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CNN Wolf Blitzer Reports

Showdown in Najaf; Interview With Bob Dole

Aired August 23, 2004 - 17:00   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.


WOLF BLITZER, HOST: Happening now. Flames shooting toward the sky. It's a showdown in the city with a shrine. New images from Najaf right under siege right now.
Plus, a CNN exclusive. Bob Dole has more to add to his controversial comment on John Kerry's war record. I'll speak with him live. That's coming up in just a few moments. Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The war over the war records.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think Senator Kerry served admirably.

BLITZER: Bush offers faint praise. But is Bob Dole getting mean again?

ROBERT DOLE (R), FORMER PRESIDENTIAL CANDIDATE: With three Purple Hearts, he never bled that I know of. And they're all superficial wounds.

BLITZER: And what about those ads? I'll speak with another former senator and war hero, Bob Kerrey.

Scrap the CIA? A controversial plan has feathers flying and tempers flaring. Can it make America safer?

"The scream." They stole a master piece. Now, what do they do with it?

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, August 23, 2004.

(END VIDEOTAPE)

BLITZER: Thanks very much for joining us. We begin with the race for the White House and the moment the Kerry campaign has been eagerly anticipating. President Bush pressed again for comment on the attack ads accusing his rival of lying about Vietnam. We'll have a full report on all of these late breaking developments, including a live interview with Bob Dole, who only yesterday came out swinging against John Kerry. We'll get to all of that.

First, though our national security correspondent, David Ensor. They normally work quietly in the shadows, but spies and former spies are raising an uproar over a plan that could send the CIA and other intelligence agencies to the scrap heap. For that, David Ensor standing by with late breaking developments.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Senator Pat Roberts' bill would eliminate the Central Intelligence Agency as we know it, putting in its place a bigger national intelligence service headed by a much more powerful boss.

(BEGIN VIDEO CLIP)

SEN. PAT ROBERTS (R), INTELLIGENCE CHAIRMAN: We think it's real reform, and we think it's good for national security. And what we did is we stood back from the trees and said, all right, what are the national threats that face our country today, either asymmetrical or what will happen down the road? We didn't pay any attention to turf. We didn't pay any attention to boxes. We didn't pay any attention to, say, the agencies.

(END VIDEO CLIP)

ENSOR: But the proposal has, as you mentioned, raised a storm among serving and former CIA officials, serving officials calling it reckless, former officials saying it would hurt morale.

(BEGIN VIDEO CLIP)

JACK DEVINE, FORMER CIA OFFICIAL: It is going to be very moralizing. We're going to lose people. We're going to go to not having some of the best and brightest apply to us. It's like taking the marine corps and saying now we're going to call you something else. It's not a trivial event and I caution those who do this to think long and hard about the full implications of it.

(END VIDEO CLIP)

ENSOR: The former director of central intelligence, George Tenet, was even tougher on the proposal, calling it yet another episode in the mad rush to rearrange wiring diagrams in an attempt to be seen as doing something. It's time, Tenet said, for someone to say stop.

The plan and the haste with which it was prepared are also under fire by Roberts' Democratic colleague, his counterpart Senator John Rockefeller. But Roberts said he wanted to lay down a marker quickly, that he wanted to come up with a plan that would enact the proposals of the 9/11 commission. Much of it depends, at this point, on the view of President Bush. He was somewhat noncommittal today when asked about it. Roberts hopes to build a coalition, first with the 9/11 families. He hopes to get former CIA directors perhaps coming out in favor of this. Interestingly, of course, the Republican chairman's proposal also got positive comment from, of all places, the Kerry campaign -- Wolf.

BLITZER: David Ensor reporting on a potentially significant development, huge development in the intelligence community. Will this mark the beginning of the end, formally, for the CIA?

Let's get to the race for the White House now.

In the moment that many Kerry campaign officials had been eagerly awaiting, the president of the United States, pressed again today for comment on those attack ads, accusing his rival of lying about Vietnam. In front of cameras, President Bush made his opinion known.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Flanked by his vice president and his national security team at his Crawford, Texas ranch, the president went slightly further than his aides in calling for an end to the controversial Swift Boat Veterans For Truth ads blasting Democratic presidential nominee John Kerry.

BUSH: I think Senator Kerry served admirably and he ought to be -- he ought to be proud of his record. But the question is who best to lead the country in the war on terror.

BLITZER: The president repeated his earlier calls for all those so-called 527 independent attack ads, tens of millions of dollars worth, put out by Democrats, Republicans and Independents, stopped. Here's what he then said when pressed that that included the attack ad put out by Kerry's Swift Boat critics.

BUSH: All of them. That means that ad, every other ad.

BLITZER: Until now the president's White House and campaign aides had refused to specifically call for an end to those Swift Boat Veteran ads, insisting only that all independent attack ads, including those blasting him, should be withdrawn.

Earlier in the day, Democratic vice presidential nominee, John Edwards, urged the president to intervene specifically in the case of the Swift Boat ads.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: The truth is he is the one man who can put an end to these ads. And this is a moment of truth for the president. It is time for him to step forward and say three words. Stop these ads.

BLITZER: Shortly after the president spoke, the Kerry campaign said he did not go far enough. "The moment of truth came and went and the president still couldn't bring himself to do the right thing. We need a president with the strength and integrity to say when something is wrong."

The Swift Boat Veterans For Truth later said the president's statement would not affect them, insisting the group will continue to take its message directly to the American people.

It's become a hot button political issue in this presidential contest. The Swift Boat Veterans For Truth has released two anti- Kerry ads. The first blasting his actual service in Vietnam.

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He's lying about his record.

BLITZER: The second blasting his anti-war statements once he came home.

UNIDENTIFIED MALE: They had personally raped, cut off ears, cut off heads.

UNIDENTIFIED MALE: The accusations that John Kerry made against the veterans who served in Vietnam was just devastating.

BLITZER: The Kerry campaign has released an ad of its own.

AD ANNOUNCER: The people attacking John Kerry's war record are funded by Bush's big money supporters. Listen to someone who was there, the man whose life John Kerry saved.

UNIDENTIFIED MALE: They blew me off the boat. All these Vietcong were shooting at me. I expected I'd be shot. When he pulled me out of the river he risked his life to save mine. .

(END VIDEOTAPE)

BLITZER: And another Republican has joined the battle over John Kerry's Vietnam war story. The former senator, the World War II veteran, the Republican presidential nominee Bob Dole has been in the political shadows largely since his retirement in 1996.

He's now back directly in the ring. For more on that, here's CNN's Brian Todd joining us live -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this might have been inevitable. This debate over John Kerry's war record, sooner or later was likely to bring in perhaps America's most famous war veteran. Well, consider the battle joined by one Bob Dole.

(BEGIN VIDEOTAPE)

TODD (voice-over): Maybe it took something as inflammatory as the debate over John Kerry's war record.

DOLE: With three Purple Hearts, he never bled that I know of. I mean, they're all superficial wounds.

TODD: Maybe he's back in from the sidelines leaving behind his role as political sage from early in the campaign.

You have it just right. You just have to keep on campaigning.

TODD: Possibly spoiling for a fight after those benign commercials for Viagra and Pepsi.

DOLE (voice-over): My faithful little blue friend. An ice cold Pepsi Cola. TODD: Either way, for some observers, it looked like the old Bob Dole was back this weekend with acid-laced commentary on Kerry's Purple Hearts.

DOLE: As far as I know, he's never spent one day in the hospital. I don't think he draws any disability pay. He doesn't have any disability. And boasting about three Purple Hearts when you think of some of the people who really got shot up in Vietnam.

TODD: And this reminiscence of serving with Kerry in the Senate.

DOLE: I served with him for 14 years. I can't remember a single piece of legislation that bore his name.

TODD: An official with the Bush/Cheney campaign told us no one from their ranks called Dole before this appearance. None of the analysts we spoke to believe anyone from the GOP put him up to it. But one close associate of Dole's told us these remarks did evoke memories of the mean-spirited Bob Dole of years past, known for outbursts like this during the 1996 presidential campaign.

DOLE: I've never been before the ethics committee. I've released my tax returns for the past 30 years, Mr. Forbes. Where are yours? And where are yours, Mr. Graham?

TODD: So is the mean Bob Dole back? That effective, aggressive, partisan from the '70s and 80s? Observers we spoke to including one conservative commentator who's been the target of Dole's wrath say the mean Dole never really went away, that he's just a tough political infighter, a mercurial guy whose sharp edges are never far from the surface. But the same people say this same man is just as naturally charming, funny and even lovable.

Two important considerations here, they add, this is a political year, when everyone gets tough. Any debate over a war record has to strike a nerve with a man whose service in World War II was both noble and painful.

(END VIDEOTAPE)

TODD: An official with the Kerry campaign told us "it is disappointing that Senator Dole is making statements that contradict U.S. Navy records. This is partisan politics, in his words, not the truth, " in his words.

BLITZER: All right, Brian Todd, thanks very much for that report.

Let's speak to Bob Dole directly on the phone now, he's joining us live.

Senator, you've certainly stirred up a lot of issues in that interview we did on "LATE EDITION" yesterday.

BOB DOLE (R), FMR. PRESIDENTIAL CANDIDATE: Maybe I should have stayed longer for brunch somewhere. But I had nice call from John Kerry this morning. And you know, we've been friends for a long time. And he knows it's hardball. But he said he was disappointed. And I said, John, I didn't mean to offend you. I've said a lot of nice things about you in the primary. I admired your prostate cancer public stand. I applauded your success in the primary. I defended you against Wesley Clark.

