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Are Political Convention Benefits Worth Cost In Security? How To Protect American Infrastructure From Terrorists; Suburban Sprawl Creates New Lexicon In Real Estate

Aired July 24, 2004 - 13:00   ET

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

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


FREDRICKA WHITFIELD, CNN ANCHOR: Now in the news. The Wave of kidnappings continues on Iraq, while negotiations are working to free a senior Egyptian diplomat, seen here, another person was taken hostage today. The latest victim is the chief of an Iraqi construction company.
Seven truck drivers are also being held by insurgents there. Negotiators say they've spoken directly with their kidnappers. We'll have more details at the top of the hour.

President Bush says the White House will look closely at the recommendations of the 9/11 Commission. In his weekly radio address today he said many of the steps advised by the panel have already been put into action. A live report from CNN White House Correspondent Suzanne Malveaux coming up in about an hour from now.

And saying their campaign is celebrating the spirit and values that built America the Kerry/Edwards ticket is going after voters in battleground states today. John Kerry is in Iowa. His running mate John Edwards is in Wisconsin. They're making their way across the country to Boston for Monday's start of the Democratic National Convention.

Lance Armstrong, outclassed the field today in the next-to-final stage of the Tour de France. The Texan flew through the French countryside winning today's final time trial. Experts say barring some catastrophe Armstrong has all but sealed his place in history as the race's first six-time champion.

I'm Fredricka Whitfield at the CNN Center in Atlanta. More news at the bottom of the hour. IN THE MONEY begins right now.

ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.

JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, pressure points, from power lines to shipping ports, America's infrastructure has plenty to get a terrorist excited. We're going to find out if the soft spots are getting the protection they need.

Plus, rah, rah, rah meets blah, blah, blah. The party conventions are costing a fortune and putting cities at risk. Let's see if the results are worth all the fuss and expense. And how to tell a lulu from a privat-opia. You know sprawl when you see it but you might not know what to call it. We're going to teach you. We'll speak with the author of a field guide to sprawl.

Joining me today a couple of the IN THE MONEY veterans, CNN Correspondents Susan Lisovicz and Christine Romans, who is on loan from "Lou Dobbs Tonight".

And you can tell Lou we really appreciate the fact you could join us.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Let's not tell Lou.

CAFFERTY: OK, we won't tell Lou.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: She's still working with Lou, though.

CAFFERTY: I am furious. The 9/11 Commission finally gets its report together, took them 20 months, 2.5 million pages of documents, they interviewed 1200 people and they came up with a list of specific recommendations on what should be done to make this country safer and to advance the war on international terror.

Congress says we don't have time to act on any of this, maybe next year and they leave for a recess. And walk away from this like, well, so what's new.

ROMANS: I think it's interesting that Congress did find time earlier this year to give itself a raise, and it doesn't have time to put together all of these important, important changes when we're hearing all of this doom and gloom that we are likely to be faced with another terrible catastrophe.

LISOVICZ: And, I mean, the 9/11 Commission, quite frankly, just confirms what we've heard already from every authority. Not only did we screw up, we are woefully still unprepared for another attack that is coming.

(CROSSTALK)

ROMANS: Almost every one says it.

CAFFERTY: But they came up with -- here are some things that can be done. Here are some recommendations on how to change things to make the country safer. Requires the Congress to get on board and help out with this. They're on vacation for a month.

They also said the legislative agenda for the rest of the year is too full. Well they make the legislative agenda.

ROMANS: Right.

CAFFERTY: They have time to stop everything so they could --

(CROSSTALK)

ROMANS: This should be on the top, this should be on the top of the list.

LISOVICZ: Let's remember that at least one of those planes was headed toward Washington.

CAFFERTY: Unbelievable. It makes you want to send in your taxes early, doesn't it?

On to other things. America's infrastructure basically one big potential terrorist target, and because we depend on it so much it's easy to take it all for granted. We probably shouldn't.

We're talking about things like power plants that make it possible for you to watch this program right now. We certainly hope nothing happens to the power plant beaming this program in your house.

Our first guest believes Washington is not protecting the infrastructure well enough. And he has some ideas on how to do it better. Stephen Flynn is the author of a new book called "America the Vulnerable". He's also senior fellow in Security Studies at the Council on Foreign Relations.

Steven, it's nice to have you with us.

STEPHEN FLYNN, AUTHOR, "AMERICA THE VULNERABLE": Very nice to be with you this morning.

CAFFERTY: Within a couple of weeks after September 11th we heard talk that bridges, tunnels, railroads, ports, in particular, all very vulnerable to terrorist attacks, that the terrorists were so inclined. How much progress have we made in securing those kinds of things? And how much needs to be done?

FLYNN: Well, not much progress. If we were -- if we put it on a scale of one to 10, where one were a bull's-eye and 10 were secure, in some sectors maybe we've got up to a three. We just have such a long ways to go. And I'm having a sense of deja vu here, frankly, with 9/11 Commission's report coming out.

I had the opportunity to participate in the U.S. Commission on National Security, the Hart-Rudman Commission. They came out on January 31, 2001, so the number one national security imperative was a catastrophic terrorism on our soil. And we're just not organized as a government to deal with it. They've got a collective yawn in Washington.

ROMANS: Right. On our soil, you say, it could be in our ports or coming into our ports, as well.

There are new Coast Guard rules that went into effect on the first of July, but just the sheer volume of what's coming into this country. And when you look at the number of people that are being smuggled into this country through ships that we don't even know about. If we can't protect our borders in general, how are we going to be able to specifically, specifically, go after terrorists?

FLYNN: Well, this is the problem. We're treating still the war on terrorism as something that can be done as an away game, to go to the source. The terrorists aren't cooperating. The reality of 9/11 was they were here.

They used our infrastructure against us. Then a domestic commercial airliner, they didn't import a weapon of mass destruction. They used our infrastructure as one.

And a lot of the costs that flowed from it were things that we did to ourselves. That's what we should be spending a lot more time on. Not just protecting borders. Not just sending out troops overseas to die on our behalf. But a little more than just shopping and traveling on our side, a little more effort to make ourselves less of a soft target.

Our seaports, we have 361 commercial seaports in our country. And they're the lifelines of our economy. And 90 percent of everything that comes in and out of this economy moves by sea. But we have spent in the last three years with federal monies going to those ports to make them more secure and they started with nothing, what we spent in maybe three days in Iraq. It's that kind of disconnect.

The Coast Guard, yes, was responsible for some fairly straightforward new standards for security. But Congress didn't give any money to the Coast Guard to go out and verify whether or not people are living up to them. Didn't give any money to the ports to be able to begin to develop the means to comply with these new requirements.

Yet another reason to fire Jack up about Congress. But you were talking about transportation. Let's talk, also, about the food the food that we consume every day in the United States. You say that is a threat, as well as the power system.

FLYNN: Exactly. This is actually, though, an opportunity that is win-win. My book is designed to be read by the everyday American to get them more informed about just how vulnerable we are. It's one- third scary, two-thirds, hey, we can do this. Take a deep breath.

But our food supply makes up 10 percent of our gross domestic product. And one of the examples of suggestions I have out there is put a microchip in the cow's ear for about five bucks. This is for livestock, and you can tell where it's been, who it's hung out with, what kind of vaccinations it has had.

Why would you do that? If a cow comes down with a disease you can figure out who else may be affected and isolate that from the food chain. Now that would help with food safety.

If you recall, last December we had one mad cow we spotted out in Washington. Within 72 hours, 30 countries boycotted a $3 billion industry because we couldn't figure out if the rest of the cattle were safe or not. It took the Canadians to tell us that the cow came from them, for us to be able to sort it out. That investment for food safety would also make that sector far less attractive for a bioterror attack. If they knew that they used a bioagent against our livestock and we could contain it, very quickly get back on our feet, they wouldn't do it. There's deterrence value, too, in making these investments.

CAFFERTY: You know, I mean, you're a college professor and you're a bright guy and you figured some of this stuff out. Why isn't any of this being done?

FLYNN: Part of the problem is, and I'm a retired Coast Guard officer who spent a lot of time on the front lines, here, as well. Part of the problem is we're still locked in a mind-set that says national security is something we do as an away game. We're unlimited in the resources, virtually, a half trillion dollars we will spend this year on conventional military capability to fight the war on terror overseas.

Our young men and women in uniform are paying the ultimate sacrifice for that effort, while we're not willing to cobble together even the most basic security here because we're not used to it. We lived for two centuries in the most peaceful corner of the world. Friendly neighbors to the north and south, big oceans to the east and west, we could do the pursuit of happiness, security was somebody else's business. But 9/11 said it should be all our business.

ROMANS: Bottom line, you think the money should be spent here and it shouldn't be spent halfway across the world?

