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PAULA ZAHN NOW

Homeland Security or Pork-Barrel Politics?; Interview With Bob Kerrey

Aired August 25, 2004 - 20:00   ET

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


(BEGIN VIDEOTAPE)
PAULA ZAHN, CNN ANCHOR (voice-over): Washington is spending billions of your tax dollars to protect you against another terrorist attack. What is wrong with this picture, New York, $11 a person, Wyoming, $45 a person? Tonight, homeland security or pork-barrel politics?

(END VIDEOTAPE)

ZAHN: Good evening. Welcome. Glad to have you all with us tonight.

Looking at the numbers, you might wonder whether Washington thinks lives in Wyoming are worth four times more than lives in New York. Of course, that's not the case. It's not that simple. But as you're about to see, the way the government spreads the homeland security money around seems to defy common sense. And it's not just New York. California, Texas, Florida and Illinois all get far less per person than states with smaller populations, like the Dakotas, Montana, Delaware and Vermont.

Tonight, Drew Griffin crunches the numbers starting in Wyoming, the state with the fewest people.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): It may seem unlikely, a remote chance in this remote town that sits on the plain, but Douglas, Wyoming's 15 sworn police officers are ready.

UNIDENTIFIED MALE: There's four suits two different types. The air cartridge pops out.

GRIFFIN: They are ready for a chemical, biological or even dirty bomb attack.

LORI EMMERT, DOUGLAS POLICE CHIEF: We're very fortunate to be at the level we are.

GRIFFIN: Douglas Police Chief Lori Emmert says don't laugh. Her city of 5,500 sits on a major interstate. Last week, Douglas hosted the state fair, and if anything happens here, 50 miles east of Casper...

UNIDENTIFIED FEMALE: Have a nice day. EMMERT: Thank you.

GRIFFIN: ... it's up to the chief and her officers to respond.

(on camera): Why does Douglas, Wyoming, need to protect itself from terrorists?

EMMERT: My feeling is that every emergency responder, fire, police or medical should have the equipment they need to respond to an incident, and I don't know that state or boundaries negates that.

GRIFFIN (voice-over): Douglas is one of many small towns across America benefiting from the fight against terrorism. The Homeland Security Act sends money across the nation to help first-responders prepare for the next attack. Douglas purchased this mobile command post, new air tanks for its firefighters, radios, and every single police officer in Wyoming received chemical and biological defense suits, thanks to federal dollars.

(on camera): Is this something you could afford without homeland security.

EMMERT: No, we could not afford it.

GRIFFIN (voice-over): Kelly Ruiz is with Wyoming's Office of Homeland Security.

(on camera): Does the state of Wyoming really think there will be a terrorist-related strike in this state?

EMMERT: All we know is that you cannot second-guess a terrorist. Wyoming's strong in agriculture and energy. So you just can't second- guess them and say where they're going to strike or where they're not going to strike.

GRIFFIN (on camera): Yet even during the height of a busy state far, it's hard to imagine any terrorist would strike Douglas, Wyoming. Yet this town and the state of Wyoming are spending more federal dollars per person defending themselves against terrorism than even New York.

(voice-over): In fact, according to the Department of Homeland Security, while California and New York will spend about $11 per person on homeland defense, Wyoming's per capita spending will be four times that amount, $45.22 for every man, woman and child in the state.

How did it happen? In the aftermath of 9/11, Congress was pressed to react, swiftly passing legislation to help the country defend itself. And nothing could be quicker than plugging in an existing federal funding formula.

REP. CHRISTOPHER COX (R), CALIFORNIA: We used the same funding formulas for paving roads.

GRIFFIN: That's right, road paving, based in part on population, but also on such details as the number of postal roads in a state. Congressman Christopher Cox heads the House Select Committee on Homeland Security. He's pushing a bill that would change the formula.

COX: Terrorism funding isn't like paving roads. Terrorism funding, counterterrorism funding has to be focused on actual threats, actual vulnerabilities.

GRIFFIN: Cox says the current system pays little attention to actual risk. All states get money no matter the need. And this has led to a counterterrorism spending spree that in some cases has little to do with countering terrorism. In Lake County, Tennessee, counterterrorism money purchased a $30,000 defibrillator for a high school.

The mayor says it would be good to have on hand for the district basketball tournament. Mason County, Washington, bought a $63,000 decontamination unit the county sheriff's department says it cannot currently use. West Bloomfield, Michigan, is waiting on a $213,000 check, homeland security money for fire prevention. And in Grand Isle, Vermont, the sheriff's department bought a new four-wheel drive pickup truck for winter patrols. It also pulls the new command center.

COX: Monies should be spent according to the 9/11 Commission according to risk, according to threat. And that's what the pending legislation in Congress will do.

UNIDENTIFIED MALE: In the north arena, contestant No. 208.

GRIFFIN: The bill is getting wide support in Congress. But that support is likely to wither in the Senate, where small states like Wyoming may not have an equal risk of terrorism, but they do have an equal vote.

(END VIDEOTAPE)

ZAHN: And that was Drew Griffin.