But I said, you know, when you continue to attack George Bush, either you or these MoveOn.org or these groups, you know, George Bush is my guy. And I don't mean to offend you. We had a good back and forth visit and I think an e-mail is on the way to Senator Kerry saying that, in effect, that I wish him luck up to a point.

BLITZER: Up to a point. You clearly support President Bush for reelection.

DOLE: Obviously. And I never had any contact with the Bush people. They have a little number you call in before you go on these shows I guess if you want to get briefed for Sunday shows. I didn't talk to anybody. I don't think I needed to talk to anybody. But, you know, I have no quarrel about his Purple Heart -- or I mean, about his Silver Star or the Bronze Star. I said, John, I've never questioned that. I've said you're a hero.

Why don't you call George Bush on the telephone, and say, Mr. President, let's get on with the campaign, let's get on with the issues. Let's stop all this talk about the National Guard and Vietnam. And he said, well, that's what I'm doing. I'm talking about the issues. I said, well, we know how it works in presidential races. Somebody else is doing it. In fact, the DNC today has put out a message to call Bob Dole and we've had lots of phone calls because of it.

But I don't know. I mean, this is what's happening, I mean, there's a debate out there about his record. And I sent a message to John I think at least two or three months ago, it's a very fine line because a lot of men weren't in the service and a lot of others like to think they had a part in what happened in Vietnam, or World War II or Korea, whatever. And I said that to him again today. I said, you know, you can't be running just because you're a veteran, because maybe I tried that in '96. It didn't work very well.

BLITZER: Senator Dole, let me just get one thing straight. Did you initiate the call to John Kerry this morning, or did he call you?

DOLE: He called me.

BLITZER: And it went relatively well? Was he angry? What was the end of the conversation like?

DOLE: The final words were: "John, I wish you good luck up to a point." And he said, thank you. And you know, there's respect there. We were in the Senate together. But we're talking about the presidential race, and I tweaked him a little on the Purple Hearts. But he said he didn't draw any disability, that he could have because of his hearing and he didn't spend any time in a hospital. But I wasn't trying to be mean-spirited. I was just trying to say all these guys on the other side just can't be Republican liars. Maybe there's some truth and that's when I suggested maybe somebody like Wolf Blitzer ought to be the referee, but you declined.

BLITZER: I'm not sure I would necessarily be a great referee. Senator Dole, there were three specific things that irritated Democrats, including those in the Kerry campaign that you said in the interview on "LATE EDITION." The first were, you belittled the extent of his injuries in Vietnam. Second were the statements he made when he came home. You urged him to apologize formally to the 2 1/2 million veterans who returned after the war. And third, you said -- belittled, basically, his years in the Senate, saying he really had no record to speak on. Do you want to revise or amend any of those comments?

DOLE: Well, I don't know. You know, his record is pretty thin in the Senate. And I think that's what we ought to be talking about. He only I think had 73 words at the convention about his Senate experience. The title of his book is "Line of Duty." His whole campaign is based on the fact that he served in Vietnam. And as said with John, you're proud to be veteran, I'm proud to be a veteran. I'm not quarreling with that. I didn't quarrel with your Silver Star. I didn't quarrel with the Bronze Star. But, you know, as I understand, the wounds were superficial, you never were hospitalized. You don't draw any disability pay. So I think I was fairly consistent. I probably -- he said he did bleed. And I said, well, you know, that's OK.

And on the specific issue, Senator, if either the Bush-Cheney campaign or the White House or Republicans, what some Democrats are saying, they put you up to this appearance yesterday on "LATE EDITION" in which you said these things. I want you to clarify that matter as well.

DOLE: Well, it's doesn't need to be clarified, because it's not true. And as you know, you've been after me for about three weeks to come on the show. And I told John Kerry, I said, I haven't been out there trying to stir up anything. I'm, in fact, ducking the issue because I knew when I got on the show you'd have to ask me these questions. So I said, I haven't been having press conferences, I don't run any ads, I haven't written any letters to the editor. I showed up because I respect your program and you asked me and I did it I think on the third request. But...

BLITZER: Well, we -- that's true. We've been asking you for many, many weeks. But I guess I'm a little confused. You said that there's some sort of recording you can call up and get information before you go out on these Sunday shows. What exactly does that mean?

DOLE: I think when anybody's going to be on a Sunday show, there's a conference call number if you want, I guess, get updated on the facts. At least I got some e-mail saying if you want to get any information, call a certain number. I didn't do that. I don't know if anybody else does that. But I guess it's just probably to stay on message, whatever. But I can tell you with total accuracy and honesty that nobody asked me to do anything. I mean, I think President Bush today denounced the ads. And I think it would be a good chance to bring closure to this now if Senator Kerry would follow up and say, OK, we've had our debate on the National Guard. We've had our debate on Vietnam. Let's talk about today and the future.

BLITZER: Do you want these Swift Boat Veterans for Truth to drop the ads that they're running against John Kerry?

DOLE: I'm not a candidate. I think that's up to President Bush. But I think it's up to them. I mean, they have First Amendment rights. I think there can't be discrimination saying, well, certain veterans can say this happened, but others who may have some knowledge can't question their views. And I think that's not fair. That's not the American way. We have these debates. This is a presidential race, we're 70-some days away. It's political hardball, and certainly Senator Kerry understands that.

And I reminded him that in 1996, I didn't have anybody out writing these great stories about Bob Dole's war record and I don't think we were feeding them to people, but I just wanted him to get off Bush's back and have his people get off Bush's back. He's been called almost a traitor. He's been referred to as a coward -- well, Cheney is referred to as a coward. Bush referred to as a deserter, referred to as being AWOL. And I think this is over the top.

Now maybe some people like that, some real hard-line Democrats, Republicans, they like that kind of politics. But I don't think most Americans like it. And I don't think they want to be reminded every day that John Kerry or Bob Dole or anybody else who did this or that in World War II or Vietnam.

BLITZER: Senator Dole, appreciate it very much. Thanks very much for joining us, clarifying some of the comments from yesterday's "LATE EDITION." Always good to have you on CNN.

DOLE: I may never come back.

(LAUGHTER)

BLITZER: I hope you will come back.

DOLE: Thank you.

BLITZER: I hope you will come back early and often. Thanks very much, Senator Dole, for joining us.

And we'll have more on this entire swift boat controversy coming up a little bit later in the program. I'll speak live with former U.S. senator and Vietnam veteran, Bob Kerrey. Not John Kerry, Bob Kerrey.

New overtime rules now in effect. Will you be working more for less.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: If I didn't have the overtime, my income would be cut at least by 40 or better.

(END VIDEO CLIP)

BLITZER: New rules causing protest, and creating confusion about your pay check.

Taking aim at the star witness for the first time, the defense strikes directly back in the Laci Peterson murder trial.

Art heist: thieves make off with a masterpiece, as museum watcher watch. Why the burglars my find this steal is easier than the sale.

(COMMERCIAL BREAK)

BLITZER: We have a developing story in Iraq we're following right now. U.S. Aircraft and armor have launched what's being described as a fierce assault on Shiite militiamen in Najaf.

(BEGIN VIDEOTAPE)

BLITZER: Gun battles have been going on around the clock. And for the past several hours, a huge fire has lit up the Najaf skyline. The source of the flames, at least at this point, not clear. Hundreds of militiamen are still holed up in the Shiite shrine. But the rebel cleric, Muqtada al-Sadr, has not been seen in public for many days. His aides deny he has fled.

A day after he and his translator were freed by kidnappers, the American journalist, Micah Garen, says he hopes to stay in Iraq. The two were seized more than a week ago in the southern city of Nasiriya. Garen, says he was well treated and hopes to continue work on a documentary project about the looting of Iraq's archaeological sites.

The main export pipeline in southern Iraq was reopened today two weeks after a sabotage attack brought the oil flow to a halt. Iraqi national guardsmen have been deployed to protect oil facilities in the area. Crude oil is also reportedly flowing again through Iraq's northern pipeline to Turkey.

Will the bloody battle in Najaf derail efforts to put Iraq back on its feet.

Joining us now our world affairs analyst, the former Defense Secretary William Cohen.

Mr. Cohen, thanks very much for joining us.

Najaf, right now -- is it possible that when all is said and done, the new government, the interim government of Iyad Allawi will allow Muqtada al-Sadr to be part of the political process?

WILLIAM COHEN, FORMER DEFENSE SECRETARY: Well, that has been sort of his best and final offer, saying you have an opportunity now to disband to put down the weapons, to leave the holy shrine and to become part of the political process. A failure on the part of al- Sadr to accept that means that Mr. Allawi will have very little choice. He'll have to show force. He will have to crush the opposition, as such. And a failure to do so will only cause him great difficulties with other parts of Iraq. So this is really crunch time for Prime Minister Allawi as well as al-Sadr.

BLITZER: Because as you know, al-Sadr has ordered his militiamen to kill Americans.

Is this something the United States government could ever accept.

COHEN: Well, it's unclear in terms of what his position would be, whether or not he'd have to stand trial by a group of his peers, as such, whether he'd be prosecuted by the Allawi administration. But this is something that has yet to be resolved.

But it's clear what the message has been, as far as his followers are concerned, they must lay down those arms. And as time passes on without a resolution, this does not work in the favor of Allawi. It works against the interim government. So now is crunch time. They've either got to resolve this, by diplomacy, giving it every last chance, but diplomacy failing, they must take the military action.

