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Iraq's Most Wanted; Bush Backs Abbas; Bolton Vote; Chinese Currency Manipulation; Stem Cell Research

Aired May 26, 2005 - 18:00   ET


KITTY PILGRIM, CNN ANCHOR: Good evening, everybody.
Tonight, bird flu is coming to this country. It could kill millions. My guest says the United States is totally unprepared.

Also, gaping holes in our port security. How terrorists might be able to smuggle a weapon of mass destruction into this country.

And our crumbling highways. Our roads are rapidly deteriorating, but our political leaders are too busy talking to fix the problem.

The war in Iraq is our top story tonight. The Iraqi government today announced a huge anti-terrorist offensive in Baghdad. Forty thousand Iraqi troops and police will take part in Operation Lightning. Meanwhile, the Iraqi interior minister declared the top insurgent leader, Abu Musab al-Zarqawi, has been wounded.

Jamie McIntyre reports.


JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): While some Iraqi officials say they are convinced Abu Musab al-Zarqawi was wounded five days ago in a firefight, Pentagon officials insist there is still no hard evidence to back up the claims.

BRIG. GEN. CARTER HAM, JOINT STAFF DEPUTY DIRECTOR: I think the best way to categorize it is that we look at those with great interest.

MCINTYRE: With a $25 million price on his head, there is no one the U.S. wants to capture or kill more than Zarqawi, who is believed to be ale to inspire his followers to carry out deadly suicide attacks. But while Zarqawi's death or capture would clearly deal a blow to his al Qaeda network, the Pentagon says it would probably not shut it down.

HAM: We ought not expect that when that happens that the organization will crumble and will cease to exist. This -- the organization has proven to be somewhat resilient.

MCINTYRE: A chart released by the U.S. military this month claims Zarqawi's network is shrinking, with the roll-up of more than 20 trusted lieutenants in recent months. But it remains, in the words of the Pentagon, "lethal and dangerous." In a speech to U.S. soldiers at Fort Bragg, Defense Secretary Donald Rumsfeld said Zarqawi is now acting much like Adolph Hitler did during his final days, when defeat was clear.

DONALD RUMSFELD, DEFENSE SECRETARY: Reminiscent of Hitler in his bunker, this violent extremist, failing to achieve his military and political objectives, now appears committed to trying to destroy everything and everyone around him. History teaches us that this kind of evil over time fails.


MCINTYRE: Pentagon officials say if Zarqawi is captured, killed or otherwise out of the picture, undoubtedly someone else will step up and take his place. But at this point no one seems to be able to see who that might be. If conflicting and confusing postings on al Qaeda Web sites are to believe -- to be believed, it might only be decided after an internal power struggle.


PILGRIM: All right. Thank you very much, Jamie McIntyre.

The war in Iraq has claimed another American life. A U.S. Marine taking part in an offensive in western Iraq has been killed in combat. Sixty-four U.S. troops have been killed so far this month. That's the highest monthly total since January. 1,649 American troops have been killed since the war began two years ago.

President Bush today turned his attention to another pressing Middle East problem, the conflict between Israel and the Palestinians. The president held his first White House meeting with Palestinian leader Mahmoud Abbas. President Bush promised the Palestinian Authority the first direct American aid ever.

Dana Bash reports.


DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): After more than four years in office, President Bush for the first time greeted a Palestinian president at the White House and offered $50 million in direct aid to his government.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These funds will be used to improve the quality of life of the Palestinians living in Gaza, where poverty and unemployment are very high.

BASH: Direct aid to the Palestinian Authority, not channeled through third parties, is a signal of trust Mr. Bush did not have for Yasser Arafat, whom he called corrupt and supportive of terrorism.

Showcasing Mahmoud Abbas is part of a White House effort to boost his stature back home, where his Fatah movement faces increasing political competition from Hamas. AARON MILLER, FMR. MIDEAST NEGOTIATOR: It's got to be Abbas and not Hamas that are -- that is essentially delivering goods and services to the Palestinian people.

BASH: Mr. Bush deliberately played down -- in public, anyway -- concerns Abbas is not doing enough to disarm Hamas and other known Palestinian terrorist groups.

BUSH: All who engage in terror are the enemies of a Palestinian state and must be held to account.

BASH: Bush aides say the leaders spent most of their time discussing Israel's planned August withdrawal from the Gaza Strip. Abbas promised to work for a peaceful transition but wants Mr. Bush's help making clear Israel should yield more territory, especially in the West Bank. Until then, the Palestinian leader says a key ingredient is missing.

MAHMOUD ABBAS, PRESIDENT, PALESTINIAN AUTHORITY (through translator): Democracy is like a coin, it has two sides. On one side is democracy, on the other side of the coin is freedom.

BASH: The president reiterated his warning Israel should stop building West Bank settlements and not use a security wall to redraw political lines. But some experts say Mr. Bush still has yet to prove Mideast peace is really a top priority.

