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CNN Live Saturday

Michael Phelps Gives Up Position In Medley Race; Pakistani Hunt For al-Qaeda Along Afghan Border

Aired August 21, 2004 - 12:00   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, ANCHOR: It is 12:00 p.m. in Washington; 11:00 a.m. in Crawford, Texas, I'm Fredricka Whitfield at the CNN Center in Atlanta. Welcome to CNN LIVE SATURDAY. Ahead this hour:
The nasty twists in the fight for the presidency: how the story has changed for some of the Swift Boat Veterans speaking out about John Kerry and a reaction from the Bush camp.

Also, the fight over a crucial holy site in Najaf. What new role U.S. troops could face in that volatile struggle.

And, later:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It ain't livable, but it's standing up. You can go in there and take a shower, you can use the commode, it flushes.

(END VIDEO CLIP)

WHITFIELD: Hard times for thousands of people more than after a week Hurricane Charley hit Florida. An update on when they might finally get some help. But first, here's some stories now in the news.

A former prime minister of Bangladesh was slightly injured today when several grenades exploded while she was finishing a speech during an opposition party rally. Four people were killed and hundreds of others were wounded. Officials say the former prime minister was the target of that attack.

On the hunt for al-Qaeda: Pakistani troops are searching for members of the terror group in a rugged region near the Afghan border. Using artillery and aircraft, the Pakistani's attacked two suspected al-Qaeda hideouts killing a number of suspected militants.

At the Olympic games in Greece, a new twist in the controversy over the men's all-around gymnastics' final. Three judges have been suspended. The competition results will not change. American, Paul Hamm gets to keep his gold medal despite an error in Wednesday's judging. The scoring error led to a bronze medal for a South Korean gymnast who may otherwise have received gold. Keeping you informed, CNN, the most trusted name in news.

We begin with the decidedly bitterly turn in the race for the White House. John Kerry is on the offensive asking the Federal Election Commission to force a veteran's group to drop ads that challenge his service in Vietnam. The group, Swift Boat Veterans for Truth, is behind the ad. It mixes clips of a young Kerry talking about war atrocities in testimony before Congress back in 1971 with images of veterans condemning his remarks. The Kerry campaign accuses the group of violating the law.

(BEGIN VIDEO CLIP)

TAD DEVINE, KERRY CAMPAIGN SR. STRATEGIST: These attacks need to be answered directly because they are going after John Kerry with lies and distortions and they're doing it with people who are nothing more than front people for the Bush campaign.

(END VIDEO CLIP)

WHITFIELD: Senator Kerry says President Bush should condemn the ad. The democratic nominee says Bush wants the veteran's group to, quote, "to do his dirty work."

While the ad battle plays out here in the United States, some Vietnam veterans who support John Kerry are speaking out in Hanoi. At a news conference yesterday members of the group wore t-shirts with a line over President Bush's face. They also called him a "draft dodger."

President Bush's campaign advisers are firing back accusing John Kerry of losing his cool they also deny any involvement in the Swift Boat Veterans for Truth ad. CNN's Jill Dougherty is with us now from Crawford, Texas where the president is spending some time at his ranch -- Jill.

JILL DOUGHERTY, CNN CORRESPONDENT: Well Fredricka, you know the Bush campaign, President Bush, all of his aides say the way to deal with this is simply get rid of all of these ads. After all, they say, the president as the target of $62 million worth of these so-called attack ads.

Now, attack ads, as we know, are funded by soft money and probably the most famous or infamous is that Swift Boat ad that has been attacking Senator John Kerry and doing some damage for him among veterans.

But, both parties do use these ads. The White House says that they are funded by quote, "shadowy groups." But, actually, they are legal. They cannot coordinate with the parties, but they can attack individual candidates. Senator Kerry is particularly vulnerable on this because, after all, he is running as a war hero and this begins to undercut, chip away at that image and it's also forcing him to spend money and that is one of the last things he wants to do right now because after all as an official democratic candidate, he is receiving public financing.

President Bush, by the way, will be in the same case after he becomes the republican candidate. So, the Kerry campaign had to fire back with this ad featuring a general who formerly supported President Bush.

(BEGIN VIDEOTAPE)

GEN. MERRILL A. MCPEAK, USAF, RET.: As a fighter pilot, I saw my share of combat. As chief of staff, I led the Air Force during the first Gulf War and four years ago I endorsed George Bush for president, but this year I'm voting for John Kerry.

Nothing is more important to me than protecting America. John Kerry has the strength and common sense we need in a commander in chief and something more, a real strategy to make America safer.

The Democratic National Committee is responsible for the content of this advertisement.

(END VIDEOTAPE)

DOUGHERTY: So, both parties claim that they are the victims of these ads, but both parties definitely are benefiting from these ads, Fredricka.

WHITFIELD: And Jill, does the president plan to in any way publicly condemn these ads? Meanwhile, he's just days away from the Republican National Convention getting underway, is he making plans for it?

DOUGHERTY: Yes. Well, to the first question, no, it doesn't look as if that will happen because they have -- the president and his aides have been given ample opportunity to do that, if they should want to do it, but they have not. They continue to say, "We won't do that. We condemn all of these ads." Now, in preparation for the convention, the president is here at his ranch in Crawford, Texas and in addition to having a little R and R he has been working for preparations for that speech that he will deliver at the convention.

WHITFIELD: All right, Jill Dougherty in Crawford, Texas, thanks so much.

Well, just who are the veterans behind these attack ads on John Kerry and what, if any, relationship do they have with the Bush campaign? Some answers now, from CNN senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST: The ad ran for eight days in three states.

GEORGE ELLIOT, VIETNAM VETERAN: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He is lying about his record.

SCHNEIDER: The ad was run by a group of Vietnam war veterans who call themselves Swift Boat Veterans for Truth. Questions have emerged about inconsistencies in their testimony. For instance, former Rear Admiral Roy Hoffman says in the ad:

ADM. ROY HOFFMAN, U.S. ARMY RET.: John Kerry has not been honest.

SCHNEIDER: But last year, Hoffman told the "Boston Globe" that he corroborated the actions that won Kerry a silver star. "It took guts, and I admire that," Roy Hoffman said. George Elliot and Adrian Lansdale who also appear in the ad, showed up at a news conference in Boston during Kerry's 1996 Senate campaign where they also backed up Kerry's version of events. Now the Kerry campaign has released an ad with this countercharge.

ANNOUNCER: The people attacking John Kerry's war record are funded by Bush's big-money supporters.

SCHNEIDER: There's Texas real estate developer, Bob Perry, one of former Governor George W. Bush's biggest backers who contributed $200,000 to the Swift Boat Veteran group.

"New York Times" reporter, Kate Zernike who has been following this story calls Perry:

KATE ZERNIKE, "NEW YORK TIMES": The biggest donor in Texas. A huge Bush donor.

SCHNEIDER: There's public relation executive Merrie Spaeth, another Bush contributor who helped organize the Swift Boat Veterans.

ZERNIKE: A woman who has done her P.R. works in the Reagan White House and coached President Bush's father before his debate with Geraldine Ferraro.

SCHNEIDER: Next week, Swift Boat Veterans for Truth plans to release a second ad, this one uses excerpts from Kerry's 1971 testimony before the Senate Foreign Relations Committee.

SEN. JOHN KERRY, PRESIDENTIAL CANDIDATE: They had personally raped, cut off ears, cut off heads...

JOE PONDER, VIETNAM VETERAN: The accusations that John Kerry made against the veterans who served in Vietnam was just devastating.

SCHNEIDER: But in his testimony, Kerry was actually quoting statements made by other veterans.

KERRY: Several months ago in Detroit we had an investigation at which over 150 honorably discharged and many very highly decorated veterans testified to war crimes committed in Southeast Asia.

SCHNEIDER: Kerry's actual statement was: "They told the stories, at times they had personally raped, cut off ears, cut off heads..." earlier this year Kerry said this about his 1971 testimony.

KERRY: I think the way I characterized at that time was mostly the voice of the young, angry person who wanted to end the war.

SCHNEIDER: Bill Schneider, CNN Washington.

(END VIDEOTAPE)

WHITFIELD: And this political programming note, stay with CNN for an encore presentation of "Paula Zahn Now: The Undecided Vote, a CNN Town Hall Meeting." that's coming up tonight at 8:00 p.m. Eastern time.

Oil prices flirted with $50 a barrel this week and some traders whispered $60 could be on the horizon. Eventually, the record oil prices will make their way to your local gas pumps and some say that's likely to push gasoline above the national average of $2 an a gallon. CNN financial correspondent, Ali Velshi is in Washington with more on this -- Ali.

ALI VELSHI, CNN FINANCIAL CORRESPONDENT: Fredricka, good to see you. The issue here is that despite the fact that crude oil is up 50 percent this year, the average cost of gas has come down since its high in May of $2.06 across the nation, but even at today's prices people are paying 15 percent more for gas than a year ago for gas and if oil stays near $50 a barrel or goes higher you can expect to pay more at the pump. Now here's the thing, when you pay a little bit more at the pump every week, you don't sort of make that decision if it's $5 more that that you're not going to buy, let's say, a pair of shoes or something, but let's look at heating oil.

When you pay for your heating oil, you pay for it monthly or maybe every couple of months and the extra $100 or $200 that's going to hit you, that's going to be the decision not to buy a washing machine, let's say, or not to go out as much or not to travel as much because that comes in a big lump. Some people say if the prices of oil stay where they are, that could actually add up to $350 to $600 extra to heat your home for the heating season, maybe that means, as I say, the trip -- the trip for Christmas or maybe it means the washing machine that doesn't get bought -- Fred.

WHITFIELD: So, is this where the talk of recession is come coming from?