FLYNN: My bottom line is we're a wealthy country. You can afford an offense as well as a defense when you're a nation at war. In the Second World War we all pitched in. In this war we seem to be putting it all on the backs of our military and intelligence and not doing the smart things we can do in the private sector in our communities to make ourselves safer.

And the federal government isn't helping us as much as they need to, to spawn us on to bring us in and to provide the resources to jump-start the process.

CAFFERTY: Maybe when Congress gets back from its month-long vacation we can look forward to getting some stuff done.

Stephen, thanks for being with us. I appreciate it.

FLYNN: Thank you for having me.

CAFFERTY: Stephen Flynn, he wrote "America The Vulnerable: How The Government Is Failing to Protect Us From Terrorism".

We're going to step out here and make the boss happy, make a couple of dollars with some commercials. But we will be back and we expect you to be there when we return.

Putting the party in party politics up next. The convention is burning taxpayer cash, raising fears of a terrorist attack. Find out if the results are worth the price.

Plus, woulda, coulda shoulda. See how Martha Stewart might have done better at making her legal case. She's off to prison for five months at some point. We'll talk to noted defense lawyer Robert Shapiro about that case.

And the many faces of sprawl. Learn how to tell ball pork from a pork chop lot as we check a field guy to sprawl. You don't want to miss this deal.

ANNOUNCER: Competitors across the globe wish they could fill the shoes on NIKE, this year's industry leader in the apparel category. The company sells its products throughout the U.S. and in about 200 other countries. Even though NIKE ranks as the world's number one shoemaker, these days, variety is the name of the game.

The company now sells everything from yoga apparel to hockey gear to golf equipment. However, NIKE has been slow to break into the world of non-team sports such as skate boarding, where consumers are typically anti-Swoop.

(COMMERCIAL BREAK)

CAFFERTY: There was a time, way back when I was a lot younger than I am now, that the political conventions promised a surprise or two. Even one as big as who the actual candidate might be.

But that's all over now, today the primaries and the TV spots have changed all that. We know who the candidates are. We know what the issues are. We know where the parties stand on the issues. So why do we make such a fuss over the Democratic and Republican conventions? Our next guest says it's because of the money -- and the momentum.

Larry Noble joins us from Washington, D.C. He's the executive director of the Center for Responsive Politics, which is a nonprofit research group.

Larry, nice to have you with us.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Great to be with you.

CAFFERTY: You can't find people who say we don't need these things anymore, these conventions.

NOBLE: They really are a major part of the political process. They may not have any great impact in terms of deciding who's going to be the nominee, but it's a way for the party to launch its candidate. And it's a way for a bunch of people to get together and have a good time.

LISOVICZ: Speaking of a good time, I do recall the 1988 convention, which was in the great town of New Orleans, there was actually news there. Because I believe it was George Bush announced Dan Quayle as his running mate. Which was big news when people like Bob Dole, and Elizabeth Dole were mentioned as running mates. But for the Democratic Convention, would you not agree that it's all about the speech. For Kerry now, he has to distinguish himself, not as against Bush, but it's all about me. What I'm for.

NOBLE: Right. The convention is really the way for Kerry to launch himself to the public. The Bush campaign has been doing a very good job trying to label him for the last couple of months. One of the things the polls show is that there are a lot of Americans out there who don't really have a good sense of Kerry.

This is really the launching pad for that if the news covers it and if it gets through all the other news that's out there, it is a way for Kerry to define himself as the real presidential campaign starts.

ROMANS: If the news covers it. It's starting to sound like assignment editors all over this country think this is show biz more than it's politics, or it's news. A lot of people spent an awful lot of money, but the more money they spent, the less interested the major news media is in this.

NOBLE: Right. What the news media wants is some drama. As you pointed out we already know who the nominees are going to be. I remember years ago that the networks used to cover the conventions and used to be a sense of drama.

Here, a lot of the networks are looking at it and say why cover it? Everybody knows what's going to happen. It's just going to be a bunch of speeches, which is, frankly, unfortunate because this is where the candidates begin to really define themselves for the November election.

CAFFERTY: Who's at fault here? It's kind of like a dog chasing his tail. Are the political parties responsible for the demise and decline in interest in their conventions because of the fact that all of the stuff gets done long before they ever go into the convention hall? Or is it the media have found other things to amuse themselves with, and because there's no suspense left in these things, they just kind of look the other way?

NOBLE: I think it's a little bit of both. I think the way the primary system has worked out, there really is no drama left in most of the conventions. And the reality is we've known who the Democratic nominee was going to be for several months. And obviously the news wants some sort of drama. So in part it is the party's fault.

And then there's just this general, I think, thought that the networks don't want to cover long speeches. Now, I'm sure there will be some coverage and there will be some bits and pieces of it, depending on who they get to speak.

Obviously, part of the game at the convention is to get speakers who will get coverage. But I don't think we're going to see at least, on general broadcast news we're going to see a lot of gavel-to-gavel coverage. It's just not going to happen anymore. LISOVICZ: One thing that you certainly will get a lot of coverage, Larry, every convention we get is the celebrities who attend. And celebrities attend oftentimes because there's also parties there. That means there's a lot of money, a lot of corporate money coming in.

Would you say at this point that the Democrats and the Republicans are getting about the same amount of money from the same sectors or even the same corporations?

NOBLE: Yes, pretty much. You have to keep in mind that, in fact, the conventions are supposed to be publicly funded. Each party gets about $15 million in taxpayer funds to put on the convention. But that's just a drop in the bucket in terms of what's actually spent.

Basically what's happened is the political conventions have become the last stronghold for soft money, the unregulated corporate and labor contributions. And we're expecting over $100 million to be spent on the conventions together, both Republican and Democratic. And that's coming from corporations, from labor unions, in a number of different ways. And really we're seeing it three ways.

One is money given to what's called the host committee, which is the city's committee that's going to help fund the convention. What's called official provider status, that is where Microsoft, New Balance, companies like that go to both the Republican and the Democratic conventions, and to get their name mentioned, they give a lot of free equipment.

And then there are going to be the corporate parties that everybody is looking forward to, the ones where they -- the lobbyists and corporations get together with the office holders at both state, local and federal level.

ROMANS: It does not sound publicly funded to me at all. With the way you put it. Now let's talk about the towns. What about Boston and New York? Are they going to get a whole lot of economic boost from this?

NOBLE: That's always the big debate with any type of convention. And you know, there are a lot of people who say no, that in the end it's going to cost the cities money.

Now, keep in mind we're dealing with somewhat of a different situation now because there's a lot of security money being poured in from the federal government. There's going to be a lot of security. But they've also gotten grants to put a lot of security into place.

So I think, you know, it's a mixed bag. I think a lot of the people who are going to be leaving Boston next week, a lot of the businesses that are going to be either working on skeleton staffs or closing down because of the disruption of the convention, aren't going to see this as a great boon to the city.

But there will be an accounting afterwards and I think the debate will rage for a while about whether this was worth it or not. CAFFERTY: Is there a likelihood, as we move into the next few years, that cities might be increasingly reluctant to host these things for some of the reasons you just alluded to? I mean it makes the city a target, potentially, for all kinds of bad things to happen, and it costs a ton of money to try to keep it from happening?

NOBLE: Right. I think there's always opposition to bringing a convention, a political convention to town by a lot of people. And I think it is going to get harder as the security issues increase. And I think, you know, everybody is hoping nothing happens here. And if nothing does happen, then maybe people will relax a little bit about it.

But given the amount of security and the amount of disruption in the city, I think other cities are going to think long and hard before they put in the bids. But they have to bid for these conventions.

And there's a certain kind of historic dimension to it that they like the general image of putting on a national party convention. But there are clearly some downside costs to it now that is going to affect the cities that are going to decide to bid in the future.

LISOVICZ: And there are plenty of New Yorkers, I can tell you, Larry, that are planning to get out of town when the GOP convention is held here in a month.

Larry Noble, executive director of the Center for Responsive Politics.

Thanks for joining us.

NOBLE: My pleasure. Thank you.

LISOVICZ: Madison Avenue has a message for you, but we'll be back after the ads coming up. Beer money, Molson and Coors are looking to team up. Find out whether Wall Street is toasting that idea. Plus tell it to the judge. We'll check out whether Martha Stewart delivered the best defense she could.

And goosing the mouse: A lot of online -- you heard me. A lot of online retailers are having a tougher time this year, even though business isn't too bad. We'll tell you why

Jack!

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at the week's top stories in our "Money Minute".