Joining us now, a member of the 9/11 Commission, former Democratic Senator Bob Kerrey, still a Democrat, as far as I know.

(CROSSTALK)

ZAHN: How are you tonight?

BOB KERREY (D), FORMER U.S. SENATOR: Good.

ZAHN: So let me get this straight. So the same formula that is used to calculate funding for paving roads is the formula that's now being used to dole out, per state, money to fight terrorism?

KERREY: That's correct.

ZAHN: How can that be?

KERREY: You don't think this thing's on the level, do you?

(LAUGHTER) KERREY: You're not still suffering that illusion.

No, I think the thing is being very, very poorly managed. And I don't think that we're establishing what our objectives ought to be, whether it's computer interoperability or making the border secure and safe, training the people that need to be trained. There's huge deficiencies in the operation right now. And when you put that kind of money out there, it's bound to get sucked up in pork-barrel politics. It's bound to. It's like laws of nature.

Not only can they not help themselves. They're rewarded for doing so. There's merit for doing it, in fact. So once you start...

ZAHN: The merit comes from what?

KERREY: Well, the merit is that's how you're proven to be effective, whether or not you can get appropriations for your state. And every one of these states, they can make a case.

If the prioritization is not being done by the executive branch, if the executive branch doesn't say, look, New York's been attacked twice. There's been attempts on New York at least two other times, so we have got to take care of New York first -- Los Angeles is likely a second city that is going to get attacked. It's been on people's lists. Newark is on. Northern Virginia is on the list. You got to take care of those things first. And here's what you need to do.

(CROSSTALK)

ZAHN: But that's not what's happening.

KERREY: No it's not what is happening, because the executive branch isn't saying that needs to happen. And they have to do it. They have to establish the priorities. They have to know what it is that they're trying to get done, where are the security vulnerabilities and what are we doing to try to close them. And I just don't see that happening.

If you just say to Congress, 535 people, jump ball, have at it, they'll spend the money willy-nilly.

ZAHN: Well, let's talk about your home state of Nebraska. They've just been given a grant for $19 million for homeland security.

(CROSSTALK)

KERREY: Isn't it our home state?

ZAHN: Yes, well, I grew up there too, Syracuse, Nebraska. All right, we got the home

(CROSSTALK)

ZAHN: ... thing in tonight.

Is there any defense of that? I have heard people in Nebraska argue, we have got to start from someplace. How do we beef up our system?

KERREY: The answer is, yes, a terrorist could go to a shopping center in Omaha, Lincoln, Kearney and do a tremendous amount of damage to the political psyche and the emotional psyche in the United States of America. Is it likely? No.

It's more likely in New York. It's more likely in Los Angeles. It's more likely in Newark or Northern Virginia. Those are the cities that have been targeted in the past and those are likely to be the cities that are targeted in the future. But, again, unless the president comes and says, you have to take care of those first and this is what we need in order to take care of it, it isn't going to happen. You just turn it over to Congress and let Congress fight it out, each one of the states will come and make their claim.

ZAHN: Do you have any faith that we'll see any of this change?

KERREY: Yes. Yes.

I think Congress is working as hard as they can. I think they're trying to figure this thing out. But you've got to have on the executive branch the establishment of those priorities. And I think the president's willing to do it, but he's got to do it. He's got to break the logjam and say these are the priorities, this is how we're going to close the gap between where we are today and where we need to go. I think he's got the capacity to do it, but he's got to do.

ZAHN: I want to change our focus now to an issue that's been in the news that we're actually going to discuss in greater detail later on this evening, the ongoing swift boat controversy.

You, yourself, are a decorated Vietnam War veteran, a Navy SEAL that performed heroic acts under active fire. Your reaction when you heard Senator Bob Dole over the weekend essentially say that Senator John Kerry didn't deserve the medals he was awarded because he didn't bleed?

KERREY: It's pathetic. He shouldn't have said it. He's angry about a lot of the anti-war stuff that was going on in the early '70s.

Look, you got two choices in life when you lose something, when something bad happens. And this is not just another issue. This is Vietnam. I say to President Bush, this is Vietnam. You, Dick Cheney, John Kerry had a choice in 1968. Do you go to war? John Kerry went. Now we got another unpopular war going on right now in Iraq. Do you want to send a signal out to American young people to say, hey, maybe I shouldn't sign up, maybe it's a bad decision to go fight in this war, maybe there's going to be a swift boat veterans against me 30 years from now when I decide to run for office if I go fight in this darn war?

It's a bad thing to be doing. This was the most divisive war in this nation's history. It divided this country in a terrible fashion.

(CROSSTALK)

ZAHN: It's still dividing the country.

KERREY: Did John Kerry demand an apology from Richard Nixon? No. Before he died, he went and forgave him.

Did John Kerry live in bitterness in the 1990s over this war? No. He worked to solve the conflict over the POW/MIA. He worked with the first President Bush to get the foundation for normalization with Vietnam. He worked with John McCain and other veterans to make certain we provided the support to President Clinton. We normalized and achieved a great foreign policy victory at the site of our worst foreign policy mistake.

