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CNN Live Saturday

Ukraine's Opposition Party Leader Viktor Yushchenko Poisoned; Kerik Withdraws Himself From Consideration Of Homeland Security Chief;

Aired December 11, 2004 - 12:00   ET

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

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


FREDRICKA WHITFIELD, CNN ANCHOR: It is noon on the East coast and 9:00 in the morning on the West coast. Welcome to CNN LIVE SATURDAY, I'm Fredricka Whitfield at CNN's global headquarters in Atlanta. Ahead this hour:
(BEGIN VIDEO CLIP)

BERNARD KERIK, FMR, NEW YORK CITY POLICE COMMISSIONER: I contacted the White House and requested that my name be withdrawn.

(END VIDEO CLIP)

WHITFIELD: The president's nominee for Homeland Security chief is out of the running. Nanny problems forced Bernard Kerik to step down. We'll have a live report.

Doctors say dioxin disfigured the face of Ukraine's opposition presidential candidate. Was it deliberate? We'll have a live report from Moscow.

Insurgents, bombs, and video tape: We'll show you the explosive pictures. And this:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Everyone should be shaking my husband's hand saying "what can I do for you because of all you gave for me, not the reverse."

(END VIDEO CLIP)

WHITFIELD: Outrage and disbelief as Uncle Sam tries to bill a veteran soldier returning from Iraq. But first, here are the top stories.

The Bush administration's Homeland Security nominee withdraws from Cabinet consideration. Bernard Kerik called President Bush last night. The reason, Kerik says he hadn't paid taxes when employing a nanny who may have been an illegal immigrant. Immigration is one of the areas supervised by the Homeland Security secretary. Kerik's former boss, Rudy Giuliani, is about to hold a press conference in New York and will have that for you live when it happens.

President Bush is scheduled to meet wounded Marines this hour at the National Naval Medial Center, just outside Washington. He was there for his annual physical exam earlier today. The White House says the president is in great physical shape.

A lengthy French medical report on Yasser Arafat has been handed over to Palestinian authorities. It still isn't clear exactly what caused his death last month, but his nephew, who turned over the documents, says there are suspicions Arafat died of unnatural causes.

A week ago under much fanfare, the White House tapped him as the next Homeland Security secretary. This morning, a dejected looking Bernard Kerik emerged from his New Jersey home to explain why he withdrew his name from consideration, last night. Mary Snow was there for the impromptu news conference earlier today, and joins us now live -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well Fredricka, Bernard Kerik says that he realized there was a problem on Wednesday night. He says he was going through financial statements and realized there were tax issues involved with his nanny, who takes care of his two children, also question about her legal status. Here's what he had to say:

(BEGIN VIDEO CLIP)

KERIK: As you know by now, last evening, I contacted the White House and requested that my name be withdrawn as the candidate for the secretary of Homeland Security position. I did so on my own, I thought it was the right thing to do. Over the last week..."

(END VIDEO CLIP)

WHITFIELD: And those are the statements of Bernard Kerik earlier this morning. Right now, Rudy Giuliani, former mayor of New York is speaking now in Manhattan. Let's listen in.

RUDY GIULIANI, FMR. NEW YORK MAYOR: I understand, I agree with his decision that he had to drop out. I believe the issue is a dispositive (SIC) one for someone who wants to run an agency that has the immigration service as part of their function. It's proven to be dispositive (SIC) for other nominees, in fact, on several occasions. So, it would have been a very bitter, difficult battle, which probably would have resulted in his not being confirmed, if history is the guide, and that would have been a very unfortunate thing to do to a critically important department and a president who deserves nominees who can be confirmed easily. And I have great confidence in Bernie, he made a mistake that people, human beings make mistakes, even the very best of us, including you and me. It's one, unfortunately, that's a mistake that you can't deal with in a process like this where he's going to run the immigration service and he had this oversight in terms of the immigration status and tax situation of this woman who was working for him.

QUESTION: Are you heartbroken, and will you step into the breach now?

GIULIANI: Well, first of all, yes I am heartbroken. I'm heartbroken for Bernie, for the president, and for the department because, as one reporter already said that I was listening to earlier, the irony of this is he was about as qualified as you can possibly be for this job. Law enforcement experience, experience actually even about the business and things. The man, for the last three years, is one of the experts on security. I mean he's kept up with it, he's been in Iraq. And I -- Bernie, you know, is a very good friend of mine. I'm the godfather to his young children and I have so much admiration for him. He was traveling with me on September 11, 2001. He almost died that day, and then he went and volunteered for Iraq and every day he could have been killed while he was in Iraq. I use today hear the guns the background when I would talk to him I'd ask him "how you doing?" And he would very calmly describe to me what was going on in Iraq and I could hear gunfire in the background or explosions or -- but um...

QUESTION: How about you? And are you...

(CROSSTALK)

GIULIANI: Pardon me?

QUESTION: If it's not Bernie Kerik then...

GIULIANI: Oh, the White House, I'm sure, will make a choice expeditiously. They have...

(CROSSTALK)

GIULIANI: No, I'm not -- I'm not a candidate for the job, for any job right now.

(UNINTELLIGIBLE)

GIULIANI: Well, they asked him the question and he said he didn't believe he had a problem here. They asked him the question right in the beginning of the process. And he can tell you best. I think it was the second or third question they asked him. And then sometime on Wednesday, when he was going through the more detailed forms, he took a look -- he took a look at it and he started to realize that there were some discrepancies in dates and some other problems. He told me about it on Wednesday night. At that time, he thought she was legal, but that he had a problem in not paying some back taxes, which he was going to remedy. Then as he investigated it during the day, by Friday morning, he realized there was also a question about her immigration status. The other heartbreaking part of this is, Bernie tells me, that she's a very fine woman, that his children were heartbroken when she left and he doesn't want any trouble for her he thinks she's great.

QUESTION: Was there other (UNINTELLIGIBLE)

GIULIANI: Every, every -- sure, there are always issues in a confirmation process. All the other issues were the things you usually deal with. You can't nominate somebody who's had a full and complete life, particularly the kind of colorful life Bernie had, coming up from the streets, overcoming some of the worst obstacles you could face and becoming maybe one of our best corrections commissioners in history, one of our best police commissioners, a hero in Iraq and superbly successful in business, which he's been...

QUESTION: I guess what we're asking...

GIULIANI: ...without having problems. But, those problems were manageable. I've been through, in one way or another, maybe 250 confirmation processes, not only my own, but in the Justice Department. Questions about do you refuse yourself from prior clients come up all the time. There's a procedure for it. That could have been handled. List of clients, he could not have been involved with taser. You would scrutinize that. If he messed up, he would be in trouble and he would be very careful not to, so that that was absolutely manageable.

QUESTION: Are you going to stay in business with him?

GIULIANI: Absolutely. Bernie is an enormously talented human being. The mere fact a person makes a mistake doesn't make them, in any way, not talented or not really very, very useful. This doesn't take away from Bernie's heroism, doesn't take away from his decency or it doesn't take away from the fact that he's one of the world experts on security, probably knows more about it than anyone that I know. Those things are all true, that he's a wonderful father, that he has beautiful children. He made a mistake and it cost him the job.

QUESTION: You're honor, what do you think this does to you political aspirations? What effect do you think this has on your future plans?

GIULIANI: Right now, I don't have future plans, so when and if I do, we'll find out what this, and a thousand other things that you'll look at, the things I did right, the things I did wrong, the things people think I did right or the things people think I did wrong.

QUESTION: That's quite a... (UNINTELLIGIBLE)

(CROSSTALK)

GIULIANI: Oh yea, they were absolutely -- everything I knew about, which is essentially everything you know about that's been written about, all of them were in the realm of the things you deal with and were all manageable and he had the full, complete support of the White House, he had the complete full support of the Senate.

QUESTION: You're not aware of any other skeletons or problems in Kerik's personal life.

GIULIANI: No, there was nothing else. There were other issues. I know about -- go ahead...

QUESTION: "Newsweek" is reporting there was an arrest warrant.

GIULIANI: Yeah, I -- actually I just looked at it. I had never seen it before. It's a -- it's not a criminal arrest warrant. It doesn't involve a criminal case. I believe this is -- I believe this is a civil case. It's some kind of a forfeiture proceeding, he didn't show up, so, they technically issued a warrant. He then showed up. The case has been either dismissed or settled. So, it just hung on the books for six years and, you know, he lives in New Jersey. QUESTION: He never contemplated sticking it out, appealing to the democrats? To make this a kind of diminuous (PH) kind of thing?

GIULIANI: It isn't.

QUESTION: Put the nation's best interest...

GIULIANI: Well honestly, Geraldo, it's not diminuous (PH). I mean it's serious for that job. If it were commerce secretary or treasury secretary or secretary of state or something like that, maybe it wouldn't be, but the worst part of this is, he is going to be running the immigration service. He's going to have to ask for strict compliance with the immigration laws and every time an immigration issue comes up, this would be a problem. And you know, also, mindful of the fact that this president has, as part of his agenda, immigration reform. And Bernie did not want to put the president through a difficult confirmation process where the odds were, because of this issue, he wouldn't get confirmed. Maybe he could have been. Nobody will ever know, but it would have not been the right thing to do.

UNIDENTIFIED FEMALE: Last question.

QUESTION: Have you spoken to the president?

GIULIANI: It's an embarrassment to me and Bernie and those of us -- you know, because -- that supported him, because we should have disclosed this earlier, we should have found it out earlier, so it's our responsibility. They did everything that they could do. They asked the right question.

Same question I ask many, many times when I did this. They asked him, is there any complications with your domestic situ -- domestic workers or something like that. At that time, he didn't believe there were. He believed the woman was legal. He believed everything was OK. It was not something he paid a lot of attention to in the kind of busy life that he leads.

