (ph) could have simply searched the whole school and not just have pinpointed the 107 students that were in the main hallway that morning.

ZAHN: Carl, we're going to share some of the numbers with our audience now. Less than 25 percent of the students at the high school are African-Americans. Yet at the time of the raid, when some of those buses arrived at school earlier that morning, two thirds of the 107 students were African-American. Do you see this as racial profiling, too, like De'Nea?

ALEXANDER: Yes, I think it is because just like what De'Nea said, they didn't have to search just those people in the hall, but they could have just took the people that they suspected was doing the drugs to the side, instead of doing the whole hallway. So yes, I think it is racial profiling in this case.

ZAHN: Denyse, we're going to bring you into the picture now. We want to look at some of the statements from the high school district, the first regarding the principal, George, McCracken, saying although he and members of his staff were involved in planning the search, he was not made aware by the Goose Creek Police Department that any officers would enter the building with drawn weapons. And then the district went on to say, "The district regrets any negative perceptions in reference to this incident. We are adamant that facts, rather than emotion and perception, define the actions of November 5."

Obviously, the police are saying they had some reason to believe there were some kind of drug transactions going on at school. Didn't they have a right to mount any kind of raid here?

DENYSE WILLIAMS, EXEC. DIR., SOUTH CAROLINA ACLU: Well, what I want to say is that what happened at the school was truly shocking. These types of tactics that were used on these kids are more appropriate for a prison riot, as opposed to schools, children in a school. The police -- if they had suspicions that there were kids taking drugs or dealing drugs, the way to handle would have been to bring the kids into the office and search them there, but not a wholesale raid on 107 kids.

ZAHN: And Denyse, we made it clear through that piece at the top that the police found nothing that morning. How confident are you that there isn't drug trafficking going on at this school or that there isn't a drug problem at all?

WILLIAMS: What we know is that our plaintiffs were some of the ones that were really harmed by this, harmed in a much more substantial way than many of the kids. They were children that were taken from the cafeteria and brought into the hallway and handcuffed. We know that those children were not involved in drugs. And we don't want to see this type of tactic ever used on any kids in any schools in South Carolina or anywhere in America. That's what our lawsuit is all about.

ZAHN: But Denyse, do you have reason to believe there were other students at the school involved either in trafficking or the use of drugs?

WILLIAMS: We have no evidence of that. And if, in fact, they have that evidence, they should have gone after the students that were involved in drugs, not all of the students that arrived on the early buses.

ZAHN: We are going to end our conversation there. Thanks to De'Nea Dykes, Carl Alexander in Charleston and Denyse Williams in Columbia, South Carolina.

So what's in a name? Fear and hatred, according to some religious leaders. A Muslim American football league uses team names that spark outrage. And we've heard a lot about the big flu outbreak, but are you and your family really at risk?

(COMMERCIAL BREAK)

ZAHN: Now to our debate tonight. There isn't anything much more American for young men to do on New Year's Day than play a little football. So why should an upcoming tournament in California be causing so many controversy among religious leaders? Well, it might be because the players are young Muslim men, and the team names include the Mujahideen and the Intifada.

Joining us in California is Sabiha Khan of the Council on American Islamic Relations, and Rabbi Abraham Cooper, director of the Simon Wiesenthal Center. Welcome to both of you.

SABIHA KHAN, CAIR SOUTHERN CALIFORNIA: Thank you.

ZAHN: Let's talk a little bit, Sabiha, about the names of these teams. Besides Mujahideen and Intifada, you've got Soldiers of Allah. Do you understand why people are offended by these names?

KHAN: Well, first of all, Paula, I'd just like to say that as soon as we did hear about this story, as soon as it broke out, we did contract the organizers and ask them and requested them perhaps they would consider changing their names. These are average-day youth who wanted to show their bravado and pick the scariest names, the toughest names, and perhaps they didn't realize when they did choose these names that, you know, these names are often associated with fearful items.

You know, we're not naive. We realize that these words are thrown about in the poplar culture, by some in the media, and they've come to be known as different things than Muslims know about. But this was actually an internal football game, and these youths, all they wanted to do was play football. And they all know what these terms mean to each other. But again, realizing this and feeling shameful and that they could actually hurt other people and offend other people, they did decide to change the names.

ZAHN: All right, Rabbi Cooper, let's listen to what one of those young men had to say about this controversy. Quote -- we can actually hear him say it himself.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (UNINTELLIGIBLE) if you look at it, it's actually a pretty good word because it's basically standing up for human rights and injustices around the world. So that -- I don't see why it would bother anybody. Mujahideen was one of the most elite warriors of their time, so I don't see why that would be bad also.

(END VIDEO CLIP)

ZAHN: Sabiha, Rabbi, was just talking about the bravado of these young man. Is it bravado or just complete lack of sensitivity here?