MILLER: The administration will have to choose as to whether or not they want to invest in the next year-and-a-half in not only managing this conflict but actively trying to resolve it.


BASH: The president did announce Secretary of State Condoleezza Rice will go to Ramallah and Jerusalem ahead of the Israeli withdrawal from Gaza. And the White House says that is the top priority right now. On final status talks, any discussions of the thorny issues like Jerusalem, a senior administration official says that neither side is prepared for that and pushing them too soon could be dangerous. Kitty.

PILGRIM: Thanks very much. Dana Bash.

Well, President Bush's nominee to be U.S. ambassador to the United Nations could face a critical Senate vote in the next hour. The Senate may decide whether to confirm John Bolton. But first, the Senate must decide whether to end the debate on Bolton's nomination.

Andrea Koppel has our report.


ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Kitty, the magic number is 60. That's how many votes Republicans need to end the debate that's been going on now for two days on the floor of the Senate. Republicans hoping to convince at least five Democrats to come over.

As you know, the Senate Republicans have a majority of 55 votes, so they need five more in order to get the magic number of 60. The vote is -- has as yet to begin. There's a quorum call right now that's under way. We're expecting that vote to happen at any time.

Now, the reason that Republicans need 60 votes is because two Democrats, in particular Joe Biden of Delaware and Chris Dodd of Connecticut, have basically threatened to block the vote unless they can force the hand of the State Department to cough up documents they say they must see, documents on Syria and documents on the 10 intercepts that John Bolton requested a couple of years back on a number of U.S. officials.

So right now what you have is a nail-biter, Kitty, as Republicans and Democrats wait to see if they will have enough votes to force an end to the debate. If they do get those 60 votes, we can expect an up- or-down vote on John Bolton's nomination to be the next U.N. ambassador later tonight. If there isn't enough votes, then you can expect this to continue next month after the Memorial Day holiday. Kitty.

PILGRIM: We'll be following closely with you. Thanks, Andrea.

Well, still to come, the Minutemen never turned violent, but last night hundreds of protesters against the Minutemen did. We'll have that story.

And your identity at risk. Why your personal information might be more vulnerable than you think. We'll have a special report.


PILGRIM: Security at our nation's ports is dangerously lax. According to two new reports, only a small fraction of shipping containers coming into American ports are properly inspected.

Jeanne Meserve has the report.


JEANNE MESERVE, CNN HOMELAND SECURITY DEPARTMENT CORRESPONDENT: A weapon of mass destruction smuggled into the country in a cargo container -- a frighteningly plausible scenario say the experts.

Now word that two Department of Homeland Security programs designed to prevent it from happening have holes.

SEN. FRANK LAUTENBERG (D-NJ), HOMELAND SECURITY COMMITTEE: I'm afraid that the report card is one that will not make anyone particularly proud. The administration has failed.

MESERVE: The Container Security Initiative puts U.S. Customs inspectors in 36 foreign ports. They identify high-risk containers and refer them to the host country for inspection. But the General Accountability Office found that equipment used at some ports may not be good enough to detect WMD. And 28 percent of the time the GAO says designated high-risk containers are not inspected overseas. Sometimes they aren't inspected even when they arrive in the U.S.

RICHARD M. STANA, GAO: We found no records that could assure us that in all cases the inspection was done stateside.

MESERVE: A second report took a critical look at the Customs Trade Partnership Against Terrorism, or C-TPAT. Shipments of participating companies go through Customs quicker if the company files paperwork saying it has improved security. But the GAO says 90 percent of the time the government has failed to verify with physical inspections that the security measures are in place and effective -- in essence, taking the company at its word.

STANA: I don't know if that's enough in this day and age.

MESERVE: Customs Commissioner Robert Bonner defends the program, saying they strike the right balance.

ROBERT BONNER, COMMISSIONER, CUSTOMS & BORDER PROTECTION: We have to protect both lives and livelihoods. These are initiatives that provide extraordinary increases in the security of our country but do it at the same time that it doesn't unduly impede the flow of trade and shut down our economy in the process.

MESERVE: Some critics suggest that the programs may create a false sense of security and might give terrorists a means to conduct a Trojan horse type of attack. Commissioner Bonner calls that ridiculous.

Jeanne Meserve, CNN, Washington.


PILGRIM: The Department of Homeland Security is also trying to improve airport security.

Homeland Security Secretary Michael Chertoff today said international travelers should prepare for more biometric tests such as fingerprinting and eye scanning.

Secretary Chertoff today said, "When we screen based on names we're screening on the most primitive and least technological basis of identification."

Chertoff made those comments at a meeting with European officials to talk about ways to coordinate efforts. And the hope is biometric testing will prevent potential terrorists from entering this country. They also hope to cut down on confusion and mistakes that have happened when they just use a list of names.