Microsoft rocked the Street by announcing a $30 billion stock buyback and a one-time $32 billion dividend payout. The company says it wants to return some of its massive cash horde to investors. They like that a lot. Microsoft paid its first-ever dividends in March of last year. Former New York Stock Exchange Chief Dick Grasso is responding to the lawsuit calling for the return of much of his pay package by counter-suing the NYSE. Grasso says he's still owed about $50 million in compensation and benefits. A spokesman for Grasso said any money he's awarded will go to charity.

And the pusher on the street corner is thinking about raising his prices. Well, that's her way of saying your daily Starbucks fix will probably cost you more pretty soon. The coffee chain says rising dairy prices will likely force it to raise prices early next year. Starbucks also announced 44 percent earnings growth earlier this week.

ROMANS: A major beer merger brewing between two very famous names. But it's not a done deal yet. Earlier this week Colorado's Adolph Coors and Canada's Molson agreed to a merger that would create a company with combined annual sales of $6 billion.

But, former Molson Deputy Chairman Ian Molson reportedly hopes to block the deal with a $4 billion offer of his own. It's been a mostly healthy years for Coors shares so far, but this merger and Chairman Pete Coors' decision to run for the U.S. Senate this year could shake things up at the company. Adolph Coors is our stock of the week.

Susan, we were talking about the sticker symbol, RKY, Rocky Mountains.

(CROSSTALK)

ROMANS: Both of these companies have such an amazing brand presence in their respective countries. Molson, I mean, what's more Canadian than Molson? And Adolph Coors, what's more American, Colorado, Rockies, than that? I wonder how it will go?

LISOVICZ: It's wonderful. They do have these sort of fabled brands, and they're two family-owned big breweries. But on the other hand, they're microscopic compared to Anheuser-Busch, 50 percent of the market. SABMiller, a lot of consolidation in the beer market just like with other industries and that's why these two decided that at least there were characteristics that are very much similar.

CAFFERTY: Well, the expectation, too, was that they could save something north of $175 million a year out of consolidating these two because they're both geographically in the right place, I guess.

But you mentioned they're both closely held corporations. Families of both of these control most of the stock. And it's the families that could wind up queering this deal.

ROMANS: An analyst this week even told me, that if you do have this merger goes through it still may need to merge with somebody else to still compete with SABMiller and Bud.

(CROSSTALK)

ROMANS: This might not even be enough, so if there's a spoiler in here that could be trouble for RKY shares, if they think it is not going to happen.

LISOVICZ: That spoiler would be the name of -- Ian Molson. Who's trying to finance his own deal.

ROMANS: All right.

LISOVICZ: Stay tuned.

ROMANS: Coming up on IN THE MONEY, hush your mouth. See if Martha Stewart would have gained more in court by saying less.

Plus, thinking outside the big box. We'll take you to a book that can turn anyone into a sprawl watcher.

And label conscious, find out how you right when it's time to order a beer on looks alone. Our "Fun Site of the Week" is on the way.

(COMMERCIAL BREAK)

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello, I'm Fredricka Whitfield at the CNN center in Atlanta. "In the Money" continues in a moment. But first here are some stories in the news now. Negotiators are working urgently to free a senior Egyptian diplomat taken hostage by insurgents in Iraq amid news that gunmen have also seized the chief of a state-owned construction company. The latest kidnappings come as diplomats try to secure the release of three Kenyans, three Indians and an Egyptian also held hostage.

A remote-controlled bomb ripped through a mini bus near Karachi, Pakistan, killing one person and wounding eight others. Police say the bus was carrying teachers and school workers to an Islamic school on the outskirts of the city. So far there's been no claim of responsibility.

Spanish police say they found a rental car used by terrorists in the March 11th Madrid train attacks. A police spokeswoman says the car was used to transport explosives and had Koranic (ph) tapes inside. She said DNA tests confirm the car was used by two suspected Islamic terrorists.

Turkish authorities have charged a train official and two conductors for their alleged roles in a deadly derailment. Thursday's crash was one of the worst in Turkey's history, 37 people were killed and 81 injured. The cause remains unknown.

I'll have all the day's news at the top of the hour. Now back to more of "In the Money."

LISOVICZ: Time now for a little Monday morning quarterbacking in the Martha Stewart case. Last week, of course, Stewart was sentenced to five months in prison for lying to Federal investigators about her ImClone stock sale. Stewart's lawyers have already filed an appeal. But our next guest says Martha could have avoided this whole mess entirely if her legal team had coached her better both in and out of court. Robert Shapiro joins us today. He, of course, is a renowned criminal defense attorney whose clients have included O.J. Simpson and Darryl Strawberry. Welcome, great to see you.

ROBERT SHAPIRO, CRIMINAL DEFENSE ATTORNEY: Very nice to be with you this morning.

LISOVICZ: Martha Stewart finally really talked about the case right after the sentencing, calling it a small personal matter. Well, she was the CEO of a public company and on the board of directors at the New York Stock Exchange. And not telling the truth to Federal authorities is a felony, and she was convicted of that. Now, this points something that you say, which is one of the first rules, is don't talk to the authorities in the first place. Have people like you do that.

SHAPIRO: Well, first let me say that I don't want to be critical of Martha's lawyers or the tactics that were used, because I don't like to be second-guessed. It's much easier to sit here after a verdict and critique something that went on. But from my point of view, I think that her stay away in the Federal away penitentiary for four to five months could have been easily avoided. I think one of the pitfalls people have when they're engaged in high profile white collar defense is that they are somewhat intimidated by the clients.

The clients are powerful. The clients are rich. The clients are competitive and used to getting their own way. And most people in those positions believe they can talk their way around things or explain things. And no matter how good you are, that when the Federal government is looking at something that you may have done, their resources, their techniques and their ability to get financial records and background is so enormous that the risk that you're taking is too great. So, my rule is plain and simple. When anyone wants to talk to my client, the answer is, keep your mouth shut.

LISOVICZ: Well, the irony is --

SHAPIRO: I'll do the talking.

CHRISTINE ROMANS, CNN ANCHOR, "IN THE MONEY": The irony is that she mentioned she'd like to write a book for people in her situation to give them pointers on how to deal with it. Well, it would be a how not to do book, because it looks like she did everything wrong. She didn't get on the stand, yet she turned around and was out there talking outside of the courtroom, quite prolifically. What do you think about that?

SHAPIRO: You know, you make a very, very good point. One of the things we've seen with the corporate indictments of people in high profile public places is that those who do take the witness stand in their own defense are more likely to be acquitted than those who remain silent and try to have a lawyer convince the jury that they were just not dumb enough to do what they're accused of doing. And that obviously didn't play well with this jury.

JACK CAFFERTY, CNN ANCHOR, "IN THE MONEY": Put yourself in the attorney's mind that has to decide whether or not to put her on the stand. On the one hand she's the things you describe. She's much beloved, she's admired, she's respected, she's well known. On the other hand there are a lot of people in the country that don't like her for whatever the reason. Who do you assess the odds on whether it's a win or lose to put somebody like Martha Stewart on the witness stand?

SHAPIRO: You know, it's the most difficult decision an attorney has to make. First you have to be able to gauge, has the prosecution proven their case? Well, in almost all cases with white collar crime, as I said, the resources of the Federal government and the ability of their prosecutors is much greater than in a state case and so, the likelihood is that they are going to be able to prove a white collar case. That being said, the defense best position generally is, if you have a public figure that's used to talking, people want to hear from that person. It's natural, even though the jury is instructed that you can't consider the fact that Martha Stewart in this case didn't take the witness stand, people still do. And they really want to hear what somebody on trial has to say for themselves.

LISOVICZ: You know, Bob, not only is Martha Stewart used to talking, she's used to having her own way. She's a self-made woman. She was a billionaire, certainly still very wealthy, and has done everything, for the most part, in her business pretty successfully. Do you find when you have clients who are powerful and very wealthy that sometimes they don't listen, that, in fact, there is -- there is a tension there between the clients and the counsel?

SHAPIRO: You have made the crucial point of these white collar cases. Not only do some people not want to listen, one of the other problems is they want to get so many different opinions from so many other people, rather than relying on the person that they literally have entrusted their life to. And I think that the Martha Stewart case now, by hindsight obviously, would have been much better for her had the matter been resolved early on, with what may or may not have been a technical violation, but simply to admitting to a technical violation, paying a disgorgement or a small fine and explaining it, as a technical violation and it's a one-day story. Now it's a three-year story.

CAFFERTY: I've got 30 seconds. What did you make of the sentence?

SHAPIRO: The sentence was the lowest the judge could give under the Federal guidelines, which judges universally hate. That is, they have very little discretion. That was the lowest the judge could have given. She could have gone up to 16 months. But that was it. The judge had no other options. I thought the sentence was the lowest the judge could give, but if there were no guidelines, it should have been a case for probation.