VELSHI: Well, if people buying less and companies are making fewer products, they're selling fewer products, and that could then lead to them laying off more employees and this little tenuous economy that we're in, could turn the other way. The other side of the story is that oil prices are being driven up by U.S. consumption. We continue to thirst for more oil. China, the world's biggest country, is now the world's second largest user of oil, they have increased activity -- economic activity, four million new cars on the road every year in China. They imported 40 percent more oil than they did the previous year.

India has this technological expansion 10 percent more oil demand than last year and then there is all the doubts, all the uncertainty. Uncertainty about Iraq's oil outputs, scandal around Russia's biggest oil producing company, Yukos, and continuing fears of a terror attack in the United States. All of that is causing oil traders to speculate. They're buying up oil futures to make money off of that uncertainty. There's a perfect storm of things going on, Fredricka, that's causing that upward pressure on oil and as you said, there are a lot of traders who think that while it should be around $30 to $35 a barrel, there are many people who say expect it to stay around $50 and maybe go higher -- Fredricka.

WHITFIELD: Well, it looks like then there's no reason to hope the oil prices would ever go down. It sounds like up is the only direction.

VELSHI: Except if we start finding oil in other places and, really, we have to remember, conservation, again. Two years ago people thought these hybrid cars, wacky idea, now we're hearing that come back, we're hearing about wind energy, we're hearing about alternative energy. I think you're going to start hearing more about that -- Fred.

WHITFIELD: Ali Velshi in Washington, thanks so much.

VELSHI: Yep.

WHITFIELD: A quiet night in Najaf, Iraq broken this morning by gunfire outside the Imam Ali Masque. Inside the holy shrine, members of Moqtada al-Sadr's militia, they're armed, but with brooms, apparently. Sweeping floors and preparing for a handover. CNN's Matthew Chance is there and joins us by phone -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Yeah thanks, Fredricka. A bit of confusion surrounding who is actually inside the Imam Ali Mosque at this stage, certainly we know, from our position here on the northern outskirts of Naja -- Najaf rather, that military operations have been temporarily suspended so that they can assess the situation on the ground around the mosque of Imam Ali.

But certainly I should mention, there have been sporadic crashes, but the military officials that we've spoken to here saying that these aren't serious engagements between U.S. forces and the Mehdi army, loyalists, of course to the radical Shia cleric Moqtada al-Sadr. These dramatic efforts are continuing -- continuing to try and bring this standoff to some kind of peaceful close. Representatives of the highest Shia religious authority, Grand Ayatollah Al al-Sistani, are talking to members of the Mehdi army, representatives of Moqtada al- Sadr, to get the keys handed over to the Imam Ali Mosque so they can lock that mosque up and put it off the danger zone to make sure it doesn't become the focus of any big offensive to sort of retake Najaf and attack the Mehdi army.

Those negotiations have gone no where at the moment because Sistani's representatives are saying the security situation is so (UNINTELLIGIBLE) they're not able to enforce that restriction around the mosque at this time. U.S. and Iraqi forces have masked in and around Najaf ready to resume military operations, if necessary. Diplomacy, as they're saying, is being given another chance. But with each day that passes, Fredricka, their patience is wearing more and more thin for a diplomatic solution to this crisis.

WHITFIELD: And Matthew, could it be that further complicating matters involving Ali al-Sistani is that he is still being hospitalized overseas in London?

CHANCE: Well, it's certainly true that he doesn't carry the same kind of weight that he does when he's in country. He's in London, he actually is recovering from heart surgery. He's been there for several weeks now, in fact, he left just before this latest violence in Najaf broke out. But, he is expected to return soon. Apparently he's making a good recovery, perhaps then he'll be able to impose his will and impose his authority a bit more effectively.

WHITFIELD: All right, Matthew Chance, thank you for that report from Najaf.

Ahead on CNN LIVE SATURDAY, the political implications of the Najaf standoff. I'll talk with a Middle East expert on what the fledgling Iraqi government must do to survive.

And learning how to cope without hot water, housing, and electricity. We'll have a live report from Florida where hurricane clean-up is far from over for many residents there.

And the battle over evidence in the Michael Jackson case. Find out what legal tactic the pop star's lawyers are using now.

(COMMERCIAL BREAK)

WHITFIELD: Since the handover of authority in Iraq took place June 30, the interim government there has been laboring to wlans the country's constitution with Islamic law, set up elections, and train security forces, all this while dodging assassin's bullets and facing other challenges from the insurgents. Here with some perspective Iraq's new government is a Shibley Telhami a professor at University of Maryland and author of "The Stakes: America and the Middle East."

PROF. SHIBLEY TELHAMI, UNIVERSITY OF MARYLAND: Good to see you, Professor.

Pleasure.

WHITFIELD: Well, it looks like publicly, the interim prime minister, Iyad Allawi, is trying to demonstrate that he is in charge, but that al-Sadr seems to be still in control very much of Najaf. Does this seem to be undermining the authority of the interim government significantly?

TELHAMI: Well, Mr. Allawi has two important tests ahead of him. One to establish legitimacy, another is to establish security. Both of these are essential for him. On the first one, he's losing. He's losing because any time there's a confrontation of this sort he needs the American military forces and then that shows him to be essentially collaborating with the U.S. at a time when there is resistance to the occupation -- opposition to the occupation. On the security front, the outcome of the confrontation is going to reflect on him. So, he needs to interpret the outcome as a victory for him. He's, for now, I think given up on the legitimacy, but he's trying to show that he's tough, that he's willing to use force, even it has to do with the U.S., and in the end he wants to show this is an altimatem, but al- Sadr is just giving up.

WHITFIELD: When you say he's losing, is he losing the confidence of the Iraqis as a whole?

TELHAMI: Well, he's losing, I think, in the short term in the legitimacy, because in fact, he's trying to show the government to be independent from the U.S. at the time when he's desperately in need of the U.S., so the confrontation in Najaf weakens his legitimacy. But, on the military side, if this is, in fact -- if it ends up with his victory or at least an interpretation of the public that won and Sadr gave up, certainly he can gain, at least in a sense of showing himself to be in control. And that's why I think what we see in the last few days, a maneuvering. How do you interpret the political deal? Is this really Sadr giving up or this really the government giving in? And that's why you see all this (UNINTELLIGIBLE).

WHITFIELD: So, if Allawi or the interim government is losing legitimacy then the question has to be asked, who's gaining strength? Would it be foreign fighters or would it be people like al-Sadr who seem to be gaining support, at least in that stronghold of Najaf?

TELHAMI: For Sadr, it's certainly a double edged sword. On the one hand, he's come really, the face of the opposition and the problem for Iraqi opposition is there is no real face, it's been mostly shadowy, including the militants who are create -- carrying out attacks, he's really the only central face of that opposition and so, to the extent that there's an increasing opposition to the U.S., he emerges as that player in that game. But, on the other hand, people also want peace and they don't want damage the holy places in Najaf. He will win some, he will lose some, but overall, it'll diminish the government's authority and legitimacy.

WHITFIELD: So, has this very complicated volatile situation become further complicated the fact that Ali al-Sistani is now being brought into the equation, although he's still being hospitalized in London, that al-Sadr would even talk about conceding to handing over the keys to the mosque to Ali al-Sistani certainly seems like a very strange request, particularly further undermining Allawi and the interim government and their power.

TELHAMI: Well, Ayatollah Sistani obviously remains the highest religious authority, he's still highly respected. In the past he's managed to remain somewhat above politics and to play all sides to survive and keep the Shias, in a way, managing their affairs beyond politics. But, in this kind of case when you have a real confrontation, he's in a way forced to take sides. Neutrality is costly. The real issue for him is whether his seeming neutrality is undermining his own authority, is weaken actually within the Shia community. That's going to be interesting though, in the coming days.

But, let me just say one other thing. We're really focused on Sadr as the only security problem in Iraq, in fact, that's not the case. The problem in Iraq is that you have lawlessness, you have crime, you have attacks on police, you have no government control and most of these attacks are not coming from Sadr's men, they're coming from shadowy groups. So, even if we address this particular crisis, security is not at hand.

WHITFIELD: So then, throughout Iraq and other places particularly in places like Baghdad and Nasiriyah where there is some U.S. presence, significant U.S. Presence, is this too, sending the wrong message or a rather confusing message to the Iraqis as to who really is in control here?

TELHAMI: Well, there's no question that I think most people believe that thee U.S. is in control in Iraq today. And that's true, by the way, in the Arab world. I just did a survey in six Arab countries and the vast majority of people I surveyed, in six Arab countires, believe that essentially the transfer of sovereignty is mere fig leaf for the American presence, so most people really believe the U.S. is in control and they see Allawi just as an instrument of that. We don't have a real survey in Iraq that tells us what the Iraqi people today feel, but I suspect that many clearly see him as essentially an agent of the U.S., at the moment.

WHITFIELD: Professor Shibley Telhami of the University of Maryland. Thanks so much for joining us from Washington.

TELHAMI: My pleasure.

WHITFIELD: Well, it certainly wouldn't be the miracle on ice, but it could be close. We'll have a live update from Greece where Iraq's soccer team is looking to continue its winning ways.

And still to come:

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I certainly miss girl. I'm not going to lie about that.

(END VIDEO CLIP)

WHITFIELD: No women, no booze, and a lot of hard labor. Find out why dozens of high school graduates choose this school to continue their education.

(COMMERCIAL BREAK)

WHITFIELD: At the summer games in Athens, Greece, no surprise here, there's been a run on track and field tickets. Olympic organizers say those events at the main Olympic stadium were complete sellouts and they add, that after a slow start, overall tickets are nearing projections of 3.4 million.