Ten thousand people had their names and personal identification stolen from Stanford University. This is the latest in a string of identity theft cases. The FBI is investigating, but critics say our personal information is far too easily compromised.

Bill Tucker reports.


BILL TUCKER, CNN CORRESPONDENT (voice-over): Getting a hold of someone's Social Security number is just this easy.

BJ OSTERGREN, THE VIRGINIA WATCHDOG: And there it is right here, the CIA director's Social Security number right there. TUCKER: Meet BJ, as she prefers to be called. The names and numbers she finds aren't those of ordinary citizens. She focuses on politicians and posts their numbers.

Like her posting of Florida Governor Jeb Bush's Social Security number. It's done to make a point.

OSTERGREN: I zeroed in on the big people because when you target extremely highly -- or, you know, high-profile people, then you can make a point, and so that's why I chose some high-profile people to zero in on.

TUCKER: And it's worked. The state of Florida has ordered the masking of personal data by the beginning of next year.

Recent reports of computer records being lost or stolen at Stanford, ChoicePoint, LexisNexis, Time Warner, have made the issue front-page news.

Florida, North Carolina and New Hampshire, among others, are moving to pass or have passed laws which protect the posting of Social Security numbers, as well as other personal information, a move that is long overdue and overlooked as states acted quickly to make public records available on the Internet.

KATHI GUAY, REGISTER OF DEEDS, MERRIMACK COUNTY: You know, the debate is going to continue to rage between the Internet record and the in-house courthouse record. You know, one is practically obscure, which is the courthouse record. You'd have you to come to the courthouse Monday through Friday whenever they are open. Whereas if you really want to make it a public record, you open up that access on the Internet. But there do -- there do need to be some kind of a safeguard in place so that that personal information isn't out there for everyone to see.

TUCKER: Ten million people a year are victims of some form of identity theft according to the Federal Trade Commission. That's a little more than 4.5 percent of the population.


TUCKER: In the case of public records, it's the case of technology getting ahead of its purpose. Records are meant to be public, so the transactions are recorded and noted -- and, Kitty, not to grant access to someone's personal data.

PILGRIM: Thanks very much. Bill Tucker. Thanks, Bill. Well, we now have some breaking news. A U.S. helicopter has been shot down in Iraq. Jamie McIntyre at the Pentagon has the details on that. Jamie.

MCINTYRE: Well, Kitty, we're just getting this word from the multinational forces in Iraq that an Army helicopter was shot down about three hours ago near Baquba. That is not far from Saddam Hussein's hometown of Tikrit.

The helicopter is apparently, according to sources, an OH-58 Kiowa Warrior Scout Helicopter that carries two people. There were actually two helicopters on patrol at the time when they received small arms fire from the ground, according to a statement given to the press. One of the helicopters made it back safely to a coalition forces base. The other one crashed.

We're told that the site is now being secured and the status of the two-person crew is unknown at this time.

Again, it appears that the helicopters both received small arms fire from the ground, one landed safely, the other crashed. The status of that crew is unknown. We believe it was, again, a small Scout helicopter, OH-58 Kiowa. Kitty.

PILGRIM: All right. Thank you very much for that update. Jamie McIntyre.

And coming up next, and witness (ph) a violent protest over the peaceful Minuteman Project. We'll have a report on that.

We'll also -- our roads, they are in a sorry state of disrepair. It's costing money. Congress is talking about the problem instead of acting.

That and much more straight ahead.


PILGRIM: Violent protests broke out last night during a speech by Minuteman co-founder Jim Gilchrist. Illegal alien advocates who wrongly predicted the Minuteman Project would end in violence are now resorting to violence themselves.

Casey Wian reports from Los Angeles.


CASEY WIAN, CNN CORRESPONDENT (voice-over): It started out as a simple speech by Minuteman Project co-founder Jim Gilchrist before a Garden Grove, California, women's group.


UNIDENTIFIED MALE: Yes. GILCHRIST: More alive than ever, despite the death threats.

WIAN: Outside the event, a group of about 300 protesters organized and supported by several groups favoring expanded rights for illegal aliens, including the League of United Latin American Citizens, or LULAC, and the Green Party. They chanted slogans. They are saying, "We didn't cross the border. The border crossed us."

And despite the presence of 60 Garden Grove Police officers in riot gear, police say the demonstrators turned violent, hurling rocks, bottles and sticks at people attending the event, and even at the officers. Five protesters were arrested, some on felony charges, including assault with a deadly weapon.

Protest organizers say the group grew angry after this demonstrator was hit and injured while attempting to block a vehicle driven by this border security activist attending the meeting.

HAL NETKIN, BORDER SECURITY ACTIVIST: They got (ph) on to my car, started banging with their posters and with other objects I'm not sure of. I started fearing for my life, and so I went through. And some of them had to scatter out of the way.