LISOVICZ: I've got less than 30 seconds. Is she going to win on appeal, yes or no?

SHAPIRO: I think she has a very good chance on one issue on appeal and that is that she was convicted of lying about and covering up something that most likely was not even a crime.

LISOVICZ: Robert Shapiro, criminal defense attorney joining us from Los Angeles. Thanks so much for your insight.

SHAPIRO: You're welcome. Good to be with you this morning.

LISOVICZ: We're not going anywhere, so hang around while we take a break. Coming up on "In the Money," the space race. Sprawl is growing fast and now it even has its own language. Learn how to talk the talk from the big box to litter on a stick.

Also ahead, if the cash register rings in cyberspace, does it make a sound? Found out why some top e-tailors aren't thriving like they used to.

(COMMERCIAL BREAK)

ROMANS: Truck City, Privatopia, Snout House. Sound like towns in some futuristic video game? Not quite. These are terms developers and designers use to describe suburban building patterns right now, part of the modern phenomenon known as urban sprawl. Joining us today is Dolores Hayden. She's the author of "A Field Guide to Sprawl." She's also professor of architecture and American studies at Yale University. Dolores, welcome to the program. In the last couple of months I've been in Davenport, Iowa. I've been in -- about 20 miles north of Sacramento and I've been in the northern D.C. suburbs and I'm telling you right now, in any of those places if I didn't know where I was, it could be the same place.

DOLORES HAYDEN, "A FIELD GUIDE TO SPRAWL": Well, many Americans find that they're lost when they're driving and confused by tracks, strips, malls, the landscapes that we've created are very, very, very confusing. And that's one reason why I decided that it was time to write "A Field Guide to Sprawl." I've identified 51 building patterns and they're all illustrated with aerial photographs by Jim Rourke (ph) so the people can flip through this field guide and get a sense of where they are.

LISOVICZ: Dolores I was born and bred in the great state of New Jersey. We have long known what sprawl is like. Ever since I was a little girl when the beautiful nursery in town with the flowers and the trees was bulldozed over for another strip mall. Let's get to some of your -- some of your unique names. Let's start with a category killer. What is that?

HAYDEN: Category killer is slang for a retail operation which attempts to dominate a category, such as hardware or lumber or books, and category killer is usually a big box store.

LISOVICZ: Like Home Depot and Gap and Borders?

HAYDEN: Exactly, exactly.

ROMANS: What about logo building?

HAYDEN: Logo building is a building that's meant to be instantly recognizable from far away on the highway.

ROMANS: I'm thinking McDonald's. HAYDEN: Yes, or it could be a branch bank. It could be a fast lube place. Many, many brands try to make their buildings identical.

ROMANS: That's why every place looks the same. You go some place to see the strip of the Best Buy, the Circuit City and then you know that you're going to have a McDonald's and if you're in the Midwest, you're going to have a Hardees and you're going to have a Kentucky Fried Chicken two blocks to the left almost.

CAFFERTY: So what's wrong with that?

ROMANS: Well, it's just not --

CAFFERTY: Some of us like a certain predictability in our lives. You go into a strange town. You find that one piece of highway leading into town. You know you can get gas. You can find a Holiday Inn. You can get something to eat. It's either Taco Bell or McDonald's or -- I mean, what's wrong with that?

ROMANS: What about a handshake with the community?

CAFFERTY: I don't want a handshake with the community.

ROMANS: Wait a minute.

(CROSSTALK)

CAFFERTY: I want a room, a tank of gas and something to eat. I'll shake hands tomorrow after I get a little sleep.

ROMANS: Where is your individuality in the American countryside? Jack I'm surprised at you.

LISOVICZ: Dolores help us out.

HAYDEN: Well, places are unique and places have wonderful historic buildings that are frequently at a scale best suited to pedestrians. Once you start on the logo buildings and the category killers, you're at the scale of cars and trucks. And frequently people feel very lost in those environments once they get out of the car. It's very difficult to stick one of those highway environments onto a traditional town of an attractive kind and find that the town survives. The businesses on the highway tend to kill the smaller stores, the pharmacies, the bookstores inside those towns. And then the towns are struggling to keep their shape.

LISOVICZ: Dolores, as much as I love the names that you have in your guide to sprawl like Privatopia and alligator, and ball pork, there's much more serious issue here. And one that's getting more serious attention in state legislatures all over the country, including my own, New Jersey.

HAYDEN: New Jersey has declared war on sprawl and tried to develop state land use policies, which will strengthen older cities and older suburbs in existing towns and stop rapid growth in areas that are green field areas. And I think that's a good thing that many, many other states should emulate. Because when we have constant unregulated new growth, frequently the places that we built a generation or two generations ago are left to fall down.

ROMANS: Dolores, I have a prediction. I think that what's happening in California with Wal-Mart is sort of a snapback against this. I think that communities are starting to say they don't want the big box. They don't want the funny water runoff. They decided they want nice, little main streets again. Do you think there could be maybe a retro movement in community planning?

HAYDEN: I think the important thing is to do careful land use and energy conservation and public transportation wherever possible rather than having unregulated growth, unregulated use of the maximum amount of energy and a sort of careless throwaway attitude.

CAFFERTY: Dolores, forgive me for interrupting, we're going to lose the satellite. I want to thank you before you disappear off the screen. Dolores Hayden, "Field Guide to Sprawl." Thanks for being with us. I appreciate it.

HAYDEN: Thanks for having me.

CAFFERTY: All right. Don't go getting chummy with the remote. We have more just ahead for you. Coming up, stores that let you shop without ever leaving your seat. Online retailing is convenient but it's having a tough year anyway. We're going to take a look at why. Certainly not my wife. She supports those places. And the web is good for more than just buying stuff. For example you can send us an e-mail. Give us your thoughts on sprawl, inthemoneycnn.com.

(COMMERCIAL BREAK)

CAFFERTY: Online retailers Amazon and eBay helped to lead the big market rally a year ago. But this year things are not so good for the e-tailers. Web master Allen Wastler has more on that and the fun site of the week which has something to do with bottles of beer on the wall. How you doing?

ALLEN WASTLER, CNNMONEY.COM: Kind of interesting about the Internet retailers, right? They sort of charged to the end of last year, beginning of this year everybody's saying they're back. It's a happening thing and the idea was they sort of cater to an audience which is maybe a little more well-to-do, everybody's surfing the net and looking to do some good things.

CAFFERTY: Or lazy because they don't have to go anywhere.

WASTLER: You saw some ideas pop up that were interesting, Blue Nile, jewelry type place and everybody had these high hopes. Then all of a sudden this week the results came in and sort of flattening out. Sort of guess what, they sell stuff just like other retailers sell stuff. So when the economy starts going -- it weakens. And there's a line of reasoning that perhaps there's a little bit more susceptible because if you're buying stuff on the Internet you're using a credit card. If you're in an environment where interest rates are going up and you've already amassed enough personal debt, all of a sudden you're likely to retreat on the credit card purchases a little more. You go to your Wal-Mart or Target, you can pay cash if you want to put yourself on a little budget type action.

ROMANS: America on a budget? That's a news flash.

WASTLER: It could start to happen.

LISOVICZ: Not using plastic, that's another news flash.

WASTLER: $8400 per family in terms of debt, credit card debt. You need to trim that.

CAFFERTY: They're not going anywhere though, right, eBay and Amazon.

WASTLER: No, they got solid results (INAUDIBLE) guided down. Part of it is the excitement factor, too. People bid them up, bid them up, bid them up.

ROMANS: The stocks have already done so well that they almost have to just blow away expectations to sustain it.

WASTLER: Exactly. They've got to sort of pull back a little bit and get back down to more moderate levels.

CAFFERTY: Let's move on to happy hour.

WASTLER: Let's go to happy hour, OK. I know you were talking about the beer emergent (ph) stuff before, right.

LISOVICZ: Christine and I are ready to play.

WASTLER: What you got to do is you got to figure out what brand of beer --

LISOVICZ: Heineken is in the middle.

WASTLER: Susan jumps out there with Heineken in the middle.

LISOVICZ: Christine.

ROMANS: On the left I think -- the right looks like Bud Light to me. And the left looks like it might be some kind of an MGD, Miller Genuine Draft.

CAFFERTY: Michelob.

ROMANS: Michelob.

WASTLER: Very good, Jack.

CAFFERTY: Not bad for a guy who quit drinking 15 years ago, right?

WASTLER: Now there's nine other bottles on the site that people can go check out and figure out. LISOVICZ: You don't want to -- you don't want us to end on a winning streak?

WASTLER: It's all a positive note but there you go.

CAFFERTY: Thanks, Allen. Coming up next on "In the Money," time to hear from you as we read some of your e-mails we got in the past week. You can send us an e-mail if you're so inclined right this very minute. We're at inthemoney@cnn.com. Write to use and unburden yourself.

