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PAULA ZAHN NOW

Interview With Uncle of Natalee Holloway; Marines Sweep Through Iraqi City

Aired June 23, 2005 - 20:00   ET

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


PAULA ZAHN, CNN ANCHOR: Welcome. Glad to have you all with us tonight.
A new and unexpected development in the search for Natalee Holloway, the Alabama teenager who vanished in Aruba on May 30. This afternoon, another suspect was arrested, this time, Aruban Judge Paul Van Der Sloot. His 17-year-old, Joran, is one of four young men already being held in the case.

Karl Penhaul has been following this case and has more from Aruba.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): Last weekend, investigators said they were questioning Judge Paul Van Der Sloot simply as a possible witness. Now, in an unexpected twist, prosecutors have had him arrested, saying he's sudden of involvement in Natalee Holloway's disappearance.

His 17-year-old son, Joran, was arrested two weeks ago. Paul Van Der Sloot went to the police station with his wife, Anita, Thursday afternoon after neighbors notified him of police cars close to his home. Mrs. Van Der Sloot said police then detained him. She says she feels like she's trapped in a crazy nightmare, but is convinced her husband and son are innocent.

ANITA VAN DER SLOOT, FATHER OF JORAN VAN DER SLOOT: I will (INAUDIBLE) I will be strong. I have to, because I believe in my husband. I believe in my son. I believe in my family. And I know it all comes right.

PENHAUL: Her husband, Paul, is 53 years old. The family came from Holland about 15 years ago.

Before becoming a judge, he was an official in Aruba's prosecution service. A total of five suspects are now being held in connection with Natalee's disappearance. Natalee's father, Dave Holloway, said he felt the latest arrest brought his family closer to finding out what has happened to his daughter.

DAVE HOLLOWAY, FATHER OF NATALEE HOLLOWAY: Well, it just adds that additional piece to the puzzle. And how big is the puzzle? I don't know. But the pieces are falling into place and falling into place very quickly. PENHAUL: Joran Van Der Sloot, 18-Year-old Satish Kalpoe and his brother Deepak, 21, were seen leaving a bar with Natalee in the wee hours of May 30. She's not been seen first. Police say the three boys original said they first dropped Natalee off at the Holiday Inn, where she was staying.

But under interrogation, police say the boys have changed their stores. The Kalpoe brothers' mother visited Satish in prison for the first time Tuesday, and she says he admitted lying to her. She describes her sons as two good Hindu boys who share a love of TV wrestling shows, Indian movies and the Internet. She said Satish and Deepak she prayed every morning with the rest of the family in front of this Hindu shrine in a room of their home and rarely partied.

NADIRA RAMIREZ, MOTHER OF SUSPECTS: We don't have party never. We are a simple family. We just cook, eat, drink something at home with our kids or we go dinner.

PENHAUL: Across the island, Anita Van Der Sloot knows nothing about any change in the Kalpoe brothers' story, but Anita Van Der Sloot is angry.

VAN DER SLOOT: I think it's ridiculous, but, of course, it hurts. It hurts, because my husband gave 15 years of his integrity to this island. And that this could happen is just so bizarre.

PENHAUL: She says her husband was calm after his arrest, and that Joran is holding up well.

VAN DER SLOOT: He's already doing exercises again, and he played soccer this morning. And he's -- he's -- I mean, he's not happy. He says every morning when he wakes up, he feels like in a bad dream and he misses us terrible.

PENHAUL: She says she's praying the crazy nightmare ends soon.

(END VIDEOTAPE)

ZAHN: Karl Penhaul with that update from Aruba.

Earlier this afternoon, I talked with Mariaine Croes, spokeswoman for the prosecution in Aruba, about this latest development in the case.

(BEGIN VIDEOTAPE)

ZAHN: Thanks so much for being with us.

Mariaine, why was Mr. Van Der Sloot arrested?

MARIAINE CROES, ARUBAN SPOKESWOMAN: He was arrested today because he was first questioned as a witness. And he told a certain story, and if you tell a story as a witness, then the story will be checked out.

And if during the investigation it happens that your story doesn't check out completely because of other facts or because of other stories that are being told, it can happen that you go from being a witness to being a suspect. And that's what happened in this case.