WIAN: Netkin was also arrested but later released. Garden Grove Police say he will not be charged with a crime.

Meanwhile, members of the same groups who have accused the Minuteman Project of being racist and potentially violent can clearly be heard screaming "La Raza," Spanish for "The Race," and calling police pigs, Nazis and rednecks. And five now face criminal charges for their participation in this violent demonstration.

In contrast, there was not a single confirmed report of violence during the month-long Minuteman Project in Arizona.


WIAN: Now, we could see more of these clashes in the future. Gilchrist says the protesters have only strengthened his resolve to bring the Minuteman Project to California. And his opponents say they are going to continue to protest those efforts. Kitty.

PILGRIM: Thanks very much. Casey Wian.

Well, a new report says Los Angeles has among the worst roads in the nation. And road conditions in the rest of the country are deteriorating as well. Critics say rough roads are costing drivers billions. They're making America less competitive.

Christine Romans has our report.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): In Kansas City, Missouri, these roadways hold the title of America's worst. A survey by transportation research group TRIP found worsening road conditions around the country, but especially in California and Missouri.

TRIP is a nonprofit group funded by diverse industries, including insurance companies, labor unions and road construction companies.

After Kansas City, America's worst roads are in San Jose, St. Louis, L.A., and the San Francisco-Oakland area. Most roads in these cities are considered unacceptable.

Kevin Fahey has done roadwork in Kansas City for three decades.

KEVIN FAHEY, JM FAHEY CONSTRUCTION: Over the last 30 years, the increase in traffic and the increase in the number of vehicles on the roadway is just stunning from our perspective.

ROMANS: Nationwide, a 58 percent increase in heavy trucks on our roads since 1990. A 41 percent increase for autos.

(on camera): America's roads are now so rough, TRIP says drivers spend an additional $400 a year on wear and tear on their cars. And those bad roads hurt fuel efficiency.

(voice-over): And as our roads age, it only gets worse.

FRANK MORETTI, TRIP: It takes years for the deterioration to accelerate. But once it does, it really takes a constant attention to it and willingness to spend the adequate money to turn that around quickly.

ROMANS: Federal Highway Administrator Mary Peters called the report a - quote -- "stark reminder that Congress is long overdue passing a federal transportation bill."

Funding expired two years ago and Congress has been passing ad hoc extensions ever since, passing another on Thursday.

Transportation groups say the funding uncertainty has put projects on hold and falls short of what is needed just to maintain our roads, estimated at $94 billion a year by the American Society of Civil Engineers.

Christine Romans, CNN.


PILGRIM: The Senate put off debate on a new highway bill today. It voted instead for an extension of a highway bill that expired two years ago. Now, the president says the new Senate bill is too expensive and has vowed to veto it. But highway advocates say it will go a long way to fixing the highway system.

Well, the Memorial Day weekend driving season is on us, and high gas prices are a factor. In a new CNN/"USA Today"/Gallup poll, 55 percent of Americans say they will cut back on driving this summer because of the price at the pump. Fifty-nine percent of those polled say gas prices are now causing them financial hardship. Up next, a killer flu is coming. An ominous warning from the CDC tonight. Erica Check of "Nature" magazine warns that the threat of an avian flu epidemic is much greater than the public realizes. She will join us.

Also ahead, former State Department adviser David Philips warns that the real fight for power in Iraq will be over the new constitution.

And Senator Arlen Specter is a leading advocate for embryonic stem cell research funding. He is my guest.


ANNOUNCER: News, debate and opinion continues. Sitting in for Lou Dobbs is Kitty Pilgrim.

PILGRIM: Scientists are warning the bird flu will cause the next global pandemic, and they say not enough is being done to fight it. As Christy Feig reports, America's top health experts are testifying on Capitol Hill about what to do to stop it.


CHRISTY FEIG, CNN CORRESPONDENT (voice-over): The type of bird flu that is spreading in Asia is dangerous because it is a strain that humans have never been exposed to. So we have no natural immunity, and there is no vaccine.

The virus first spread from bird to bird, and then some of the people who work with the animals became infected. Fifty-three have died.

So far, the virus doesn't often spread from person to person. There has only been two such cases. If that becomes more frequent experts say a pandemic could be imminent.

According to several articles in the journal "Nature," the world isn't prepared. One author estimates 30 million people would need to be hospitalized, and a quarter of them would die. The authors say developing a vaccine is essential.

Clinical trials are already under way at the National Institutes of Health, but even if the trials are completed in time to respond to an outbreak, there won't be enough vaccine for everyone. Only 300 million doses can be made on an urgent basis, experts say.

DR. ANTHONY FAUCI, NIH: If you're talking about stopping everything for seasonal flu and using all the facilities to make pandemic flu vaccine, the H5N1, you still, even with the greatest intentions, the greatest effort and unlimited supply of money, have you a physical limitation of vaccine-manufacturing capacity.