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


Aired July 24, 2004 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Now in the news. The Wave of kidnappings continues on Iraq, while negotiations are working to free a senior Egyptian diplomat, seen here, another person was taken hostage today. The latest victim is the chief of an Iraqi construction company.
Seven truck drivers are also being held by insurgents there. Negotiators say they've spoken directly with their kidnappers. We'll have more details at the top of the hour.

President Bush says the White House will look closely at the recommendations of the 9/11 Commission. In his weekly radio address today he said many of the steps advised by the panel have already been put into action. A live report from CNN White House Correspondent Suzanne Malveaux coming up in about an hour from now.

And saying their campaign is celebrating the spirit and values that built America the Kerry/Edwards ticket is going after voters in battleground states today. John Kerry is in Iowa. His running mate John Edwards is in Wisconsin. They're making their way across the country to Boston for Monday's start of the Democratic National Convention.

Lance Armstrong, outclassed the field today in the next-to-final stage of the Tour de France. The Texan flew through the French countryside winning today's final time trial. Experts say barring some catastrophe Armstrong has all but sealed his place in history as the race's first six-time champion.

I'm Fredricka Whitfield at the CNN Center in Atlanta. More news at the bottom of the hour. IN THE MONEY begins right now.

ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.

JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, pressure points, from power lines to shipping ports, America's infrastructure has plenty to get a terrorist excited. We're going to find out if the soft spots are getting the protection they need.

Plus, rah, rah, rah meets blah, blah, blah. The party conventions are costing a fortune and putting cities at risk. Let's see if the results are worth all the fuss and expense. And how to tell a lulu from a privat-opia. You know sprawl when you see it but you might not know what to call it. We're going to teach you. We'll speak with the author of a field guide to sprawl.

Joining me today a couple of the IN THE MONEY veterans, CNN Correspondents Susan Lisovicz and Christine Romans, who is on loan from "Lou Dobbs Tonight".

And you can tell Lou we really appreciate the fact you could join us.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Let's not tell Lou.

CAFFERTY: OK, we won't tell Lou.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: She's still working with Lou, though.

CAFFERTY: I am furious. The 9/11 Commission finally gets its report together, took them 20 months, 2.5 million pages of documents, they interviewed 1200 people and they came up with a list of specific recommendations on what should be done to make this country safer and to advance the war on international terror.

Congress says we don't have time to act on any of this, maybe next year and they leave for a recess. And walk away from this like, well, so what's new.

ROMANS: I think it's interesting that Congress did find time earlier this year to give itself a raise, and it doesn't have time to put together all of these important, important changes when we're hearing all of this doom and gloom that we are likely to be faced with another terrible catastrophe.

LISOVICZ: And, I mean, the 9/11 Commission, quite frankly, just confirms what we've heard already from every authority. Not only did we screw up, we are woefully still unprepared for another attack that is coming.

(CROSSTALK)

ROMANS: Almost every one says it.

CAFFERTY: But they came up with -- here are some things that can be done. Here are some recommendations on how to change things to make the country safer. Requires the Congress to get on board and help out with this. They're on vacation for a month.

They also said the legislative agenda for the rest of the year is too full. Well they make the legislative agenda.

ROMANS: Right.

CAFFERTY: They have time to stop everything so they could --

(CROSSTALK)

ROMANS: This should be on the top, this should be on the top of the list.

LISOVICZ: Let's remember that at least one of those planes was headed toward Washington.

CAFFERTY: Unbelievable. It makes you want to send in your taxes early, doesn't it?

On to other things. America's infrastructure basically one big potential terrorist target, and because we depend on it so much it's easy to take it all for granted. We probably shouldn't.

We're talking about things like power plants that make it possible for you to watch this program right now. We certainly hope nothing happens to the power plant beaming this program in your house.

Our first guest believes Washington is not protecting the infrastructure well enough. And he has some ideas on how to do it better. Stephen Flynn is the author of a new book called "America the Vulnerable". He's also senior fellow in Security Studies at the Council on Foreign Relations.

Steven, it's nice to have you with us.

STEPHEN FLYNN, AUTHOR, "AMERICA THE VULNERABLE": Very nice to be with you this morning.

CAFFERTY: Within a couple of weeks after September 11th we heard talk that bridges, tunnels, railroads, ports, in particular, all very vulnerable to terrorist attacks, that the terrorists were so inclined. How much progress have we made in securing those kinds of things? And how much needs to be done?

FLYNN: Well, not much progress. If we were -- if we put it on a scale of one to 10, where one were a bull's-eye and 10 were secure, in some sectors maybe we've got up to a three. We just have such a long ways to go. And I'm having a sense of deja vu here, frankly, with 9/11 Commission's report coming out.

I had the opportunity to participate in the U.S. Commission on National Security, the Hart-Rudman Commission. They came out on January 31, 2001, so the number one national security imperative was a catastrophic terrorism on our soil. And we're just not organized as a government to deal with it. They've got a collective yawn in Washington.

ROMANS: Right. On our soil, you say, it could be in our ports or coming into our ports, as well.

There are new Coast Guard rules that went into effect on the first of July, but just the sheer volume of what's coming into this country. And when you look at the number of people that are being smuggled into this country through ships that we don't even know about. If we can't protect our borders in general, how are we going to be able to specifically, specifically, go after terrorists?

FLYNN: Well, this is the problem. We're treating still the war on terrorism as something that can be done as an away game, to go to the source. The terrorists aren't cooperating. The reality of 9/11 was they were here.

They used our infrastructure against us. Then a domestic commercial airliner, they didn't import a weapon of mass destruction. They used our infrastructure as one.

And a lot of the costs that flowed from it were things that we did to ourselves. That's what we should be spending a lot more time on. Not just protecting borders. Not just sending out troops overseas to die on our behalf. But a little more than just shopping and traveling on our side, a little more effort to make ourselves less of a soft target.

Our seaports, we have 361 commercial seaports in our country. And they're the lifelines of our economy. And 90 percent of everything that comes in and out of this economy moves by sea. But we have spent in the last three years with federal monies going to those ports to make them more secure and they started with nothing, what we spent in maybe three days in Iraq. It's that kind of disconnect.

The Coast Guard, yes, was responsible for some fairly straightforward new standards for security. But Congress didn't give any money to the Coast Guard to go out and verify whether or not people are living up to them. Didn't give any money to the ports to be able to begin to develop the means to comply with these new requirements.

Yet another reason to fire Jack up about Congress. But you were talking about transportation. Let's talk, also, about the food the food that we consume every day in the United States. You say that is a threat, as well as the power system.

FLYNN: Exactly. This is actually, though, an opportunity that is win-win. My book is designed to be read by the everyday American to get them more informed about just how vulnerable we are. It's one- third scary, two-thirds, hey, we can do this. Take a deep breath.

But our food supply makes up 10 percent of our gross domestic product. And one of the examples of suggestions I have out there is put a microchip in the cow's ear for about five bucks. This is for livestock, and you can tell where it's been, who it's hung out with, what kind of vaccinations it has had.

Why would you do that? If a cow comes down with a disease you can figure out who else may be affected and isolate that from the food chain. Now that would help with food safety.

If you recall, last December we had one mad cow we spotted out in Washington. Within 72 hours, 30 countries boycotted a $3 billion industry because we couldn't figure out if the rest of the cattle were safe or not. It took the Canadians to tell us that the cow came from them, for us to be able to sort it out. That investment for food safety would also make that sector far less attractive for a bioterror attack. If they knew that they used a bioagent against our livestock and we could contain it, very quickly get back on our feet, they wouldn't do it. There's deterrence value, too, in making these investments.

CAFFERTY: You know, I mean, you're a college professor and you're a bright guy and you figured some of this stuff out. Why isn't any of this being done?

FLYNN: Part of the problem is, and I'm a retired Coast Guard officer who spent a lot of time on the front lines, here, as well. Part of the problem is we're still locked in a mind-set that says national security is something we do as an away game. We're unlimited in the resources, virtually, a half trillion dollars we will spend this year on conventional military capability to fight the war on terror overseas.

Our young men and women in uniform are paying the ultimate sacrifice for that effort, while we're not willing to cobble together even the most basic security here because we're not used to it. We lived for two centuries in the most peaceful corner of the world. Friendly neighbors to the north and south, big oceans to the east and west, we could do the pursuit of happiness, security was somebody else's business. But 9/11 said it should be all our business.

ROMANS: Bottom line, you think the money should be spent here and it shouldn't be spent halfway across the world?