And then when it came down to having to fill it all out on these complex forms that they give you and started looking at the dates and when the taxes were paid, he realized the taxes weren't paid for a big period in the past, but he thought she was legal.

Then he decided to check into it and he found out that that cannot be verified and that she probably isn't. Now, that's his responsibility, our responsibility, the White House did everything they could do. After all, they were doing the right thing. They selected the man that, but for this problem, could be one of the best qualified people for this job. I mean, I actually put in a call to him.

I spoke to Andy Card, I'll speak to the president a little bit later, and I apologized to him. I told Andy this is our responsibility. I'm sorry. We don't want to do anything to distract the administration from the important job of Homeland Security and he was very, very generous about it. And the president spoke to Bernie last night and he was extremely generous and very, very kind, understanding that Bernie is going through a lot of turmoil.

UNIDENTIFIED FEMALE: Thank you.

GIULIANI: Thank you very much. Thank you.

WHITFIELD: Former New York mayor, Rudy Giuliani, expressing how heartbroken he is for his friend, Bernie Kerik, as well as for the president, because in the words of Giuliani, he says, "Kerik's law enforcement experience and all that he has done, his serving in Iraq, makes him more qualified than anyone for the position of Homeland Security chief." Giuliani saying that Bernie Kerik made a mistake, the mistake being unpaid taxes and employing a nanny that may have been an illegal immigrant. Let's listen more on how he's responding to these questions, now.

GIULIANI: Looking at it, he's the one who discovered it and came forward with it and the warrant issue is something that actually we didn't know about until after he had made his decision. So, it played no part in it and that would have been something he could easily explain. It's a civil case, it's resolved and it's behind him.

UNIDENTIFIED MALE: OK, thank you, guys.

WHITFIELD: All right, Rudy Giuliani there in Manhattan. Let's go to New Jersey now, not far from the home of Bernie Kairk and that's where we'll find our Mary Snow. She had a chance to talk with him among other reporters earlier this is morning when he spoke for the first time about him withdrawing his name from the nomination process -- Mary.

SNOW: That's right, Fredricka and also, Bernie Kerik also thanking Rudy Giuliani early this morning. Giuliani had been such a strong advocate for Kerik and Kerik currently works at his private firm. In terms of the mistake that Rudy Giuliani was just talking about, saying it was an embarrassment, Kerik himself called this, in his words, "a stupid mistake." He said he realized there were problems on Wednesday when he was going through financial statements and then later discovered there were question about the legal status of his nanny. This is what he had to say:

(BEGIN VIDEO CLIP)

KERIK: As you know by now, last evening, I contacted the White House and requested that my name be withdrawn as the candidate for the secretary of Homeland Security position. I did so on my own. I thought it was the right thing to do. Over the last week since my announcement, I had been putting together documents for my background investigation for the FBI, the White House and the Senate confirmation hearings. Over the last few days, I had been going through financial statements and my financials too -- as a part of this package. Late Wednesday evening, I became aware of what I thought may be a problem in some tax filings on a housekeeper and nanny that I had working for us in my home with my children. A very lovely woman, very good woman, she was good to my kids. My children loved her. She loved them. And over the next, I guess, 48 hours or so, I came to realize that in addition to some of the tax issues that I thought I may have, there may have been a question with regard to her legal status in this country.

(END VIDEO CLIP)

SNOW: And Kerik says that he realized if the nomination process had gone forward, he says, he believes it would have gotten ugly. Now, he called the White House last night. He did speak directly with President Bush. Kerik, this morning, also saying that he owes some apologies.

(BEGIN VIDEO CLIP)

SNOW: I didn't want to distract from the president's job and what he had to do, and I owe him an enormous thanks and gratitude for this opportunity, but I owe him a bigger apology for what has happened. This is my responsibility. It was my mistake. It wasn't a mistake made by the White House. I think during their vetting process, this was something that they had looked at, but in a deeper, closer look by me, it was something that I felt was just something I couldn't move forward on.

(END VIDEO CLIP)

SNOW: And Kerik also said that he apologized to the American people. He said he believes that the job of Homeland Security director is one of the most important jobs in the nation. Also, when asked about other potential conflicts of interest, he said he believes there was nothing else that would have prevented his nomination process from going forward. We also asked him about a report in "Newsweek" about an arrest warrant issued by a New Jersey judge back in 1998. This had to do with bills linked to a condo or property that he owned. Kerik said, in his words, that there was not an arrest warrant, that this was a civil proceeding. He said that that report did not have anything to do with his decision, that this was based solely on the issue about his nanny, and as you just heard Rudy Giuliani, Kerik's boss, also, Kerik served under him as New York city police commissioner, Rudy Giuliani saying he is heartbroken over what has happened and heartbroken for Bernie Kerik, his close friend -- Fredricka.

WHITFIELD: And Mary, Kerik specifically addressed the notion that he may have been asked by the White House to step down. He insisted that this was his decision and his alone, didn't he?

SNOW: Yes, he did. He said this was his action alone, that a question had come up about the nanny and that it was only on Wednesday, he says, that he realized that there was a problem with tax questions. Then he said after that, going further into the process, he realized there were questions about her legal status and he said it was then that he decided that he had to take action and ask the White House to withdraw his nomination.

WHITFIELD: Mary Snow in Franklin Lakes, New Jersey, not far from the home of Bernie Kerik. Thanks so much for joining us.

Well, you heard the former New York police commissioner say" it was the right thing to do," his call to the president last night. That only comes after Kerik reexamined his financial statements, but apparently after other questions that Mary was talking about his background were being investigated by members of Congress, as well. Among the issues being looked into: As New York police commissioner, he was fined $2,500 for using off-duty detectives to research his autobiography, and on his finances, the ones ones bankrupt street officer has accumulated more than $6 million in the last three years, mostly from the sale of his stock options in Taser International, which did lucrative business with the Homeland Security Department. Despite these questions, the White House had been standing by Kerik.

And after the phone call from Kerik last night, the White House released a statement, saying they respect his decision. CNN's Elaine Quijano joins us live from the White House with more on that -- Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Fredricka. That's right. Yesterday, White House officials had been very emphatically saying they were not concerned about the confirmation process for Bernard Kerik. Now, at issue yesterday, some reports in the media about possible conflicts of interest. We've heard about this now with Taser International, the stun gun manufacturing company, through which Kerik earned millions of dollars through stock options. Well, in talking to officials yesterday who were very close to this process, they said that the process in place, they felt, was set up to identify any kind of potential conflicts before it even got to the point where President Bush nominated Kerik or announced the nomination, so they felt as though the vetting process had been very thorough, and then, of course, we heard the news yesterday.

Now, let's take a look at this statement that the White House issued. This was last night, after that phone call from Bernard Kerik. This is from the White House press secretary, Scott McClellan, quote, "Commissioner Kerik informed the White House this evening that he is withdrawing his name for personal reasons from consideration for secretary of the Department of Homeland Security. The president respects his decision and wishes Commissioner Kerik and his wife, Hala, well."

Again, that statement coming last night after the phone call Bernard Kerik made to the president. Now, president Bush today, in leaving for his annual physical to go to Bethesda Naval Medical Center, also visiting troops there, did not have any kind of comment on this. And officials that we've been trying to talk to today are being very tight-lipped. No reaction yet, no word on what exactly they may be doing next. Although, they will only say the White House is moving quickly to get a new nominee. Besides that, though, Fredricka, obviously there's a big misstep as President Bush looks to put his new team in place for his second term -- Fredricka.

WHITFIELD: Well Elaine, you heard the former mayor, Giuliani, say this was embarrassing as to why this wouldn't have been uncovered earlier. You have to wonder why the White House vetting process wouldn't have uncovered this kind of information far before the nomination.

QUIJANO: Well, that is the central question at this point. The way the process has been explained to me, by an administration official who was close to all of this, is that it's really sort of a three-phase process. You have, on the first front, the presidential office of personnel and what they do is take a look at the personal as well as financial background, sort of a cursory look, make sure everything is OK there. The second level is one that involves not just the White House, but involves lawyers at the Department of Homeland Security. These are ethics lawyers who basically go through and help get disclosure forms together and we believe it's in that particular process that Kerik found out about this potential -- this nanny problem and the third part process -- or the third part of the process, rather, is the actual Senate confirmation itself -- Fredricka.

WHITFIELD: All right, Elaine Quijano at the White House. Thanks so much.

And we'll be back with more right after this.

(COMMERCIAL BREAK)

WHITFIELD: To a developing story from overseas now, the diagnosis is poisoning for Viktor Yushchenko. Doctors blame poisoning from dioxin for the incredible metamorphosis of the Ukraine opposition candidate. Seemingly overnight, Yushchenko's movie star looks were transformed into a mask of disfigurement. Yushchenko accuses his political enemies for the poisoning. CNN's Moscow bureau chief, Jill Dougherty, joins us live with the very latest -- Jill.

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: Well, Fredricka that is what Mr. Yushchenko said all along, that it was his political enemies who poisoned him in order to kill him. And now, he's been in this clinic in Vienna, where he first went after the poisoning and they did a battery of tests over the past 24 hours and they say, indeed, it was dioxin, a very toxic chemical that it appears to have been deliberate. It was probably contained in some type of liquid, one doctor even said it might have been soup, and presumably, by a third party.

Now, that's the second half of this mystery. Nobody is saying exactly at this point who might have done it. But, Fredricka, you know, we do know from their staff that he was at a dinner. It was kind of like a reception dinner with the leadership of the SBU, that's kind of like the KGB of Ukraine. Nobody else apparently got sick and then the next day, he came down very, very sick, ended up in that clinic in Vienna, but was able, eventually, to get back on the campaign trail and now we have this very important bit of news.

WHITFIELD: And, Jill, that was just a few months ago, wasn't it?