We got over it and we achieved a great deal as a consequence. That's the way you conduct yourself, with forgiveness and with compassion, with an effort to say we've got to get over all this old stuff. And these ads are opening it right back up again. And President Bush and the Republican Party can say this is just another 527. It's not. This is Vietnam.

ZAHN: Is it all that different from MoveOn.org, which has spent tens of millions of dollars attacking President Bush?

(CROSSTALK)

KERREY: No. No. Generically, it's not different. But it's Vietnam. And that makes it different.

And we still got 30 or 40 million people who are alive in the 1960s and 1970s and they're starting all over to hate each other again. They're starting all over to get angry with each other. We're going to debate the Vietnam War again. That is what's going to happen.

ZAHN: Senator, final question for you tonight.

KERREY: Yes.

ZAHN: If John Kerry and George Bush really wanted these ads off the air, wouldn't they be off the air or are they both guilty of double-speak?

KERREY: Well, it's hard to get them off the air. Once you establish the right to put them up, it's hard to get them off. But they can at least -- President Bush, he has got friends that are involved in this thing that. They're funding it. He can at least say, quit funding it. Quit doing it.

(CROSSTALK)

ZAHN: What about John Kerry?

KERREY: John Kerry can do the same and should do the same.

(CROSSTALK)

ZAHN: But will they? KERREY: I refuse to allow this thing to be compared equally to ads that are being put up by MoveOn.org.

Vietnam is qualitatively different. We're sending a signal that says -- I'm going to say it now for the third time -- it's very bad to young people in this country who are trying to figure out whether or not they want to serve their country, whether or not they want to be put in harm's way, go to Iraq and fight in a war that's become unpopular in the United States of America. It's a very bad thing to do, a very dangerous thing to do.

And the president, I think, should call on his friends to cut this thing off. Whether they can do it or not, I don't know. But McCain has done it. McCain, he understands how dangerous this is. And he's called on the president to do it and he should do it.

(CROSSTALK)

ZAHN: Senator Bob Kerrey, always good to see you.

KERREY: Nice to see you, too.

ZAHN: Thank you for dropping by.

KERREY: Thank you.

ZAHN: And that controversy over those swift boat ads claimed a casualty today. A top Bush/Cheney campaign adviser makes a swift departure.

When we'll come back, we'll hear from him.

(COMMERCIAL BREAK)

ZAHN: Today, the controversy over political attack ads showed up in President Bush's ranch in Crawford, Texas. A group of Senator Kerry supporters, led by Vietnam veteran and former U.S. Senator Max Cleland, tried to deliver a letter calling on the president to condemn the anti-Kerry ads sponsored by Swift Boat Veterans For Truth.

(BEGIN VIDEO CLIP)

MAX CLELAND (D), FORMER U.S. SENATOR: The letter is signed by some nine distinguished members of the United States Senate, all of whom have worn the uniform. One of them, Senator Daniel Inouye, is the only member of the Senate to be sitting there as a holder of the Medal of Honor.

The question is, where is George Bush's honor? The question is, where is his shame to attack a fellow veteran who has distinguished himself in combat, regardless of the political combat involved, is disgraceful.

(END VIDEO CLIP)

ZAHN: Well, the Democrats never got to see President Bush. Instead, one of the president's representatives tried to give them a letter critical of the John Kerry campaign's tactics. The letter, which Max Cleland refused to accept, accused Kerry of saying only Vietnam veterans who support him have a right to speak up.

(BEGIN VIDEO CLIP)

JERRY PATTERSON, TEXAS LAND COMMISSIONER: Either we pull them all down or all get their piece. Either they all go down or they all have their piece. It's not mutually exclusive. All veterans have a right to speak. But if we have 527s, you can't selectively say this one's good, that one's bad.

(END VIDEO CLIP)

ZAHN: Well, that reference to 527s gets to the heart of the controversy.

He's Tom Foreman with more.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, AD)

LARRY THURLOW, LIEUTENANT J.G., BRONZE STAR: When the chips were down, you could not count on John Kerry.

(END VIDEO CLIP)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): The ad accusing John Kerry of lying about his military service landed like a bombshell in the presidential campaign. And now after weeks of bitter debate, it has claimed a victim. Bush campaign attorney Ben Ginsberg, while admitting no wrong, has resigned, saying he gave advice to the veterans behind those ads. The Kerry camp pounced.

MICHAEL MEEHAN, SENIOR ADVISER, JOHN KERRY CAMPAIGN: We learned today that the web continues for the ties for the Bush White House when Bush's top lawyer has to step down because of his involvement in this.

FOREMAN: And the Bush campaign pounced right back.

TERRY HOLT, BUSH CAMPAIGN SPOKESMAN: The Kerry campaign knows and has known for months that their attorneys and their friends are organizing and putting millions of dollars in TV spots on the air. For them to pounce on Ben at this point is ridiculous.

(BEGIN VIDEO CLIP, AD)

NARRATOR: In 2000, George Bush misled Nevada. That's right.