A controversy involving tainted gold leads to suspensions at the summer games. Three Olympic judges have been suspended over a scoring mistake in the men's gymnastics. The mistake cost a South Korean the gold, but gave it to an American, and the "Associated Press" says the South Korean team will ask the court of arbitration to -- for sports, rather, to determine if a gold medal should be awarded to their athlete, as well. CNN's Mark McKay is live with more on all of this from Athens. Hi, Mark.

MARK MCKAY, CNN CORRESPONDENT: Hello, Fredricka. You mentioned just before the break, no it wouldn't be the miracle on ice, but perhaps a miracle on the pitch or on grass, as a team that defied the odds by just coming here to Athens is looking for a birth in the semi- finals of Olympic soccer. The Iraqi team, they're currently on the pitch against Australia and Iraq has scored, they lead 1-0 in the second half. The Iraqis are 2-1 in Olympic soccer so far at these games.

As for (UNINTELLIGIBLE) mentioning a little while ago Paul Hamm's Olympic gold medal, here in Athens, has come under question. A native of Wisconsin, he became the first American male to win the all-around gold in the first weeks of these games, but on Saturday the International Gymnastics Federation ruled a scoring error cost the South Korean, who earned bronze, the gold. The judges, three of them, were suspended from this. A South Korea spokesman says that their Olympic committee has gone on to the Court of Arbitration for Sport looking to get a reversal of the results.

Michael Phelps, his Olympic odyssey ends this Saturday night, but not in the pool. After winning his fifth gold here in Athens, in the 100 meters butterfly, on Friday, Phelps gave up his place in Saturday's medley relay to his teammate Ian Crocker. A medal would give Phelps a record equaling eighth overall, of course, technically speaking, Fredricka, Phelps helped the team reach the finals, so if they medal, he gets one, too. Pretty good deal, he's going to be cheering from the stands.

WHITFIELD: That's a great deal since he was at least in the preliminaries, that's good. And I know Ian Crocker is so grateful for that very generous move by Michael Phelps.

MCKAY: That's right.

WHITFIELD: All right, Mark McKay, thanks very much.

Well, one week ago today, many residents of Punta Gorda, Florida, awoke to devastation left by Hurricane Charley. When might life ever get back to normal? We'll have a live report on recovery efforts right after this.

(COMMERCIAL BREAK)

WHITFIELD: Here's some of the stories now in the news. Police in Tampa, Florida, have rounded up 52 suspects in a drug smuggling scheme using cruise ships. Authorities say the drugs came aboard Carnival Cruise ships from Jamaica bound for New Orleans, then they were driven to Tampa.

Four people in Spain have been injured in two bombings linked to a Basque separatist group. It happened in two villages on Spain's north Atlantic coast, now full of vacationers. The bombs were planted in trash cans. No serious damage is being reported. A continuing challenge to Iraq's interim government. Militia forces loyal to rebellious leader Muqtada Al Sadr retained control of the shrine in Najaf. That follows days of intense fighting with U.S. and Iraqi troops.

Grenades exploded near the former prime minister of Bangladesh as she was finishing a speech at an opposition rally in Dhaka. She was slightly injured and four people died and hundreds were wounded.

Keeping you informed, CNN, the most trusted name in news.

A week after Hurricane Charley turned lives upside down in southwest Florida, a quarter of a million people still don't have power today. The toll stands at 10,000 homes destroyed, 16,000 uninhabitable and at least 24 people dead.

One hospital is up and running again and portable classrooms are arriving for schools. CNN Correspondent Sara Dorsey is in hard hit Punta Gorda -- Sara.

SARA DORSEY, CNN CORRESPONDENT: Hi, Fredricka.

Things are not back to normal just yet. I'm right in front of a distribution center that is out here. This particular one was set up by two people from Ft. Lauderdale, Florida, that just wanted to help out the victims of this hurricane.

They brought things like toothbrushes, bug spray, water, all the necessities, because like you said, the power is not on. We're seeing a lot of that. Strangers helping strangers to make do.

(BEGIN VIDEOTAPE)

DORSEY (voice over): Darlene Bills refuses to leave her massively damaged home in Punta Gorda, Florida. Tents serve as her shelter for the night. Her cold shower the only relief from the brutal heat during the day.

UNIDENTIFIED FEMALE: It's not livable, but it's standing up. You can go in there and take a shower. You can use the commode, it flushes.

DORSEY: Her family, like thousands of others in Florida, is still without power. The water in many areas, undrinkable.

FEMA inspectors roam neighborhoods in the hardest hit areas of the state, trying to estimate the damage. And 60,000 people have already registered for assistance.

UNIDENTIFIED MALE: The limb from one of these trees landed right there and poked a hole down through the roof in there and right into the bathroom.

DORSEY: In Port Charlotte, James Campbell is still working on his insurance company. In the meantime, his damaged home and lack of air conditioning have forced him to leave, for now, until power can be restored.

UNIDENTIFIED MALE: Hot in there. Can't stay in there. Can't afford to buy a generator either. It was either the generator of the chain saw.

DORSEY: Keeping in good spirits isn't always easy, but volunteers are on hand to help. Distribution centers are set up and teams take to the streets to make sure no one is overlooked. Bills says she couldn't make it without the extra help.

UNIDENTIFIED FEMALE: There is money coming in. So, whatever I gather, I'll just put to a place for my kids and my mom.

DORSEY: A tale of two lives damaged, but not broken by the fury of Hurricane Charley.

(END VIDEOTAPE)

DORSEY: The destruction in this town is still very evident. You can tell by the building behind me, not yet touched by human hands. In fact, that one, I'm told, has been condemned.

From here, people are starting to clean up, but it looks like that clean up process will be a long haul -- Fredricka?

WHITFIELD: And, Sara, is part of the issue that larger machinery has not been able to come in yet to help in any of the rebuilding?

DORSEY: Well, we do see some trucks coming in now, just during today. We don't know if that's been happening all the time. I know there was a perimeter for a while, but they're now bringing larger machinery in, so hopefully, that will speed the process up for the people here.

WHITFIELD: Sara Dorsey, in Punta Gorda, Florida. Thanks so much.

Rebuilding will take billion billions of insurance dollars and months, perhaps even years to complete. During that time resident need to watch for shysters peddling scams. Kenneth Burris is a deputy federal coordinator for FEMA and joins us now from Orlando.

Good to see you, Mr. Burris.

KENNETH BURRIS, FEMA: Hello, how are you?

WHITFIELD: I'm doing pretty good.

One week after Charley, so far, what does it seem like the biggest obstacles are for you all doing your jobs?

BURRIS: One of the bigger obstacles that we face is the housing program, which we're working hard on trying to get those that are in the shelters some housing and those that have been impacted, either their homes dried in through our tarping or plasticing process, working with our Army Corp of Engineers in the state of Florida, as well as other volunteer organizations. And our travel trailer/mobile home, temporary housing is what we're working on desperately right now.

WHITFIELD: And so often in coastal communities a big problem is uninsured homes in a disproportionate way. Are you finding that in hard-hit Punta Gorda?

BURRIS: Right now our statistics show it's about 50/50, in those that are seeking assistance that have some insurance, and those that don't.

WHITFIELD: How long before those who do not have insurance, usually the ones who will rely on FEMA money the most, how long before they can actually start seeing their applications processed and get some financial help to restart the building?

BURRIS: We actually have applications processed currently. We actually assisted over 14,000 individuals. We have currently over 100,000 individuals who have registered for assistance. To kind of put that in perspective with Hurricane Andrew, today seven or eight days into the process, we're a couple months ahead where we were in the Andrew process with people registering and receiving assistance.

WHITFIELD: Since you brought up Hurricane Andrew, immediately after that there was a big problem with looting and even a lot of scams. There haven't been widespread reports of looting, but scams can still crop up at some point.

How are you as an agency, FEMA, trying to educate people about scams? You know, help them understand what kind of questions to ask, something about, I.D.s, et cetera?

BURRIS: Unfortunately, every disaster brings out those who want to prey on the most unfortunate and the victims.

It's important to note that FEMA inspectors that go out will not be asking you for personal information, such as your Social Security number, your check numbers, your I.D. or routing numbers. That's all taken care of over the phone through our 1-800 teleregistration process.

The FEMA, the people that you will see on the ground, or that the victims will see on the ground, are there to help them and assist them in that process and go through the inspection process. There is no fee for those services and no one will be asking for that type of personal information. All that information is given over the phone when you call our 1-800 FEMA number.

WHITFIELD: One rule of thought, you're also saying, that FEMA doesn't necessarily make house calls. It's up to you, the homeowner, to issue a phone call or come down to the location where you set up office?

BURRIS: Correct. We have community relations specialists that go out and help you assist in making that phone call. Also, everyone with our agency has a government I.D., just because somebody has a FEMA shirt on doesn't mean that they're a representative of our organization. So, you want to ask for that I.D. badge and see that I.D. badge.

WHITFIELD: All right, Kenneth Burris, of the Federal Emergency Management Agency, thanks so much for joining us from Orlando.

BURRIS: Thank you.

WHITFIELD: Other note on money and spending it wisely, the high cost of college. Books, food, extras, it all adds up. "Dollar $igns" takes your calls and e-mails today at 4:30 Eastern Time. Find out how to prepare for those college extras and where you can cut come corners.

Send your questions to us at dollarsigns@cnn.com. Or call us at 1-800-807-2620.

Straight ahead, the legal strategy of Michael Jackson's defense team and how they're trying to keep evidence seized from his Neverland Ranch out of any possible trial.

Plus, America's emerald gem, how can you experience Seattle within your own budget?

(COMMERCIAL BREAK)

WHITFIELD: In our legal briefs, search and seizure is the issue in Michael Jackson's pretrial hearing this week. Employees at his Neverland Ranch testified that authorities searched areas that weren't included on a search warrant. CNN's Miguel Marquez has more on the case from Santa Maria, California.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice over): It is another legal thrust by Jackson's lawyers to keep a jury from hearing potentially damaging evidence.