ZAHN: Do you think he was involved in the disappearance of Natalee Holloway?

CROES: What I can say at this point is that he is arrested based on the suspicion of being involved in the disappearance. But what exactly his role was, that's something that the investigation will have to bring forward.

ZAHN: Are you also looking into the possibility that Mr. Van Der Sloot may have been involved in a cover-up here, trying to protect his son?

CROES: At this point, by summing it up very generally, by not going into specifics, we are keeping all our possibilities open.

ZAHN: Can you confirm for us tonight whether Mr. Van Der Sloot's arrest has anything to do with evidence that might have been found in his home linking someone in his family to the disappearance of Natalee Holloway?

CROES: That is something that ,at this point, I cannot confirm. But I can say, though, that it is a possibility at this time.

ZAHN: There are now five people in custody in connection with the disappearance of Natalee Holloway. Are you any closer tonight to understanding what happened to her?

CROES: We are every day, so that also counts for today -- every day we are a little closer to uncovering the truth. And, for us, that's our motivation. That's why we keep working hard every day, to find out that truth as soon as possible.

ZAHN: Mariaine, as you know, Natalee Holloway's family has been critical of what they describe as a lack of coordination between the Aruba police and other investigators involved in this case. Do you think that's a fair criticism?

CROES: No.

At this point, it may come over as a lack of coordination to people who do not understand our system fully. But we are working very hard. The police is working close together with the prosecutors. They have daily briefings. We also have people from Holland and people from the FBI here who function in an advisory role, so we are coordinating everything very good. And we are working very hard together to solve this case.

ZAHN: Do you think you'll ever find Natalee Holloway?

CROES: That is something that we are working very hard to make happen.

ZAHN: So, would you say you're pretty optimistic tonight that this alleged crime will be solved?

CROES: Every day, we are still optimistic, yes.

ZAHN: Well, we very much appreciate your update tonight. Mariaine Croes, thanks for joining us.

CROES: You're welcome.

(END VIDEOTAPE)

ZAHN: And joining me now on the phone from Bacliff, Texas, Natalee Holloway's uncle, Paul Reynolds. He's been in touch with her mother and other family members who are now in Aruba.

Paul, good of you to join us tonight. What do you think Mr. Van Der Sloot is holding back from investigators?

PAUL REYNOLDS, UNCLE OF NATALEE HOLLOWAY: Well, that's -- we don't really have specific information on that.

But we -- we imagine that he may have some information from his son that he's not releasing. And, of course, we're waiting on the officials to give us that information from their investigation.

ZAHN: Do you have reason to believe he's trying to cover up for his son?

REYNOLDS: Well, again, we don't really know what is happening. But, obviously the police felt there was something in his information or lack of information that warranted his being taken into custody.

ZAHN: Do you see his arrest as a big break in this case?

REYNOLDS: Well, we think it's progress. Obviously, we're glad to see progress being made. The officials seemed to be working diligently toward this, and we're happy to see that.

ZAHN: Your sister met with Mr. Van Der Sloot at one point. And we've never heard her publicly characterize what came out of that meeting. Are you able to give us any of those details tonight?

REYNOLDS: She has not spoken about that. That is something she's been unable to release at this time. But I'm certainly interested in finding that out at the appropriate time.

ZAHN: And what did she tell you today about his arrest? What did that mean to her?

REYNOLDS: Well, again, that means progress is being made. It's something that I don't know would be considered a surprise to her. I think it's something that had been considered for a while. But we're just happy that the officials are moving forward.

ZAHN: Your sister also mentioned that she believed that investigators had to pursue more people to really get to the truth, to better understand what happened to Natalee. Do you think she was specifically referring to Joran's father, Judge Van Der Sloot?

REYNOLDS: I would be speculating to say that. But it's very possible.

ZAHN: I know that you believe what happened here today with the arrest is making progress in the case, but how would you characterize the status of the case today? Is it moving fast enough?

REYNOLDS: Well, I think it's making progress.

Obviously, we would like this to be resolved as soon as possible and find Natalee, so that we can bring her home. It's been more than three weeks and a very difficult time period. But we do understand the complexity of the case. And, you know, we're trying to be patient. And we're glad everyone is working as hard as they are to get it resolved.