FEIG: In Washington, I'm Christy Feig.

(END VIDEOTAPE) PILGRIM: Now, for more on this, I'm joined by Erika Check. She's the Washington biomedical correspondent for "Nature" magazine. In this week's issue, the magazine focuses on the bird flu, and it warns that a flu pandemic could infect 20 percent of the world's population.

Erika Check joins me now from Washington. Thanks for being with us.

That is a heck of a number -- 20 percent of the world's population. Is that -- that is not one of those hyped numbers, is it?

ERIKA CHECK, WASHINGTON BIOMEDICAL CORRESPONDENT: No. Scientists are very afraid that is a very realistic scenario. As a matter of fact, that article mentions, as your report mentioned, that 30 million people could be hospitalized and up to a quarter of those could die if a pandemic hits.

PILGRIM: Let's talk about bird flu. Now, many people are not familiar with this. They understand the normal flu that comes around every year. Bird flu comes from -- it came from China, from Asia, and it will migrate to other countries.

How will that happen?

CHECK: Well, what scientists are very concerned about is that the bird flu will learn to infect people, and also to pass from person-to- person. In that case, it would be very simple for a traveler to transmit the virus across international borders. And especially in today's world of interconnected travel and trade, scientists fear that would be a very real possibility.

PILGRIM: We all remember back to the SARS epidemic when they were insisting that people fly with masks and they were checking the health of passengers.

Might we hit a situation like that?

CHECK: Yes. Scientists are very concerned that if a pandemic influenza strain arises, we'll be facing situations where entire countries might decide to down their borders. That could have really disastrous economic consequences as well.

PILGRIM: Let's talk about preparedness. Do we have a vaccine right now?

CHECK: Unfortunately, no, we do not. And testifying before the Congress today, Tony Fauci did say that, in some ways, we are in the United States, farther ahead than any other nation in this particular respect. We are testing a potential vaccine. But at the moment we don't have anything in hand.

PILGRIM: How much would we need, Erika? And is it possible to get that much on hand?

CHECK: If you're talking about a vaccine, we might need enough to give every man, woman and child in the United States two doses. So, we're talking about millions, hundreds of millions, of doses. Right now we simply don't have the ability to make that much vaccine. In fact, in the United States we only have one influenza manufacturing factory that can only make about 50 to 60 million doses.

PILGRIM: So, should it be the government or drug manufacturers who step up here?

CHECK: Well, scientists have been saying that the government and manufacturers need to work together to solve this problem. There's more the government could be doing to, for instance, encourage the public to get seasonal flu vaccines, so the companies will see that there is a market in this. However, there is also more that companies could do to move into this market.

PILGRIM: This is not a hypothetical, is it? We saw the Chinese health minister leave Japan very precipitously this week to go back to China to deal with an outbreak of avian flu. This is not a hypothetical situation, is it?

CHECK: No. This is something that's happening. As your reporter mentioned earlier, 100 people have been infected with the avian flu in Asia, and 50 of those have died. So scientists are really concerned it's only a matter of time before the virus becomes better at infecting people and crosses over out of Asia.

PILGRIM: Do they really know what the fatality rate is, given that it's been so limited?

CHECK: That's a very good question. The early signs are that it could kill as many as 50 percent of the people it infects, but there are a lot of unknowns here. In making that jump between people, the virus may lose some of its ability to cause death, so the fatality rate may go down.

PILGRIM: Thanks very much for keeping us up to speed on that, Erika Check. Erika, thank you.

CHECK: Thank you, Kitty.

PILGRIM: That brings us to the subject of tonight's poll. Now, how concerned are you about a bird flu pandemic reaching the United States? The choices are very, somewhat, or not at all.

Cast your vote at We'll bring you the results a little bit later in the broadcast.

Our nation's hospitals are already severely overcrowded, even without a full blown health emergency. The Centers for Disease Control say hospital E.R. visits hit a record high in 2003, nearly 114 million visits. That's a 26 percent increase from a decade ago. The CDC says more Americans are going to emergency rooms because they don't have health insurance. Also, aging baby boomers are using emergency rooms more, putting a big strain on the system.

Well, stay with CNN tonight. Paula Zahn will have a very special report on identity theft, and a panel of experts will take your calls and e-mails about how you can protect your identity.

And Paula Zahn's here now, with the preview. Paula?

PAULA ZAHN, HOST "PAULA ZAHN NOW": Great to see you, Kitty.

The problem of identity theft is exploding in this country and all have you to do is take a look at numbers to understand what a big deal it is. It strikes 19 people every minute, 27,000 a day, 10 million people a year, and you or I could be next.

Tonight, we're going to watch live as a hacker actually demonstrates just how easy it is for thieves to buy and sell your most secret information. We'll also go through the many ways you are probably leaving yourself vulnerable, at work, while you're shopping, even at your home computer. There are high-tech and low-tech ways to protect yourself. We'll give you some of advice tonight.