DOUGHERTY: Correct. It happened in September, September 5, to be exact. And in fact, his wife, who happens to be an American citizen, by the way, Kateryna, said to a U.S. television network when he came home after that reception dinner, she tasted something on his lips that tasted very metallic. She couldn't exactly say what it was, but the very next day, he came down and was sick. And the transformation really has been astounding. Doctors now are saying physically, his internal organs and basically his body is getting back to normal, but that disfigurement could last literally for years. WHITFIELD: And so, Jill, he has since gone back to doctors to try and diagnose the problem. They didn't know quite how to treat him, because this was some sort of mystery illness that he was encountering to them, correct?

DOUGHERTY: It was, Fredricka. You know, one of the problems was when he went to Vienna the first time, they did some tests, but he was in the midst of a campaign, didn't want to get further tests. They wanted to take a biopsy of his skin, for example. He said, no, I've to get back on the campaign trail. But then about a -- you know, a couple of weeks later, he returned with very, very serious pain and it was so bad that they had to inject pain killers through his back through a catheter, and he was campaigning in that form for a while, but now that pain is gone and it does not effect his brain or anything like that, but cosmetically, he is going to be a very changed person for a very long time.

WHITFIELD: Jill Dougherty in Moscow thanks so much for that update.

Well, this bizarre turn of events concerning Viktor Yushchenko raises a lot of questions about dioxin. What exactly is it? And what are the circumstances of exposure? With now me now, Dr. Mark Siegel with the New York University Medical School.

Good to see you, Dr. Siegel.

DR. MARK SIEGEL, NEW YORK UNIVERSITY MEDICAL SCHOOL: Hi Fredricka, how are you?

WHITFIELD: I'm good. First of all, let's explain dioxin, because it doesn't necessarily constitute one chemical, does it?

SIEGEL: Right, actually dioxin is a naturally occurring substance, but the way we encounter it mostly is in industrial plants. It's part of a pesticide and it's part of making paper and pulp and it's actually a chlorinated compound, which can also be synthetic. Now, we know it as Agent Orange from Vietnam and that's actually a more chronic exposure to dioxin than this situation.

WHITFIELD: So, because it can be found in pesticides and chlorine, etcetera, that means it's common which means access to it is rather readily and easey.

SIEGEL: That's absolutely right and the real signature of dioxin that makes us suspicious of very suspicious of it is something called chloracne, which is what Mr. Yushchenko has. Which is his face break out in a sudden yellowish acne, very severe, and that's sign of a chlorinated type of poison. So, he was -- you know, saying that he was saying that he was poisoned at the beginning and doctors in Vienna were thinking of that, but they didn't check him for dioxin right away.

WHITFIELD: Why wouldn't they then if already you're describing this to be very normal symptoms of that kind of exposure? SIEGEL: Well you know, that's a very good question. And of course, we weren't there, but I would say that the skin findings have been more prevalent over time and I think it's become more and more obvious that this was some kind of poison.

They speculated at the beginning all the organs that were involved could have been due to a virus, but the virus didn't explain these skin findings.

WHITFIELD: How do you treat somebody once you realize they have been exposed or ingested dioxin?

SIEGEL: You can try to get rid of it with charcoal or dialysis. Of course, at this stage of the game they've rechecked him and they found his dioxin levels are back down to normal, which is good news. And that his organs involved, liver, kidneys, his GI tract -- he had a lot of nausea, vomiting, diarrhea. A lot of that has receded.

He still has the nerve palsies, the facial droops, that is persisting. And the skin findings will persist for several weeks or months. It may improve, though, his skin.

WHITFIELD: He is actually very lucky that internally it looks as though it's getting out of his system. When you say it could be a while before there are any changes in his skin externally, are we talking months, years? Is this permanent disfigurement?

SIEGEL: It can be permanent, I would say months before we start to see significant improvement. In some cases, it gets better. A thousand times the normal dioxin was in his blood, originally. It could have killed him. But one thing very significant, is you never know what the reaction of a person to dioxin is going to be. It's on an individual basis.

WHITFIELD: Quickly before I let you go, we heard Jill say it's believed it was possibly in was in a soup or liquid he may have ingested. Ingesting this chemical is that the only way or could you just breathe it, and get the same kind of symptoms, results?

SIEGEL: You can just breathe it, but you wouldn't get the same kind of symptoms. You get a very concentrated form in the soup or liquid that he had.

WHITFIELD: OK, Dr. Mark Siegel of New York University Medical Center. Thanks so much for joining us. Appreciate it.

SIEGEL: Thank you, Fredricka.

WHITFIELD: Many experts agree it's the kind of authority the commander in chief should have. Where many disagree is whether the president is abusing the right to keep soldiers in Iraq beyond their scheduled tours of duty. We'll debate stop-loss orders.

And he gave so much for his chiropractors but when Uncle Sam said he still owed more, he said, enough. We think you just might agree with him. And the tale of the tape. An amazing look at video shot by insurgents in Iraq, of attacks on U.S. forces serving over there.

(COMMERCIAL BREAK)

WHITFIELD: In Iraq, a U.S. military court has sentenced a U.S. soldier to three years in prison for killing a severely wounded Iraqi civilian. Sergeant John E. Horne of Winston-Salem, North Carolina, also received a dishonorable discharge, loss of wages and his rank was reduced to private.

Elsewhere in Baghdad, suspected insurgents show and killed two high-ranking officials of the Iraqi interior ministry. The officials were attacked on their way to work.

U.S. soldiers going into battle in Iraq will have more armored HUMVEES to protect them. Armor holdings Incorporated says it plans to increase the production of armored HUMVEES from 450 to 550 a month. But the company says it probably wont' reach that level until February, at the very earliest.

The Army made a deal with Armor Holdings after National Guardsmen raised concerns with Defense Secretary Donald Rumsfeld earlier in week in Kuwait. The guardsman asked why soldiers must search landfills for possible armor for their vehicles.

Incredible images, from the fight for Iraq. An insurgent group has compiled a slickly produced video of its handiwork, including attacks on U.S. positions, and chilling views of the indoctrination of future generations. More from CNN's Tim Lister.

And a word of caution some of the images may be disturbing to some viewers.

(BEGIN VIDEOTAPE)

TIM LISTER, CNN CORRESPONDENT (voice over): Never before has an insurgent group produced such a comprehensive visual record of its operations.

In a 40-minute video, the Islamic army in Iraq shows a wide range of operations. From remotely controlled roadside bombs to shoulder- launched rocket attacks, and attempts to bring down U.S. aircraft.

In this incident, the insurgents claim to shot down a Chinook helicopter. One sequence includes a mortar attack on a U.S. base.

(EXPLOSIONS)

Expecting return fire, the insurgents leave the area, but keep their camera rolling. A graphic appears that says 10 minutes later. And then the camera records incoming fire from coalition forces, as they pinpoint the insurgents' position.

The video, which was quickly posted on several Islamic websites, specifies some of the attacks were west of Baghdad and near Falluja. In one sequence, the insurgents appear to be arming an improvised roadside bomb. The next sequence shows traffic passing alongside the road and then amid cries of, Allah Akbar (ph), "God is Great", an armored car is blown up.

In another part of the video, a toddler is shown barely managing to hold an automatic weapon, while the Arabic audio relates a poem, from his father, which includes the lines, stand by, my son, and seek martyrdom. Stand by, my son, and do your duty.

It Islamic army in Iraq is one of the largest and best-organized groups operating in the Sunni Triangle. This video seems designed to show just how audacious it has become-Tim Lister, CNN, Atlanta.

(END VIDEOTAPE)

WHITFIELD: A hot debate being spawned from the U.S. military service in Iraq. The stop-loss plan, is it being overused? We'll debate that issue coming up.

(COMMERCIAL BREAK)

WHITFIELD: The army's stop-loss policy can force soldiers to extend their service beyond discharge date to maintain troop levels. It's being challenged in court. The question among critics, is the policy being abused in Iraq? Our guests in Washington take opposite sides on that question. Robert Maginnis is a national security analyst and syndicated columnist, and P.J. Crowley is with the Center for American Progress.

Good to see both of you.

LT. COL. ROBERT MAGINNIS, U.S. ARMY (RET.): Hello.

P.J. CROWLEY, CENTER FOR AMERICAN PROGRESS: Thank you.

WHITFIELD: Robert, let me begin with you. Should the stop-loss policy come to the surprise of any enlistee or Reservist?

MAGINNIS: Not at all, Fredricka. Everybody signs up for eight years. Part of it is going to be active, and the other part is going to be reserve. You know, we have 4.5 million people that we can draw from to send to Iraq or wherever.

It's analogous to a football team. Before you go to the Super Bowl, you don't let your football players leave. You keep them there, you play the football game, and then you let them go afterwards.

Well, with our soldiers, going to war, we want to keep the experience and keep their knowledge on hand, so it helps the unit to be better ready when we have to face the enemy.

WHITFIELD: P.J. -- sorry, Robert.

P.J., it sounds reasonable. How could U.S. military, at a time of war, afford to allow those most experienced, those veteran soldiers go when they're still need?

CROWLEY: Well, to borrow Bob's analogy, however, once you turn into the second half of the game, the question is, using this tool, which is important -- for example, Secretary Rumsfeld said this week when you go to conflict, you go to war with the army you have, particularly at the early stages of a conflict, stop-loss is essential. The longer it goes, you have to evaluate its benefits versus its costs.

Clearly, because soldiers are suing the Secretary of Defense, you have the National Guard that has recently missed its recruitment goals for this year, now the question is, are we paying a higher price in terms of possibility of losing good soldiers in the future because of retention questions? Now is there a better way? In my view, the better way, as you get longer into this conflict, is to have a larger army.

WHITFIELD: So, P.J., it sounds like the concern is not just the current retention, but the concern is recruiting. That perhaps the Army or any other branch of military may have a problem recruiting any potential candidates as a result of this kind of stop-loss policy that is being used, quite extensively in the view of some soldiers, right now?