ZAHN: And we know this is very difficult for you, on a whole number of different levels. We really appreciate your joining us in the wake of this new development tonight. Thank you, Paul Reynolds.

REYNOLDS: Thanks. Thank you.

ZAHN: And good luck to your family.

Coming up, we're going to sample some reading material that might make your stomach churn. It's what insurgents read in Iraq.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It appears as if these guys were targeted by the foreign fighters that were here. So, I don't know whether they're alive or dead.

(END VIDEO CLIP)

ZAHN: We're going to warn you now, this is something you're not going to want your children to watch. But, next, the rest of us will get a chilling, unforgettable look inside the Iraq insurgency.

(COMMERCIAL BREAK)

ZAHN: Tonight, we get a unique close-up look at just who the U.S. is fighting in Iraq. It's something that you'll only see here.

Before we go any further, we want to warn you that this material is not suitable for young children. It's a portrait of evil, of things you wouldn't imagine human beings could actually do to each other.

In a sweep through the Iraqi city of Karabila near the Syrian border, U.S. and Iraqi forces government discovered insurgent prisons, torture chambers, and bomb factories.

Senior Baghdad correspondent Jane Arraf was embedded with the Marines. Here's exactly what she saw. (BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF (voice-over): There was no key to these shackles. A U.S. Marine cut through the metal. An Iraqi soldier removed it. The man was painfully thin. He'd been bound and tortured for three weeks.

There were four men here. Terrified of their captors, they begged us not to identify them in any way. Just after they were discovered, they told us their story. Two were former Iraqi border police and two unemployed young men, held from eight to 22 days in a house in the city near the Syrian border. Their hands and feet were bound.

They were blindfolded. Their ears were stuffed with cotton and covered in tape, so they couldn't hear the voices of their captors. When one of the younger men would say he just wanted to see his mother, a man would whisper in his ear, "There's only death for you."

They were tortured.

(on camera): This is the worst of the rooms, very heavy rope hanging here from the ceiling. They say they were hung here by their feet. One of them tells us that, as he was hung, he was dipped in water, his head dipped first in a bucket of water.

They would bring him up again and then they would give him electric shocks.

(voice-over): One of the men is so broken, he can barely sit up or speak. His skull is bandaged. There's a deep wound on his nose from having his head slammed into the floor.

"You saved our lives," he says to the Iraqi soldier who asked him how he feels being freed. Another man was whipped with cables and a rubber hose. His back is crisscrossed with raised welts and dried blood. Their captors fled when the bombing started. The hostages were held in a complex used to make car bombs. As Marines fired on the adjoining buildings, the men feared the building would collapse around them.

UNIDENTIFIED MALE (through translator): We entered the house and I heard them yelling, but the Americans don't understand Iraqi. They were blindfolded. And their ears were taped. I took off their blindfolds and wiped their faces and gave them water.

ARRAF: As these Iraqi soldiers help remove the cuffs, they lecture them on speaking up and standing up to the terrorists. In this small and terrible room, they argue about how to save Iraq.

"What do you mean you can't talk," the soldier says? "Don't you have a tribe to protect you?" "Talk and they'll cut off your head," one of them replies. "There's no police." "What do you mean there's no police? You yourselves have to take control."

"You're the youth right now," says another soldier. You need to get together and fulfill this duty."

Torture was nothing new under Saddam Hussein, but this is like nothing they've ever seen.

"Why are they trying to destroy Iraq?" this Iraqi soldier asks. In the house, Marines finds photos of applications for Iraqi army officers. The battalion commander knows them.

UNIDENTIFIED MALE: So, it appears as if these guys were targeted by the foreign fighters that were here. So, I don't know whether they're alive or dead.

ARRAF: As he speaks, the Marines warn that a suicide truck bomb might be headed towards us.

UNIDENTIFIED MALE: We got dump trucks headed this way with (EXPLETIVE DELETED) in the back of them.

ARRAF: It's the same kind of truck used in the triple suicide car bomb at a Marine base on the Syrian border. The Marines fire shots, but the truck disappears from view. They find documents in the building, including this printed manual on waging jihad marked first edition, 2005.