Jackson lawyer Steve Cochran argued the warrant for the search at Neverland Ranch, in November 2003, only authorized investigators to go into Jackson's main house, the arcade and security headquarters.

DIANE DIMOND, COURT TV: The defense is saying on Neverland Ranch the sheriff department people went into places they weren't supposed to go. But when you ask them where did they go that they weren't supposed to, they mentioned three places which were in the security headquarters.

MARQUEZ: Long-time Jackson employee Joseph Marcus testified that Jackson's personal office and apartment and a video library are in the same building as the security headquarters. The question for the judge will be, did investigators have the right to go into other parts of the building?

DIMOND: I think the defense is picking on every little thing they can to get the Neverland search warrant out because that's where the sheriff's office got the most evidence.

MARQUEZ: As an example Cochran questioned Santa Barbara County Sheriff Lieutenant Paul Zellas (ph) on why they took into evidence a magazine with the phone number of British billionaire Mohammed Al Fiad (ph) on it. Zellas would only say that they were interested in someone named Al.

Another problem for Jackson, the Santa Maria courthouse received an e-mail threat against him, CNN confirmed, before he and his family showed up to Monday's hearing. Police in Ontario, Canada say that a 26-year-old man was arrested and charged with one count of uttering a death threat.

(On camera): Possibly the last and biggest piece of this suppression of evidence hearing is now set in place. The testimony of Jane Doe, the accuser's mother is now scheduled for September 17th -- Miguel Marquez, CNN, Santa Maria, California.

(END VIDEOTAPE)

WHITFIELD: Well, turning to another high profile celebrity case. An investigator gives a motive in the Robert Blake murder trial.

Blake, the former "Barretta" TV star, is accused of killing his wife back in 2001. A private investigator testified that Blake plotted to kill Bonny Lee Bakley to gain custody of the couple's child.

The 78-year-old was investigators' testimony was taped in case he wouldn't be able to testify at the trial set to start in November.

Rocker Courtney Love pleads not guilty to a felony assault charge. Love allegedly attacked a woman with a liquor bottle at her former boyfriend's home in April.

Love told reporters yesterday she's scared and only wants to play music. A preliminary hearing is set for October 7th.

And court is back in session Monday for the Scott Peterson murder trial. Amber Frey, Peterson's former mistress, will take to the stand for cross-examination. What will she say? And what might she be asked? Our legal experts will discuss the case on CNN LIVE SATURDAY coming up at 2 o'clock Eastern Time.

And discovering the hidden beauty of Seattle. Why it has more to offer than just coffee, clouds and computers. I'll talk to a travel expert coming up next.

And hitting the open range while cracking those college books. We'll tell you about a unique school where students spend their down time as farm hands.

(COMMERCIAL BREAK)

WHITFIELD: Coffee, clouds, computers -- sounds like Seattle? You're right. The city is vibrant this time of year with mild summer temperatures and hot political conversations, always. Let's talk to Don George from Lonely Planet. He joins us from San Francisco for our focus on weekend getaways.

Good to see you, Don.

DON GEORGE, LONELY PLANET: Hi, Fredricka.

WHITFIELD: All right, so why Seattle?

GEORGE: Seattle is remarkable, especially because it's the most outdoors oriented city in the United States. It's ringed by gorgeous mountains, surrounded by beautiful water, so even when you're in the middle of downtown you have this incredible magnetic pull to the outdoors, which is why I think Seattle is the only city where fleece vests and hiking boots are standard business attire.

It's always present in people's lives so it is a great place to combine the city and the outdoors.

WHITFIELD: Many of us choose a weekend getaway or vacation destination based on weather. And Seattle is known for a whole lot of wet weather. But I also understand that it may not be as wet as most people think. Apparently Houston, Chicago, and New York just might be rainier? Is that true?

GEORGE: Exactly. In terms of rainfall Atlanta, Washington and New York all get more annual precipitation than Seattle does. But in terms of clouds, I think Seattle is number one. It gets an average of 55 days of sunshine a year.

WHITFIELD: So, how do you want to go about vacationing in Seattle or really getting to know the city? Do you want to rely on public transportation or some other unique way such as just walking it?

GEORGE: Walking is a great way to see it. Seattle is a city of neighborhoods, so, once you plant yourself in a neighborhood there is a terrific bus system. When you get into the neighborhood, just walk around and explore it.

If you're lucky enough to be there when the sun comes out, the city will blossom magically, like a flower opening to the sun. So, hopefully that will happen. Walking is a great way to see it.

WHITFIELD: You talk about nature being a real centerpiece for Seattle, does that mean you really need to leave the downtown area and get to know the countryside or appreciate it just from downtown?

GEORGE: Downtown is wonderful. For example, go to the Pike Place Market, which is a block's long complex of shops selling fresh produce, fresh, glistening fish, all kinds of wonderful produce and food stuffs that you find right there in the Pacific Northwest.

It's fun to see the food. It is also fun to the see the interactions between the venders and the customers. It's the soul of Seattle. It is a great place to start a visit. WHITFIELD: So, how affordable might this trip be?

GEORGE: Seattle is wonderfully affordable. It really is tailored to every budget. You can stay in great three star, four star, or five star hotels or the international youth hostel for $25 a night.

The restaurants, again, a whole range from very, very inexpensive to quite expensive. The restaurants, happily, have scaled down their menus so that you can get really high quality fare but at affordable prices.

WHITFIELD: Do you have a preferred time of year? Is this it right now?

GEORGE: This is it right now. If you can go at Labor Day there is a wonderful festival called Bumber Shoot, which features great music, great theater, all kinds of art exhibits. It's a terrific time of year to be there.

WHITFIELD: Sounds like a mischievous festival.

GEORGE: Indeed, the quintessential Seattle festival in a lot of ways.

WHITFIELD: All right. Don George of Lonely Planet, thanks for helping us plan our next weekend get away to Seattle.

GEORGE: Thanks. Thanks, Fredricka.

WHITFIELD: Well, one other travel story to note, traffic at O'Hare in Chicago, one of the nation's busiest and most congested airports might get better. United and American Airlines will cut 37 daily flights between them, in a deal with federal authorities. It is hoped the move might ease delays at O'Hare, which often ripple through the nation's entire air network.

A higher education with a higher calling. No, these students aren't studying for the priesthood. So why are they spending their time tending to animals between classes? We'll explain coming up.

(COMMERCIAL BREAK)

WHITFIELD: There's a remote spot in the California Desert that's an unusual outpost on the road to success at an Ivy League college. CNN's Jason Bellini has the story of the college cowboys.

(BEGIN VIDEOTAPE)

JASON BELLINI, CNN CORRESPONDENT (voice over): They quote Camus and wax poetic about land, labor ...

UNIDENTIFIED MALE: (UNINTELLIGIBLE) ...is in the sweet spot and it's maintained by our work.

BELLINI: ... and life.

JULIAN PETRI, DEEP SPRINGS STUDENT: There's a real sense of purpose here.

BELLINI: These are not your typical college students. And this is not your typical college. Since it's founding in 1917, Deep Springs College, located deep in the California Desert, began as an educational experiment combining intense academics ...

UNIDENTIFIED MALE: Is he talking more of an evolutionary social inheritance.

BELLINI: ...with hard labor.

The goal is to create something more than a typical college graduate.

MITCH HUNTER, DEEP SPRING STUDENT: Every afternoon is full. So, I don't have so much free time.

BELLINI (on camera): Enough time to study?

HUNTER: That depends on how quickly you study.

BELLINI (on camera): Deep Springs is a two-year college. Most, if not all students, transfer into prestigious four-year institutions, Yale, Harvard and Cornell, chief among them.

(voice over): Nearly all the students come from privileged backgrounds.

(on camera): When you go home, do you wear your cowboy hat?

GARETH FISHER, DEEP SPRINGS STUDENT: I may have worn it a couple of times, yes.

BELLINI: They chose Deep Springs, they say, to do something real. Gareth Fisher, from Upstate New York, is responsible for over 200 head of cattle.

FISHER: This isn't just like going out -- I'll go around and chase a calf just for the hell of it. It's a potential $400, $500, $600 loss if this calf doesn't get brought in.

BELLINI: Deep Springs accepts less than 10 percent of its applicants. It has a student body of 26 students, all of men.

ROSS PETERSON, DEEP SPRINGS PRESIDENT: Even though every student has a full scholarship, they pay a good price, in many respects, to be here. Then they appreciate the rewards that come from having contributed to the school.

BELLINI: The rewards, they believe, are self-reliance and self- confidence built through self-sacrifice. But there are rigid rules. No alcohol, no drugs, no leaving the ranch.

FISHER: I certainly miss girls. I'm not going to lie about that. And I love the guys who are here. I love all the guys here, most of the time. JAMES WILSON, DEEP SPRINGS STUDENT: It's tough to see when you're here, when you're cut off from the outside world. And you are with, you know, these 25 other really high strung guys, who are all engaged in this crazy project.

BELLINI: They don't grow up to be cowboys. Most go on to get M.D.s, Ph.D.s and law degrees, but where else, they say, can they learn so much about life?

Jason Bellini, CNN, Deep Springs, California.

(END VIDEOTAPE)

WHITFIELD: An Olympic update now. The sentimental favorite team, the Iraqi men's soccer team, well, they've got another win under their belts. They beat the Australian team 1-0 and now the Iraqi team advances to the semi-finals in the Olympics.

Still much more ahead on CNN SATURDAY. In a few moments, "In The Money". At 2:00 Eastern, in depth on what is turning into one of the biggest presidential campaign issues, the swift boat ads.

At 3:00, it is "Next@cnn." Today, looking that portable Olympic pool that is making a big splash for swimming competition.