CROWLEY: I think the issue for the relatively small number of soldiers that are affected by stop-loss, right now, is manageable. Now, the question is, what does it do to the psychology of the rest of the force? What's it do to others who are evaluating service in the army? At this stage of the game, I think there will probably be better ways to go.

Because this is going to be a concern both for soldiers, particularly for families. I would hate to see the extended use of stop-loss means we lose good soldiers in the future and put additional pressure on our force.

WHITFIELD: So, Robert, is that psychology something that the White House, the commander in chief, is worried about right now, when there are two wars ongoing and getting to the bottom of those wars and finishing those wars, and achieving the goals of those wars, is still under way?

MAGINNIS: Well, no doubt. We need to sustain a large contingent of people overseas, in Iraq, and elsewhere. We have 450,000 people at 144 countries around the world, Fredricka.

However, what we need to keep in mind here is that we have a pool of people and retention, quite frankly, even in the National Guard, is reasonably good.

We have to make sure that we keep as many as we can and, if we're going to have immobilization, which we have, we can't let people that are already on active duty go into the Reserves just to pull other Reservists up. We have always had a mobilization and then a stop-loss.

Back in 1991, during Desert Storm we pulled in 265,000 people, but we also had a stop-loss, because it's hypocritical not to have one and have the -- not have the other.

So, we're trying to understand the dynamics of what we're facing here. It's very tough, but we're looking at whether or not we need to increase the force, but at the same time, we're transforming, as Mr. Rumsfeld said. We're taking some of the reserve component people and putting them permanently in the active component, because we're unbalanced based on a Cold War model and now the insurgency world we face in the future is very different.

WHITFIELD: How do you have the stop-loss policy now being used and not have the complaints coming from, like we saw earlier this week, Specialist Wilson, who was questioning Donald Rumsfeld, and now you have a handful of soldiers who have taken their cases to court, challenging the Defense Department on what they believe is no longer going to be a voluntary service, but, instead, a forced service? P.J.?

MAGINNIS: It's all --

WHITFIELD: OK, go ahead, Robert, first.

MAGINNIS: It's all voluntary. At 4.5 million people out there, they all signed a DD form that says I understand eight years of my life is committed to the military.

Now, not all of that is going to be active duty, but the president has, by statute, has a provision in there that says the president can call up to a million people for a two-year period under certain conditions. And he has taken advantage of that in a number of different venues over the last 10 years.

WHITFIELD: P.J., are we seeing what is being bread now is a new sentiment, perhaps an under lying problem of the psychology of the soldier who says I question now my authority?

CROWLEY: Well, I think stop-loss is a blunt instrument. I think we have to -- certainly, whether we agree that Iraq should have been the central front on terrorism, it is the central front now, and it's not going to be the last front. This war on terrorism is going to have a disproportionate at impact on our land forces. They are the ones that will have to intercede in the future to make sure we don't have political vacuums turn into terrorist safe havens.

We have to look at the issue of a larger force and that will help us manage it better and use stop-loss less often.

WHITFIELD: Gentlemen, thank you very much, P.J. Crowley and Robert Maginnis, for joining us.

CROWLEY: My pleasure.

MAGINNIS: Thank you.

WHITFIELD: Still ahead, U.S. military adds insult to a returning veteran's injury. An explanation straight ahead. But, first, we'll lighten things up for you a little bit. We have the key to your weekend getaways, the Florida Keys, that is. We'll take you there.

(COMMERCIAL BREAK)

(WEATHER FORECAST)

(COMMERCIAL BREAK)

WHITFIELD: Warm, inviting and relaxing. Could you just imagine yourself cruising the waters off the Florida Keys right now, especially as winter approaches? The latest issue of "Travel+ Leisure" magazine takes us to some resorts in the Keys. Senior Editor Nilou Motamed, joining us live from New York.

Good to see you, Nilou.

NILOU MOTAMED, SR. EDITOR, "TRAVEL & LEISURE": Good to see you, too.

WHITFIELD: So many times, people think Keys, they only think of Key West but there is so much more over that 113-mile span of islands, isn't there?

MOTAMEND: You're absolutely right. Jimmy Buffet seared those 800 islands in our minds as a place for margaritas and shakers of salt, but there's a lot more there. This is known as America's Caribbean. This is a place you can go for sun, sand and relaxation. Just a load of fun. Great resorts there.

WHITFIELD: As you drive south on U.S. 1, one of the first ones you come to, Chico Lodge.

MOTAMED: Chico Lodge is a favorite of Bush, Sr. It's been around since the '60s and a place for golf and for fishing. It's about an hour south of Miami and it's a huge fishing destination in the Keys. So, it's very much a favorite of the old school and the old guard. There is a reason why they take care of you. It's a great place to go.

WHITFIELD: They have great food there. I've been there. It's good dining.

Let's talk about Hawk's Cay Resort. That's a good family-oriented place, isn't it?

MOTAMED: I think one description says it all. They have a pirate shaped water slide. That pretty much says that your kids will be happy. There's a teen spa. So, your teen can go get a facial, and movies by the pool. This is really -- they've done everything they can in the 60-acre resort to make sure your kids are going to really occupied and happy.

WHITFIELD: Oh, boy. Spoil those teens early with facials and everything for them. All right. And then, if you're really lucky and really want to get away, it's very private, why not the Palm Island Resort?

MOTAMEND: Know it. It's $895 a night for this property, but you're really only -- yeah. It's a lot.

WHITFIELD: Yeah.

MOTAMED: But you are going to get taken care of. There are so many details you the see to. You feel you're in this tropical oasis. You are in this thatched hut. The food is amazing. Attention to detail, as I said. Hammocks, as you see. You really get pampered here. If you really want to get away from it all, this is a place to go.

WHITFIELD: No wonder that is on my list of places to go. I didn't realize it was $800 something. It's really a deterrent, but something very attractive about it, you can't just drive there. It's not a matter of driving across the bridge to get into Palm Island Resort, is it?

MOTAMED: No, no. You actually have to take a helicopter. You probably have it on your list, so you know. It's definitely a boat, or helicopter. What's great about all of the Keys are there there's so much access to water. You're surrounded by water, obviously. That means fishing and snorkeling and diving as well. There's the most incredible diving spots off of Key Largo.

WHITFIELD: We are in peak season for any of these places, right now, aren't we?

MOTAMED: This is it. We passed the hurricane season, which showed a little dip in their tourism. They were not as hard hit as other parts of Florida were. You will get some deals, because people are trying to lure back customers, but it's been spared remarkably, which is great.

WHITFIELD: Fantastic. I'm inspired. I'm ready to pack my bags, Nilou.

MOTAMED: Thanks so much.

WHITFIELD: All right. Thanks, Nilou Motamed, from "Travel + Leisure" magazine.

Coming up next on CNN LIVE SATURDAY.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He signed up for this, because he wanted to serve his country. He wanted to do something he could be proud of. And they're making it very hard for him to feel proud.

(END VIDEOTAPE)

WHITFIELD: But the treatment this Army specialist has received from the military upon returning from Iraq is nothing to be proud of. Details straight ahead.

(COMMERCIAL BREAK)

WHITFIELD: We end today with the story of a soldier's fight. He went to Iraq to fight for his country, then he had to fight to keep his limbs after a bomb attack. As Ed Lavandera explains, he has now had to battle the Army over how much they expected him to give just to serve his country.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN NATIONAL CORRESPONDENT (voice over): Last February, Army Specialist Robert Loria was helping rescue a fellow soldier, who had just been injured by a roadside bomb north of Baghdad.

Loria and a group of soldiers drove in, loaded the soldier's body in the HUMVEE, but as Loria started driving away, a second bomb detonated. Loria looked down and saw his left arm mangled and shrapnel wounds along the left side of his body.

ROBERT LORIA, WOUNDED SOLDIER: When they had gotten me fully out of the vehicle and laid me on the ground, the first things I said to him, I told him my wife was going to be pissed at me. Because I told her a long time ago I would be back all right. and I wouldn't get hurt, and I felt like I lied to her.

LAVANDERA: Specialist Loria is getting used to life with part of an arm. Nerve damage has left him without feeling in his left foot. But as Loria prepared to discharge from the military, after serving five years, he was told he owed the army more than $6,000 for pay the Army says he shouldn't have received. And for travel expenses to get treatment.

The bill also included $310 for equipment that Loria didn't bring back from Iraq, like a sleeping bag, suspenders, and a rucksack, among other things.

LORIA: I didn't have anything to say to them. I didn't what to say to them. They were like, hey, screw you. Bye.

LAVANDERA: The Army even took his last paycheck and applied it to the debt. After that, he still owed almost $2,000.

Loria and his wife started to worry. The 27-year-old specialist had no idea how he would afford to get back home to New York. Unsure what to do, Christine Loria started calling her local congressman, a couple of U.S. senators and their hometown newspaper.

CHRISTINE LORIA, SOLDIER'S WIFE: He signed up for this because he wanted to serve his country. He wanted to do something he could be proud of. They're making it very hard for him to feel proud, by trying to take more from him. What more do they want? What?

LAVANDERA: Right now, the Army wants to get out of the spotlight on this one, so they're making the debt disappear. An Army spokesman says these actions clearly demonstrate that once the command leadership is involved, the Army does its utmost to correct and satisfy the needs of the soldiers and their families.

But the Lorias are left wondering why it was so hard to make this happen.

C. LORIA: Everyone should be shaking my husband's hand and saying what can I do for you because of all you gave for me, not the reverse.

LAVADERA: In a couple of days Specialist Robert Loria will jump in his car and start driving home to New York, but the best part of all is he will be home for Christmas and have some money to spend on gifts. Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

WHITFIELD: Still much more ahead on CNN SATURDAY. In a few moments, "In The Money", at 2 Eastern, CNN LIVE SATURDAY, an in-depth look at the 9/11 bill, and what they didn't tell you about it. At 3, its NEXT@CNN, but first a look at the headlines.