UNIDENTIFIED MALE: One is legitimacy of shooting at the infidels, killing them and fighting them any way possible.

ARRAF: One passage deals with how to choose hostages, telling students to keep them alive until their value is determined. Another handwritten document has a roll call of fighters.

UNIDENTIFIED MALE: This one is -- it lists names of supposed terrorists. It lists their name, where they're from, the emir they actually follow, what city they're from.

ARRAF: From the outside, these look like ordinary buildings. But two doors down, at a girl's school, someone has been holding classes on bombmaking.

(on camera): This huge pile of land mines, bullets, explosives, have all been found in this school. There are obviously no students here. School is out right now. But, from this blackboard, it looks as if someone has been studying how to construct a relay switch for a homemade bomb.

(voice-over): The school is stockpiled with weapons, including rocket-propelled grenades.

UNIDENTIFIED MALE: We found some RPGs, RPG launchers. We found a medium machine gun. We found lots of items that have been used as receivers in IEDs they've been using against us.

ARRAF: The Marines blow up the explosives, so they can't be used. This is, perhaps, the worst, but just one section of a city, a city, it seems, taken over by masters of terror and their students.

(END VIDEOTAPE)

ZAHN: And that was Jane Arraf reporting for us tonight.

Today on Capitol Hill, Defense Secretary Donald Rumsfeld told skeptical lawmakers that, in recent months, the insurgents in Iraq have suffered significant losses and casualties. They've been denied havens and suffered weakened popular support. He said setting a deadline for U.S. troops to leave Iraq would be -- quote -- "a terrible mistake."

Still to come, a legal and moral dilemma. If you were the judge, would you force a rape counselor to turn over a patient's records to lawyers for an alleged attacker?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Private thoughts, intimate details, deeply painful information does not need to be shared.

(END VIDEO CLIP)

ZAHN: Coming up, a counselor who is willing to go to jail for what she believes is the right thing to do.

(COMMERCIAL BREAK)

ZAHN: Still to come, aftershocks of the Air Force Academy rape scandals. We're going to tell you why a private rape counselor, instead of an accused cadet, could end up going to jail.

First, though, Sophia Choi joins us from Headline News to update some of the other top stories tonight.

Hi, Sophia.

SOPHIA CHOI, CNN CORRESPONDENT: Hi, Paula. Glad you're back.

Well, for the first time ever, the price of oil hit $60 a barrel. And that worried Wall Street today. The Dow fell 166 points. And another airline, Continental, said record high oil prices are forcing it to raise fares. United, Northwest, and others already have. One airline says one dollar rise in a barrel of oil means $80 million more for fuel.

Edgar Ray Killen will spend the rest of his life in prison. The 80-year-old former Klan leader gets a 60-year sentence for the deaths of three civil rights workers 41 years ago in Philadelphia, Mississippi.

Democrats say it's Karl Rove's turn to apologize for telling a Manhattan audience that 9/11 made Republicans angry, while liberals wanted to offer therapy to the attackers. The Democrats say Rove is using a national tragedy for political purposes.

And here's a look back at 25 years of CNN and another Republican who was once in the eye of a political storm. Here's Miles O'Brien.

(BEGIN VIDEOTAPE)

KATHERINE HARRIS (R), FLORIDA SECRETARY OF STATE: But please understand.

MILES O'BRIEN, CNN CORRESPONDENT (voice-over): She was the first lady of the election night that lasted 36 days, when the Sunshine State was in the spotlight. As Florida's secretary of state, Katherine Harris ended the 2000 vote recount.

HARRIS: I hereby declare Governor George W. Bush the winner of Florida's 25 electoral votes.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: And many thousands of votes that were cast on Election Day have not yet been counted at all.

O'BRIEN: Her decision was challenged and overturned by the state Supreme Court, but later upheld by the U.S. Supreme Court. Throughout the election debacle, Harris endured ridicule about everything from her right-leaning politics to her hair and makeup.

HARRIS: I think they had to learn that I really wasn't Cruella De Vil. I think that was a learning curve.

O'BRIEN: Harris is now in her second term as a U.S. congresswoman representing Florida's 13th District. She keeps a bronze statue of the famous Florida ballot in her office on Capitol Hill, complete with pregnant and dangling chads.