First, Jack Cafferty with a preview of "In The Money"

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 August 21, 2004 - 12:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, ANCHOR: It is 12:00 p.m. in Washington; 11:00 a.m. in Crawford, Texas, I'm Fredricka Whitfield at the CNN Center in Atlanta. Welcome to CNN LIVE SATURDAY. Ahead this hour:
The nasty twists in the fight for the presidency: how the story has changed for some of the Swift Boat Veterans speaking out about John Kerry and a reaction from the Bush camp.

Also, the fight over a crucial holy site in Najaf. What new role U.S. troops could face in that volatile struggle.

And, later:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It ain't livable, but it's standing up. You can go in there and take a shower, you can use the commode, it flushes.

(END VIDEO CLIP)

WHITFIELD: Hard times for thousands of people more than after a week Hurricane Charley hit Florida. An update on when they might finally get some help. But first, here's some stories now in the news.

A former prime minister of Bangladesh was slightly injured today when several grenades exploded while she was finishing a speech during an opposition party rally. Four people were killed and hundreds of others were wounded. Officials say the former prime minister was the target of that attack.

On the hunt for al-Qaeda: Pakistani troops are searching for members of the terror group in a rugged region near the Afghan border. Using artillery and aircraft, the Pakistani's attacked two suspected al-Qaeda hideouts killing a number of suspected militants.

At the Olympic games in Greece, a new twist in the controversy over the men's all-around gymnastics' final. Three judges have been suspended. The competition results will not change. American, Paul Hamm gets to keep his gold medal despite an error in Wednesday's judging. The scoring error led to a bronze medal for a South Korean gymnast who may otherwise have received gold. Keeping you informed, CNN, the most trusted name in news.

We begin with the decidedly bitterly turn in the race for the White House. John Kerry is on the offensive asking the Federal Election Commission to force a veteran's group to drop ads that challenge his service in Vietnam. The group, Swift Boat Veterans for Truth, is behind the ad. It mixes clips of a young Kerry talking about war atrocities in testimony before Congress back in 1971 with images of veterans condemning his remarks. The Kerry campaign accuses the group of violating the law.

(BEGIN VIDEO CLIP)

TAD DEVINE, KERRY CAMPAIGN SR. STRATEGIST: These attacks need to be answered directly because they are going after John Kerry with lies and distortions and they're doing it with people who are nothing more than front people for the Bush campaign.

(END VIDEO CLIP)

WHITFIELD: Senator Kerry says President Bush should condemn the ad. The democratic nominee says Bush wants the veteran's group to, quote, "to do his dirty work."

While the ad battle plays out here in the United States, some Vietnam veterans who support John Kerry are speaking out in Hanoi. At a news conference yesterday members of the group wore t-shirts with a line over President Bush's face. They also called him a "draft dodger."

President Bush's campaign advisers are firing back accusing John Kerry of losing his cool they also deny any involvement in the Swift Boat Veterans for Truth ad. CNN's Jill Dougherty is with us now from Crawford, Texas where the president is spending some time at his ranch -- Jill.

JILL DOUGHERTY, CNN CORRESPONDENT: Well Fredricka, you know the Bush campaign, President Bush, all of his aides say the way to deal with this is simply get rid of all of these ads. After all, they say, the president as the target of $62 million worth of these so-called attack ads.

Now, attack ads, as we know, are funded by soft money and probably the most famous or infamous is that Swift Boat ad that has been attacking Senator John Kerry and doing some damage for him among veterans.

But, both parties do use these ads. The White House says that they are funded by quote, "shadowy groups." But, actually, they are legal. They cannot coordinate with the parties, but they can attack individual candidates. Senator Kerry is particularly vulnerable on this because, after all, he is running as a war hero and this begins to undercut, chip away at that image and it's also forcing him to spend money and that is one of the last things he wants to do right now because after all as an official democratic candidate, he is receiving public financing.

President Bush, by the way, will be in the same case after he becomes the republican candidate. So, the Kerry campaign had to fire back with this ad featuring a general who formerly supported President Bush.

(BEGIN VIDEOTAPE)

GEN. MERRILL A. MCPEAK, USAF, RET.: As a fighter pilot, I saw my share of combat. As chief of staff, I led the Air Force during the first Gulf War and four years ago I endorsed George Bush for president, but this year I'm voting for John Kerry.

Nothing is more important to me than protecting America. John Kerry has the strength and common sense we need in a commander in chief and something more, a real strategy to make America safer.

The Democratic National Committee is responsible for the content of this advertisement.

(END VIDEOTAPE)

DOUGHERTY: So, both parties claim that they are the victims of these ads, but both parties definitely are benefiting from these ads, Fredricka.

WHITFIELD: And Jill, does the president plan to in any way publicly condemn these ads? Meanwhile, he's just days away from the Republican National Convention getting underway, is he making plans for it?

DOUGHERTY: Yes. Well, to the first question, no, it doesn't look as if that will happen because they have -- the president and his aides have been given ample opportunity to do that, if they should want to do it, but they have not. They continue to say, "We won't do that. We condemn all of these ads." Now, in preparation for the convention, the president is here at his ranch in Crawford, Texas and in addition to having a little R and R he has been working for preparations for that speech that he will deliver at the convention.

WHITFIELD: All right, Jill Dougherty in Crawford, Texas, thanks so much.

Well, just who are the veterans behind these attack ads on John Kerry and what, if any, relationship do they have with the Bush campaign? Some answers now, from CNN senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST: The ad ran for eight days in three states.

GEORGE ELLIOT, VIETNAM VETERAN: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He is lying about his record.

SCHNEIDER: The ad was run by a group of Vietnam war veterans who call themselves Swift Boat Veterans for Truth. Questions have emerged about inconsistencies in their testimony. For instance, former Rear Admiral Roy Hoffman says in the ad:

ADM. ROY HOFFMAN, U.S. ARMY RET.: John Kerry has not been honest.

SCHNEIDER: But last year, Hoffman told the "Boston Globe" that he corroborated the actions that won Kerry a silver star. "It took guts, and I admire that," Roy Hoffman said. George Elliot and Adrian Lansdale who also appear in the ad, showed up at a news conference in Boston during Kerry's 1996 Senate campaign where they also backed up Kerry's version of events. Now the Kerry campaign has released an ad with this countercharge.

ANNOUNCER: The people attacking John Kerry's war record are funded by Bush's big-money supporters.

SCHNEIDER: There's Texas real estate developer, Bob Perry, one of former Governor George W. Bush's biggest backers who contributed $200,000 to the Swift Boat Veteran group.

"New York Times" reporter, Kate Zernike who has been following this story calls Perry:

KATE ZERNIKE, "NEW YORK TIMES": The biggest donor in Texas. A huge Bush donor.

SCHNEIDER: There's public relation executive Merrie Spaeth, another Bush contributor who helped organize the Swift Boat Veterans.

ZERNIKE: A woman who has done her P.R. works in the Reagan White House and coached President Bush's father before his debate with Geraldine Ferraro.

SCHNEIDER: Next week, Swift Boat Veterans for Truth plans to release a second ad, this one uses excerpts from Kerry's 1971 testimony before the Senate Foreign Relations Committee.

SEN. JOHN KERRY, PRESIDENTIAL CANDIDATE: They had personally raped, cut off ears, cut off heads...

JOE PONDER, VIETNAM VETERAN: The accusations that John Kerry made against the veterans who served in Vietnam was just devastating.

SCHNEIDER: But in his testimony, Kerry was actually quoting statements made by other veterans.

KERRY: Several months ago in Detroit we had an investigation at which over 150 honorably discharged and many very highly decorated veterans testified to war crimes committed in Southeast Asia.

SCHNEIDER: Kerry's actual statement was: "They told the stories, at times they had personally raped, cut off ears, cut off heads..." earlier this year Kerry said this about his 1971 testimony.

KERRY: I think the way I characterized at that time was mostly the voice of the young, angry person who wanted to end the war.

SCHNEIDER: Bill Schneider, CNN Washington.

(END VIDEOTAPE)

WHITFIELD: And this political programming note, stay with CNN for an encore presentation of "Paula Zahn Now: The Undecided Vote, a CNN Town Hall Meeting." that's coming up tonight at 8:00 p.m. Eastern time.

Oil prices flirted with $50 a barrel this week and some traders whispered $60 could be on the horizon. Eventually, the record oil prices will make their way to your local gas pumps and some say that's likely to push gasoline above the national average of $2 an a gallon. CNN financial correspondent, Ali Velshi is in Washington with more on this -- Ali.

ALI VELSHI, CNN FINANCIAL CORRESPONDENT: Fredricka, good to see you. The issue here is that despite the fact that crude oil is up 50 percent this year, the average cost of gas has come down since its high in May of $2.06 across the nation, but even at today's prices people are paying 15 percent more for gas than a year ago for gas and if oil stays near $50 a barrel or goes higher you can expect to pay more at the pump. Now here's the thing, when you pay a little bit more at the pump every week, you don't sort of make that decision if it's $5 more that that you're not going to buy, let's say, a pair of shoes or something, but let's look at heating oil.

When you pay for your heating oil, you pay for it monthly or maybe every couple of months and the extra $100 or $200 that's going to hit you, that's going to be the decision not to buy a washing machine, let's say, or not to go out as much or not to travel as much because that comes in a big lump. Some people say if the prices of oil stay where they are, that could actually add up to $350 to $600 extra to heat your home for the heating season, maybe that means, as I say, the trip -- the trip for Christmas or maybe it means the washing machine that doesn't get bought -- Fred.

WHITFIELD: So, is this where the talk of recession is come coming from?