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 December 11, 2004 - 12:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: It is noon on the East coast and 9:00 in the morning on the West coast. Welcome to CNN LIVE SATURDAY, I'm Fredricka Whitfield at CNN's global headquarters in Atlanta. Ahead this hour:
(BEGIN VIDEO CLIP)

BERNARD KERIK, FMR, NEW YORK CITY POLICE COMMISSIONER: I contacted the White House and requested that my name be withdrawn.

(END VIDEO CLIP)

WHITFIELD: The president's nominee for Homeland Security chief is out of the running. Nanny problems forced Bernard Kerik to step down. We'll have a live report.

Doctors say dioxin disfigured the face of Ukraine's opposition presidential candidate. Was it deliberate? We'll have a live report from Moscow.

Insurgents, bombs, and video tape: We'll show you the explosive pictures. And this:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Everyone should be shaking my husband's hand saying "what can I do for you because of all you gave for me, not the reverse."

(END VIDEO CLIP)

WHITFIELD: Outrage and disbelief as Uncle Sam tries to bill a veteran soldier returning from Iraq. But first, here are the top stories.

The Bush administration's Homeland Security nominee withdraws from Cabinet consideration. Bernard Kerik called President Bush last night. The reason, Kerik says he hadn't paid taxes when employing a nanny who may have been an illegal immigrant. Immigration is one of the areas supervised by the Homeland Security secretary. Kerik's former boss, Rudy Giuliani, is about to hold a press conference in New York and will have that for you live when it happens.

President Bush is scheduled to meet wounded Marines this hour at the National Naval Medial Center, just outside Washington. He was there for his annual physical exam earlier today. The White House says the president is in great physical shape.

A lengthy French medical report on Yasser Arafat has been handed over to Palestinian authorities. It still isn't clear exactly what caused his death last month, but his nephew, who turned over the documents, says there are suspicions Arafat died of unnatural causes.

A week ago under much fanfare, the White House tapped him as the next Homeland Security secretary. This morning, a dejected looking Bernard Kerik emerged from his New Jersey home to explain why he withdrew his name from consideration, last night. Mary Snow was there for the impromptu news conference earlier today, and joins us now live -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well Fredricka, Bernard Kerik says that he realized there was a problem on Wednesday night. He says he was going through financial statements and realized there were tax issues involved with his nanny, who takes care of his two children, also question about her legal status. Here's what he had to say:

(BEGIN VIDEO CLIP)

KERIK: As you know by now, last evening, I contacted the White House and requested that my name be withdrawn as the candidate for the secretary of Homeland Security position. I did so on my own, I thought it was the right thing to do. Over the last week..."

(END VIDEO CLIP)

WHITFIELD: And those are the statements of Bernard Kerik earlier this morning. Right now, Rudy Giuliani, former mayor of New York is speaking now in Manhattan. Let's listen in.

RUDY GIULIANI, FMR. NEW YORK MAYOR: I understand, I agree with his decision that he had to drop out. I believe the issue is a dispositive (SIC) one for someone who wants to run an agency that has the immigration service as part of their function. It's proven to be dispositive (SIC) for other nominees, in fact, on several occasions. So, it would have been a very bitter, difficult battle, which probably would have resulted in his not being confirmed, if history is the guide, and that would have been a very unfortunate thing to do to a critically important department and a president who deserves nominees who can be confirmed easily. And I have great confidence in Bernie, he made a mistake that people, human beings make mistakes, even the very best of us, including you and me. It's one, unfortunately, that's a mistake that you can't deal with in a process like this where he's going to run the immigration service and he had this oversight in terms of the immigration status and tax situation of this woman who was working for him.

QUESTION: Are you heartbroken, and will you step into the breach now?

GIULIANI: Well, first of all, yes I am heartbroken. I'm heartbroken for Bernie, for the president, and for the department because, as one reporter already said that I was listening to earlier, the irony of this is he was about as qualified as you can possibly be for this job. Law enforcement experience, experience actually even about the business and things. The man, for the last three years, is one of the experts on security. I mean he's kept up with it, he's been in Iraq. And I -- Bernie, you know, is a very good friend of mine. I'm the godfather to his young children and I have so much admiration for him. He was traveling with me on September 11, 2001. He almost died that day, and then he went and volunteered for Iraq and every day he could have been killed while he was in Iraq. I use today hear the guns the background when I would talk to him I'd ask him "how you doing?" And he would very calmly describe to me what was going on in Iraq and I could hear gunfire in the background or explosions or -- but um...

QUESTION: How about you? And are you...

(CROSSTALK)

GIULIANI: Pardon me?

QUESTION: If it's not Bernie Kerik then...

GIULIANI: Oh, the White House, I'm sure, will make a choice expeditiously. They have...

(CROSSTALK)

GIULIANI: No, I'm not -- I'm not a candidate for the job, for any job right now.

(UNINTELLIGIBLE)

GIULIANI: Well, they asked him the question and he said he didn't believe he had a problem here. They asked him the question right in the beginning of the process. And he can tell you best. I think it was the second or third question they asked him. And then sometime on Wednesday, when he was going through the more detailed forms, he took a look -- he took a look at it and he started to realize that there were some discrepancies in dates and some other problems. He told me about it on Wednesday night. At that time, he thought she was legal, but that he had a problem in not paying some back taxes, which he was going to remedy. Then as he investigated it during the day, by Friday morning, he realized there was also a question about her immigration status. The other heartbreaking part of this is, Bernie tells me, that she's a very fine woman, that his children were heartbroken when she left and he doesn't want any trouble for her he thinks she's great.

QUESTION: Was there other (UNINTELLIGIBLE)

GIULIANI: Every, every -- sure, there are always issues in a confirmation process. All the other issues were the things you usually deal with. You can't nominate somebody who's had a full and complete life, particularly the kind of colorful life Bernie had, coming up from the streets, overcoming some of the worst obstacles you could face and becoming maybe one of our best corrections commissioners in history, one of our best police commissioners, a hero in Iraq and superbly successful in business, which he's been...

QUESTION: I guess what we're asking...

GIULIANI: ...without having problems. But, those problems were manageable. I've been through, in one way or another, maybe 250 confirmation processes, not only my own, but in the Justice Department. Questions about do you refuse yourself from prior clients come up all the time. There's a procedure for it. That could have been handled. List of clients, he could not have been involved with taser. You would scrutinize that. If he messed up, he would be in trouble and he would be very careful not to, so that that was absolutely manageable.

QUESTION: Are you going to stay in business with him?

GIULIANI: Absolutely. Bernie is an enormously talented human being. The mere fact a person makes a mistake doesn't make them, in any way, not talented or not really very, very useful. This doesn't take away from Bernie's heroism, doesn't take away from his decency or it doesn't take away from the fact that he's one of the world experts on security, probably knows more about it than anyone that I know. Those things are all true, that he's a wonderful father, that he has beautiful children. He made a mistake and it cost him the job.

QUESTION: You're honor, what do you think this does to you political aspirations? What effect do you think this has on your future plans?

GIULIANI: Right now, I don't have future plans, so when and if I do, we'll find out what this, and a thousand other things that you'll look at, the things I did right, the things I did wrong, the things people think I did right or the things people think I did wrong.

QUESTION: That's quite a... (UNINTELLIGIBLE)

(CROSSTALK)

GIULIANI: Oh yea, they were absolutely -- everything I knew about, which is essentially everything you know about that's been written about, all of them were in the realm of the things you deal with and were all manageable and he had the full, complete support of the White House, he had the complete full support of the Senate.

QUESTION: You're not aware of any other skeletons or problems in Kerik's personal life.

GIULIANI: No, there was nothing else. There were other issues. I know about -- go ahead...

QUESTION: "Newsweek" is reporting there was an arrest warrant.

GIULIANI: Yeah, I -- actually I just looked at it. I had never seen it before. It's a -- it's not a criminal arrest warrant. It doesn't involve a criminal case. I believe this is -- I believe this is a civil case. It's some kind of a forfeiture proceeding, he didn't show up, so, they technically issued a warrant. He then showed up. The case has been either dismissed or settled. So, it just hung on the books for six years and, you know, he lives in New Jersey. QUESTION: He never contemplated sticking it out, appealing to the democrats? To make this a kind of diminuous (PH) kind of thing?

GIULIANI: It isn't.

QUESTION: Put the nation's best interest...

GIULIANI: Well honestly, Geraldo, it's not diminuous (PH). I mean it's serious for that job. If it were commerce secretary or treasury secretary or secretary of state or something like that, maybe it wouldn't be, but the worst part of this is, he is going to be running the immigration service. He's going to have to ask for strict compliance with the immigration laws and every time an immigration issue comes up, this would be a problem. And you know, also, mindful of the fact that this president has, as part of his agenda, immigration reform. And Bernie did not want to put the president through a difficult confirmation process where the odds were, because of this issue, he wouldn't get confirmed. Maybe he could have been. Nobody will ever know, but it would have not been the right thing to do.

UNIDENTIFIED FEMALE: Last question.

QUESTION: Have you spoken to the president?

GIULIANI: It's an embarrassment to me and Bernie and those of us -- you know, because -- that supported him, because we should have disclosed this earlier, we should have found it out earlier, so it's our responsibility. They did everything that they could do. They asked the right question.

Same question I ask many, many times when I did this. They asked him, is there any complications with your domestic situ -- domestic workers or something like that. At that time, he didn't believe there were. He believed the woman was legal. He believed everything was OK. It was not something he paid a lot of attention to in the kind of busy life that he leads.

And then when it came down to having to fill it all out on these complex forms that they give you and started looking at the dates and when the taxes were paid, he realized the taxes weren't paid for a big period in the past, but he thought she was legal.