BLITZER: Based on what you know about Senator Pat Roberts' proposal, basically to gut the CIA, to destroy it and create a new organization, is this something you would support?

COHEN: Well, I think he is laying down a marker, saying that the proposal as expressed by the Bush administration doesn't go nearly far enough. Namely to create a, in essence, someone outside the administration, the executive branch, outside of the cabinet who would have no budgetary authority.

And so, I think what Senator Roberts is doing, is to lay down a marker saying if you're going to talk about reform, let's really talk about fundamental reform. I don't know there's any expectation that would have a chance of passing this year. But I think he's putting down a marker. And whatever is resolved before the election, I think will be revisited by next January.

BLITZER: A pretty dramatic marker indeed.

Finally Bob Dole, we just heard him on this program. We heard him yesterday on "Late Edition." You served in the United States Senate with him. You were a good Republican senator in those days. What do you make of his decision a, to go on the offensive against John Kerry, and b, for John Kerry to call him this morning and to say let's talk about this.

COHEN: Well, I served with both Senator Dole and Senator Kerry. And I think both are gentlemen. Bob Dole, certainly has a reputation for being tough -- a tough political fighter and he is. And as clear he felt strongly about this based on your provocative interview, pushing him to come on television to talk about issues, and he feels very strongly. But I think that Senator Kerry is also a gentleman. And I think, as far as I'm concerned, Bob Dole has some good words. Put this behind the campaign right now. I think everybody's being damaged by it, President Bush, Senator Kerry. I think the people of this country are entitled to get to issue of who is best suited to lead this country in this war against terror, to deal with the economic issues. All of those things have been put on the sideline. We have to get back to the central issue of who is best person to help lead this country in the future.

BLITZER: All right. There are a lot more important issues to discuss than what happened in Vietnam 30 or 40-years-ago. Thanks very much secretary for joining us.

COHEN: Pleasure.

BLITZER: Showdown in the Scott Peterson case. The prosecution's star witness is on the stand, facing questions from the defense for the first time. We'll have a live report.

Veterans Against Kerry, what's the driving force behind the recent critical ads?

And safety in question: find out if Wrigley Field will be benched by Chicago building inspectors.

(COMMERCIAL BREAK)

ANNOUNCER: From our studio's in Washington, once again Wolf Blitzer.

BLITZER: Welcome back. John Kerry, in his own words. The past statements that may be the driving force behind the Vietnam veterans movement against his campaign. We'll take a much closer, in-depth look.

First, though, a quick check of some stories now in the news.

One of the soldiers charged with mistreating prisoners at the Abu Ghraib prison in Iraq is expected to plead guilty. Among the charges faced by Staff Sergeant Ivan Frederick, assaulting detainees and committing indecent acts. Military sources say he will enter a guilty plea on one or two charges.

A museum honoring the secret network that helped escaped slaves reach freedom in pre-Civil War America opened today in Cincinnati. Events celebrating the dedication of the National Underground Railroad Freedom Center began this morning. The first lady, Laura Bush, is expected to speak this evening.

Play ball, that's the word from the Chicago Buildings Commission after an inspection of Wrigley Field, the 90-year-old home of the Cubs. On at least three occasions, since June, pieces of concrete have fallen from the upper deck, forcing protective netting to be installed. But they're going to play baseball.

Keeping you informed, CNN, the most trusted name in news. Controversial new overtime rules went into effect today. They mark the first major overhaul of federal overtime law in 50 years. Business groups lobbied hard to get the new rules put into place.

CNN's Louise Schiavone has a look at who's likely to win under the new rules and who might lose.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Several hundred union workers rallied at the Labor Department to protest the launch of new overtime regulations. The new rules add overtime guarantees for 1.3 million workers at the bottom of the rung. But in this election year, with job security a major issue, Democrats charge the Bush Labor Department has left the middle class vulnerable.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: It's not like people aren't struggling enough to be able to pay their bills. The last thing they need is a pay cut, right? And along comes the president and changes the rules and laws that have been protecting our overtime for potentially millions of Americans.

SCHIAVONE: Critics warn that new definitions of management jobs could take current overtime protections away from millions of middle class workers, using job classification terms like learned professionals and team leaders, in this group, high-tech workers, workers in the insurance, financial and funeral industries and restaurant workers like James Ware of Washington.

JAMES WARE, CHEF: If I didn't have the overtime, my income would be cut at least by a quarter or maybe a fourth or better.

SCHIAVONE: The Labor Department asserts, there will be no wholesale job reclassification and wage loss. Officials say they're on the workers' side.

VICTORIA LIPNIC, ASST. LABOR SECRETARY: This administration is completely an advocate for workers. And look at our record. If you look at the record in the Bush administration for enforcement of the wage and hour laws, we have set record levels of enforcement. Last year, the enforcement in terms of back wages, which are all violations of wage and hour laws, was $212 million restored to workers.

SCHIAVONE: The new rules specify that, regardless of annual pay, most blue-collar workers, like plumbers and carpenters, along with police and firefighters, are guaranteed overtime.

(on camera): Democrats have stood by for a year with legislation to block any new regulations that would take overtime pay away from workers who now have it. But it's tough to get anything done this close to elections. And this issue is no exception.

Louise Schiavone, CNN Financial News, Washington.

(END VIDEOTAPE) BLITZER: They say he lied about his service in Vietnam. But are the Swift Boat Veterans For Truth really angry with John Kerry about that or about something else? Up next, I'll speak live with Vietnam veteran former Senator Bob Kerrey.

The star witness on the stand. How far will Mark Geragos go in his cross-examination of Amber Frey?

And making off with a masterpiece. Brazen thieves pull off an art heist in broad daylight. But their new loot might be a hard sell.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

As we mentioned, President Bush is calling for an end to all independent attack ads. But the president stopped short in directly asking one group, Swift Boat Veterans For Truth, to stop its anti- Kerry ads, ads that have dominated the campaign and the news, at least in recent days. That group's anger is rooted to comments Kerry made to the Senate Foreign Relations Committee in 1971.

(BEGIN VIDEOTAPE)

JOHN KERRY, VIETNAM VETERAN: Turned up the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in a fashion reminiscent of Genghis Khan.

BLITZER (voice-over): Those comments by John Kerry before the Senate Foreign Relations Committee in 1971 upset some Vietnam War veterans then and appear to be the driving force behind the current independent anti-Kerry ads today by the Swift Boat Veterans For Truth.

(BEGIN VIDEO CLIP, AD)

KERRY: 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.

(END VIDEO CLIP)

BLITZER: Kerry's testimony came about two years after the end of his combat tour of duty as a swift boat commander in Vietnam. One of the key points not mentioned by the swift boat ad that Kerry's accounts of alleged atrocities were based on stories he heard two months earlier at a meeting of Vietnam veterans in Detroit.

KERRY: I would like to talk, representing all those veterans, and say that 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.

BLITZER: In an interview on CNN's "LATE EDITION" Sunday, former Senator and World War II veteran Bob Dole said Kerry owes an apology to Vietnam veterans. BOB DOLE (R), FORMER U.S. SENATOR: Maybe he should apologize to all the other 2.5 million veterans who served. He wasn't the only one in Vietnam.

BLITZER: Kerry in fact offered an explanation about his comments on atrocities in an interview a few months ago on NBC's "Meet the Press."

(BEGIN VIDEO CLIP, "MEET THE PRESS")

KERRY: I thought a lot, for a long time, about that period of time, the things we said. And I think the word is a bad word. I think it's an inappropriate word.

BLITZER: Historian Douglas Brinkley says in his book on Kerry, "Tour of Duty," that Kerry's main target in 1971 was not fellow veterans, but U.S. military policy, a point Kerry emphasized in his Senate testimony.

KERRY: I think it lies with the men who designed free fire zones. I think it lies with the men who encouraged body counts. I think it lies in large part with this country.

BLITZER: Kerry's main points have been documented by others. More than 200 Vietnam veterans were convicted of serious crimes against the Vietnamese. The most infamous U.S. atrocity in Vietnam was the My Lai massacre, in which U.S. troops killed at least 175, possibly as many as 400 civilian men, women and children.

Robert McNamara, the Vietnam War defense secretary, says in an interview -- quote -- "There were atrocities, without question. We had photographs of officers shooting innocent Vietnamese."

Earlier this year, the Ohio newspaper "Toledo Blade" won a Pulitzer Prize for a series on Vietnam War atrocities committed by an elite U.S. Army unit in 1967. As did Kerry, the report linked the killings to violations of official U.S. military policy in Vietnam, including free-fire zones, in which soldiers had a green light to kill anything that moved if they were attacked and shooting back at the enemy.

(END VIDEOTAPE)

BLITZER: And joining us now with his take on this entire, very sensitive issue, the former Democratic senator, 9/11 Commissioner, the Vietnam War veteran, Bob Kerrey. He's now the president of the New School University in New York.

Senator, thanks very much for joining us.

What's your bottom line view of this whole uproar that has developed in recent days?

BOB KERREY (D), FORMER U.S. SENATOR: Well, there's an organized effort to smear John Kerry's military record. And, unfortunately, Bob Dole, who many of us as Vietnam veterans defended in '96 when he was attacked in a cartoon participated in it yesterday.

I like Bob Dole a lot and I admire John Kerry for calling him and talking to him about this. But, what, he didn't bleed enough and get three Purple Hearts? He wasn't hospitalized, therefore, he doesn't deserve it? This is an organized effort to belittle John Kerry's military effort. And I think it's probably true that behind it comes their anger with what he said in '71.