VELSHI: Well, if people buying less and companies are making fewer products, they're selling fewer products, and that could then lead to them laying off more employees and this little tenuous economy that we're in, could turn the other way. The other side of the story is that oil prices are being driven up by U.S. consumption. We continue to thirst for more oil. China, the world's biggest country, is now the world's second largest user of oil, they have increased activity -- economic activity, four million new cars on the road every year in China. They imported 40 percent more oil than they did the previous year.

India has this technological expansion 10 percent more oil demand than last year and then there is all the doubts, all the uncertainty. Uncertainty about Iraq's oil outputs, scandal around Russia's biggest oil producing company, Yukos, and continuing fears of a terror attack in the United States. All of that is causing oil traders to speculate. They're buying up oil futures to make money off of that uncertainty. There's a perfect storm of things going on, Fredricka, that's causing that upward pressure on oil and as you said, there are a lot of traders who think that while it should be around $30 to $35 a barrel, there are many people who say expect it to stay around $50 and maybe go higher -- Fredricka.

WHITFIELD: Well, it looks like then there's no reason to hope the oil prices would ever go down. It sounds like up is the only direction.

VELSHI: Except if we start finding oil in other places and, really, we have to remember, conservation, again. Two years ago people thought these hybrid cars, wacky idea, now we're hearing that come back, we're hearing about wind energy, we're hearing about alternative energy. I think you're going to start hearing more about that -- Fred.

WHITFIELD: Ali Velshi in Washington, thanks so much.

VELSHI: Yep.

WHITFIELD: A quiet night in Najaf, Iraq broken this morning by gunfire outside the Imam Ali Masque. Inside the holy shrine, members of Moqtada al-Sadr's militia, they're armed, but with brooms, apparently. Sweeping floors and preparing for a handover. CNN's Matthew Chance is there and joins us by phone -- Matthew.

MATTHEW CHANCE, CNN CORRESPONDENT: Yeah thanks, Fredricka. A bit of confusion surrounding who is actually inside the Imam Ali Mosque at this stage, certainly we know, from our position here on the northern outskirts of Naja -- Najaf rather, that military operations have been temporarily suspended so that they can assess the situation on the ground around the mosque of Imam Ali.

But certainly I should mention, there have been sporadic crashes, but the military officials that we've spoken to here saying that these aren't serious engagements between U.S. forces and the Mehdi army, loyalists, of course to the radical Shia cleric Moqtada al-Sadr. These dramatic efforts are continuing -- continuing to try and bring this standoff to some kind of peaceful close. Representatives of the highest Shia religious authority, Grand Ayatollah Al al-Sistani, are talking to members of the Mehdi army, representatives of Moqtada al- Sadr, to get the keys handed over to the Imam Ali Mosque so they can lock that mosque up and put it off the danger zone to make sure it doesn't become the focus of any big offensive to sort of retake Najaf and attack the Mehdi army.

Those negotiations have gone no where at the moment because Sistani's representatives are saying the security situation is so (UNINTELLIGIBLE) they're not able to enforce that restriction around the mosque at this time. U.S. and Iraqi forces have masked in and around Najaf ready to resume military operations, if necessary. Diplomacy, as they're saying, is being given another chance. But with each day that passes, Fredricka, their patience is wearing more and more thin for a diplomatic solution to this crisis.

WHITFIELD: And Matthew, could it be that further complicating matters involving Ali al-Sistani is that he is still being hospitalized overseas in London?

CHANCE: Well, it's certainly true that he doesn't carry the same kind of weight that he does when he's in country. He's in London, he actually is recovering from heart surgery. He's been there for several weeks now, in fact, he left just before this latest violence in Najaf broke out. But, he is expected to return soon. Apparently he's making a good recovery, perhaps then he'll be able to impose his will and impose his authority a bit more effectively.

WHITFIELD: All right, Matthew Chance, thank you for that report from Najaf.

Ahead on CNN LIVE SATURDAY, the political implications of the Najaf standoff. I'll talk with a Middle East expert on what the fledgling Iraqi government must do to survive.

And learning how to cope without hot water, housing, and electricity. We'll have a live report from Florida where hurricane clean-up is far from over for many residents there.

And the battle over evidence in the Michael Jackson case. Find out what legal tactic the pop star's lawyers are using now.

(COMMERCIAL BREAK)

WHITFIELD: Since the handover of authority in Iraq took place June 30, the interim government there has been laboring to wlans the country's constitution with Islamic law, set up elections, and train security forces, all this while dodging assassin's bullets and facing other challenges from the insurgents. Here with some perspective Iraq's new government is a Shibley Telhami a professor at University of Maryland and author of "The Stakes: America and the Middle East."

PROF. SHIBLEY TELHAMI, UNIVERSITY OF MARYLAND: Good to see you, Professor.

Pleasure.

WHITFIELD: Well, it looks like publicly, the interim prime minister, Iyad Allawi, is trying to demonstrate that he is in charge, but that al-Sadr seems to be still in control very much of Najaf. Does this seem to be undermining the authority of the interim government significantly?

TELHAMI: Well, Mr. Allawi has two important tests ahead of him. One to establish legitimacy, another is to establish security. Both of these are essential for him. On the first one, he's losing. He's losing because any time there's a confrontation of this sort he needs the American military forces and then that shows him to be essentially collaborating with the U.S. at a time when there is resistance to the occupation -- opposition to the occupation. On the security front, the outcome of the confrontation is going to reflect on him. So, he needs to interpret the outcome as a victory for him. He's, for now, I think given up on the legitimacy, but he's trying to show that he's tough, that he's willing to use force, even it has to do with the U.S., and in the end he wants to show this is an altimatem, but al- Sadr is just giving up.

WHITFIELD: When you say he's losing, is he losing the confidence of the Iraqis as a whole?

TELHAMI: Well, he's losing, I think, in the short term in the legitimacy, because in fact, he's trying to show the government to be independent from the U.S. at the time when he's desperately in need of the U.S., so the confrontation in Najaf weakens his legitimacy. But, on the military side, if this is, in fact -- if it ends up with his victory or at least an interpretation of the public that won and Sadr gave up, certainly he can gain, at least in a sense of showing himself to be in control. And that's why I think what we see in the last few days, a maneuvering. How do you interpret the political deal? Is this really Sadr giving up or this really the government giving in? And that's why you see all this (UNINTELLIGIBLE).

WHITFIELD: So, if Allawi or the interim government is losing legitimacy then the question has to be asked, who's gaining strength? Would it be foreign fighters or would it be people like al-Sadr who seem to be gaining support, at least in that stronghold of Najaf?

TELHAMI: For Sadr, it's certainly a double edged sword. On the one hand, he's come really, the face of the opposition and the problem for Iraqi opposition is there is no real face, it's been mostly shadowy, including the militants who are create -- carrying out attacks, he's really the only central face of that opposition and so, to the extent that there's an increasing opposition to the U.S., he emerges as that player in that game. But, on the other hand, people also want peace and they don't want damage the holy places in Najaf. He will win some, he will lose some, but overall, it'll diminish the government's authority and legitimacy.

WHITFIELD: So, has this very complicated volatile situation become further complicated the fact that Ali al-Sistani is now being brought into the equation, although he's still being hospitalized in London, that al-Sadr would even talk about conceding to handing over the keys to the mosque to Ali al-Sistani certainly seems like a very strange request, particularly further undermining Allawi and the interim government and their power.

TELHAMI: Well, Ayatollah Sistani obviously remains the highest religious authority, he's still highly respected. In the past he's managed to remain somewhat above politics and to play all sides to survive and keep the Shias, in a way, managing their affairs beyond politics. But, in this kind of case when you have a real confrontation, he's in a way forced to take sides. Neutrality is costly. The real issue for him is whether his seeming neutrality is undermining his own authority, is weaken actually within the Shia community. That's going to be interesting though, in the coming days.

But, let me just say one other thing. We're really focused on Sadr as the only security problem in Iraq, in fact, that's not the case. The problem in Iraq is that you have lawlessness, you have crime, you have attacks on police, you have no government control and most of these attacks are not coming from Sadr's men, they're coming from shadowy groups. So, even if we address this particular crisis, security is not at hand.

WHITFIELD: So then, throughout Iraq and other places particularly in places like Baghdad and Nasiriyah where there is some U.S. presence, significant U.S. Presence, is this too, sending the wrong message or a rather confusing message to the Iraqis as to who really is in control here?

TELHAMI: Well, there's no question that I think most people believe that thee U.S. is in control in Iraq today. And that's true, by the way, in the Arab world. I just did a survey in six Arab countries and the vast majority of people I surveyed, in six Arab countires, believe that essentially the transfer of sovereignty is mere fig leaf for the American presence, so most people really believe the U.S. is in control and they see Allawi just as an instrument of that. We don't have a real survey in Iraq that tells us what the Iraqi people today feel, but I suspect that many clearly see him as essentially an agent of the U.S., at the moment.

WHITFIELD: Professor Shibley Telhami of the University of Maryland. Thanks so much for joining us from Washington.

TELHAMI: My pleasure.

WHITFIELD: Well, it certainly wouldn't be the miracle on ice, but it could be close. We'll have a live update from Greece where Iraq's soccer team is looking to continue its winning ways.

And still to come:

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I certainly miss girl. I'm not going to lie about that.

(END VIDEO CLIP)

WHITFIELD: No women, no booze, and a lot of hard labor. Find out why dozens of high school graduates choose this school to continue their education.

(COMMERCIAL BREAK)

WHITFIELD: At the summer games in Athens, Greece, no surprise here, there's been a run on track and field tickets. Olympic organizers say those events at the main Olympic stadium were complete sellouts and they add, that after a slow start, overall tickets are nearing projections of 3.4 million.