FLYNN: My bottom line is we're a wealthy country. You can afford an offense as well as a defense when you're a nation at war. In the Second World War we all pitched in. In this war we seem to be putting it all on the backs of our military and intelligence and not doing the smart things we can do in the private sector in our communities to make ourselves safer.

And the federal government isn't helping us as much as they need to, to spawn us on to bring us in and to provide the resources to jump-start the process.

CAFFERTY: Maybe when Congress gets back from its month-long vacation we can look forward to getting some stuff done.

Stephen, thanks for being with us. I appreciate it.

FLYNN: Thank you for having me.

CAFFERTY: Stephen Flynn, he wrote "America The Vulnerable: How The Government Is Failing to Protect Us From Terrorism".

We're going to step out here and make the boss happy, make a couple of dollars with some commercials. But we will be back and we expect you to be there when we return.

Putting the party in party politics up next. The convention is burning taxpayer cash, raising fears of a terrorist attack. Find out if the results are worth the price.

Plus, woulda, coulda shoulda. See how Martha Stewart might have done better at making her legal case. She's off to prison for five months at some point. We'll talk to noted defense lawyer Robert Shapiro about that case.

And the many faces of sprawl. Learn how to tell ball pork from a pork chop lot as we check a field guy to sprawl. You don't want to miss this deal.

ANNOUNCER: Competitors across the globe wish they could fill the shoes on NIKE, this year's industry leader in the apparel category. The company sells its products throughout the U.S. and in about 200 other countries. Even though NIKE ranks as the world's number one shoemaker, these days, variety is the name of the game.

The company now sells everything from yoga apparel to hockey gear to golf equipment. However, NIKE has been slow to break into the world of non-team sports such as skate boarding, where consumers are typically anti-Swoop.

(COMMERCIAL BREAK)

CAFFERTY: There was a time, way back when I was a lot younger than I am now, that the political conventions promised a surprise or two. Even one as big as who the actual candidate might be.

But that's all over now, today the primaries and the TV spots have changed all that. We know who the candidates are. We know what the issues are. We know where the parties stand on the issues. So why do we make such a fuss over the Democratic and Republican conventions? Our next guest says it's because of the money -- and the momentum.

Larry Noble joins us from Washington, D.C. He's the executive director of the Center for Responsive Politics, which is a nonprofit research group.

Larry, nice to have you with us.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Great to be with you.

CAFFERTY: You can't find people who say we don't need these things anymore, these conventions.

NOBLE: They really are a major part of the political process. They may not have any great impact in terms of deciding who's going to be the nominee, but it's a way for the party to launch its candidate. And it's a way for a bunch of people to get together and have a good time.

LISOVICZ: Speaking of a good time, I do recall the 1988 convention, which was in the great town of New Orleans, there was actually news there. Because I believe it was George Bush announced Dan Quayle as his running mate. Which was big news when people like Bob Dole, and Elizabeth Dole were mentioned as running mates. But for the Democratic Convention, would you not agree that it's all about the speech. For Kerry now, he has to distinguish himself, not as against Bush, but it's all about me. What I'm for.

NOBLE: Right. The convention is really the way for Kerry to launch himself to the public. The Bush campaign has been doing a very good job trying to label him for the last couple of months. One of the things the polls show is that there are a lot of Americans out there who don't really have a good sense of Kerry.

This is really the launching pad for that if the news covers it and if it gets through all the other news that's out there, it is a way for Kerry to define himself as the real presidential campaign starts.

ROMANS: If the news covers it. It's starting to sound like assignment editors all over this country think this is show biz more than it's politics, or it's news. A lot of people spent an awful lot of money, but the more money they spent, the less interested the major news media is in this.

NOBLE: Right. What the news media wants is some drama. As you pointed out we already know who the nominees are going to be. I remember years ago that the networks used to cover the conventions and used to be a sense of drama.

Here, a lot of the networks are looking at it and say why cover it? Everybody knows what's going to happen. It's just going to be a bunch of speeches, which is, frankly, unfortunate because this is where the candidates begin to really define themselves for the November election.

CAFFERTY: Who's at fault here? It's kind of like a dog chasing his tail. Are the political parties responsible for the demise and decline in interest in their conventions because of the fact that all of the stuff gets done long before they ever go into the convention hall? Or is it the media have found other things to amuse themselves with, and because there's no suspense left in these things, they just kind of look the other way?

NOBLE: I think it's a little bit of both. I think the way the primary system has worked out, there really is no drama left in most of the conventions. And the reality is we've known who the Democratic nominee was going to be for several months. And obviously the news wants some sort of drama. So in part it is the party's fault.

And then there's just this general, I think, thought that the networks don't want to cover long speeches. Now, I'm sure there will be some coverage and there will be some bits and pieces of it, depending on who they get to speak.

Obviously, part of the game at the convention is to get speakers who will get coverage. But I don't think we're going to see at least, on general broadcast news we're going to see a lot of gavel-to-gavel coverage. It's just not going to happen anymore. LISOVICZ: One thing that you certainly will get a lot of coverage, Larry, every convention we get is the celebrities who attend. And celebrities attend oftentimes because there's also parties there. That means there's a lot of money, a lot of corporate money coming in.

Would you say at this point that the Democrats and the Republicans are getting about the same amount of money from the same sectors or even the same corporations?

NOBLE: Yes, pretty much. You have to keep in mind that, in fact, the conventions are supposed to be publicly funded. Each party gets about $15 million in taxpayer funds to put on the convention. But that's just a drop in the bucket in terms of what's actually spent.

Basically what's happened is the political conventions have become the last stronghold for soft money, the unregulated corporate and labor contributions. And we're expecting over $100 million to be spent on the conventions together, both Republican and Democratic. And that's coming from corporations, from labor unions, in a number of different ways. And really we're seeing it three ways.

One is money given to what's called the host committee, which is the city's committee that's going to help fund the convention. What's called official provider status, that is where Microsoft, New Balance, companies like that go to both the Republican and the Democratic conventions, and to get their name mentioned, they give a lot of free equipment.

And then there are going to be the corporate parties that everybody is looking forward to, the ones where they -- the lobbyists and corporations get together with the office holders at both state, local and federal level.

ROMANS: It does not sound publicly funded to me at all. With the way you put it. Now let's talk about the towns. What about Boston and New York? Are they going to get a whole lot of economic boost from this?

NOBLE: That's always the big debate with any type of convention. And you know, there are a lot of people who say no, that in the end it's going to cost the cities money.

Now, keep in mind we're dealing with somewhat of a different situation now because there's a lot of security money being poured in from the federal government. There's going to be a lot of security. But they've also gotten grants to put a lot of security into place.

So I think, you know, it's a mixed bag. I think a lot of the people who are going to be leaving Boston next week, a lot of the businesses that are going to be either working on skeleton staffs or closing down because of the disruption of the convention, aren't going to see this as a great boon to the city.

But there will be an accounting afterwards and I think the debate will rage for a while about whether this was worth it or not. CAFFERTY: Is there a likelihood, as we move into the next few years, that cities might be increasingly reluctant to host these things for some of the reasons you just alluded to? I mean it makes the city a target, potentially, for all kinds of bad things to happen, and it costs a ton of money to try to keep it from happening?

NOBLE: Right. I think there's always opposition to bringing a convention, a political convention to town by a lot of people. And I think it is going to get harder as the security issues increase. And I think, you know, everybody is hoping nothing happens here. And if nothing does happen, then maybe people will relax a little bit about it.

But given the amount of security and the amount of disruption in the city, I think other cities are going to think long and hard before they put in the bids. But they have to bid for these conventions.

And there's a certain kind of historic dimension to it that they like the general image of putting on a national party convention. But there are clearly some downside costs to it now that is going to affect the cities that are going to decide to bid in the future.

LISOVICZ: And there are plenty of New Yorkers, I can tell you, Larry, that are planning to get out of town when the GOP convention is held here in a month.

Larry Noble, executive director of the Center for Responsive Politics.

Thanks for joining us.

NOBLE: My pleasure. Thank you.

LISOVICZ: Madison Avenue has a message for you, but we'll be back after the ads coming up. Beer money, Molson and Coors are looking to team up. Find out whether Wall Street is toasting that idea. Plus tell it to the judge. We'll check out whether Martha Stewart delivered the best defense she could.

And goosing the mouse: A lot of online -- you heard me. A lot of online retailers are having a tougher time this year, even though business isn't too bad. We'll tell you why

Jack!

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at the week's top stories in our "Money Minute".

Microsoft rocked the Street by announcing a $30 billion stock buyback and a one-time $32 billion dividend payout. The company says it wants to return some of its massive cash horde to investors. They like that a lot. Microsoft paid its first-ever dividends in March of last year. Former New York Stock Exchange Chief Dick Grasso is responding to the lawsuit calling for the return of much of his pay package by counter-suing the NYSE. Grasso says he's still owed about $50 million in compensation and benefits. A spokesman for Grasso said any money he's awarded will go to charity.