But even there, they misrepresent what he said. They don't include the full story. They don't care. They call themselves Swift Boat Veterans For Truth, but they shave the truth every single time. And, unfortunately, too many people are participating. And the president, by not condemning it forthrightly is participating, I think, in an indirect fashion with this campaign to smear John Kerry's record.

BLITZER: The president today said he wants all of these independent attack ads from Democrats, Republicans, independents, tens of millions of dollars worth over the past several months, to simply go away, including those ads put out by the Swift Boat Veterans For Truth. Is that good enough for you?

KERREY: No, it's not good enough for me.

It's certainly a good first step. John Kerry attacked MoveOn.org's campaign against President Bush. Yes, it would have been better for us to deal with this when McCain-Feingold was being debated in the Senate. Unfortunately, it's the law of the land. I wrote a piece. It's very difficult for me to call on President Bush to call for these things to come down. In fairness, he's being whacked as hard by 527 things that are saying, I think, inaccurate things about him as well.

But this is about his military service in Vietnam. And inaccurate things are being said. And the burden of proof, it seems to me, needs to lie on us as politicians to defend those who are being, I think, recklessly and misguidedly smeared in an effort to try to score a political victory. And it's just -- it's a standard that we ought to say, this is too low for us. We're not going to sink to this standard and we're going to try to do everything we can to get it stopped.

BLITZER: Do you have any hard evidence that the White House is really behind this or the Bush/Cheney campaign is really behind these ads put out by the Swift Boat Veterans For Truth?

KERREY: Geez, you don't need hard evidence. I've been in politics long enough. You can see these things going on.

We watch these things going off against President Bush. They don't have to be orchestrated by President Bush. He had a member of his Veterans Committee who participated in one of the ads. He resigned after he did the ad, said he didn't realize that his voice was going to be used. Karl Rove has connections with the people. These are the same people that smeared John McCain in 2000. He needs to condemn it. It's beneath I think the unfortunate low level that American politics has sunk to. It's just, there are some things that we just should say, we don't like it; we're going to condemn it. That's why I went to the floor in '96 when Bob Dole was attacked in a cartoon. His military service was attacked in a cartoon. There are some things we just ought to leave alone and not do.

BLITZER: Did Senator Kerry go too far in his 1971 testimony? You served in Vietnam. You were injured in Vietnam. You were highly decorated. Did he go too far in the things that he said?

KERREY: Yes, I think the Detroit trials in particular went way too far.

But that was a terrible time, 1971. And, again, the ad that Swift Boat Veterans For Truth are putting up on the air misrepresent it. They leave out the contextual statement, which is, I heard this from talking to veterans in Detroit a few days ago. He doesn't say -- himself assert that he saw these things or heard these things. He takes it from a conversation.

Yes, it was a terrible time. And I think John realizes he went too far in 1971. But an awful lot of people did during that period of time, that terrible time. And John, by the way, has risen above it. And Bob Dole says he didn't do much in the Senate. He worked with the first President Bush to get a peace agreement for Cambodia that provided the basis for a road map to normalization. A lot of these guys are probably still mad at him for leading the POW/MIA Commission, for finally resolving the hate and the mistrust and the bitterness that lay between us and Vietnam.

We have an ambassador, a former POW that went to Vietnam. We resolved all that and hopefully put it all behind us. We rose above it, in other words. And, once more, we're sinking right back down into the mire.

BLITZER: What, if anything, do you think John Kerry should do right now to get beyond this issue.

KERREY: Just keep doing what he's doing.

Look, he's telling the American people why the Vietnam experience is connected to his desire to be president. I thought what he did this morning by calling Senator Dole -- Senator Dole is a great hero and a wonderful human being. And John Kerry took the initiative. He will be a unifier and not a divider. He does have both the capacity and the willingness to do the things necessary to bring the country together, rather than divide it.

BLITZER: Senator Kerrey, thanks very much for joining us.

KERREY: You're welcome.

BLITZER: Amber Frey, she's back on the stand right now in a much-awaited cross-examination by Scott Peterson's defense team.

And the art of the steal. Thieves get away with a world famous painting, but may find that crime does not necessarily pay.

And Olympic sweep. Americans prove they're the fastest when it comes to the 400, an update from Athens.

First, though a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): There is sporadic violence in Bangladesh as protesters opposed to the government demonstrated in the capital, Dhaka. A grenade attack on an opposition rally two days ago killed 17 and injured dozens.

Arsonists destroyed a Jewish community center in Paris yesterday. They left behind swastikas and anti-Semitic threats written on the walls. A militant Islamic group posted a statement claiming responsibility on an Islamic Web site. France has suffered a series of anti-Semitic attacks since 2000.

And in Kabul, Afghanistan, three Americans are on trial for running a freelance jail and torture center. The men described their operation as an officially sanctioned part of the U.S. war on terror. They could face 20 years in prison.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Amber Frey back on the witness stand in the double murder trial of Scott Peterson. Cross-examination of Peterson's former lover was postponed by the judge last week. Now the defense is getting its chance to question her.

CNN's Ted Rowlands is outside the courthouse in Redwood City, California. He's joining us now live with the latest -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Well, Wolf, Mark Geragos, Scott Peterson's defense attorney, has had over an hour with Amber Frey in cross-examination. He's been pushing her, but he hasn't been overly aggressive with her and hasn't really attacked her to this point.

He has used her to establish a possible reason why Scott Peterson told those elaborate lies about being in Europe. He had Frey testify to the fact that Peterson within three hours of meeting her at a dinner date told her these lies, that he planned to go to Alaska, then on to Europe, to Kennebunkport, Maine. And Geragos seemed to imply that he was tied to those lies and then later carried out the charade, so that he could keep her -- quote -- "emotionally at bay" while his wife was missing.

Earlier today -- or at the beginning, Geragos established that they had nine phone calls, they met three times, had sex every time and drank together each time during their meetings, insinuating that Amber Frey was really nothing more than a fling for Scott Peterson. She is expected to be on the stand for the remainder of the day today and possibly spill into tomorrow -- Wolf.

BLITZER: All right, Ted Rowlands with the latest on that, thanks, Ted, very much.

Stolen scream. A bold robbery in broad daylight leaves art lovers around the world in shock.

(BEGIN VIDEO CLIP)

SARAH JACKSON, ART LOSS REGISTER: We're not talking here about an art lover who has got a secret gallery of the world's masterpieces on his wall.

(END VIDEO CLIP)

BLITZER: Why this world famous painting is not likely to land on the black market.

Plus, Olympic controversy. Gymnast Paul Hamm, will he be forced to give up his gold medal?

(COMMERCIAL BREAK)

BLITZER: In Oslo, Norway, masked thieves walked into a museum and walked out with one of the most famous paintings in the world. "The Scream" by Edvard Munch is valued at tens of millions of dollars. But what's it really worth to thieves?

CNN's Jim Boulden takes a closer look.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): It appears that stealing "The Scream" in Oslo will be easier than selling it. Anyway, the art world does not expect such a famous painting to end up on the black market.

Tony Russell has been tracking art thieves for 25 years.

TONY RUSSELL, ART RECOVERY LTD: And their options are either ransom it back, take a reward for returning it, or passing it on amongst the other criminals maybe for a few kilos of drugs.

ROWLANDS: The Art Loss Register tracks stolen goods on behalf of insurance companies and victims. Its experts estimate art crime ranks fourth behind drugs, money laundering, and illegal arms.

JACKSON: We're not talking here about an art lover who has got a secret gallery of the world's masterpieces on his wall. This is a nasty crime, linked to organized crime, gun running, drugs. And the idea is to convert artworks into cash.

ROWLANDS (on camera): The insurance industry estimates some $5 billion worth of artwork is stolen every year. And only about 5 percent of that is ever recovered. But if it's a well-known piece of artwork, then the odds of recovery go up greatly.

(voice-over): That's because paintings worth tens of millions of dollars are often returned in exchange for ransom. But the real money is in stealing art worth much less money that can be easily sold on without much notice. That's why more than half of all art is stolen from homes. Much of that is then sold through the Internet. Only 12 percent is stolen from museums. The same amount is also taken from galleries.

Ironically, a crackdown on stolen art coming back into the market through auctions has kept many pieces from resurfacing. And a crackdown on money laundering is making it harder for criminals to move cash around. So a portable piece of art, like this tiny da Vinci masterpiece stolen last year, is becoming a preferred currency between criminal gangs.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

BLITZER: Golden glory. A true American dream team takes the top prize in Athens.

(COMMERCIAL BREAK)

BLITZER: It's week two for Olympians in Athens.

Here are some of the key results today. If you'd rather wait for tonight's telecast, turn down the sound for a few seconds right now. The American women took gold in softball, beating Australia 5-1. That was the only run scored off the U.S. team during nine games in Athens, as the women ran their overall winning streak to 79 games.

Americans finished one, two, three in the men's 400-meter run. A relative unknown just a year ago, Jeremy Wariner, won the gold with a time of 44 seconds flat. Otis Harris won the silver and Derrick Brew took the bronze.

They've taken their lumps in Athens, but the U.S. men's basketball team finally had an easy game today, beating Angola 89-53 to remain in contention for a medal.

The U.S. Olympic Committee would consider a South Korean bid for a duplicate gold medal in men's all-around gymnastics. A scoring error last week gave the gold to American Paul Hamm.

And that's all the time we have today. I'll be back tomorrow, same time, 5:00 Eastern, as well as noon Eastern. Thanks very much for joining us. I'm Wolf Blitzer in Washington.