A controversy involving tainted gold leads to suspensions at the summer games. Three Olympic judges have been suspended over a scoring mistake in the men's gymnastics. The mistake cost a South Korean the gold, but gave it to an American, and the "Associated Press" says the South Korean team will ask the court of arbitration to -- for sports, rather, to determine if a gold medal should be awarded to their athlete, as well. CNN's Mark McKay is live with more on all of this from Athens. Hi, Mark.

MARK MCKAY, CNN CORRESPONDENT: Hello, Fredricka. You mentioned just before the break, no it wouldn't be the miracle on ice, but perhaps a miracle on the pitch or on grass, as a team that defied the odds by just coming here to Athens is looking for a birth in the semi- finals of Olympic soccer. The Iraqi team, they're currently on the pitch against Australia and Iraq has scored, they lead 1-0 in the second half. The Iraqis are 2-1 in Olympic soccer so far at these games.

As for (UNINTELLIGIBLE) mentioning a little while ago Paul Hamm's Olympic gold medal, here in Athens, has come under question. A native of Wisconsin, he became the first American male to win the all-around gold in the first weeks of these games, but on Saturday the International Gymnastics Federation ruled a scoring error cost the South Korean, who earned bronze, the gold. The judges, three of them, were suspended from this. A South Korea spokesman says that their Olympic committee has gone on to the Court of Arbitration for Sport looking to get a reversal of the results.

Michael Phelps, his Olympic odyssey ends this Saturday night, but not in the pool. After winning his fifth gold here in Athens, in the 100 meters butterfly, on Friday, Phelps gave up his place in Saturday's medley relay to his teammate Ian Crocker. A medal would give Phelps a record equaling eighth overall, of course, technically speaking, Fredricka, Phelps helped the team reach the finals, so if they medal, he gets one, too. Pretty good deal, he's going to be cheering from the stands.

WHITFIELD: That's a great deal since he was at least in the preliminaries, that's good. And I know Ian Crocker is so grateful for that very generous move by Michael Phelps.

MCKAY: That's right.

WHITFIELD: All right, Mark McKay, thanks very much.

Well, one week ago today, many residents of Punta Gorda, Florida, awoke to devastation left by Hurricane Charley. When might life ever get back to normal? We'll have a live report on recovery efforts right after this.

(COMMERCIAL BREAK)

WHITFIELD: Here's some of the stories now in the news. Police in Tampa, Florida, have rounded up 52 suspects in a drug smuggling scheme using cruise ships. Authorities say the drugs came aboard Carnival Cruise ships from Jamaica bound for New Orleans, then they were driven to Tampa.

Four people in Spain have been injured in two bombings linked to a Basque separatist group. It happened in two villages on Spain's north Atlantic coast, now full of vacationers. The bombs were planted in trash cans. No serious damage is being reported. A continuing challenge to Iraq's interim government. Militia forces loyal to rebellious leader Muqtada Al Sadr retained control of the shrine in Najaf. That follows days of intense fighting with U.S. and Iraqi troops.

Grenades exploded near the former prime minister of Bangladesh as she was finishing a speech at an opposition rally in Dhaka. She was slightly injured and four people died and hundreds were wounded.

Keeping you informed, CNN, the most trusted name in news.

A week after Hurricane Charley turned lives upside down in southwest Florida, a quarter of a million people still don't have power today. The toll stands at 10,000 homes destroyed, 16,000 uninhabitable and at least 24 people dead.

One hospital is up and running again and portable classrooms are arriving for schools. CNN Correspondent Sara Dorsey is in hard hit Punta Gorda -- Sara.

SARA DORSEY, CNN CORRESPONDENT: Hi, Fredricka.

Things are not back to normal just yet. I'm right in front of a distribution center that is out here. This particular one was set up by two people from Ft. Lauderdale, Florida, that just wanted to help out the victims of this hurricane.

They brought things like toothbrushes, bug spray, water, all the necessities, because like you said, the power is not on. We're seeing a lot of that. Strangers helping strangers to make do.

(BEGIN VIDEOTAPE)

DORSEY (voice over): Darlene Bills refuses to leave her massively damaged home in Punta Gorda, Florida. Tents serve as her shelter for the night. Her cold shower the only relief from the brutal heat during the day.

UNIDENTIFIED FEMALE: It's not livable, but it's standing up. You can go in there and take a shower. You can use the commode, it flushes.

DORSEY: Her family, like thousands of others in Florida, is still without power. The water in many areas, undrinkable.

FEMA inspectors roam neighborhoods in the hardest hit areas of the state, trying to estimate the damage. And 60,000 people have already registered for assistance.

UNIDENTIFIED MALE: The limb from one of these trees landed right there and poked a hole down through the roof in there and right into the bathroom.

DORSEY: In Port Charlotte, James Campbell is still working on his insurance company. In the meantime, his damaged home and lack of air conditioning have forced him to leave, for now, until power can be restored.

UNIDENTIFIED MALE: Hot in there. Can't stay in there. Can't afford to buy a generator either. It was either the generator of the chain saw.

DORSEY: Keeping in good spirits isn't always easy, but volunteers are on hand to help. Distribution centers are set up and teams take to the streets to make sure no one is overlooked. Bills says she couldn't make it without the extra help.

UNIDENTIFIED FEMALE: There is money coming in. So, whatever I gather, I'll just put to a place for my kids and my mom.

DORSEY: A tale of two lives damaged, but not broken by the fury of Hurricane Charley.

(END VIDEOTAPE)

DORSEY: The destruction in this town is still very evident. You can tell by the building behind me, not yet touched by human hands. In fact, that one, I'm told, has been condemned.

From here, people are starting to clean up, but it looks like that clean up process will be a long haul -- Fredricka?

WHITFIELD: And, Sara, is part of the issue that larger machinery has not been able to come in yet to help in any of the rebuilding?

DORSEY: Well, we do see some trucks coming in now, just during today. We don't know if that's been happening all the time. I know there was a perimeter for a while, but they're now bringing larger machinery in, so hopefully, that will speed the process up for the people here.

WHITFIELD: Sara Dorsey, in Punta Gorda, Florida. Thanks so much.

Rebuilding will take billion billions of insurance dollars and months, perhaps even years to complete. During that time resident need to watch for shysters peddling scams. Kenneth Burris is a deputy federal coordinator for FEMA and joins us now from Orlando.

Good to see you, Mr. Burris.

KENNETH BURRIS, FEMA: Hello, how are you?

WHITFIELD: I'm doing pretty good.

One week after Charley, so far, what does it seem like the biggest obstacles are for you all doing your jobs?

BURRIS: One of the bigger obstacles that we face is the housing program, which we're working hard on trying to get those that are in the shelters some housing and those that have been impacted, either their homes dried in through our tarping or plasticing process, working with our Army Corp of Engineers in the state of Florida, as well as other volunteer organizations. And our travel trailer/mobile home, temporary housing is what we're working on desperately right now.

WHITFIELD: And so often in coastal communities a big problem is uninsured homes in a disproportionate way. Are you finding that in hard-hit Punta Gorda?

BURRIS: Right now our statistics show it's about 50/50, in those that are seeking assistance that have some insurance, and those that don't.

WHITFIELD: How long before those who do not have insurance, usually the ones who will rely on FEMA money the most, how long before they can actually start seeing their applications processed and get some financial help to restart the building?

BURRIS: We actually have applications processed currently. We actually assisted over 14,000 individuals. We have currently over 100,000 individuals who have registered for assistance. To kind of put that in perspective with Hurricane Andrew, today seven or eight days into the process, we're a couple months ahead where we were in the Andrew process with people registering and receiving assistance.

WHITFIELD: Since you brought up Hurricane Andrew, immediately after that there was a big problem with looting and even a lot of scams. There haven't been widespread reports of looting, but scams can still crop up at some point.

How are you as an agency, FEMA, trying to educate people about scams? You know, help them understand what kind of questions to ask, something about, I.D.s, et cetera?

BURRIS: Unfortunately, every disaster brings out those who want to prey on the most unfortunate and the victims.

It's important to note that FEMA inspectors that go out will not be asking you for personal information, such as your Social Security number, your check numbers, your I.D. or routing numbers. That's all taken care of over the phone through our 1-800 teleregistration process.

The FEMA, the people that you will see on the ground, or that the victims will see on the ground, are there to help them and assist them in that process and go through the inspection process. There is no fee for those services and no one will be asking for that type of personal information. All that information is given over the phone when you call our 1-800 FEMA number.

WHITFIELD: One rule of thought, you're also saying, that FEMA doesn't necessarily make house calls. It's up to you, the homeowner, to issue a phone call or come down to the location where you set up office?

BURRIS: Correct. We have community relations specialists that go out and help you assist in making that phone call. Also, everyone with our agency has a government I.D., just because somebody has a FEMA shirt on doesn't mean that they're a representative of our organization. So, you want to ask for that I.D. badge and see that I.D. badge.

WHITFIELD: All right, Kenneth Burris, of the Federal Emergency Management Agency, thanks so much for joining us from Orlando.

BURRIS: Thank you.

WHITFIELD: Other note on money and spending it wisely, the high cost of college. Books, food, extras, it all adds up. "Dollar $igns" takes your calls and e-mails today at 4:30 Eastern Time. Find out how to prepare for those college extras and where you can cut come corners.

Send your questions to us at dollarsigns@cnn.com. Or call us at 1-800-807-2620.

Straight ahead, the legal strategy of Michael Jackson's defense team and how they're trying to keep evidence seized from his Neverland Ranch out of any possible trial.

Plus, America's emerald gem, how can you experience Seattle within your own budget?

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WHITFIELD: In our legal briefs, search and seizure is the issue in Michael Jackson's pretrial hearing this week. Employees at his Neverland Ranch testified that authorities searched areas that weren't included on a search warrant. CNN's Miguel Marquez has more on the case from Santa Maria, California.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice over): It is another legal thrust by Jackson's lawyers to keep a jury from hearing potentially damaging evidence.