And, like we said, we'll have a panel of experts to answer our viewers' phone calls and e-mails. You can call us at 1-800-304-3638 -- once again, 1-800-304-3638, or you can send us an e-mail at We'll leave that graphic up there for a moment, if you're -- like I do, and never watch television with a pen or pencil around, but we hope you will join us at 8:00. It's absolutely fascinating because you're going to meet a lot of folks who have been victimized.

PILGRIM: We very much look forward to it and it's always a nagging worry in the back of your head. It's nice to get some hard information.

ZAHN: We had one guy on tonight who basically said, he worked for CBS, a disgruntled employee took some personal information about him. Not too long after that, he's getting a call from a police officer saying, someone is buying two SUVs, and (INAUDIBLE)


ZAHN: Two, not just one, but two!

PILGRIM: We look forward to this. Thanks very much, Paula.

ZAHN: Thanks, Kitty.

PILGRIM: Coming up next, Iraq now says he's wounded, but will he -- will that make our troops safer? Abu Musab al Zarqawi leaves the scene. We'll talk to a former State Department advisor about the future of al Qaeda's man in Iraq next.


PILGRIM: In Baghdad today, an interior ministry official was murdered in a drive-by shooting, and a car bomb attack against an Iraqi police patrol killed five. In all, rebels killed at least 15 people in the Iraqi capital today.

Tens of thousands of Iraqi government troops will soon be on the offensive against the insurgents in Baghdad. The fledgling army is launching its first-ever major security operation.

And new reports that the head of the insurgency, al Qaeda's Abu Musab al-Zarqawi is indeed injured -- no confirmation, no word on his condition.

Iraq expert and former senior State Department adviser, David Phillips, joins me now to talk about the situation.

Thanks for being with us, David.


PILGRIM: Let's talk about Zarqawi first. And you know, it's still a little sketchy on exactly what's going on, but how important is he to the insurgency?

PHILLIPS: He's important as a symbolic figurehead. But the reality is, there are 5,000 of these foreign fighters and jihadists who have poured across the border, and there are many people in the Zarqawi queue who are ready to take his place.

PILGRIM: He was embraced by al Qaeda, too, was he not? I mean, how important is this on the whole war on terror, that he would be someone that was eliminated from the war on terror?

PHILLIPS: He came across the border and set up a base with Ansar al-Islam just prior to the military action. So he was really one of the first al Qaeda operatives in Iraq. Getting him is symbolically and substantively important. The world and Iraq would be much better off with Abu Musab al-Zarqawi dead.

But the reality is that there are many who are ready to take his place. The fight against terrorism in Iraq and around the world needs to deal with the root causes of terrorism, which primarily is anti- Americanism.

PILGRIM: Let's talk about the structure, though, for a minute about Zarqawi. They do think that they have many of the people who are associated with him. The problem is that they don't know who else is associated, that the names are not familiar.

Isn't that a big problem?

PHILLIPS: That is a problem. There's also this coalition within the insurgency. You have the foreign fighters, which is one end of the troika. Then there are the former regime elements, who are the Baathists that are trying to create chaos in order to take power back. And then 100,000 common criminals that are out on the street with carjackings and kidnappings.

So just cutting off the head of the snake isn't going to eliminate the insurgency.

PILGRIM: How are we doing on the lawlessness? You talk about the criminal element, and we're about to have this 40,000 Iraqi security forces out patrolling. Will that make a difference? PHILLIPS: It will make a difference as far as this individual operation is concerned. But the pace of standing up Iraqi security, whether it's police or the Iraqi army, has lagged far behind schedule.

The only way to defeat the insurgency is to train these security forces so they are more effective, but also to demonstrate to the Iraqi people that their new leaders are legitimate, and that new Iraqi institutions are worth defending. If you can get those two working hand in hand, then you are going to make progress in this fight.

PILGRIM: As you get these Iraqi security forces out in the street, does that not legitimize the regime because it isn't American forces?

PHILLIPS: It's really key that the profile of the counter- insurgency be Iraqi because they are Arab-speaking, they know the clans and the subclans. They are much more effective in the human intelligence side of it. Ultimately that's where the fight is going to be won.

PILGRIM: Let's talk about the government a bit. And we made considerable progress, the elections. Now we're on to writing the constitution, which I believe is in August is the deadline for that.


PILGRIM: How are we doing on that process? It's very important, isn't it?

PHILLIPS: After the January 30 elections, there was a huge momentum. Iraqis were enthusiastic about their new government. But then it took 90 days to appoint cabinet ministers. A lot of the enthusiasm dissipated during that time.

Finally, a constitutional commission was appointed, a 55-member body, and only two of its members were Arab Sunnis.