(END VIDEO CLIP)

FOREMAN: Each side is accusing the other of improperly using tax-free political organizations called 527s to launch smear campaigns; 527s, named for a part of the IRS code, are supposed to be issues-oriented groups, independent of the candidates.

(on camera): The problem is, big-name Republicans and Democrats close to the candidates are also connected at least in some way to the 527s. And figuring out those connections can be difficult.

(voice-over): For example, the Republicans say Democrat Bob Bauer is a consultant for both Kerry and a 527 called America Coming Together. But listen to a Kerry spokesperson.

STEPHANIE CUTTER, KERRY CAMPAIGN COMMUNICATIONS DIRECTOR: Bob Bauer does not work for a 527. Bob Bauer's law firm works for a 527.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: And so the 527s are really making all the nasty accusations that the campaigns can't make, but frankly the campaigns are not terribly upset are being made are.

FOREMAN: John Kerry has suggested he does not like the 527 attacks.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: My duty is to be a president who tells the truth, instead of hiding behind front groups saying anything and doing anything to avoid the real issues that matter.

FOREMAN: The president says 527s are bad for politics.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I thought we were going to, once and for all, get rid of a system where people could just pour tons of money in and, you know, not be held to account.

FOREMAN: But in this contentious election, neither party has stopped all that soft money being turned into hard words.

(END VIDEOTAPE)

ZAHN: And that was our Tom Foreman.

So is the White House connected to the swift boat ads? When we come back, I'll ask Benjamin Ginsberg himself to set the record straight.

(COMMERCIAL BREAK)

ZAHN: Welcome back.

We're continuing to focus on the presidential campaign and the outside groups that sponsor attack ads.

As we reported, the Bush campaign's national counsel, Ben Ginsberg, resigned today when it came to light he'd also given advice to one such group, the Swift Boat Veterans For Truth.

I spoke with him a little bit earlier tonight and asked him if someone from the Bush campaign asked him to leave.

(BEGIN VIDEOTAPE)

BENJAMIN GINSBERG, FORMER BUSH-CHENEY CAMPAIGN ATTORNEY: No.

When I saw what was becoming a media maelstrom, I offered my resignation, because the one thing a lawyer can never do is get in the way of the important message about the future the president wants to get out, and which the Kerry campaign desperately doesn't want him to be able to get out.

ZAHN: But you still maintain you did nothing wrong. If that is the case, why bail?

GINSBERG: Well, because, unfortunately, the politics of this -- and frankly, the double standard of scrutiny on lawyers -- got to be a distraction.

This campaign is about the president's forward-looking agenda for the future. And I can never get in the way of that. But the truth of the matter is, is that what I've done for the swift boat groups and for the Bush campaign is no different than what my colleagues on the Democratic side do for the Kerry campaign and the Democratic National Committee and their 527 groups. And that's because the law allows it.

ZAHN: But you're an experienced Washington insider. There had to be part of you who was thinking about the perception that was created by you on one hand giving legal advice to the Bush campaign and on the other hand also giving the swift boat commercial people advice.

GINSBERG: You know what happened was that a group of decorated veterans came to me and said, we want to participate in the political debate. We feel what we have is an important point of view to interject in that debate. We want to exercise our First Amendment rights to do it. There's a complicated new law in effect. We want to be sure we comply with that law. Will you help us comply with the law?

ZAHN: And, at that point, you weren't worried about the appearance of your involvement?

GINSBERG: No, not at all, not at all. And I'd do it again tomorrow if it occurred, because it's perfectly proper to give legal advice under the way the law is written to both a 527 group and a party committee. My Democratic colleagues do the same thing. They're in compliance with the law.

ZAHN: But the argument from "The Washington Post," which I think most people agree laid out a very detailed accounts of what was in these ads, said that a lot of what was in these ads was simply not true. It wasn't factual.

GINSBERG: Well, I would quarrel with that characterization of "The Washington Post" ad. The truth of the matter is, is that the swift boat veterans have voluminous proof for their point of view.

ZAHN: "The Washington Post" isn't the only paper. Those aren't the only journalists that have pointed to what are considered factual errors in these ads.

GINSBERG: Well, Paula, I contest that there has been fair reporting. For one reason or another, it is clear...

ZAHN: But let's talk about the substance of the ads.

GINSBERG: We certainly can talk about the substance of the ads.

ZAHN: And you've got a bunch of journalists who have said what is in those ads simply isn't true. It's not just the Kerry campaign saying it's not true.

GINSBERG: But that goes more to I think the double standard of reporting and the scrutiny that these ads have been put under.

I think, at best and fairly, if you read through the independent reporting that's been done about this, is that you have an incident in which a whole host of very brave individuals risked their lives in war. And in the fog of war, there may be disputes about the details.

ZAHN: Thank you for sharing your story with us tonight, Ben Ginsberg.

GINSBERG: Paula, thank you very much.

ZAHN: Appreciate it.