Jackson lawyer Steve Cochran argued the warrant for the search at Neverland Ranch, in November 2003, only authorized investigators to go into Jackson's main house, the arcade and security headquarters.

DIANE DIMOND, COURT TV: The defense is saying on Neverland Ranch the sheriff department people went into places they weren't supposed to go. But when you ask them where did they go that they weren't supposed to, they mentioned three places which were in the security headquarters.

MARQUEZ: Long-time Jackson employee Joseph Marcus testified that Jackson's personal office and apartment and a video library are in the same building as the security headquarters. The question for the judge will be, did investigators have the right to go into other parts of the building?

DIMOND: I think the defense is picking on every little thing they can to get the Neverland search warrant out because that's where the sheriff's office got the most evidence.

MARQUEZ: As an example Cochran questioned Santa Barbara County Sheriff Lieutenant Paul Zellas (ph) on why they took into evidence a magazine with the phone number of British billionaire Mohammed Al Fiad (ph) on it. Zellas would only say that they were interested in someone named Al.

Another problem for Jackson, the Santa Maria courthouse received an e-mail threat against him, CNN confirmed, before he and his family showed up to Monday's hearing. Police in Ontario, Canada say that a 26-year-old man was arrested and charged with one count of uttering a death threat.

(On camera): Possibly the last and biggest piece of this suppression of evidence hearing is now set in place. The testimony of Jane Doe, the accuser's mother is now scheduled for September 17th -- Miguel Marquez, CNN, Santa Maria, California.

(END VIDEOTAPE)

WHITFIELD: Well, turning to another high profile celebrity case. An investigator gives a motive in the Robert Blake murder trial.

Blake, the former "Barretta" TV star, is accused of killing his wife back in 2001. A private investigator testified that Blake plotted to kill Bonny Lee Bakley to gain custody of the couple's child.

The 78-year-old was investigators' testimony was taped in case he wouldn't be able to testify at the trial set to start in November.

Rocker Courtney Love pleads not guilty to a felony assault charge. Love allegedly attacked a woman with a liquor bottle at her former boyfriend's home in April.

Love told reporters yesterday she's scared and only wants to play music. A preliminary hearing is set for October 7th.

And court is back in session Monday for the Scott Peterson murder trial. Amber Frey, Peterson's former mistress, will take to the stand for cross-examination. What will she say? And what might she be asked? Our legal experts will discuss the case on CNN LIVE SATURDAY coming up at 2 o'clock Eastern Time.

And discovering the hidden beauty of Seattle. Why it has more to offer than just coffee, clouds and computers. I'll talk to a travel expert coming up next.

And hitting the open range while cracking those college books. We'll tell you about a unique school where students spend their down time as farm hands.

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WHITFIELD: Coffee, clouds, computers -- sounds like Seattle? You're right. The city is vibrant this time of year with mild summer temperatures and hot political conversations, always. Let's talk to Don George from Lonely Planet. He joins us from San Francisco for our focus on weekend getaways.

Good to see you, Don.

DON GEORGE, LONELY PLANET: Hi, Fredricka.

WHITFIELD: All right, so why Seattle?

GEORGE: Seattle is remarkable, especially because it's the most outdoors oriented city in the United States. It's ringed by gorgeous mountains, surrounded by beautiful water, so even when you're in the middle of downtown you have this incredible magnetic pull to the outdoors, which is why I think Seattle is the only city where fleece vests and hiking boots are standard business attire.

It's always present in people's lives so it is a great place to combine the city and the outdoors.

WHITFIELD: Many of us choose a weekend getaway or vacation destination based on weather. And Seattle is known for a whole lot of wet weather. But I also understand that it may not be as wet as most people think. Apparently Houston, Chicago, and New York just might be rainier? Is that true?

GEORGE: Exactly. In terms of rainfall Atlanta, Washington and New York all get more annual precipitation than Seattle does. But in terms of clouds, I think Seattle is number one. It gets an average of 55 days of sunshine a year.

WHITFIELD: So, how do you want to go about vacationing in Seattle or really getting to know the city? Do you want to rely on public transportation or some other unique way such as just walking it?

GEORGE: Walking is a great way to see it. Seattle is a city of neighborhoods, so, once you plant yourself in a neighborhood there is a terrific bus system. When you get into the neighborhood, just walk around and explore it.

If you're lucky enough to be there when the sun comes out, the city will blossom magically, like a flower opening to the sun. So, hopefully that will happen. Walking is a great way to see it.

WHITFIELD: You talk about nature being a real centerpiece for Seattle, does that mean you really need to leave the downtown area and get to know the countryside or appreciate it just from downtown?

GEORGE: Downtown is wonderful. For example, go to the Pike Place Market, which is a block's long complex of shops selling fresh produce, fresh, glistening fish, all kinds of wonderful produce and food stuffs that you find right there in the Pacific Northwest.

It's fun to see the food. It is also fun to the see the interactions between the venders and the customers. It's the soul of Seattle. It is a great place to start a visit. WHITFIELD: So, how affordable might this trip be?

GEORGE: Seattle is wonderfully affordable. It really is tailored to every budget. You can stay in great three star, four star, or five star hotels or the international youth hostel for $25 a night.

The restaurants, again, a whole range from very, very inexpensive to quite expensive. The restaurants, happily, have scaled down their menus so that you can get really high quality fare but at affordable prices.

WHITFIELD: Do you have a preferred time of year? Is this it right now?

GEORGE: This is it right now. If you can go at Labor Day there is a wonderful festival called Bumber Shoot, which features great music, great theater, all kinds of art exhibits. It's a terrific time of year to be there.

WHITFIELD: Sounds like a mischievous festival.

GEORGE: Indeed, the quintessential Seattle festival in a lot of ways.

WHITFIELD: All right. Don George of Lonely Planet, thanks for helping us plan our next weekend get away to Seattle.

GEORGE: Thanks. Thanks, Fredricka.

WHITFIELD: Well, one other travel story to note, traffic at O'Hare in Chicago, one of the nation's busiest and most congested airports might get better. United and American Airlines will cut 37 daily flights between them, in a deal with federal authorities. It is hoped the move might ease delays at O'Hare, which often ripple through the nation's entire air network.

A higher education with a higher calling. No, these students aren't studying for the priesthood. So why are they spending their time tending to animals between classes? We'll explain coming up.

(COMMERCIAL BREAK)

WHITFIELD: There's a remote spot in the California Desert that's an unusual outpost on the road to success at an Ivy League college. CNN's Jason Bellini has the story of the college cowboys.

(BEGIN VIDEOTAPE)

JASON BELLINI, CNN CORRESPONDENT (voice over): They quote Camus and wax poetic about land, labor ...

UNIDENTIFIED MALE: (UNINTELLIGIBLE) ...is in the sweet spot and it's maintained by our work.

BELLINI: ... and life.

JULIAN PETRI, DEEP SPRINGS STUDENT: There's a real sense of purpose here.

BELLINI: These are not your typical college students. And this is not your typical college. Since it's founding in 1917, Deep Springs College, located deep in the California Desert, began as an educational experiment combining intense academics ...

UNIDENTIFIED MALE: Is he talking more of an evolutionary social inheritance.

BELLINI: ...with hard labor.

The goal is to create something more than a typical college graduate.

MITCH HUNTER, DEEP SPRING STUDENT: Every afternoon is full. So, I don't have so much free time.

BELLINI (on camera): Enough time to study?

HUNTER: That depends on how quickly you study.

BELLINI (on camera): Deep Springs is a two-year college. Most, if not all students, transfer into prestigious four-year institutions, Yale, Harvard and Cornell, chief among them.

(voice over): Nearly all the students come from privileged backgrounds.

(on camera): When you go home, do you wear your cowboy hat?

GARETH FISHER, DEEP SPRINGS STUDENT: I may have worn it a couple of times, yes.

BELLINI: They chose Deep Springs, they say, to do something real. Gareth Fisher, from Upstate New York, is responsible for over 200 head of cattle.

FISHER: This isn't just like going out -- I'll go around and chase a calf just for the hell of it. It's a potential $400, $500, $600 loss if this calf doesn't get brought in.

BELLINI: Deep Springs accepts less than 10 percent of its applicants. It has a student body of 26 students, all of men.

ROSS PETERSON, DEEP SPRINGS PRESIDENT: Even though every student has a full scholarship, they pay a good price, in many respects, to be here. Then they appreciate the rewards that come from having contributed to the school.

BELLINI: The rewards, they believe, are self-reliance and self- confidence built through self-sacrifice. But there are rigid rules. No alcohol, no drugs, no leaving the ranch.

FISHER: I certainly miss girls. I'm not going to lie about that. And I love the guys who are here. I love all the guys here, most of the time. JAMES WILSON, DEEP SPRINGS STUDENT: It's tough to see when you're here, when you're cut off from the outside world. And you are with, you know, these 25 other really high strung guys, who are all engaged in this crazy project.

BELLINI: They don't grow up to be cowboys. Most go on to get M.D.s, Ph.D.s and law degrees, but where else, they say, can they learn so much about life?

Jason Bellini, CNN, Deep Springs, California.

(END VIDEOTAPE)

WHITFIELD: An Olympic update now. The sentimental favorite team, the Iraqi men's soccer team, well, they've got another win under their belts. They beat the Australian team 1-0 and now the Iraqi team advances to the semi-finals in the Olympics.

Still much more ahead on CNN SATURDAY. In a few moments, "In The Money". At 2:00 Eastern, in depth on what is turning into one of the biggest presidential campaign issues, the swift boat ads.

At 3:00, it is "Next@cnn." Today, looking that portable Olympic pool that is making a big splash for swimming competition.

First, Jack Cafferty with a preview of "In The Money"

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