Then he decided to check into it and he found out that that cannot be verified and that she probably isn't. Now, that's his responsibility, our responsibility, the White House did everything they could do. After all, they were doing the right thing. They selected the man that, but for this problem, could be one of the best qualified people for this job. I mean, I actually put in a call to him.

I spoke to Andy Card, I'll speak to the president a little bit later, and I apologized to him. I told Andy this is our responsibility. I'm sorry. We don't want to do anything to distract the administration from the important job of Homeland Security and he was very, very generous about it. And the president spoke to Bernie last night and he was extremely generous and very, very kind, understanding that Bernie is going through a lot of turmoil.

UNIDENTIFIED FEMALE: Thank you.

GIULIANI: Thank you very much. Thank you.

WHITFIELD: Former New York mayor, Rudy Giuliani, expressing how heartbroken he is for his friend, Bernie Kerik, as well as for the president, because in the words of Giuliani, he says, "Kerik's law enforcement experience and all that he has done, his serving in Iraq, makes him more qualified than anyone for the position of Homeland Security chief." Giuliani saying that Bernie Kerik made a mistake, the mistake being unpaid taxes and employing a nanny that may have been an illegal immigrant. Let's listen more on how he's responding to these questions, now.

GIULIANI: Looking at it, he's the one who discovered it and came forward with it and the warrant issue is something that actually we didn't know about until after he had made his decision. So, it played no part in it and that would have been something he could easily explain. It's a civil case, it's resolved and it's behind him.

UNIDENTIFIED MALE: OK, thank you, guys.

WHITFIELD: All right, Rudy Giuliani there in Manhattan. Let's go to New Jersey now, not far from the home of Bernie Kairk and that's where we'll find our Mary Snow. She had a chance to talk with him among other reporters earlier this is morning when he spoke for the first time about him withdrawing his name from the nomination process -- Mary.

SNOW: That's right, Fredricka and also, Bernie Kerik also thanking Rudy Giuliani early this morning. Giuliani had been such a strong advocate for Kerik and Kerik currently works at his private firm. In terms of the mistake that Rudy Giuliani was just talking about, saying it was an embarrassment, Kerik himself called this, in his words, "a stupid mistake." He said he realized there were problems on Wednesday when he was going through financial statements and then later discovered there were question about the legal status of his nanny. This is what he had to say:

(BEGIN VIDEO CLIP)

KERIK: As you know by now, last evening, I contacted the White House and requested that my name be withdrawn as the candidate for the secretary of Homeland Security position. I did so on my own. I thought it was the right thing to do. Over the last week since my announcement, I had been putting together documents for my background investigation for the FBI, the White House and the Senate confirmation hearings. Over the last few days, I had been going through financial statements and my financials too -- as a part of this package. Late Wednesday evening, I became aware of what I thought may be a problem in some tax filings on a housekeeper and nanny that I had working for us in my home with my children. A very lovely woman, very good woman, she was good to my kids. My children loved her. She loved them. And over the next, I guess, 48 hours or so, I came to realize that in addition to some of the tax issues that I thought I may have, there may have been a question with regard to her legal status in this country.

(END VIDEO CLIP)

SNOW: And Kerik says that he realized if the nomination process had gone forward, he says, he believes it would have gotten ugly. Now, he called the White House last night. He did speak directly with President Bush. Kerik, this morning, also saying that he owes some apologies.

(BEGIN VIDEO CLIP)

SNOW: I didn't want to distract from the president's job and what he had to do, and I owe him an enormous thanks and gratitude for this opportunity, but I owe him a bigger apology for what has happened. This is my responsibility. It was my mistake. It wasn't a mistake made by the White House. I think during their vetting process, this was something that they had looked at, but in a deeper, closer look by me, it was something that I felt was just something I couldn't move forward on.

(END VIDEO CLIP)

SNOW: And Kerik also said that he apologized to the American people. He said he believes that the job of Homeland Security director is one of the most important jobs in the nation. Also, when asked about other potential conflicts of interest, he said he believes there was nothing else that would have prevented his nomination process from going forward. We also asked him about a report in "Newsweek" about an arrest warrant issued by a New Jersey judge back in 1998. This had to do with bills linked to a condo or property that he owned. Kerik said, in his words, that there was not an arrest warrant, that this was a civil proceeding. He said that that report did not have anything to do with his decision, that this was based solely on the issue about his nanny, and as you just heard Rudy Giuliani, Kerik's boss, also, Kerik served under him as New York city police commissioner, Rudy Giuliani saying he is heartbroken over what has happened and heartbroken for Bernie Kerik, his close friend -- Fredricka.

WHITFIELD: And Mary, Kerik specifically addressed the notion that he may have been asked by the White House to step down. He insisted that this was his decision and his alone, didn't he?

SNOW: Yes, he did. He said this was his action alone, that a question had come up about the nanny and that it was only on Wednesday, he says, that he realized that there was a problem with tax questions. Then he said after that, going further into the process, he realized there were questions about her legal status and he said it was then that he decided that he had to take action and ask the White House to withdraw his nomination.

WHITFIELD: Mary Snow in Franklin Lakes, New Jersey, not far from the home of Bernie Kerik. Thanks so much for joining us.

Well, you heard the former New York police commissioner say" it was the right thing to do," his call to the president last night. That only comes after Kerik reexamined his financial statements, but apparently after other questions that Mary was talking about his background were being investigated by members of Congress, as well. Among the issues being looked into: As New York police commissioner, he was fined $2,500 for using off-duty detectives to research his autobiography, and on his finances, the ones ones bankrupt street officer has accumulated more than $6 million in the last three years, mostly from the sale of his stock options in Taser International, which did lucrative business with the Homeland Security Department. Despite these questions, the White House had been standing by Kerik.

And after the phone call from Kerik last night, the White House released a statement, saying they respect his decision. CNN's Elaine Quijano joins us live from the White House with more on that -- Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Fredricka. That's right. Yesterday, White House officials had been very emphatically saying they were not concerned about the confirmation process for Bernard Kerik. Now, at issue yesterday, some reports in the media about possible conflicts of interest. We've heard about this now with Taser International, the stun gun manufacturing company, through which Kerik earned millions of dollars through stock options. Well, in talking to officials yesterday who were very close to this process, they said that the process in place, they felt, was set up to identify any kind of potential conflicts before it even got to the point where President Bush nominated Kerik or announced the nomination, so they felt as though the vetting process had been very thorough, and then, of course, we heard the news yesterday.

Now, let's take a look at this statement that the White House issued. This was last night, after that phone call from Bernard Kerik. This is from the White House press secretary, Scott McClellan, quote, "Commissioner Kerik informed the White House this evening that he is withdrawing his name for personal reasons from consideration for secretary of the Department of Homeland Security. The president respects his decision and wishes Commissioner Kerik and his wife, Hala, well."

Again, that statement coming last night after the phone call Bernard Kerik made to the president. Now, president Bush today, in leaving for his annual physical to go to Bethesda Naval Medical Center, also visiting troops there, did not have any kind of comment on this. And officials that we've been trying to talk to today are being very tight-lipped. No reaction yet, no word on what exactly they may be doing next. Although, they will only say the White House is moving quickly to get a new nominee. Besides that, though, Fredricka, obviously there's a big misstep as President Bush looks to put his new team in place for his second term -- Fredricka.

WHITFIELD: Well Elaine, you heard the former mayor, Giuliani, say this was embarrassing as to why this wouldn't have been uncovered earlier. You have to wonder why the White House vetting process wouldn't have uncovered this kind of information far before the nomination.

QUIJANO: Well, that is the central question at this point. The way the process has been explained to me, by an administration official who was close to all of this, is that it's really sort of a three-phase process. You have, on the first front, the presidential office of personnel and what they do is take a look at the personal as well as financial background, sort of a cursory look, make sure everything is OK there. The second level is one that involves not just the White House, but involves lawyers at the Department of Homeland Security. These are ethics lawyers who basically go through and help get disclosure forms together and we believe it's in that particular process that Kerik found out about this potential -- this nanny problem and the third part process -- or the third part of the process, rather, is the actual Senate confirmation itself -- Fredricka.

WHITFIELD: All right, Elaine Quijano at the White House. Thanks so much.

And we'll be back with more right after this.

(COMMERCIAL BREAK)

WHITFIELD: To a developing story from overseas now, the diagnosis is poisoning for Viktor Yushchenko. Doctors blame poisoning from dioxin for the incredible metamorphosis of the Ukraine opposition candidate. Seemingly overnight, Yushchenko's movie star looks were transformed into a mask of disfigurement. Yushchenko accuses his political enemies for the poisoning. CNN's Moscow bureau chief, Jill Dougherty, joins us live with the very latest -- Jill.

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: Well, Fredricka that is what Mr. Yushchenko said all along, that it was his political enemies who poisoned him in order to kill him. And now, he's been in this clinic in Vienna, where he first went after the poisoning and they did a battery of tests over the past 24 hours and they say, indeed, it was dioxin, a very toxic chemical that it appears to have been deliberate. It was probably contained in some type of liquid, one doctor even said it might have been soup, and presumably, by a third party.

Now, that's the second half of this mystery. Nobody is saying exactly at this point who might have done it. But, Fredricka, you know, we do know from their staff that he was at a dinner. It was kind of like a reception dinner with the leadership of the SBU, that's kind of like the KGB of Ukraine. Nobody else apparently got sick and then the next day, he came down very, very sick, ended up in that clinic in Vienna, but was able, eventually, to get back on the campaign trail and now we have this very important bit of news.

WHITFIELD: And, Jill, that was just a few months ago, wasn't it?