(END VIDEOTAPE)

ZAHN: So the question begs to be asked, are voters better off after campaign finance reform?

We'll debate that straight out of the break.

(COMMERCIAL BREAK)

ZAHN: As we've seen, attack ads by 527 groups are shaping this year's presidential election.

Joining me to talk about whether that's a good or a bad thing for the election process in the country, from Washington, we're joined by Peter Beinart, editor of "The New Republic." And here in New York with me, "Wall Street Journal" columnist John Fund. We like to keep these two guys separated geographically. You never know what they're going to say.

Welcome, gentlemen.

All right, bottom line tonight -- and I'm going to start with Peter -- if both of these candidates wanted the 527s off the air, wouldn't they be off the air right now, Peter?

PETER BEINART, EDITOR, "THE NEW REPUBLIC": Sure, but this is a false parallelism.

The charge has never been the content of the ads, that they were funded by outside groups. The problem with the swift boats ads is twofold, about its content, first of all, that it's based on flagrant lies, as you yourself pointed out in your interview with Benjamin Ginsberg.

Second of all, it completely contradicts President Bush's claim that he and his allies were not going to go after John Kerry's Vietnam record because they honored it.

That's what fundamentally makes it different from the Democratic 527 ads. Yes, they have the same legal structure, but one is based on lies and contradicts what the president has said. The other ones are by and large issue ads.

ZAHN: What about that, Mr. Fund?

JOHN FUND, "WALL STREET JOURNAL": The reason this country has succeeded is we operate by simple rules. The First Amendment says congress shall make no law regarding freedom of speech.

Once we go beyond that, and this McCain-Feingold reform -- David Broder and Joe Klein on Monday have admitted this -- have spawned this controversy because it's created an incentive for these single-issue micro groups.

ZAHN: And what you -- Their conclusion is you can't keep money out of politics?

FUND: Well, yes. And also, lies are in the eye of the beholder. MoveOn.org has an ad on right now which claims the Bush family directly intervened to keep George W. Bush out of Vietnam in 1970. Now...

BEINART: In response to Bush's ad.

FUND: Is that a lie, or is that actually proven, Peter?

BEINART: I think that ad...

FUND: Is it actually proven?

BEINART: John Kerry has said he didn't want to go after that issue. But you made that...

FUND: My point, Peter -- My point, Peter, is if the swift boat ads can be perceived as lies, so too can the MoveOn.org ad, which says that Bush's family has been proven to have kept him out of Vietnam using their family connection.

BEINART: But you know that was in response to the swift boat ads.

ZAHN: All right, but Peter, go to the core of the argument.

FUND: Well, we shouldn't have these things.

ZAHN: Is there any documentation that proves that the parents of George W. Bush wrote a letter or used some contact to keep their son out of service in Vietnam?

BEINART: No. And I don't think that ad should be on the air, absolutely not. But...

FUND: So there are lies on both sides, according to your standards?

ZAHN: Well, that is true, right?

FUND: Right. So Peter, you can't make a distinction between one 527 ad and the other.

BEINART: No. We didn't -- We weren't going down this road. John Kerry was clearly not going to go after that National Guard issue...

FUND: Peter...

BEINART: ...until the swift boat guys came along and challenged him about Vietnam. It was something he explicitly said he wasn't going to do.

FUND: Peter, there's only one thing you've forgotten. We were here on this show in April discussing Terry McAuliffe calling George Bush AWOL in Vietnam and Michael Moore calling Bush a deserter in Vietnam.

BEINART: And John Kerry explicitly said...

FUND: And who started it, Peter? Who started it?

BEINART: John Kerry responded by saying he didn't want any part of that ad...

FUND: No.

BEINART: ...which is part of the reason it died out.

FUND: He raised the...

ZAHN: Let Peter finish.

FUND: John Kerry said there were legitimate questions.

ZAHN: Go ahead, Peter.

FUND: John Kerry said there were questions.

ZAHN: Go ahead, Peter.

BEINART: John -- John Kerry has said nothing about this until the swift boat ad came on, and that has changed in part and made it a much uglier campaign.

ZAHN: All right. Let me ask you this. No matter what the debate continues to be over the next -- the course of the next couple of weeks, is there any way, Peter, both sides are going to yank these ads?

BEINART: No. And I don't think -- I think it would be nice if they did, but you have to remember the larger context.

McCain-Feingold has created a better environment than the one before, because the goal of the McCain-Feingold was not to take money out of politics. It was to make sure there was more -- there were more small donations, fewer larger donations.

If you look at the extraordinary amount of money that the parties and the individual candidates have raised from small donors, which is a very encouraging thing in this political system...

ZAHN: All right.

BEINART: ... even despite the 527s, you have a much healthier environment than you had before McCain-Feingold.

ZAHN: But Peter, we all know there are very wealthy people who are also contributing to put these 527s on the air.

BEINART: Yes, of course there are. But those people were contributing beforehand and there were much fewer smaller donations. Now the balance is tipped towards more Americans...

FUND: Paula...

BEINART: ... giving smaller amounts of money.

ZAHN: OK. You don't...