RABBI ABRAHAM COOPER, SIMON WIESENTHAL CENTER: Well, you know, to their credit, one of the young men actually called me on Monday morning, and I explained to him that we're not only talking about a football league but a reality check. Suicide bombings are now a reality. Every morning, when you wake up and watch CNN, it could be Moscow, it could be Riyadh, it could be Turkey, it could be Jerusalem. And I explained to him that, Look, we live in the real world, and these names, in fact, need to be dropped.

What troubles me is...

KHAN: Actually, Paula...

COOPER: Excuse me. If I may just finish? What troubles me is that, you know, just in June of 1991, the Islamic community just down the road from Irvine asked the Catholic high school to drop the name Crusaders from their team, which they did, because of events that took place 1,000 years ago. Today...

KHAN: But people are (UNINTELLIGIBLE)

COOPER: ... Mujahideen, Intifada are, in fact, terms that are used to inspire in real time young people from democracies like the United Kingdom to go up and blow them themselves up in the Holy Land or to be involved in attacking our young people who are in the military service from Afghanistan to Iraq.

ZAHN: All right, but...

COOPER: So my hope is that they will, in fact, drop it. And I told them if they did, they would be our guests at the Museum of Tolerance. And if they want, I'm happy to come out and toss the first coin of their game on January 4.

ZAHN: All right, now, Sabiha, you say these men do feel shame now by their actions, after the fact. As far as you're concerned, is this controversy over?

KHAN: Right. They just want to play football. They feel shameful. And if I can get back to what the rabbi said about the Intifada? You know, we shouldn't really score a point for Israel at the expense of Muslims who just want to play football, American teenagers, young, in their 20s. Really, what the Intifada is, and if we go back in our historical records, Intifada is an uprising that began in 1987 that was peaceful. And we only heard about suicide bombings...

ZAHN: All right...

KHAN: ... recently, starting in 1994. And what...

COOPER: Sabiha...

ZAHN: All right -- all right, you two.

COOPER: Sabiha, terrorism is not a game...

ZAHN: We... COOPER: ... and this is not about scoring points.

ZAHN: I wish we had...

KHAN: Actually...

(CROSSTALK)

ZAHN: ... time to go back to the history, but we've got to end the debate there this evening. Thanks to Rabbi Abraham Cooper and Sabiha Khan.

COOPER: Thank you.

ZAHN: Coming up: the flu and the fear of it. Just how serious is the threat? And does the prosecution really have a case against Michael Jackson? We will ask celebrity defense lawyer Gerry Spence.

(COMMERCIAL BREAK)

ZAHN: So far this year, flu has hit all but Massachusetts and Washington, D.C., and the outbreak is especially bad in 13 states. The nation's vaccine supply is running out, emergency rooms are jammed, and some people are saying children are more at risk this year than before. So how worried should we be? Well, according to the Centers for Disease Control, 36,000 Americans die of the flu every year.

Let's bring in the truth squad tonight. Dr. Anthony Fauci is director of the National Institutes of Allergy and Infectious Diseases. Good to see you, Doctor.

DR. ANTHONY FAUCI, NATIONAL INSTITUTES OF HEALTH: Good to be here.

ZAHN: In spite of the tragic deaths we just talked about, do you think the media is making too big of a deal out of this year's flu outbreak?

FAUCI: You know, Paula, I don't know if I can say they're making too big a deal. I think to put it in perspective, we have to realize that flu is something you need to take seriously. Is there a need to panic? Absolutely not. Some people might panic on the basis of what they hear in the media or not.

I think what we need to do, as we are, hopefully, doing tonight, is to put it into perspective. There is a considerable degree of seriousness to influenza in general. As you just mentioned very accurately, 36,000 people a year die of flu on a regular flu year. We seem to be having a particularly bad year, in the sense of the initiation of the flu epidemic, if you want to call it that, and it certainly is widespread in certain regions in the country.

ZAHN: All right...

FAUCI: The fact that it started so early and we're seeing serious consequences, particularly in children, certainly means that there's the possibility we might be having a particularly bad year. But flu itself, even in a regular year, has serious consequences. So everyone in the CDC is certainly doing this -- taking this very, very seriously. But it's not something that one should panic about...

ZAHN: All right...

FAUCI: ... but to just follow the recommendations of the CDC.

ZAHN: You just mentioned the geography, and we have a map that shows some 13 states that have already reported severe outbreaks. But at this time last year, none of these states had. Do we know why we've been hit harder and earlier this year?

FAUCI: You know, we don't. I have to -- one thing that all of us in infectious disease know very well is that influenza is a very unpredictable disease, unpredictable in whether you're going to start off really heavy, as we're seeing. Generally, it peaks in January. We're seeing early clusters of cases now. Why it starts in one area of the country versus the other is just not known. It's a quite unpredictable infection.