DOUGHERTY: Correct. It happened in September, September 5, to be exact. And in fact, his wife, who happens to be an American citizen, by the way, Kateryna, said to a U.S. television network when he came home after that reception dinner, she tasted something on his lips that tasted very metallic. She couldn't exactly say what it was, but the very next day, he came down and was sick. And the transformation really has been astounding. Doctors now are saying physically, his internal organs and basically his body is getting back to normal, but that disfigurement could last literally for years. WHITFIELD: And so, Jill, he has since gone back to doctors to try and diagnose the problem. They didn't know quite how to treat him, because this was some sort of mystery illness that he was encountering to them, correct?

DOUGHERTY: It was, Fredricka. You know, one of the problems was when he went to Vienna the first time, they did some tests, but he was in the midst of a campaign, didn't want to get further tests. They wanted to take a biopsy of his skin, for example. He said, no, I've to get back on the campaign trail. But then about a -- you know, a couple of weeks later, he returned with very, very serious pain and it was so bad that they had to inject pain killers through his back through a catheter, and he was campaigning in that form for a while, but now that pain is gone and it does not effect his brain or anything like that, but cosmetically, he is going to be a very changed person for a very long time.

WHITFIELD: Jill Dougherty in Moscow thanks so much for that update.

Well, this bizarre turn of events concerning Viktor Yushchenko raises a lot of questions about dioxin. What exactly is it? And what are the circumstances of exposure? With now me now, Dr. Mark Siegel with the New York University Medical School.

Good to see you, Dr. Siegel.

DR. MARK SIEGEL, NEW YORK UNIVERSITY MEDICAL SCHOOL: Hi Fredricka, how are you?

WHITFIELD: I'm good. First of all, let's explain dioxin, because it doesn't necessarily constitute one chemical, does it?

SIEGEL: Right, actually dioxin is a naturally occurring substance, but the way we encounter it mostly is in industrial plants. It's part of a pesticide and it's part of making paper and pulp and it's actually a chlorinated compound, which can also be synthetic. Now, we know it as Agent Orange from Vietnam and that's actually a more chronic exposure to dioxin than this situation.

WHITFIELD: So, because it can be found in pesticides and chlorine, etcetera, that means it's common which means access to it is rather readily and easey.

SIEGEL: That's absolutely right and the real signature of dioxin that makes us suspicious of very suspicious of it is something called chloracne, which is what Mr. Yushchenko has. Which is his face break out in a sudden yellowish acne, very severe, and that's sign of a chlorinated type of poison. So, he was -- you know, saying that he was saying that he was poisoned at the beginning and doctors in Vienna were thinking of that, but they didn't check him for dioxin right away.

WHITFIELD: Why wouldn't they then if already you're describing this to be very normal symptoms of that kind of exposure? SIEGEL: Well you know, that's a very good question. And of course, we weren't there, but I would say that the skin findings have been more prevalent over time and I think it's become more and more obvious that this was some kind of poison.

They speculated at the beginning all the organs that were involved could have been due to a virus, but the virus didn't explain these skin findings.

WHITFIELD: How do you treat somebody once you realize they have been exposed or ingested dioxin?

SIEGEL: You can try to get rid of it with charcoal or dialysis. Of course, at this stage of the game they've rechecked him and they found his dioxin levels are back down to normal, which is good news. And that his organs involved, liver, kidneys, his GI tract -- he had a lot of nausea, vomiting, diarrhea. A lot of that has receded.

He still has the nerve palsies, the facial droops, that is persisting. And the skin findings will persist for several weeks or months. It may improve, though, his skin.

WHITFIELD: He is actually very lucky that internally it looks as though it's getting out of his system. When you say it could be a while before there are any changes in his skin externally, are we talking months, years? Is this permanent disfigurement?

SIEGEL: It can be permanent, I would say months before we start to see significant improvement. In some cases, it gets better. A thousand times the normal dioxin was in his blood, originally. It could have killed him. But one thing very significant, is you never know what the reaction of a person to dioxin is going to be. It's on an individual basis.

WHITFIELD: Quickly before I let you go, we heard Jill say it's believed it was possibly in was in a soup or liquid he may have ingested. Ingesting this chemical is that the only way or could you just breathe it, and get the same kind of symptoms, results?

SIEGEL: You can just breathe it, but you wouldn't get the same kind of symptoms. You get a very concentrated form in the soup or liquid that he had.

WHITFIELD: OK, Dr. Mark Siegel of New York University Medical Center. Thanks so much for joining us. Appreciate it.

SIEGEL: Thank you, Fredricka.

WHITFIELD: Many experts agree it's the kind of authority the commander in chief should have. Where many disagree is whether the president is abusing the right to keep soldiers in Iraq beyond their scheduled tours of duty. We'll debate stop-loss orders.

And he gave so much for his chiropractors but when Uncle Sam said he still owed more, he said, enough. We think you just might agree with him. And the tale of the tape. An amazing look at video shot by insurgents in Iraq, of attacks on U.S. forces serving over there.

(COMMERCIAL BREAK)

WHITFIELD: In Iraq, a U.S. military court has sentenced a U.S. soldier to three years in prison for killing a severely wounded Iraqi civilian. Sergeant John E. Horne of Winston-Salem, North Carolina, also received a dishonorable discharge, loss of wages and his rank was reduced to private.

Elsewhere in Baghdad, suspected insurgents show and killed two high-ranking officials of the Iraqi interior ministry. The officials were attacked on their way to work.

U.S. soldiers going into battle in Iraq will have more armored HUMVEES to protect them. Armor holdings Incorporated says it plans to increase the production of armored HUMVEES from 450 to 550 a month. But the company says it probably wont' reach that level until February, at the very earliest.

The Army made a deal with Armor Holdings after National Guardsmen raised concerns with Defense Secretary Donald Rumsfeld earlier in week in Kuwait. The guardsman asked why soldiers must search landfills for possible armor for their vehicles.

Incredible images, from the fight for Iraq. An insurgent group has compiled a slickly produced video of its handiwork, including attacks on U.S. positions, and chilling views of the indoctrination of future generations. More from CNN's Tim Lister.

And a word of caution some of the images may be disturbing to some viewers.

(BEGIN VIDEOTAPE)

TIM LISTER, CNN CORRESPONDENT (voice over): Never before has an insurgent group produced such a comprehensive visual record of its operations.

In a 40-minute video, the Islamic army in Iraq shows a wide range of operations. From remotely controlled roadside bombs to shoulder- launched rocket attacks, and attempts to bring down U.S. aircraft.

In this incident, the insurgents claim to shot down a Chinook helicopter. One sequence includes a mortar attack on a U.S. base.

(EXPLOSIONS)

Expecting return fire, the insurgents leave the area, but keep their camera rolling. A graphic appears that says 10 minutes later. And then the camera records incoming fire from coalition forces, as they pinpoint the insurgents' position.

The video, which was quickly posted on several Islamic websites, specifies some of the attacks were west of Baghdad and near Falluja. In one sequence, the insurgents appear to be arming an improvised roadside bomb. The next sequence shows traffic passing alongside the road and then amid cries of, Allah Akbar (ph), "God is Great", an armored car is blown up.

In another part of the video, a toddler is shown barely managing to hold an automatic weapon, while the Arabic audio relates a poem, from his father, which includes the lines, stand by, my son, and seek martyrdom. Stand by, my son, and do your duty.

It Islamic army in Iraq is one of the largest and best-organized groups operating in the Sunni Triangle. This video seems designed to show just how audacious it has become-Tim Lister, CNN, Atlanta.

(END VIDEOTAPE)

WHITFIELD: A hot debate being spawned from the U.S. military service in Iraq. The stop-loss plan, is it being overused? We'll debate that issue coming up.

(COMMERCIAL BREAK)

WHITFIELD: The army's stop-loss policy can force soldiers to extend their service beyond discharge date to maintain troop levels. It's being challenged in court. The question among critics, is the policy being abused in Iraq? Our guests in Washington take opposite sides on that question. Robert Maginnis is a national security analyst and syndicated columnist, and P.J. Crowley is with the Center for American Progress.

Good to see both of you.

LT. COL. ROBERT MAGINNIS, U.S. ARMY (RET.): Hello.

P.J. CROWLEY, CENTER FOR AMERICAN PROGRESS: Thank you.

WHITFIELD: Robert, let me begin with you. Should the stop-loss policy come to the surprise of any enlistee or Reservist?

MAGINNIS: Not at all, Fredricka. Everybody signs up for eight years. Part of it is going to be active, and the other part is going to be reserve. You know, we have 4.5 million people that we can draw from to send to Iraq or wherever.

It's analogous to a football team. Before you go to the Super Bowl, you don't let your football players leave. You keep them there, you play the football game, and then you let them go afterwards.

Well, with our soldiers, going to war, we want to keep the experience and keep their knowledge on hand, so it helps the unit to be better ready when we have to face the enemy.

WHITFIELD: P.J. -- sorry, Robert.

P.J., it sounds reasonable. How could U.S. military, at a time of war, afford to allow those most experienced, those veteran soldiers go when they're still need?

CROWLEY: Well, to borrow Bob's analogy, however, once you turn into the second half of the game, the question is, using this tool, which is important -- for example, Secretary Rumsfeld said this week when you go to conflict, you go to war with the army you have, particularly at the early stages of a conflict, stop-loss is essential. The longer it goes, you have to evaluate its benefits versus its costs.

Clearly, because soldiers are suing the Secretary of Defense, you have the National Guard that has recently missed its recruitment goals for this year, now the question is, are we paying a higher price in terms of possibility of losing good soldiers in the future because of retention questions? Now is there a better way? In my view, the better way, as you get longer into this conflict, is to have a larger army.

WHITFIELD: So, P.J., it sounds like the concern is not just the current retention, but the concern is recruiting. That perhaps the Army or any other branch of military may have a problem recruiting any potential candidates as a result of this kind of stop-loss policy that is being used, quite extensively in the view of some soldiers, right now?