BEINART: That's a much healthier development.

ZAHN: John, you're not subscribing to the notion that you have more grassroots involvement in this campaign?

FUND: Paula, the 527s have less disclosure requirements, less timely disclosure requirements. David Broder and Joe Klein, who are two of the greatest supporters of campaign finance reform, have said this has had terrible unintended consequences.

And they say you cannot keep money out of politics. We need to have full disclosure.

BEINART: But you're missing the point. McCain-Feingold was never designed to keep money out of politics. That's why they raised the hard money limits.

What happened under McCain-Feingold, is that you have, although you still have these big soft money donations, you have the proportion is much more weighted towards small donations by large numbers of people.

FUND: Now you tell us.

BEINART: That's something that both Democrats and Republicans can agree is a good thing.

ZAHN: John Fund, you get the last word. You get 15 seconds.

FUND: I only wish that Peter had -- and his friends had had that explanation before we passed McCain-Feingold, because it was passed under different pretenses.

BEINART: That was, if you listened carefully.

ZAHN: Peter could use those extra five seconds there. Peter Beinart, John Fund, thank you very much for that lively debate.

We're going to take a short break here. And before we leave the campaign trail, a programming note for you. Live coverage of the Republican National Convention in New York begins next Monday night, right here on CNN.

Coming up next, we turn from domestic to foreign affairs. Can the son of a notorious leader, accused of sponsoring terrorism, become a force for peace? That story when we come back.

(COMMERCIAL BREAK)

ZAHN: For 20 years, the west treated Libya like an outlaw, a breeding ground for terrorists. But that began to change last year when Moammar Gadhafi decided to drop his pursuit of weapons of mass destruction.

And we're now beginning to learn that behind the scenes another powerful figure has been working to change Libya's renegade ways.

Brent Sadler traveled to Tripoli to meet him.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT (voice-over): He is known as the engineer, and these days he spends most of his time repairing the problems of his father, Libyan leader, Colonel Moammar Gadhafi.

His name means sword of Islam and today, Saif al Islam Gadhafi is on a satellite phone, working out the final details of a crucial deal with Germany.

It's part of astonishing efforts by Libya to buy favor in the west after two decades of bad blood. So far, he's broken billions of dollars in payouts and worked out a politically profitable way for Libya to renounce weapons of mass destruction.

SAIF GADHAFI, MOAMMAR GADHAFI'S SON: The most risky issue, and it was the biggest burden on my shoulders.

SADLER: Saif Gadhafi prefers to conduct his delicate business away from the glare of publicity, serving as his father's emissary in negotiating massive compensation to victims of Libyan terror in the 1980s with a very sophisticated appreciation of cost and benefit.

GADHAFI: To get rid of enemies, to turn your enemies into friends, to -- to buy peace, you know. It's not for free.

SADLER: Not for Saif Gadhafi the flowing Bedouin robes of his unpredictable father, but there are things, he says, they have in common.

GADHAFI: Many things, like both of us, we like to -- to be in a tent, to be somewhere out of the town or the city, and -- and to be in a remote place.

SADLER (on camera): What do you call him: Dad, Father, leader?

GADHAFI: Everything. Sometimes Dad, sometimes leader. Leader, not in front of him. But I call him Dad, yes, of course.

SADLER (voice-over): He learned the ways of the world at an early age, during the Cold War at the knee of Colonel Gadhafi, the self-styled liberator of the Arab world.

GADHAFI: Libya was in direct conflict with the West, especially with the United States, and we were at war almost every year.

SADLER: A continuing crisis erupted in 1986, when the U.S. retaliated with air strikes against the Libyan leader for a deadly bomb attack on a Berlin discotheque, an attack for which his son recently agreed to pay $35 million in blood money.

But Colonel Gadhafi himself narrowly escaped death during the attack on Tripoli. Saif now reveals his father made an almost fatal mistake.

SADLER (on camera): You lost your adopted sister?

GADHAFI: Yes.

SADLER: Was your father with you that night, close to you?

GADHAFI: Yes, of course.

SADLER: In the house?

GADHAFI: Yes. And I think it was one of the mistakes, because our intelligence warned him before that night, and told him, "You have to leave, because Americans are going to attack the house."

And he said, "I don't think so, that they're going to attack our house. Maybe they'll attack military sites, but -- but not the house."

But finally, they came.

SADLER (voice-over): Saif says Libya started to come in from the cold after he convinced his father to negotiate compensation awards for the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland.

It hasn't been easy. Even while Libya still rejects guilt, Saif has been negotiating cold cash for deadly crimes. And that, he's come to learn, is traumatic.

GADHAFI: Because in that case, you mix blood, money, emotion, with financial calculation. It's not easy, you know, to fit all of them together.

SADLER: So far, his interventions have helped pave the way for the end of most sanctions on Libya, and for Libya's relations with both the U.S. and Europe to dramatically improve.

But Saif Gadhafi is a realist. Nothing, he reasons, lasts forever.