"LOU DOBBS TONIGHT" starts right now.

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 23, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now. Flames shooting toward the sky. It's a showdown in the city with a shrine. New images from Najaf right under siege right now.
Plus, a CNN exclusive. Bob Dole has more to add to his controversial comment on John Kerry's war record. I'll speak with him live. That's coming up in just a few moments. Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): The war over the war records.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think Senator Kerry served admirably.

BLITZER: Bush offers faint praise. But is Bob Dole getting mean again?

ROBERT DOLE (R), FORMER PRESIDENTIAL CANDIDATE: With three Purple Hearts, he never bled that I know of. And they're all superficial wounds.

BLITZER: And what about those ads? I'll speak with another former senator and war hero, Bob Kerrey.

Scrap the CIA? A controversial plan has feathers flying and tempers flaring. Can it make America safer?

"The scream." They stole a master piece. Now, what do they do with it?

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, August 23, 2004.

(END VIDEOTAPE)

BLITZER: Thanks very much for joining us. We begin with the race for the White House and the moment the Kerry campaign has been eagerly anticipating. President Bush pressed again for comment on the attack ads accusing his rival of lying about Vietnam. We'll have a full report on all of these late breaking developments, including a live interview with Bob Dole, who only yesterday came out swinging against John Kerry. We'll get to all of that.

First, though our national security correspondent, David Ensor. They normally work quietly in the shadows, but spies and former spies are raising an uproar over a plan that could send the CIA and other intelligence agencies to the scrap heap. For that, David Ensor standing by with late breaking developments.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Senator Pat Roberts' bill would eliminate the Central Intelligence Agency as we know it, putting in its place a bigger national intelligence service headed by a much more powerful boss.

(BEGIN VIDEO CLIP)

SEN. PAT ROBERTS (R), INTELLIGENCE CHAIRMAN: We think it's real reform, and we think it's good for national security. And what we did is we stood back from the trees and said, all right, what are the national threats that face our country today, either asymmetrical or what will happen down the road? We didn't pay any attention to turf. We didn't pay any attention to boxes. We didn't pay any attention to, say, the agencies.

(END VIDEO CLIP)

ENSOR: But the proposal has, as you mentioned, raised a storm among serving and former CIA officials, serving officials calling it reckless, former officials saying it would hurt morale.

(BEGIN VIDEO CLIP)

JACK DEVINE, FORMER CIA OFFICIAL: It is going to be very moralizing. We're going to lose people. We're going to go to not having some of the best and brightest apply to us. It's like taking the marine corps and saying now we're going to call you something else. It's not a trivial event and I caution those who do this to think long and hard about the full implications of it.

(END VIDEO CLIP)

ENSOR: The former director of central intelligence, George Tenet, was even tougher on the proposal, calling it yet another episode in the mad rush to rearrange wiring diagrams in an attempt to be seen as doing something. It's time, Tenet said, for someone to say stop.

The plan and the haste with which it was prepared are also under fire by Roberts' Democratic colleague, his counterpart Senator John Rockefeller. But Roberts said he wanted to lay down a marker quickly, that he wanted to come up with a plan that would enact the proposals of the 9/11 commission. Much of it depends, at this point, on the view of President Bush. He was somewhat noncommittal today when asked about it. Roberts hopes to build a coalition, first with the 9/11 families. He hopes to get former CIA directors perhaps coming out in favor of this. Interestingly, of course, the Republican chairman's proposal also got positive comment from, of all places, the Kerry campaign -- Wolf.

BLITZER: David Ensor reporting on a potentially significant development, huge development in the intelligence community. Will this mark the beginning of the end, formally, for the CIA?

Let's get to the race for the White House now.

In the moment that many Kerry campaign officials had been eagerly awaiting, the president of the United States, pressed again today for comment on those attack ads, accusing his rival of lying about Vietnam. In front of cameras, President Bush made his opinion known.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Flanked by his vice president and his national security team at his Crawford, Texas ranch, the president went slightly further than his aides in calling for an end to the controversial Swift Boat Veterans For Truth ads blasting Democratic presidential nominee John Kerry.

BUSH: I think Senator Kerry served admirably and he ought to be -- he ought to be proud of his record. But the question is who best to lead the country in the war on terror.

BLITZER: The president repeated his earlier calls for all those so-called 527 independent attack ads, tens of millions of dollars worth, put out by Democrats, Republicans and Independents, stopped. Here's what he then said when pressed that that included the attack ad put out by Kerry's Swift Boat critics.

BUSH: All of them. That means that ad, every other ad.

BLITZER: Until now the president's White House and campaign aides had refused to specifically call for an end to those Swift Boat Veteran ads, insisting only that all independent attack ads, including those blasting him, should be withdrawn.

Earlier in the day, Democratic vice presidential nominee, John Edwards, urged the president to intervene specifically in the case of the Swift Boat ads.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: The truth is he is the one man who can put an end to these ads. And this is a moment of truth for the president. It is time for him to step forward and say three words. Stop these ads.

BLITZER: Shortly after the president spoke, the Kerry campaign said he did not go far enough. "The moment of truth came and went and the president still couldn't bring himself to do the right thing. We need a president with the strength and integrity to say when something is wrong."

The Swift Boat Veterans For Truth later said the president's statement would not affect them, insisting the group will continue to take its message directly to the American people.

It's become a hot button political issue in this presidential contest. The Swift Boat Veterans For Truth has released two anti- Kerry ads. The first blasting his actual service in Vietnam.

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He's lying about his record.

BLITZER: The second blasting his anti-war statements once he came home.

UNIDENTIFIED MALE: They had personally raped, cut off ears, cut off heads.

UNIDENTIFIED MALE: The accusations that John Kerry made against the veterans who served in Vietnam was just devastating.

BLITZER: The Kerry campaign has released an ad of its own.

AD ANNOUNCER: The people attacking John Kerry's war record are funded by Bush's big money supporters. Listen to someone who was there, the man whose life John Kerry saved.

UNIDENTIFIED MALE: They blew me off the boat. All these Vietcong were shooting at me. I expected I'd be shot. When he pulled me out of the river he risked his life to save mine. .

(END VIDEOTAPE)

BLITZER: And another Republican has joined the battle over John Kerry's Vietnam war story. The former senator, the World War II veteran, the Republican presidential nominee Bob Dole has been in the political shadows largely since his retirement in 1996.

He's now back directly in the ring. For more on that, here's CNN's Brian Todd joining us live -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this might have been inevitable. This debate over John Kerry's war record, sooner or later was likely to bring in perhaps America's most famous war veteran. Well, consider the battle joined by one Bob Dole.

(BEGIN VIDEOTAPE)

TODD (voice-over): Maybe it took something as inflammatory as the debate over John Kerry's war record.

DOLE: With three Purple Hearts, he never bled that I know of. I mean, they're all superficial wounds.

TODD: Maybe he's back in from the sidelines leaving behind his role as political sage from early in the campaign.

You have it just right. You just have to keep on campaigning.

TODD: Possibly spoiling for a fight after those benign commercials for Viagra and Pepsi.

DOLE (voice-over): My faithful little blue friend. An ice cold Pepsi Cola. TODD: Either way, for some observers, it looked like the old Bob Dole was back this weekend with acid-laced commentary on Kerry's Purple Hearts.

DOLE: As far as I know, he's never spent one day in the hospital. I don't think he draws any disability pay. He doesn't have any disability. And boasting about three Purple Hearts when you think of some of the people who really got shot up in Vietnam.

TODD: And this reminiscence of serving with Kerry in the Senate.

DOLE: I served with him for 14 years. I can't remember a single piece of legislation that bore his name.

TODD: An official with the Bush/Cheney campaign told us no one from their ranks called Dole before this appearance. None of the analysts we spoke to believe anyone from the GOP put him up to it. But one close associate of Dole's told us these remarks did evoke memories of the mean-spirited Bob Dole of years past, known for outbursts like this during the 1996 presidential campaign.

DOLE: I've never been before the ethics committee. I've released my tax returns for the past 30 years, Mr. Forbes. Where are yours? And where are yours, Mr. Graham?

TODD: So is the mean Bob Dole back? That effective, aggressive, partisan from the '70s and 80s? Observers we spoke to including one conservative commentator who's been the target of Dole's wrath say the mean Dole never really went away, that he's just a tough political infighter, a mercurial guy whose sharp edges are never far from the surface. But the same people say this same man is just as naturally charming, funny and even lovable.

Two important considerations here, they add, this is a political year, when everyone gets tough. Any debate over a war record has to strike a nerve with a man whose service in World War II was both noble and painful.

(END VIDEOTAPE)

TODD: An official with the Kerry campaign told us "it is disappointing that Senator Dole is making statements that contradict U.S. Navy records. This is partisan politics, in his words, not the truth, " in his words.

BLITZER: All right, Brian Todd, thanks very much for that report.

Let's speak to Bob Dole directly on the phone now, he's joining us live.

Senator, you've certainly stirred up a lot of issues in that interview we did on "LATE EDITION" yesterday.

BOB DOLE (R), FMR. PRESIDENTIAL CANDIDATE: Maybe I should have stayed longer for brunch somewhere. But I had nice call from John Kerry this morning. And you know, we've been friends for a long time. And he knows it's hardball. But he said he was disappointed. And I said, John, I didn't mean to offend you. I've said a lot of nice things about you in the primary. I admired your prostate cancer public stand. I applauded your success in the primary. I defended you against Wesley Clark.