ZAHN: Well, I've been trying to hold my panic in check, but I did follow through with your recommendation and tried the nasal version of the vaccine today. So hopefully, the rest of the folks out there will listen to you and stay healthy. Dr. Anthony Fauci, thank you for joining us tonight.

FAUCI: You're quite welcome.

ZAHN: And we're certainly going to keep an eye on this, as we move further into the flu season.

The case against Michael Jackson: A report back February called allegations of child molestation unfounded. What does this mean for the prosecution? We will ask high-profile defense attorney Gerry Spence.

(COMMERCIAL BREAK)

ZAHN: Welcome back. Now the latest in the Michael Jackson case. You may have heard by now about a leaked memo from a Los Angeles child welfare agency stating the latest allegations against Jackson were labeled unfounded months ago. How much damage could the memo do to the prosecution's case?

Gerry Spence is author of the book "The Smoking Gun." He is also a criminal defense attorney. He joins us now. Nice to see you in person, for a change.

GERRY SPENCE, DEFENSE ATTORNEY: Thank you.

ZAHN: First of all, how damaging is this leaked memo?

SPENCE: Well, it's damaging. It's -- but -- but the whole thing is damaging. I mean, it's damaging to both parties. Here's the Jackson people saying, Well, we're innocent. We're being tried in the press. We haven't had a chance to set forth our defense. And here is the defense saying, Well, look at here, this boy told the child people in February that there wasn't anything wrong, that the boy said he was perfectly -- that Jackson was perfectly OK.

And now -- but you see -- you see, the other side of that case is, is that here is the child sitting in the prosecutor's office. You can see him sitting in the prosecutor's office, this little kid, sick. And here's the prosecutor and the police. Do you think they intimidated him with respect to what he might say against Michael Jackson?

ZAHN: Essentially what you're saying is there's equal intimidation.

SPENCE: What I'm saying...

ZAHN: Even if Mr. Jackson had an employee sitting in on this meeting.

SPENCE: Well, you say it...

ZAHN: You say they cancel out each other?

SPENCE: You say it so much better than I.

ZAHN: Oh, I don't know about that.

SPENCE: But what we ought to really learn from this, Paula Zahn, is that it takes a good cross-examination in a courtroom to get to the truth. You don't cross-examine people that are appearing on the media. You don't cross-examine all of these leaks that come through. We need the whole story, and that's what cross-examination is for. And that's what a fair trial is all about.

ZAHN: Is defense attorney Mark Geragos up to the job? A lot of questions being asked on how spread thin he is, representing Scott Peterson and Michael Jackson simultaneously.

SPENCE: Well, I don't think -- I don't think there's any problem there. I can't imagine why there would be. By the time he finishes the Peterson case, he's ready to go into the Jackson case. It's -- we all have more than one case going at a time. If we didn't...

ZAHN: But maybe not in such a public form.

SPENCE: Well, that's probably...

ZAHN: Where every move is under the microscope.

SPENCE: That is probably true, too. But I think this man is a good man, and I think he's a competent lawyer, and I think he'll represent these people well.

ZAHN: When you say he will represent these people well, does that mean he will get Michael Jackson off? SPENCE: No, that doesn't mean that at all. That isn't his job. His job is, as a criminal defense attorney, is to see that Michael Jackson gets a fair trial and that the prosecution does it by the rules. And he does that same thing in the Peterson case. It isn't his job to get them off. It's his job to see they get fairly tried.

ZAHN: Look, I've read every one of your books. Isn't it also about winning, Mr. Spence?

SPENCE: Well, we...

ZAHN: You've won most of the cases you've ever tried. That's in the equation, isn't it?

SPENCE: Yes. But don't forget, Paula, that I don't take every case. I take those cases that turn me on, that say there's something worthwhile to be tried here and that I ought to try it.

ZAHN: You want to be trying this case?

SPENCE: I don't know. I...

ZAHN: Or would you want to represent Michael Jackson?

SPENCE: I can't tell you that until I see what the facts are.

ZAHN: Oh, you are waffling on that one!

SPENCE: No, it isn't.

ZAHN: How about Scott Peterson? Would you represent Scott Peterson right now?

SPENCE: I really don't know that, either. I don't know whether I represent anybody. The only person that I know, Paula, that I would represent is you.

ZAHN: Oh, I hope you never need to represent me!

SPENCE: I hope so, too!

(LAUGHTER)

ZAHN: Because I'm planning to stay here right at CNN and not get in any trouble. Gerry Spence, always good to see you.

SPENCE: Thank you.

ZAHN: That wraps it up for all of us here this evening. "LARRY KING LIVE" is next. Thanks so much for joining us tonight. Good night.

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

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