GADHAFI: This kind of friendly environment could last for 20, 30, 50 years. But who knows, because there is no payment of friends, payment of enemies. I think it's changeable. And I can't predict the future.

SADLER: All decisions in Libya still go through Colonel Moammar Gadhafi. But in the shadows, his son is taking on a bigger share of the burden. And he's already learned the politician's response to speculation he might lead Libya one day.

GADHAFI: I hope not.

(END VIDEOTAPE)

ZAHN: That was CNN's Brent Sadler.

A sign of the warming of relations with Libya, major political figures lining up to meet with Colonel Gadhafi just this week. The Reverend Jesse Jackson, who's been talking with Gadhafi about the crisis in Sudan.

A short while ago, Reverend Jackson joined us by way of videophone from Libya, and I asked him whether Gadhafi is really a changed man.

(BEGIN VIDEOTAPE)

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: Well, the conditions have certainly changed for the better. His big position now is that we should have massive disarmament of weapons of mass destruction, use those billions of dollars to reinvest in economic development. That is -- that is welcome news.

He is such a critical factor in the African Union, which now spans from Egypt down to South Africa, really in the Arab League and the European Union. And so as he moves toward positive changes, really, for the region and for the world.

ZAHN: Can he be trusted?

JACKSON: Well, I think you have to expect what you inspect and that's true for all of these nations.

ZAHN: In the end, do you believe that Moammar Gadhafi will be able to alleviate any of the suffering in Sudan?

JACKSON: Absolutely. Because at this point, one of the safe passage routes is through Libya. So he can do it. The African Union's more accepted in the Sudan now than the U.S. government, for example.

But the U.S. will supply aid, on the one hand, increased aid, or use its strength to further challenge the Khartoum government to stop the Janjaweed from their violent militia attacks there.

The U.S. will do that, and if -- and if Saddam -- if we can get Gadhafi to use his strength to get more supplies in through A.U., that would be a net plus for everybody.

He can do that and I think he will.

ZAHN: Reverend Jackson...

JACKSON: There have been some meetings over here in Libya. Just -- there was one the other day in Nigeria.

ZAHN: Reverend Jackson, I know you have a lot of important work to do. Thanks so much for your time tonight. Good luck.

(END VIDEOTAPE)

ZAHN: And coming up next, in Darfur itself, the fight for survival. I'll talk to eyewitnesses to the tragedy when we come back.

(COMMERCIAL BREAK)

ZAHN: Along with Jesse Jackson, aid workers are trying to save refugees driven from their homeland in Sudan by what some observers are calling genocide.

The U.N. has set a deadline of next Monday for Sudan to show it's disarming the Arab militias accused of killing some 50,000 black farmers. Talks also continue on sending more African Union peacekeepers to the region known as Darfur.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): Through the sand storms of the Sahara, the refugees have fled for safety.

Arab militias known as Janjaweed have forced more than a million tribal Sudanese from their homes and their land, burning huts to the ground so their owners can never return. Villagers say that the Janjaweed are killing the men and raping the women, actions that suggest a campaign of ethnic cleansing, perhaps even genocide.

Now, forced into crowded refugee camps, those who survived the attacks face possible death from hunger and disease. What has already been a violent year is now a dire humanitarian crisis, one that the U.N. calls the most severe in the world today. ADEEL JAFFERI, ISLAMIC RELIEF: They were all saying the same thing: "We want food and we want shelter." When the rains come, it's a nightmare. I've been here when the rains have started, and it's like sheets of glass hitting your face.

ZAHN: It is a race against time to get food, water and medicine to the victims. And for some, it is too little, too late. All the evidence suggests that the violence in Darfur continues. It seems there is no end to this crisis.

(END VIDEOTAPE)

ZAHN: And with me now to talk about the crisis is human rights expert Samantha Power. She is a lecturer at Harvard's Kennedy School of Government. And in 2003, she won a Pulitzer Prize for her book "A Problem from Hell: America and the Age of Genocide."

Welcome.

SAMANTHA POWER, HARVARD'S KENNEDY SCHOOL OF GOVERNMENT: Thank you.

ZAHN: You're just back from Sudan. You knew you were going to be exposed to hell. How much worse was it than what you had expected?

POWERS: Well, I hadn't expected that the atrocities were so numerous that if you walked into a refugee camp, you would just be bombarded with people.

Normally when you go into refugee camps, you have to very kind of subtly work your way through and meet, you know, family members who know family members who have suffered.

Here, you just walk in and they just flock to you, to tell you, first of all, how they got there in the first place, what the Sudanese army and Janjaweed, the Arab militia, what those attacks were like.

One woman told me about her -- how her son was thrown into the fire before her eyes, literally burned alive, her 5-year-old son. And her 7-year-old, who was next to him, was shot in the back and just died right before her.

Another woman told me about the beheading of her son as he tried to protect the family animals, because, of course, the animals are life for these people, you know, who live in these rural settings.

ZAHN: And that's the first thing the Janjaweed targets?

POWER: Exactly.

ZAHN: They clean all this out?