But I said, you know, when you continue to attack George Bush, either you or these MoveOn.org or these groups, you know, George Bush is my guy. And I don't mean to offend you. We had a good back and forth visit and I think an e-mail is on the way to Senator Kerry saying that, in effect, that I wish him luck up to a point.

BLITZER: Up to a point. You clearly support President Bush for reelection.

DOLE: Obviously. And I never had any contact with the Bush people. They have a little number you call in before you go on these shows I guess if you want to get briefed for Sunday shows. I didn't talk to anybody. I don't think I needed to talk to anybody. But, you know, I have no quarrel about his Purple Heart -- or I mean, about his Silver Star or the Bronze Star. I said, John, I've never questioned that. I've said you're a hero.

Why don't you call George Bush on the telephone, and say, Mr. President, let's get on with the campaign, let's get on with the issues. Let's stop all this talk about the National Guard and Vietnam. And he said, well, that's what I'm doing. I'm talking about the issues. I said, well, we know how it works in presidential races. Somebody else is doing it. In fact, the DNC today has put out a message to call Bob Dole and we've had lots of phone calls because of it.

But I don't know. I mean, this is what's happening, I mean, there's a debate out there about his record. And I sent a message to John I think at least two or three months ago, it's a very fine line because a lot of men weren't in the service and a lot of others like to think they had a part in what happened in Vietnam, or World War II or Korea, whatever. And I said that to him again today. I said, you know, you can't be running just because you're a veteran, because maybe I tried that in '96. It didn't work very well.

BLITZER: Senator Dole, let me just get one thing straight. Did you initiate the call to John Kerry this morning, or did he call you?

DOLE: He called me.

BLITZER: And it went relatively well? Was he angry? What was the end of the conversation like?

DOLE: The final words were: "John, I wish you good luck up to a point." And he said, thank you. And you know, there's respect there. We were in the Senate together. But we're talking about the presidential race, and I tweaked him a little on the Purple Hearts. But he said he didn't draw any disability, that he could have because of his hearing and he didn't spend any time in a hospital. But I wasn't trying to be mean-spirited. I was just trying to say all these guys on the other side just can't be Republican liars. Maybe there's some truth and that's when I suggested maybe somebody like Wolf Blitzer ought to be the referee, but you declined.

BLITZER: I'm not sure I would necessarily be a great referee. Senator Dole, there were three specific things that irritated Democrats, including those in the Kerry campaign that you said in the interview on "LATE EDITION." The first were, you belittled the extent of his injuries in Vietnam. Second were the statements he made when he came home. You urged him to apologize formally to the 2 1/2 million veterans who returned after the war. And third, you said -- belittled, basically, his years in the Senate, saying he really had no record to speak on. Do you want to revise or amend any of those comments?

DOLE: Well, I don't know. You know, his record is pretty thin in the Senate. And I think that's what we ought to be talking about. He only I think had 73 words at the convention about his Senate experience. The title of his book is "Line of Duty." His whole campaign is based on the fact that he served in Vietnam. And as said with John, you're proud to be veteran, I'm proud to be a veteran. I'm not quarreling with that. I didn't quarrel with your Silver Star. I didn't quarrel with the Bronze Star. But, you know, as I understand, the wounds were superficial, you never were hospitalized. You don't draw any disability pay. So I think I was fairly consistent. I probably -- he said he did bleed. And I said, well, you know, that's OK.

And on the specific issue, Senator, if either the Bush-Cheney campaign or the White House or Republicans, what some Democrats are saying, they put you up to this appearance yesterday on "LATE EDITION" in which you said these things. I want you to clarify that matter as well.

DOLE: Well, it's doesn't need to be clarified, because it's not true. And as you know, you've been after me for about three weeks to come on the show. And I told John Kerry, I said, I haven't been out there trying to stir up anything. I'm, in fact, ducking the issue because I knew when I got on the show you'd have to ask me these questions. So I said, I haven't been having press conferences, I don't run any ads, I haven't written any letters to the editor. I showed up because I respect your program and you asked me and I did it I think on the third request. But...

BLITZER: Well, we -- that's true. We've been asking you for many, many weeks. But I guess I'm a little confused. You said that there's some sort of recording you can call up and get information before you go out on these Sunday shows. What exactly does that mean?

DOLE: I think when anybody's going to be on a Sunday show, there's a conference call number if you want, I guess, get updated on the facts. At least I got some e-mail saying if you want to get any information, call a certain number. I didn't do that. I don't know if anybody else does that. But I guess it's just probably to stay on message, whatever. But I can tell you with total accuracy and honesty that nobody asked me to do anything. I mean, I think President Bush today denounced the ads. And I think it would be a good chance to bring closure to this now if Senator Kerry would follow up and say, OK, we've had our debate on the National Guard. We've had our debate on Vietnam. Let's talk about today and the future.

BLITZER: Do you want these Swift Boat Veterans for Truth to drop the ads that they're running against John Kerry?

DOLE: I'm not a candidate. I think that's up to President Bush. But I think it's up to them. I mean, they have First Amendment rights. I think there can't be discrimination saying, well, certain veterans can say this happened, but others who may have some knowledge can't question their views. And I think that's not fair. That's not the American way. We have these debates. This is a presidential race, we're 70-some days away. It's political hardball, and certainly Senator Kerry understands that.

And I reminded him that in 1996, I didn't have anybody out writing these great stories about Bob Dole's war record and I don't think we were feeding them to people, but I just wanted him to get off Bush's back and have his people get off Bush's back. He's been called almost a traitor. He's been referred to as a coward -- well, Cheney is referred to as a coward. Bush referred to as a deserter, referred to as being AWOL. And I think this is over the top.

Now maybe some people like that, some real hard-line Democrats, Republicans, they like that kind of politics. But I don't think most Americans like it. And I don't think they want to be reminded every day that John Kerry or Bob Dole or anybody else who did this or that in World War II or Vietnam.

BLITZER: Senator Dole, appreciate it very much. Thanks very much for joining us, clarifying some of the comments from yesterday's "LATE EDITION." Always good to have you on CNN.

DOLE: I may never come back.

(LAUGHTER)

BLITZER: I hope you will come back.

DOLE: Thank you.

BLITZER: I hope you will come back early and often. Thanks very much, Senator Dole, for joining us.

And we'll have more on this entire swift boat controversy coming up a little bit later in the program. I'll speak live with former U.S. senator and Vietnam veteran, Bob Kerrey. Not John Kerry, Bob Kerrey.

New overtime rules now in effect. Will you be working more for less.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: If I didn't have the overtime, my income would be cut at least by 40 or better.

(END VIDEO CLIP)

BLITZER: New rules causing protest, and creating confusion about your pay check.

Taking aim at the star witness for the first time, the defense strikes directly back in the Laci Peterson murder trial.

Art heist: thieves make off with a masterpiece, as museum watcher watch. Why the burglars my find this steal is easier than the sale.

(COMMERCIAL BREAK)

BLITZER: We have a developing story in Iraq we're following right now. U.S. Aircraft and armor have launched what's being described as a fierce assault on Shiite militiamen in Najaf.

(BEGIN VIDEOTAPE)

BLITZER: Gun battles have been going on around the clock. And for the past several hours, a huge fire has lit up the Najaf skyline. The source of the flames, at least at this point, not clear. Hundreds of militiamen are still holed up in the Shiite shrine. But the rebel cleric, Muqtada al-Sadr, has not been seen in public for many days. His aides deny he has fled.

A day after he and his translator were freed by kidnappers, the American journalist, Micah Garen, says he hopes to stay in Iraq. The two were seized more than a week ago in the southern city of Nasiriya. Garen, says he was well treated and hopes to continue work on a documentary project about the looting of Iraq's archaeological sites.

The main export pipeline in southern Iraq was reopened today two weeks after a sabotage attack brought the oil flow to a halt. Iraqi national guardsmen have been deployed to protect oil facilities in the area. Crude oil is also reportedly flowing again through Iraq's northern pipeline to Turkey.

Will the bloody battle in Najaf derail efforts to put Iraq back on its feet.

Joining us now our world affairs analyst, the former Defense Secretary William Cohen.

Mr. Cohen, thanks very much for joining us.

Najaf, right now -- is it possible that when all is said and done, the new government, the interim government of Iyad Allawi will allow Muqtada al-Sadr to be part of the political process?

WILLIAM COHEN, FORMER DEFENSE SECRETARY: Well, that has been sort of his best and final offer, saying you have an opportunity now to disband to put down the weapons, to leave the holy shrine and to become part of the political process. A failure on the part of al- Sadr to accept that means that Mr. Allawi will have very little choice. He'll have to show force. He will have to crush the opposition, as such. And a failure to do so will only cause him great difficulties with other parts of Iraq. So this is really crunch time for Prime Minister Allawi as well as al-Sadr.

BLITZER: Because as you know, al-Sadr has ordered his militiamen to kill Americans.

Is this something the United States government could ever accept.

COHEN: Well, it's unclear in terms of what his position would be, whether or not he'd have to stand trial by a group of his peers, as such, whether he'd be prosecuted by the Allawi administration. But this is something that has yet to be resolved.

But it's clear what the message has been, as far as his followers are concerned, they must lay down those arms. And as time passes on without a resolution, this does not work in the favor of Allawi. It works against the interim government. So now is crunch time. They've either got to resolve this, by diplomacy, giving it every last chance, but diplomacy failing, they must take the military action.

BLITZER: Based on what you know about Senator Pat Roberts' proposal, basically to gut the CIA, to destroy it and create a new organization, is this something you would support?