CROWLEY: I think the issue for the relatively small number of soldiers that are affected by stop-loss, right now, is manageable. Now, the question is, what does it do to the psychology of the rest of the force? What's it do to others who are evaluating service in the army? At this stage of the game, I think there will probably be better ways to go.

Because this is going to be a concern both for soldiers, particularly for families. I would hate to see the extended use of stop-loss means we lose good soldiers in the future and put additional pressure on our force.

WHITFIELD: So, Robert, is that psychology something that the White House, the commander in chief, is worried about right now, when there are two wars ongoing and getting to the bottom of those wars and finishing those wars, and achieving the goals of those wars, is still under way?

MAGINNIS: Well, no doubt. We need to sustain a large contingent of people overseas, in Iraq, and elsewhere. We have 450,000 people at 144 countries around the world, Fredricka.

However, what we need to keep in mind here is that we have a pool of people and retention, quite frankly, even in the National Guard, is reasonably good.

We have to make sure that we keep as many as we can and, if we're going to have immobilization, which we have, we can't let people that are already on active duty go into the Reserves just to pull other Reservists up. We have always had a mobilization and then a stop-loss.

Back in 1991, during Desert Storm we pulled in 265,000 people, but we also had a stop-loss, because it's hypocritical not to have one and have the -- not have the other.

So, we're trying to understand the dynamics of what we're facing here. It's very tough, but we're looking at whether or not we need to increase the force, but at the same time, we're transforming, as Mr. Rumsfeld said. We're taking some of the reserve component people and putting them permanently in the active component, because we're unbalanced based on a Cold War model and now the insurgency world we face in the future is very different.

WHITFIELD: How do you have the stop-loss policy now being used and not have the complaints coming from, like we saw earlier this week, Specialist Wilson, who was questioning Donald Rumsfeld, and now you have a handful of soldiers who have taken their cases to court, challenging the Defense Department on what they believe is no longer going to be a voluntary service, but, instead, a forced service? P.J.?

MAGINNIS: It's all --

WHITFIELD: OK, go ahead, Robert, first.

MAGINNIS: It's all voluntary. At 4.5 million people out there, they all signed a DD form that says I understand eight years of my life is committed to the military.

Now, not all of that is going to be active duty, but the president has, by statute, has a provision in there that says the president can call up to a million people for a two-year period under certain conditions. And he has taken advantage of that in a number of different venues over the last 10 years.

WHITFIELD: P.J., are we seeing what is being bread now is a new sentiment, perhaps an under lying problem of the psychology of the soldier who says I question now my authority?

CROWLEY: Well, I think stop-loss is a blunt instrument. I think we have to -- certainly, whether we agree that Iraq should have been the central front on terrorism, it is the central front now, and it's not going to be the last front. This war on terrorism is going to have a disproportionate at impact on our land forces. They are the ones that will have to intercede in the future to make sure we don't have political vacuums turn into terrorist safe havens.

We have to look at the issue of a larger force and that will help us manage it better and use stop-loss less often.

WHITFIELD: Gentlemen, thank you very much, P.J. Crowley and Robert Maginnis, for joining us.

CROWLEY: My pleasure.

MAGINNIS: Thank you.

WHITFIELD: Still ahead, U.S. military adds insult to a returning veteran's injury. An explanation straight ahead. But, first, we'll lighten things up for you a little bit. We have the key to your weekend getaways, the Florida Keys, that is. We'll take you there.

(COMMERCIAL BREAK)

(WEATHER FORECAST)

(COMMERCIAL BREAK)

WHITFIELD: Warm, inviting and relaxing. Could you just imagine yourself cruising the waters off the Florida Keys right now, especially as winter approaches? The latest issue of "Travel+ Leisure" magazine takes us to some resorts in the Keys. Senior Editor Nilou Motamed, joining us live from New York.

Good to see you, Nilou.

NILOU MOTAMED, SR. EDITOR, "TRAVEL & LEISURE": Good to see you, too.

WHITFIELD: So many times, people think Keys, they only think of Key West but there is so much more over that 113-mile span of islands, isn't there?

MOTAMEND: You're absolutely right. Jimmy Buffet seared those 800 islands in our minds as a place for margaritas and shakers of salt, but there's a lot more there. This is known as America's Caribbean. This is a place you can go for sun, sand and relaxation. Just a load of fun. Great resorts there.

WHITFIELD: As you drive south on U.S. 1, one of the first ones you come to, Chico Lodge.

MOTAMED: Chico Lodge is a favorite of Bush, Sr. It's been around since the '60s and a place for golf and for fishing. It's about an hour south of Miami and it's a huge fishing destination in the Keys. So, it's very much a favorite of the old school and the old guard. There is a reason why they take care of you. It's a great place to go.

WHITFIELD: They have great food there. I've been there. It's good dining.

Let's talk about Hawk's Cay Resort. That's a good family-oriented place, isn't it?

MOTAMED: I think one description says it all. They have a pirate shaped water slide. That pretty much says that your kids will be happy. There's a teen spa. So, your teen can go get a facial, and movies by the pool. This is really -- they've done everything they can in the 60-acre resort to make sure your kids are going to really occupied and happy.

WHITFIELD: Oh, boy. Spoil those teens early with facials and everything for them. All right. And then, if you're really lucky and really want to get away, it's very private, why not the Palm Island Resort?

MOTAMEND: Know it. It's $895 a night for this property, but you're really only -- yeah. It's a lot.

WHITFIELD: Yeah.

MOTAMED: But you are going to get taken care of. There are so many details you the see to. You feel you're in this tropical oasis. You are in this thatched hut. The food is amazing. Attention to detail, as I said. Hammocks, as you see. You really get pampered here. If you really want to get away from it all, this is a place to go.

WHITFIELD: No wonder that is on my list of places to go. I didn't realize it was $800 something. It's really a deterrent, but something very attractive about it, you can't just drive there. It's not a matter of driving across the bridge to get into Palm Island Resort, is it?

MOTAMED: No, no. You actually have to take a helicopter. You probably have it on your list, so you know. It's definitely a boat, or helicopter. What's great about all of the Keys are there there's so much access to water. You're surrounded by water, obviously. That means fishing and snorkeling and diving as well. There's the most incredible diving spots off of Key Largo.

WHITFIELD: We are in peak season for any of these places, right now, aren't we?

MOTAMED: This is it. We passed the hurricane season, which showed a little dip in their tourism. They were not as hard hit as other parts of Florida were. You will get some deals, because people are trying to lure back customers, but it's been spared remarkably, which is great.

WHITFIELD: Fantastic. I'm inspired. I'm ready to pack my bags, Nilou.

MOTAMED: Thanks so much.

WHITFIELD: All right. Thanks, Nilou Motamed, from "Travel + Leisure" magazine.

Coming up next on CNN LIVE SATURDAY.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He signed up for this, because he wanted to serve his country. He wanted to do something he could be proud of. And they're making it very hard for him to feel proud.

(END VIDEOTAPE)

WHITFIELD: But the treatment this Army specialist has received from the military upon returning from Iraq is nothing to be proud of. Details straight ahead.

(COMMERCIAL BREAK)

WHITFIELD: We end today with the story of a soldier's fight. He went to Iraq to fight for his country, then he had to fight to keep his limbs after a bomb attack. As Ed Lavandera explains, he has now had to battle the Army over how much they expected him to give just to serve his country.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN NATIONAL CORRESPONDENT (voice over): Last February, Army Specialist Robert Loria was helping rescue a fellow soldier, who had just been injured by a roadside bomb north of Baghdad.

Loria and a group of soldiers drove in, loaded the soldier's body in the HUMVEE, but as Loria started driving away, a second bomb detonated. Loria looked down and saw his left arm mangled and shrapnel wounds along the left side of his body.

ROBERT LORIA, WOUNDED SOLDIER: When they had gotten me fully out of the vehicle and laid me on the ground, the first things I said to him, I told him my wife was going to be pissed at me. Because I told her a long time ago I would be back all right. and I wouldn't get hurt, and I felt like I lied to her.

LAVANDERA: Specialist Loria is getting used to life with part of an arm. Nerve damage has left him without feeling in his left foot. But as Loria prepared to discharge from the military, after serving five years, he was told he owed the army more than $6,000 for pay the Army says he shouldn't have received. And for travel expenses to get treatment.

The bill also included $310 for equipment that Loria didn't bring back from Iraq, like a sleeping bag, suspenders, and a rucksack, among other things.

LORIA: I didn't have anything to say to them. I didn't what to say to them. They were like, hey, screw you. Bye.

LAVANDERA: The Army even took his last paycheck and applied it to the debt. After that, he still owed almost $2,000.

Loria and his wife started to worry. The 27-year-old specialist had no idea how he would afford to get back home to New York. Unsure what to do, Christine Loria started calling her local congressman, a couple of U.S. senators and their hometown newspaper.

CHRISTINE LORIA, SOLDIER'S WIFE: He signed up for this because he wanted to serve his country. He wanted to do something he could be proud of. They're making it very hard for him to feel proud, by trying to take more from him. What more do they want? What?

LAVANDERA: Right now, the Army wants to get out of the spotlight on this one, so they're making the debt disappear. An Army spokesman says these actions clearly demonstrate that once the command leadership is involved, the Army does its utmost to correct and satisfy the needs of the soldiers and their families.

But the Lorias are left wondering why it was so hard to make this happen.

C. LORIA: Everyone should be shaking my husband's hand and saying what can I do for you because of all you gave for me, not the reverse.

LAVADERA: In a couple of days Specialist Robert Loria will jump in his car and start driving home to New York, but the best part of all is he will be home for Christmas and have some money to spend on gifts. Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

WHITFIELD: Still much more ahead on CNN SATURDAY. In a few moments, "In The Money", at 2 Eastern, CNN LIVE SATURDAY, an in-depth look at the 9/11 bill, and what they didn't tell you about it. At 3, its NEXT@CNN, but first a look at the headlines.

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