And the pusher on the street corner is thinking about raising his prices. Well, that's her way of saying your daily Starbucks fix will probably cost you more pretty soon. The coffee chain says rising dairy prices will likely force it to raise prices early next year. Starbucks also announced 44 percent earnings growth earlier this week.

ROMANS: A major beer merger brewing between two very famous names. But it's not a done deal yet. Earlier this week Colorado's Adolph Coors and Canada's Molson agreed to a merger that would create a company with combined annual sales of $6 billion.

But, former Molson Deputy Chairman Ian Molson reportedly hopes to block the deal with a $4 billion offer of his own. It's been a mostly healthy years for Coors shares so far, but this merger and Chairman Pete Coors' decision to run for the U.S. Senate this year could shake things up at the company. Adolph Coors is our stock of the week.

Susan, we were talking about the sticker symbol, RKY, Rocky Mountains.

(CROSSTALK)

ROMANS: Both of these companies have such an amazing brand presence in their respective countries. Molson, I mean, what's more Canadian than Molson? And Adolph Coors, what's more American, Colorado, Rockies, than that? I wonder how it will go?

LISOVICZ: It's wonderful. They do have these sort of fabled brands, and they're two family-owned big breweries. But on the other hand, they're microscopic compared to Anheuser-Busch, 50 percent of the market. SABMiller, a lot of consolidation in the beer market just like with other industries and that's why these two decided that at least there were characteristics that are very much similar.

CAFFERTY: Well, the expectation, too, was that they could save something north of $175 million a year out of consolidating these two because they're both geographically in the right place, I guess.

But you mentioned they're both closely held corporations. Families of both of these control most of the stock. And it's the families that could wind up queering this deal.

ROMANS: An analyst this week even told me, that if you do have this merger goes through it still may need to merge with somebody else to still compete with SABMiller and Bud.

(CROSSTALK)

ROMANS: This might not even be enough, so if there's a spoiler in here that could be trouble for RKY shares, if they think it is not going to happen.

LISOVICZ: That spoiler would be the name of -- Ian Molson. Who's trying to finance his own deal.

ROMANS: All right.

LISOVICZ: Stay tuned.

ROMANS: Coming up on IN THE MONEY, hush your mouth. See if Martha Stewart would have gained more in court by saying less.

Plus, thinking outside the big box. We'll take you to a book that can turn anyone into a sprawl watcher.

And label conscious, find out how you right when it's time to order a beer on looks alone. Our "Fun Site of the Week" is on the way.

(COMMERCIAL BREAK)

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello, I'm Fredricka Whitfield at the CNN center in Atlanta. "In the Money" continues in a moment. But first here are some stories in the news now. Negotiators are working urgently to free a senior Egyptian diplomat taken hostage by insurgents in Iraq amid news that gunmen have also seized the chief of a state-owned construction company. The latest kidnappings come as diplomats try to secure the release of three Kenyans, three Indians and an Egyptian also held hostage.

A remote-controlled bomb ripped through a mini bus near Karachi, Pakistan, killing one person and wounding eight others. Police say the bus was carrying teachers and school workers to an Islamic school on the outskirts of the city. So far there's been no claim of responsibility.

Spanish police say they found a rental car used by terrorists in the March 11th Madrid train attacks. A police spokeswoman says the car was used to transport explosives and had Koranic (ph) tapes inside. She said DNA tests confirm the car was used by two suspected Islamic terrorists.

Turkish authorities have charged a train official and two conductors for their alleged roles in a deadly derailment. Thursday's crash was one of the worst in Turkey's history, 37 people were killed and 81 injured. The cause remains unknown.

I'll have all the day's news at the top of the hour. Now back to more of "In the Money."

LISOVICZ: Time now for a little Monday morning quarterbacking in the Martha Stewart case. Last week, of course, Stewart was sentenced to five months in prison for lying to Federal investigators about her ImClone stock sale. Stewart's lawyers have already filed an appeal. But our next guest says Martha could have avoided this whole mess entirely if her legal team had coached her better both in and out of court. Robert Shapiro joins us today. He, of course, is a renowned criminal defense attorney whose clients have included O.J. Simpson and Darryl Strawberry. Welcome, great to see you.

ROBERT SHAPIRO, CRIMINAL DEFENSE ATTORNEY: Very nice to be with you this morning.

LISOVICZ: Martha Stewart finally really talked about the case right after the sentencing, calling it a small personal matter. Well, she was the CEO of a public company and on the board of directors at the New York Stock Exchange. And not telling the truth to Federal authorities is a felony, and she was convicted of that. Now, this points something that you say, which is one of the first rules, is don't talk to the authorities in the first place. Have people like you do that.

SHAPIRO: Well, first let me say that I don't want to be critical of Martha's lawyers or the tactics that were used, because I don't like to be second-guessed. It's much easier to sit here after a verdict and critique something that went on. But from my point of view, I think that her stay away in the Federal away penitentiary for four to five months could have been easily avoided. I think one of the pitfalls people have when they're engaged in high profile white collar defense is that they are somewhat intimidated by the clients.

The clients are powerful. The clients are rich. The clients are competitive and used to getting their own way. And most people in those positions believe they can talk their way around things or explain things. And no matter how good you are, that when the Federal government is looking at something that you may have done, their resources, their techniques and their ability to get financial records and background is so enormous that the risk that you're taking is too great. So, my rule is plain and simple. When anyone wants to talk to my client, the answer is, keep your mouth shut.

LISOVICZ: Well, the irony is --

SHAPIRO: I'll do the talking.

CHRISTINE ROMANS, CNN ANCHOR, "IN THE MONEY": The irony is that she mentioned she'd like to write a book for people in her situation to give them pointers on how to deal with it. Well, it would be a how not to do book, because it looks like she did everything wrong. She didn't get on the stand, yet she turned around and was out there talking outside of the courtroom, quite prolifically. What do you think about that?

SHAPIRO: You know, you make a very, very good point. One of the things we've seen with the corporate indictments of people in high profile public places is that those who do take the witness stand in their own defense are more likely to be acquitted than those who remain silent and try to have a lawyer convince the jury that they were just not dumb enough to do what they're accused of doing. And that obviously didn't play well with this jury.

JACK CAFFERTY, CNN ANCHOR, "IN THE MONEY": Put yourself in the attorney's mind that has to decide whether or not to put her on the stand. On the one hand she's the things you describe. She's much beloved, she's admired, she's respected, she's well known. On the other hand there are a lot of people in the country that don't like her for whatever the reason. Who do you assess the odds on whether it's a win or lose to put somebody like Martha Stewart on the witness stand?

SHAPIRO: You know, it's the most difficult decision an attorney has to make. First you have to be able to gauge, has the prosecution proven their case? Well, in almost all cases with white collar crime, as I said, the resources of the Federal government and the ability of their prosecutors is much greater than in a state case and so, the likelihood is that they are going to be able to prove a white collar case. That being said, the defense best position generally is, if you have a public figure that's used to talking, people want to hear from that person. It's natural, even though the jury is instructed that you can't consider the fact that Martha Stewart in this case didn't take the witness stand, people still do. And they really want to hear what somebody on trial has to say for themselves.

LISOVICZ: You know, Bob, not only is Martha Stewart used to talking, she's used to having her own way. She's a self-made woman. She was a billionaire, certainly still very wealthy, and has done everything, for the most part, in her business pretty successfully. Do you find when you have clients who are powerful and very wealthy that sometimes they don't listen, that, in fact, there is -- there is a tension there between the clients and the counsel?

SHAPIRO: You have made the crucial point of these white collar cases. Not only do some people not want to listen, one of the other problems is they want to get so many different opinions from so many other people, rather than relying on the person that they literally have entrusted their life to. And I think that the Martha Stewart case now, by hindsight obviously, would have been much better for her had the matter been resolved early on, with what may or may not have been a technical violation, but simply to admitting to a technical violation, paying a disgorgement or a small fine and explaining it, as a technical violation and it's a one-day story. Now it's a three-year story.

CAFFERTY: I've got 30 seconds. What did you make of the sentence?

SHAPIRO: The sentence was the lowest the judge could give under the Federal guidelines, which judges universally hate. That is, they have very little discretion. That was the lowest the judge could have given. She could have gone up to 16 months. But that was it. The judge had no other options. I thought the sentence was the lowest the judge could give, but if there were no guidelines, it should have been a case for probation.

LISOVICZ: I've got less than 30 seconds. Is she going to win on appeal, yes or no?