COHEN: Well, I think he is laying down a marker, saying that the proposal as expressed by the Bush administration doesn't go nearly far enough. Namely to create a, in essence, someone outside the administration, the executive branch, outside of the cabinet who would have no budgetary authority.

And so, I think what Senator Roberts is doing, is to lay down a marker saying if you're going to talk about reform, let's really talk about fundamental reform. I don't know there's any expectation that would have a chance of passing this year. But I think he's putting down a marker. And whatever is resolved before the election, I think will be revisited by next January.

BLITZER: A pretty dramatic marker indeed.

Finally Bob Dole, we just heard him on this program. We heard him yesterday on "Late Edition." You served in the United States Senate with him. You were a good Republican senator in those days. What do you make of his decision a, to go on the offensive against John Kerry, and b, for John Kerry to call him this morning and to say let's talk about this.

COHEN: Well, I served with both Senator Dole and Senator Kerry. And I think both are gentlemen. Bob Dole, certainly has a reputation for being tough -- a tough political fighter and he is. And as clear he felt strongly about this based on your provocative interview, pushing him to come on television to talk about issues, and he feels very strongly. But I think that Senator Kerry is also a gentleman. And I think, as far as I'm concerned, Bob Dole has some good words. Put this behind the campaign right now. I think everybody's being damaged by it, President Bush, Senator Kerry. I think the people of this country are entitled to get to issue of who is best suited to lead this country in this war against terror, to deal with the economic issues. All of those things have been put on the sideline. We have to get back to the central issue of who is best person to help lead this country in the future.

BLITZER: All right. There are a lot more important issues to discuss than what happened in Vietnam 30 or 40-years-ago. Thanks very much secretary for joining us.

COHEN: Pleasure.

BLITZER: Showdown in the Scott Peterson case. The prosecution's star witness is on the stand, facing questions from the defense for the first time. We'll have a live report.

Veterans Against Kerry, what's the driving force behind the recent critical ads?

And safety in question: find out if Wrigley Field will be benched by Chicago building inspectors.

(COMMERCIAL BREAK)

ANNOUNCER: From our studio's in Washington, once again Wolf Blitzer.

BLITZER: Welcome back. John Kerry, in his own words. The past statements that may be the driving force behind the Vietnam veterans movement against his campaign. We'll take a much closer, in-depth look.

First, though, a quick check of some stories now in the news.

One of the soldiers charged with mistreating prisoners at the Abu Ghraib prison in Iraq is expected to plead guilty. Among the charges faced by Staff Sergeant Ivan Frederick, assaulting detainees and committing indecent acts. Military sources say he will enter a guilty plea on one or two charges.

A museum honoring the secret network that helped escaped slaves reach freedom in pre-Civil War America opened today in Cincinnati. Events celebrating the dedication of the National Underground Railroad Freedom Center began this morning. The first lady, Laura Bush, is expected to speak this evening.

Play ball, that's the word from the Chicago Buildings Commission after an inspection of Wrigley Field, the 90-year-old home of the Cubs. On at least three occasions, since June, pieces of concrete have fallen from the upper deck, forcing protective netting to be installed. But they're going to play baseball.

Keeping you informed, CNN, the most trusted name in news. Controversial new overtime rules went into effect today. They mark the first major overhaul of federal overtime law in 50 years. Business groups lobbied hard to get the new rules put into place.

CNN's Louise Schiavone has a look at who's likely to win under the new rules and who might lose.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Several hundred union workers rallied at the Labor Department to protest the launch of new overtime regulations. The new rules add overtime guarantees for 1.3 million workers at the bottom of the rung. But in this election year, with job security a major issue, Democrats charge the Bush Labor Department has left the middle class vulnerable.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: It's not like people aren't struggling enough to be able to pay their bills. The last thing they need is a pay cut, right? And along comes the president and changes the rules and laws that have been protecting our overtime for potentially millions of Americans.

SCHIAVONE: Critics warn that new definitions of management jobs could take current overtime protections away from millions of middle class workers, using job classification terms like learned professionals and team leaders, in this group, high-tech workers, workers in the insurance, financial and funeral industries and restaurant workers like James Ware of Washington.

JAMES WARE, CHEF: If I didn't have the overtime, my income would be cut at least by a quarter or maybe a fourth or better.

SCHIAVONE: The Labor Department asserts, there will be no wholesale job reclassification and wage loss. Officials say they're on the workers' side.

VICTORIA LIPNIC, ASST. LABOR SECRETARY: This administration is completely an advocate for workers. And look at our record. If you look at the record in the Bush administration for enforcement of the wage and hour laws, we have set record levels of enforcement. Last year, the enforcement in terms of back wages, which are all violations of wage and hour laws, was $212 million restored to workers.

SCHIAVONE: The new rules specify that, regardless of annual pay, most blue-collar workers, like plumbers and carpenters, along with police and firefighters, are guaranteed overtime.

(on camera): Democrats have stood by for a year with legislation to block any new regulations that would take overtime pay away from workers who now have it. But it's tough to get anything done this close to elections. And this issue is no exception.

Louise Schiavone, CNN Financial News, Washington.

(END VIDEOTAPE) BLITZER: They say he lied about his service in Vietnam. But are the Swift Boat Veterans For Truth really angry with John Kerry about that or about something else? Up next, I'll speak live with Vietnam veteran former Senator Bob Kerrey.

The star witness on the stand. How far will Mark Geragos go in his cross-examination of Amber Frey?

And making off with a masterpiece. Brazen thieves pull off an art heist in broad daylight. But their new loot might be a hard sell.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

As we mentioned, President Bush is calling for an end to all independent attack ads. But the president stopped short in directly asking one group, Swift Boat Veterans For Truth, to stop its anti- Kerry ads, ads that have dominated the campaign and the news, at least in recent days. That group's anger is rooted to comments Kerry made to the Senate Foreign Relations Committee in 1971.

(BEGIN VIDEOTAPE)

JOHN KERRY, VIETNAM VETERAN: Turned up the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in a fashion reminiscent of Genghis Khan.

BLITZER (voice-over): Those comments by John Kerry before the Senate Foreign Relations Committee in 1971 upset some Vietnam War veterans then and appear to be the driving force behind the current independent anti-Kerry ads today by the Swift Boat Veterans For Truth.

(BEGIN VIDEO CLIP, AD)

KERRY: 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.

(END VIDEO CLIP)

BLITZER: Kerry's testimony came about two years after the end of his combat tour of duty as a swift boat commander in Vietnam. One of the key points not mentioned by the swift boat ad that Kerry's accounts of alleged atrocities were based on stories he heard two months earlier at a meeting of Vietnam veterans in Detroit.

KERRY: I would like to talk, representing all those veterans, and say that 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.

BLITZER: In an interview on CNN's "LATE EDITION" Sunday, former Senator and World War II veteran Bob Dole said Kerry owes an apology to Vietnam veterans. BOB DOLE (R), FORMER U.S. SENATOR: Maybe he should apologize to all the other 2.5 million veterans who served. He wasn't the only one in Vietnam.

BLITZER: Kerry in fact offered an explanation about his comments on atrocities in an interview a few months ago on NBC's "Meet the Press."

(BEGIN VIDEO CLIP, "MEET THE PRESS")

KERRY: I thought a lot, for a long time, about that period of time, the things we said. And I think the word is a bad word. I think it's an inappropriate word.

BLITZER: Historian Douglas Brinkley says in his book on Kerry, "Tour of Duty," that Kerry's main target in 1971 was not fellow veterans, but U.S. military policy, a point Kerry emphasized in his Senate testimony.

KERRY: I think it lies with the men who designed free fire zones. I think it lies with the men who encouraged body counts. I think it lies in large part with this country.

BLITZER: Kerry's main points have been documented by others. More than 200 Vietnam veterans were convicted of serious crimes against the Vietnamese. The most infamous U.S. atrocity in Vietnam was the My Lai massacre, in which U.S. troops killed at least 175, possibly as many as 400 civilian men, women and children.

Robert McNamara, the Vietnam War defense secretary, says in an interview -- quote -- "There were atrocities, without question. We had photographs of officers shooting innocent Vietnamese."

Earlier this year, the Ohio newspaper "Toledo Blade" won a Pulitzer Prize for a series on Vietnam War atrocities committed by an elite U.S. Army unit in 1967. As did Kerry, the report linked the killings to violations of official U.S. military policy in Vietnam, including free-fire zones, in which soldiers had a green light to kill anything that moved if they were attacked and shooting back at the enemy.

(END VIDEOTAPE)

BLITZER: And joining us now with his take on this entire, very sensitive issue, the former Democratic senator, 9/11 Commissioner, the Vietnam War veteran, Bob Kerrey. He's now the president of the New School University in New York.

Senator, thanks very much for joining us.

What's your bottom line view of this whole uproar that has developed in recent days?

BOB KERREY (D), FORMER U.S. SENATOR: Well, there's an organized effort to smear John Kerry's military record. And, unfortunately, Bob Dole, who many of us as Vietnam veterans defended in '96 when he was attacked in a cartoon participated in it yesterday.

I like Bob Dole a lot and I admire John Kerry for calling him and talking to him about this. But, what, he didn't bleed enough and get three Purple Hearts? He wasn't hospitalized, therefore, he doesn't deserve it? This is an organized effort to belittle John Kerry's military effort. And I think it's probably true that behind it comes their anger with what he said in '71.