If the political process is going to work, it's going to have to be inclusive of all of Iraq's ethnic and sectarian groups. The government realized that was a mistake, so they have now broadened the commission. But the reality is it still has to go back to the National Assembly for ratification, and because Arab Sunnis boycotted the vote, they are just not present there.

PILGRIM: You know, much has been made of this 90-day lag, but yet there was a lot of political brokering. Maybe this was a very valuable 90 days, was it not?

PHILLIPS: They were able to agree on some principles, but there were no deals cut. All the hot-button issues -- the role of religion in the constitution, the status of Kirkuk, the demilitarization of some of these militia groups, ownership of Iraq's oil -- have to be resolved in the context of the debate on the national constitution.

There's some guidelines that they were able to agree to during that 90-day period, but the tough negotiating still lies ahead. PILGRIM: David, I have to refer to your book, which is called "Losing Iraq," but are we losing it at this point, or are you a little bit more hopeful?

PHILLIPS: I'm hopeful but not optimistic. And I'm hopeful because the Iraqis themselves realize the enormous cost of failure. If Iraq were to descend into sectarian violence and civil war, tens of thousands of Iraqis would die. There would be huge population displacement. Iraq's neighbors might send their armies across.

If Iraq succeeds in becoming a stable and viable country, it will be not because of the interventions of the Bush administration, but despite it.

PILGRIM: All right. Thank you very much, David Phillips.

PHILLIPS: Thank you, Kitty.

PILGRIM: A reminder now to vote in tonight's poll. How concerned are you about bird flu pandemic reaching the United States? Very, somewhat, or not at all?

Cast your vote at, and we'll bring you the results a little bit later in this broadcast.

Coming up at the top of the hour on CNN, we have ANDERSON COOPER 360, and Anderson joins us now with a preview. Anderson.

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Kitty, thanks very much. Yeah, in about five minutes from now, controversial nomination possibly stalled. The Senate is voting right now on whether to let John Bolton's nomination go to a full vote. We are covering it as it happens.

Also ahead tonight, abandoned military pets. You might not know this, but thousands of dogs and cats are left behind and left homeless when their owners, soldiers, go off to war. Find out why so many of the dogs and cats are being put to death.

Also, the dangers of cheerleading. It is not all fun and games. In fact, cheerleading is responsible for the majority of injuries to female college athletes. Tonight, meet one woman whose life was changed forever after a single stunt in the air.

That and more at the top of the hour. Kitty.

PILGRIM: We look forward to it, Anderson. Thank you.

Lawmakers in both parties say the Bush administration hasn't done enough to protect American businesses and American workers from unfair Chinese trade practices. Now, it was clear that for the Senate Banking Committee that patience was running out.

Louise Schiavone reports. Very sorry for the technical issues that we're experiencing. We'll take a break and we'll be right back. We'll work them out.


PILGRIM: Well, lawmakers say the Bush administration hasn't done enough to protect American businesses and American workers from unfair Chinese trade practices. Louise Schiavone reports.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Congress is tired of Chinese currency policies that keep Chinese goods artificially cheap, and weary of the same old Bush administration excuses.

SEN. ELIZABETH DOLE (R), NORTH CAROLINA: I frankly am astounded that the administration continues to report that the Chinese peg is not currency manipulating.

SEN. CHARLES SCHUMER (D), NEW YORK: You know, my view is simple. They are manipulating now, and you just didn't want to say it for some diplomatic, political reason.

SCHIAVONE: The most recent U.S. report on Chinese currency policy is more assertive than in years past, but it fails to accuse China of outright currency manipulation. Treasury Secretary John Snow is convinced the diplomatic strategy will work.

JOHN SNOW, SECRETARY OF THE TREASURY: I think we're going to see action by China, and I may have to eat those words in six months if you invite me back.

SEN. RICHARD SHELBY (R), ALABAMA: If you come up here in six months and China has not done anything material, really material to make their currency flexible, then I think the administration will lose a lot of, a lot of credibility.

SCHIAVONE: Snow says the U.S. means business.

SNOW: The consequences of not playing by the rules, of course, are to invite protectionist measures that I think are unwelcome, untoward and damaging and destructive.

SCHIAVONE: American businesses, meanwhile, fear that a cautious approach will decimate U.S. manufacturing.

DAVE BLACKBURN, THOMAS FARIA CORP: I really believe in this country. My board of directors are saying why in the hell don't you move the production to China? Well I just don't want to do that. If things keep going on the way they are, I'm not going to have any choice. I hope I'm retired by then.


SCHIAVONE: Kitty, manufacturers say they are not ready for punitive tariffs against Chinese goods, warning that it would lead to more chaos in the marketplace. But if China fails to act, Congress may feel it has no choice.


PILGRIM: All right. Thank you very much, Louise Schiavone.

Senator Arlen Specter, chairman of the Judiciary Committee, is one of the youngest advocates for embryonic stem cell research. And he says the research is critical toward curing many life-threatening diseases. I asked him if he's challenging President Bush's promise to veto federal funding for the research.