SHAPIRO: I think she has a very good chance on one issue on appeal and that is that she was convicted of lying about and covering up something that most likely was not even a crime.

LISOVICZ: Robert Shapiro, criminal defense attorney joining us from Los Angeles. Thanks so much for your insight.

SHAPIRO: You're welcome. Good to be with you this morning.

LISOVICZ: We're not going anywhere, so hang around while we take a break. Coming up on "In the Money," the space race. Sprawl is growing fast and now it even has its own language. Learn how to talk the talk from the big box to litter on a stick.

Also ahead, if the cash register rings in cyberspace, does it make a sound? Found out why some top e-tailors aren't thriving like they used to.

(COMMERCIAL BREAK)

ROMANS: Truck City, Privatopia, Snout House. Sound like towns in some futuristic video game? Not quite. These are terms developers and designers use to describe suburban building patterns right now, part of the modern phenomenon known as urban sprawl. Joining us today is Dolores Hayden. She's the author of "A Field Guide to Sprawl." She's also professor of architecture and American studies at Yale University. Dolores, welcome to the program. In the last couple of months I've been in Davenport, Iowa. I've been in -- about 20 miles north of Sacramento and I've been in the northern D.C. suburbs and I'm telling you right now, in any of those places if I didn't know where I was, it could be the same place.

DOLORES HAYDEN, "A FIELD GUIDE TO SPRAWL": Well, many Americans find that they're lost when they're driving and confused by tracks, strips, malls, the landscapes that we've created are very, very, very confusing. And that's one reason why I decided that it was time to write "A Field Guide to Sprawl." I've identified 51 building patterns and they're all illustrated with aerial photographs by Jim Rourke (ph) so the people can flip through this field guide and get a sense of where they are.

LISOVICZ: Dolores I was born and bred in the great state of New Jersey. We have long known what sprawl is like. Ever since I was a little girl when the beautiful nursery in town with the flowers and the trees was bulldozed over for another strip mall. Let's get to some of your -- some of your unique names. Let's start with a category killer. What is that?

HAYDEN: Category killer is slang for a retail operation which attempts to dominate a category, such as hardware or lumber or books, and category killer is usually a big box store.

LISOVICZ: Like Home Depot and Gap and Borders?

HAYDEN: Exactly, exactly.

ROMANS: What about logo building?

HAYDEN: Logo building is a building that's meant to be instantly recognizable from far away on the highway.

ROMANS: I'm thinking McDonald's. HAYDEN: Yes, or it could be a branch bank. It could be a fast lube place. Many, many brands try to make their buildings identical.

ROMANS: That's why every place looks the same. You go some place to see the strip of the Best Buy, the Circuit City and then you know that you're going to have a McDonald's and if you're in the Midwest, you're going to have a Hardees and you're going to have a Kentucky Fried Chicken two blocks to the left almost.

CAFFERTY: So what's wrong with that?

ROMANS: Well, it's just not --

CAFFERTY: Some of us like a certain predictability in our lives. You go into a strange town. You find that one piece of highway leading into town. You know you can get gas. You can find a Holiday Inn. You can get something to eat. It's either Taco Bell or McDonald's or -- I mean, what's wrong with that?

ROMANS: What about a handshake with the community?

CAFFERTY: I don't want a handshake with the community.

ROMANS: Wait a minute.

(CROSSTALK)

CAFFERTY: I want a room, a tank of gas and something to eat. I'll shake hands tomorrow after I get a little sleep.

ROMANS: Where is your individuality in the American countryside? Jack I'm surprised at you.

LISOVICZ: Dolores help us out.

HAYDEN: Well, places are unique and places have wonderful historic buildings that are frequently at a scale best suited to pedestrians. Once you start on the logo buildings and the category killers, you're at the scale of cars and trucks. And frequently people feel very lost in those environments once they get out of the car. It's very difficult to stick one of those highway environments onto a traditional town of an attractive kind and find that the town survives. The businesses on the highway tend to kill the smaller stores, the pharmacies, the bookstores inside those towns. And then the towns are struggling to keep their shape.

LISOVICZ: Dolores, as much as I love the names that you have in your guide to sprawl like Privatopia and alligator, and ball pork, there's much more serious issue here. And one that's getting more serious attention in state legislatures all over the country, including my own, New Jersey.

HAYDEN: New Jersey has declared war on sprawl and tried to develop state land use policies, which will strengthen older cities and older suburbs in existing towns and stop rapid growth in areas that are green field areas. And I think that's a good thing that many, many other states should emulate. Because when we have constant unregulated new growth, frequently the places that we built a generation or two generations ago are left to fall down.

ROMANS: Dolores, I have a prediction. I think that what's happening in California with Wal-Mart is sort of a snapback against this. I think that communities are starting to say they don't want the big box. They don't want the funny water runoff. They decided they want nice, little main streets again. Do you think there could be maybe a retro movement in community planning?

HAYDEN: I think the important thing is to do careful land use and energy conservation and public transportation wherever possible rather than having unregulated growth, unregulated use of the maximum amount of energy and a sort of careless throwaway attitude.

CAFFERTY: Dolores, forgive me for interrupting, we're going to lose the satellite. I want to thank you before you disappear off the screen. Dolores Hayden, "Field Guide to Sprawl." Thanks for being with us. I appreciate it.

HAYDEN: Thanks for having me.

CAFFERTY: All right. Don't go getting chummy with the remote. We have more just ahead for you. Coming up, stores that let you shop without ever leaving your seat. Online retailing is convenient but it's having a tough year anyway. We're going to take a look at why. Certainly not my wife. She supports those places. And the web is good for more than just buying stuff. For example you can send us an e-mail. Give us your thoughts on sprawl, inthemoneycnn.com.

(COMMERCIAL BREAK)

CAFFERTY: Online retailers Amazon and eBay helped to lead the big market rally a year ago. But this year things are not so good for the e-tailers. Web master Allen Wastler has more on that and the fun site of the week which has something to do with bottles of beer on the wall. How you doing?

ALLEN WASTLER, CNNMONEY.COM: Kind of interesting about the Internet retailers, right? They sort of charged to the end of last year, beginning of this year everybody's saying they're back. It's a happening thing and the idea was they sort of cater to an audience which is maybe a little more well-to-do, everybody's surfing the net and looking to do some good things.

CAFFERTY: Or lazy because they don't have to go anywhere.

WASTLER: You saw some ideas pop up that were interesting, Blue Nile, jewelry type place and everybody had these high hopes. Then all of a sudden this week the results came in and sort of flattening out. Sort of guess what, they sell stuff just like other retailers sell stuff. So when the economy starts going -- it weakens. And there's a line of reasoning that perhaps there's a little bit more susceptible because if you're buying stuff on the Internet you're using a credit card. If you're in an environment where interest rates are going up and you've already amassed enough personal debt, all of a sudden you're likely to retreat on the credit card purchases a little more. You go to your Wal-Mart or Target, you can pay cash if you want to put yourself on a little budget type action.

ROMANS: America on a budget? That's a news flash.

WASTLER: It could start to happen.

LISOVICZ: Not using plastic, that's another news flash.

WASTLER: $8400 per family in terms of debt, credit card debt. You need to trim that.

CAFFERTY: They're not going anywhere though, right, eBay and Amazon.

WASTLER: No, they got solid results (INAUDIBLE) guided down. Part of it is the excitement factor, too. People bid them up, bid them up, bid them up.

ROMANS: The stocks have already done so well that they almost have to just blow away expectations to sustain it.

WASTLER: Exactly. They've got to sort of pull back a little bit and get back down to more moderate levels.

CAFFERTY: Let's move on to happy hour.

WASTLER: Let's go to happy hour, OK. I know you were talking about the beer emergent (ph) stuff before, right.

LISOVICZ: Christine and I are ready to play.

WASTLER: What you got to do is you got to figure out what brand of beer --

LISOVICZ: Heineken is in the middle.

WASTLER: Susan jumps out there with Heineken in the middle.

LISOVICZ: Christine.

ROMANS: On the left I think -- the right looks like Bud Light to me. And the left looks like it might be some kind of an MGD, Miller Genuine Draft.

CAFFERTY: Michelob.

ROMANS: Michelob.

WASTLER: Very good, Jack.

CAFFERTY: Not bad for a guy who quit drinking 15 years ago, right?

WASTLER: Now there's nine other bottles on the site that people can go check out and figure out. LISOVICZ: You don't want to -- you don't want us to end on a winning streak?

WASTLER: It's all a positive note but there you go.

CAFFERTY: Thanks, Allen. Coming up next on "In the Money," time to hear from you as we read some of your e-mails we got in the past week. You can send us an e-mail if you're so inclined right this very minute. We're at inthemoney@cnn.com. Write to use and unburden yourself.

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