But even there, they misrepresent what he said. They don't include the full story. They don't care. They call themselves Swift Boat Veterans For Truth, but they shave the truth every single time. And, unfortunately, too many people are participating. And the president, by not condemning it forthrightly is participating, I think, in an indirect fashion with this campaign to smear John Kerry's record.

BLITZER: The president today said he wants all of these independent attack ads from Democrats, Republicans, independents, tens of millions of dollars worth over the past several months, to simply go away, including those ads put out by the Swift Boat Veterans For Truth. Is that good enough for you?

KERREY: No, it's not good enough for me.

It's certainly a good first step. John Kerry attacked MoveOn.org's campaign against President Bush. Yes, it would have been better for us to deal with this when McCain-Feingold was being debated in the Senate. Unfortunately, it's the law of the land. I wrote a piece. It's very difficult for me to call on President Bush to call for these things to come down. In fairness, he's being whacked as hard by 527 things that are saying, I think, inaccurate things about him as well.

But this is about his military service in Vietnam. And inaccurate things are being said. And the burden of proof, it seems to me, needs to lie on us as politicians to defend those who are being, I think, recklessly and misguidedly smeared in an effort to try to score a political victory. And it's just -- it's a standard that we ought to say, this is too low for us. We're not going to sink to this standard and we're going to try to do everything we can to get it stopped.

BLITZER: Do you have any hard evidence that the White House is really behind this or the Bush/Cheney campaign is really behind these ads put out by the Swift Boat Veterans For Truth?

KERREY: Geez, you don't need hard evidence. I've been in politics long enough. You can see these things going on.

We watch these things going off against President Bush. They don't have to be orchestrated by President Bush. He had a member of his Veterans Committee who participated in one of the ads. He resigned after he did the ad, said he didn't realize that his voice was going to be used. Karl Rove has connections with the people. These are the same people that smeared John McCain in 2000. He needs to condemn it. It's beneath I think the unfortunate low level that American politics has sunk to. It's just, there are some things that we just should say, we don't like it; we're going to condemn it. That's why I went to the floor in '96 when Bob Dole was attacked in a cartoon. His military service was attacked in a cartoon. There are some things we just ought to leave alone and not do.

BLITZER: Did Senator Kerry go too far in his 1971 testimony? You served in Vietnam. You were injured in Vietnam. You were highly decorated. Did he go too far in the things that he said?

KERREY: Yes, I think the Detroit trials in particular went way too far.

But that was a terrible time, 1971. And, again, the ad that Swift Boat Veterans For Truth are putting up on the air misrepresent it. They leave out the contextual statement, which is, I heard this from talking to veterans in Detroit a few days ago. He doesn't say -- himself assert that he saw these things or heard these things. He takes it from a conversation.

Yes, it was a terrible time. And I think John realizes he went too far in 1971. But an awful lot of people did during that period of time, that terrible time. And John, by the way, has risen above it. And Bob Dole says he didn't do much in the Senate. He worked with the first President Bush to get a peace agreement for Cambodia that provided the basis for a road map to normalization. A lot of these guys are probably still mad at him for leading the POW/MIA Commission, for finally resolving the hate and the mistrust and the bitterness that lay between us and Vietnam.

We have an ambassador, a former POW that went to Vietnam. We resolved all that and hopefully put it all behind us. We rose above it, in other words. And, once more, we're sinking right back down into the mire.

BLITZER: What, if anything, do you think John Kerry should do right now to get beyond this issue.

KERREY: Just keep doing what he's doing.

Look, he's telling the American people why the Vietnam experience is connected to his desire to be president. I thought what he did this morning by calling Senator Dole -- Senator Dole is a great hero and a wonderful human being. And John Kerry took the initiative. He will be a unifier and not a divider. He does have both the capacity and the willingness to do the things necessary to bring the country together, rather than divide it.

BLITZER: Senator Kerrey, thanks very much for joining us.

KERREY: You're welcome.

BLITZER: Amber Frey, she's back on the stand right now in a much-awaited cross-examination by Scott Peterson's defense team.

And the art of the steal. Thieves get away with a world famous painting, but may find that crime does not necessarily pay.

And Olympic sweep. Americans prove they're the fastest when it comes to the 400, an update from Athens.

First, though a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): There is sporadic violence in Bangladesh as protesters opposed to the government demonstrated in the capital, Dhaka. A grenade attack on an opposition rally two days ago killed 17 and injured dozens.

Arsonists destroyed a Jewish community center in Paris yesterday. They left behind swastikas and anti-Semitic threats written on the walls. A militant Islamic group posted a statement claiming responsibility on an Islamic Web site. France has suffered a series of anti-Semitic attacks since 2000.

And in Kabul, Afghanistan, three Americans are on trial for running a freelance jail and torture center. The men described their operation as an officially sanctioned part of the U.S. war on terror. They could face 20 years in prison.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Amber Frey back on the witness stand in the double murder trial of Scott Peterson. Cross-examination of Peterson's former lover was postponed by the judge last week. Now the defense is getting its chance to question her.

CNN's Ted Rowlands is outside the courthouse in Redwood City, California. He's joining us now live with the latest -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Well, Wolf, Mark Geragos, Scott Peterson's defense attorney, has had over an hour with Amber Frey in cross-examination. He's been pushing her, but he hasn't been overly aggressive with her and hasn't really attacked her to this point.

He has used her to establish a possible reason why Scott Peterson told those elaborate lies about being in Europe. He had Frey testify to the fact that Peterson within three hours of meeting her at a dinner date told her these lies, that he planned to go to Alaska, then on to Europe, to Kennebunkport, Maine. And Geragos seemed to imply that he was tied to those lies and then later carried out the charade, so that he could keep her -- quote -- "emotionally at bay" while his wife was missing.

Earlier today -- or at the beginning, Geragos established that they had nine phone calls, they met three times, had sex every time and drank together each time during their meetings, insinuating that Amber Frey was really nothing more than a fling for Scott Peterson. She is expected to be on the stand for the remainder of the day today and possibly spill into tomorrow -- Wolf.

BLITZER: All right, Ted Rowlands with the latest on that, thanks, Ted, very much.

Stolen scream. A bold robbery in broad daylight leaves art lovers around the world in shock.

(BEGIN VIDEO CLIP)

SARAH JACKSON, ART LOSS REGISTER: We're not talking here about an art lover who has got a secret gallery of the world's masterpieces on his wall.

(END VIDEO CLIP)

BLITZER: Why this world famous painting is not likely to land on the black market.

Plus, Olympic controversy. Gymnast Paul Hamm, will he be forced to give up his gold medal?

(COMMERCIAL BREAK)

BLITZER: In Oslo, Norway, masked thieves walked into a museum and walked out with one of the most famous paintings in the world. "The Scream" by Edvard Munch is valued at tens of millions of dollars. But what's it really worth to thieves?

CNN's Jim Boulden takes a closer look.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): It appears that stealing "The Scream" in Oslo will be easier than selling it. Anyway, the art world does not expect such a famous painting to end up on the black market.

Tony Russell has been tracking art thieves for 25 years.

TONY RUSSELL, ART RECOVERY LTD: And their options are either ransom it back, take a reward for returning it, or passing it on amongst the other criminals maybe for a few kilos of drugs.

ROWLANDS: The Art Loss Register tracks stolen goods on behalf of insurance companies and victims. Its experts estimate art crime ranks fourth behind drugs, money laundering, and illegal arms.

JACKSON: We're not talking here about an art lover who has got a secret gallery of the world's masterpieces on his wall. This is a nasty crime, linked to organized crime, gun running, drugs. And the idea is to convert artworks into cash.

ROWLANDS (on camera): The insurance industry estimates some $5 billion worth of artwork is stolen every year. And only about 5 percent of that is ever recovered. But if it's a well-known piece of artwork, then the odds of recovery go up greatly.

(voice-over): That's because paintings worth tens of millions of dollars are often returned in exchange for ransom. But the real money is in stealing art worth much less money that can be easily sold on without much notice. That's why more than half of all art is stolen from homes. Much of that is then sold through the Internet. Only 12 percent is stolen from museums. The same amount is also taken from galleries.

Ironically, a crackdown on stolen art coming back into the market through auctions has kept many pieces from resurfacing. And a crackdown on money laundering is making it harder for criminals to move cash around. So a portable piece of art, like this tiny da Vinci masterpiece stolen last year, is becoming a preferred currency between criminal gangs.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

BLITZER: Golden glory. A true American dream team takes the top prize in Athens.

(COMMERCIAL BREAK)

BLITZER: It's week two for Olympians in Athens.

Here are some of the key results today. If you'd rather wait for tonight's telecast, turn down the sound for a few seconds right now. The American women took gold in softball, beating Australia 5-1. That was the only run scored off the U.S. team during nine games in Athens, as the women ran their overall winning streak to 79 games.

Americans finished one, two, three in the men's 400-meter run. A relative unknown just a year ago, Jeremy Wariner, won the gold with a time of 44 seconds flat. Otis Harris won the silver and Derrick Brew took the bronze.

They've taken their lumps in Athens, but the U.S. men's basketball team finally had an easy game today, beating Angola 89-53 to remain in contention for a medal.

The U.S. Olympic Committee would consider a South Korean bid for a duplicate gold medal in men's all-around gymnastics. A scoring error last week gave the gold to American Paul Hamm.

And that's all the time we have today. I'll be back tomorrow, same time, 5:00 Eastern, as well as noon Eastern. Thanks very much for joining us. I'm Wolf Blitzer in Washington.

"LOU DOBBS TONIGHT" starts right now.

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