POWER: Yes. It's like jewelry, you know, to take camels or cattle. It's everything. They could double their life holdings just by attacking, you know, one village or one family in some cases. ZAHN: So you have been exposed to tremendous poverty before and the pain of human suffering. But when you looked into these women's eyes, when they told you these stories, what do they convey?

POWER: Well, this is going to sound strange, but what struck me was how -- how they felt, they really believed that if they just conveyed the information, that they would generate a response.

And so in a way, more shocking -- perhaps I'm jaded -- but more shocking than the abuses themselves was the way they would look you in the eye and tell you what had been done to their family, done to their children and just expect you to take the information back to the West and get that George Bush.

They even invoke Iraq. They say get George Bush to do what he did. If he's going to get rid of Saddam Hussein, why doesn't he come and get rid of the Janjaweed?

Women who have been raped, of course, are a little bit different. And so that one set of atrocities are what drove them into the camps in the first place. But now there's a new set of atrocities as they go for firewood every day, because the humanitarian aid they get actually needs to be heated. So they have to go out and walk sometimes for miles in order to get firewood.

And the Janjaweed are still patrolling outside the camps. And so, so many of the women who I ended up talking to in the camps, women who have been violated a second time when they actually got to the camps and thought that they had reached dry ground or reached safety.

ZAHN: Final thought tonight. Some experts are predicting that we may end up seeing hundreds of thousands of people who die as a result of this crisis. Is it going to get to that point?

POWER: Well, at the current rate, it certainly -- there's nothing on the horizon that looks like it's going to stop the death.

The African Union has stepped forward, I think, bravely, and said that it's willing to deploy 2,000 troops, peacekeeping troops, people to protect these refugees from the rapists and the looters and the killers.

But the Sudanese government has rejected that request. The number proposed, 2,000, is way too small. And if we don't get a protection force in there, not only to patrol the camps but to actually ensure that those people can return to their homes, they're living in such congested disaster -- it's a disease, you know, apocalypse waiting to happen.

I mean, it will take one disease spark, one cholera case, and you can imagine a million people dying over the course of the next two, three, six months. I mean, who knows? Until they get home that risk is going to exist.

ZAHN: Well, even after hearing you speak tonight, I think the horror you're talking about is just unimaginable. Samantha Power, thanks.

POWER: Thank you.

ZAHN: And for more on the efforts to help these refugees, I'm joined by Shruti Mehrotra, who is working in one of the camps in Chad, just across the border from Sudan. She is a program director for Oxfam. And she joins us by videophone.

Thank you very much for being with us tonight. What is the situation at your camp right now?

SHRUTI MEHROTRA, PROGRAM DIRECTOR, OXFAM: In Breidjing Camp, we have about 42,000 people who are in a camp that was actually designed for about 18,000. The reason for that great difference is just the huge amounts of people in excess of what we were expecting that are actually here.

In addition to that, we have about 100 to 200 people who arrive every single day with absolute horror stories from the other side in Sudan. Huge issues with water, with sanitation, with getting adequate food and shelter to the people who are here.

ZAHN: So what are you going to do to try to cover that gap you're talking about, with tens of thousands of more people coming to you than you have accommodations for?

MEHROTRA: What we're trying to do is working with the Chad authorities and UNHCR (ph) to register them as soon as possible and have been frantically getting new areas for sites, to put them into new refugee camps, getting as much as we can here in the rainy season in terms of tents, food rations, digging wells for water supplies and everything.

So basically, the people on the ground are having to serve about twice as many people or more than we had expected, and we're fighting quite a huge logistical battle.

ZAHN: What is the specific crisis, you think, confronting all of the children who are now calling your camp home?

MEHROTRA: There's -- there's a huge issue with the children, and I'd like to note upon an issue with the women.

Seventy percent of Breidjing Camp consists of women and children. Now, these women have lost their husbands. They were either killed or, as we have come to understand, have joined the rebels in Sudan.

So you can imagine, with such a large number of female-headed households, we have a lot of problems with internal protection and security. A lot of women are not used to living without their husbands.

We have a lot of orphaned kids, as well, who are needing to be with uncles and aunts or maybe even living alone. And all of these kids we're trying to frantically get them into a new school year, to get them back starting to live what would be a normal life. But you can imagine with twice as many refugees, education is not a priority at this stage. We're trying our best, but getting people food and shelter are the top of the top.

ZAHN: Well, Godspeed as you face this tremendous challenge that lies head. Shruti Mehrotra, good luck.

MEHROTRA: Thanks a lot.

ZAHN: And we will be right back.

(COMMERCIAL BREAK)

ZAHN: And that wraps it up for all of us here this evening. Thanks so much for joining us.

Tomorrow night, a PAULA ZAHN NOW exclusive, my interview with an eyewitness to the abuse inside the Abu Ghraib prison.

Also tomorrow night, women and heart disease, why so many cases are misdiagnosed. We'll meet a woman whose case wasn't diagnosed until her third cardiologist, and she happened to be married to a doctor herself.

Thanks again for joining us tonight. Have a good night.

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


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