SEN. ARLEN SPECTER, (R) PENNSYLVANIA: I'm not challenging the president. I'm making an argument that these stem cells, embryonic stem cells are either going to be used or thrown away. So that when the argument is made by the White House that they are not going to destroy lives to save lives, it just is factually incorrect.

The fact of the matter is that there are 400,000 of these embryonic stem cells. They are either going to be destroyed or used to save lives. And it's absolutely a scandalous situation when you don't use the best medical evidence to conquer Parkinson's, Alzheimer's, heart disease or cancer.

And I know that for my own personal experience. I have an identity theft. I look in the mirror and barely recognize myself. And this is not something that I have pressed since having a problem myself, I have been at it for a decade to have these stem cells used to save lives.

PILGRIM: Why do you believe it should be federally funded, sir? It is privately funded in many instances.

SPECTER: Because the federal government puts up $28 billion a year to the National Institutes of Health. And they have the best opportunity to do the most effective research, far outstripping private industry, or any of the states.

And six of the institutes at NIH reported to my subcommittee which I chaired last year that if they had the availability of stem cells, they could fight some very serious illnesses. But this is a federal responsibility. These are federal funds. And they are not being used in the best interest of the American people.

PILGRIM: Senator Sam Brownback said if the bill goes to the floor, he may try to block it by filibuster. Does that worry you?

SPECTER: Well, it doesn't worry me. If Senator Brownback wants to try a filibuster he has a lot of precedent. That's all the Democrats have been doing for the last four years. I think it's a good solid Republican principle. I heard President Bush talk about it, an up or down vote. Let's see what we think in a majoritarian society. But if he wants to filibuster it, I think we have 60 votes to have cloture, to cut off debate. Last year we had some 58 senators sign a letter, and there were 20 more in the wings. I think there's a lot of sentiment in favor of embryonic stem cell research.

And now with a big victory in the House of Representatives, I think you can expect more Americans to understand the issue. And as more people understand it, there will be more support for it.

PILGRIM: Let me switch to another topic you are deeply committed to. That's the asbestos trust fund, $140 billion. I understand that it just passed in committee. What's the next hurdle?

SPECTER: Well, after prolonged, contentious struggle that lasted almost two years, with assistance from former Chief Judge Edward Becker of the third circuit, we did pass it this afternoon out of committee and it is a very important step forward. Manufacturers and insurers are prepared to put up $140 billion to compensate a lot of asbestos victims who have deadly diseases who can't collect any money because their companies are in bankruptcy. Some 77 companies have gone belly up.

And it will be a big shot in the arm to the economy if we can get it passed in the Senate and then the House and signed into law by the president. And the president likes the bill. He is endorsing it. It would be a win-win situation for asbestos victims, for companies who are going into bankruptcy, and for the economy generally, produce a lot of jobs.

PILGRIM: Thank you very much for joining us, Senator Arlen Specter. Thank you, sir.

SPECTER: My pleasure. Thank you, Kitty.


PILGRIM: We have this news just in. Now, as you can see on the screen, the Senate has just voted to delay a final vote on the nomination of John Bolton to be U.N. ambassador. That means a confirmation vote may not take place until next month.

Now, critics say Bolton does not have the diplomatic skills for the job. President Bush says Bolton is the right man to reform the United Nations.

Now, again, the Senate has just voted to delay the final vote on John Bolton's nomination to be U.N. ambassador. We'll bring you more on the developing story later right here on CNN.

Well still ahead, the results of tonight's poll and a preview of what is ahead tomorrow. Stay with us.


PILGRIM: Now the results of tonight's poll. How concerned are you about a bird flu pandemic reaching the United States? Forty-five percent of you said you are very concerned, 42 percent said somewhat, and 13 percent said not at all.

Voyager I has entered the final frontier of our solar system after a remarkable journey through space. The spacecraft was launched 28 years ago. It's now 8.7 billion miles from the sun.

Now since its launch, Voyager I has captured some amazing pictures, including the first close-up view of Jupiter. That was in 1979. Voyager also observed the eruption of nine volcanoes on Jupiter's moon, Io. And the first time an active volcano was ever seen on another body in our solar system. And among those beautiful objects in our solar system, we can see Saturn's rings.

Now, barring hardware failure, Voyager I and II have enough power to keep sending data back to Earth for another 15 to 20 years.

Thanks for being with us tonight. Please join us tomorrow. Congressman Henry Cuellar will tell us why he was the only member of the Hispanic Caucus to vote in favor of CAFTA.

Also tomorrow, Dr. Anthony Fauci warns us that a deadly flu pandemic is all but certain to occur.

And Senator Jon Kyl joins us to discuss his plan to reform border security and immigration.

For all of us here, good night from New York. ANDERSON COOPER 360 starts right now.




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