HARRIS: No. 1, it's in my office, so that people don't feel awkward about bringing it up. It's just sort of -- it kind of takes the edge away.

O'BRIEN: She has written a book called Center of the Storm about her experiences during election 2000.

HARRIS: It was a remarkable experience. I learned a great deal.

O'BRIEN: Harris makes her home in Sarasota, Florida with her husband and stepdaughter.

(END VIDEOTAPE)

CHOI: And those are the headlines -- Paula.

ZAHN: Sophia, see you a little bit later on in the hour.

Time, though, for all of you to do a little bit of work right now. And that is to pick our "Person of the Day." Your choices, Britain's Prince William for graduating from university and officially entering public life as a royal. That means the press can be all over him now. Firefighters in California and Arizona for risking their lives, battling the first major wildfires of the season. And Indonesian carpenter -- Yes,, indeed, his name is Muhammad Ali -- for being reunited with his daughter six months after she was lost in the tsunami.

Please vote now at CNN.com/Paula. We'll have the winner for you a little bit later on in this hour.

Still to come, though, testing the limits of government's power over the lives of ordinary people.

Keeping secrets, one woman takes on military justice, a rape counselor pressured to open her files.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Private thoughts, intimate details, and it's another violation.

UNIDENTIFIED FEMALE: You think she should go to jail?

UNIDENTIFIED MALE: Yes. Yes. Absolutely.

(END VIDEO CLIP)

ZAHN: The limits of the law and the secrets of the soul.

And moving day, when the government forces you to pack up and get out of your own home.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It hurt to walk out of that house. There's a lot of feelings there.

UNIDENTIFIED FEMALE: Can you tell me?

UNIDENTIFIED MALE: No.

(END VIDEO CLIP)

ZAHN: And it's all perfectly legal -- when PAULA ZAHN NOW continues.

(COMMERCIAL BREAK)

ZAHN: When someone goes to a professional rape counselor, what is said behind closed doors is supposed to stay there. It's privileged information.

Well, that's being argued today in a Texas military court -- ironically, behind closed doors. And depending on the result, a rape trial could be stopped, and a private rape counselor, instead of an accused rapist, could end up in jail. Here's Randi Kaye.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): She is a rape counselor, but in the eyes of the federal government, Jennifer Bier belongs in jail.

JENNIFER BIER, RAPE COUNSELOR: I just had this sense of wow, you know, there's some mistake is being made here, and somebody's confused.

KAYE: Bier is caught in the middle of a rape case involving two former cadets from the United States Air Force Academy in Colorado Springs. She faces a terrible choice: Betray her client's most private conversations as the military judge in this courtroom demands, or disobey and possibly go to jail.

DAVID SHELDON, DEFENSE ATTORNEY: The military judge in this case has ruled. He has ordered her to produce these records pursuant to federal law. She is not above the law.

KAYE (on camera): Do you consider yourself above the law?

BIER: No, absolutely not.

KAYE (voice-over): But her case will likely make law, about how far the military can reach into civilian counseling files.

Jessica Brakey claims she was raped in the fall of 2000 when she was a first-year Air Force cadet. It was at a wilderness camp ground, she says, at night, during basic training. And she adds, it took two years to gain the courage to confront her alleged attacker.

Now a first lieutenant, Joseph Harding is facing a court-martial.

JESSICA BRAKEY, FORMER U.S. AIR FORCE ACADEMY CADET: When I did eventually come forward to report the rape, it was after I had been meeting with other fellow rape victims in a group therapy type setting.

KAYE: Her case, just one of 140 alleged sexual assaults at the Air Force Academy in the last decade. Allegations that have led to sweeping changes in policies and administration.

BRAKEY: A lot of these girls were being pushed out of the system. There was a lot of retribution, there was a lot of intimidation and there was a lot of fear.

KAYE: After the alleged assault, Brakey sought out Jennifer Bier, a civilian counselor with no ties to the Air Force. But the military court now wants to find out what was discussed during that one-on-one counseling. The judge subpoenaed all of Bier's records of those sessions. Citing patient/counselor confidentiality, Bier refuses to turn them over.

(on camera): You're not looking for special treatment?

BIER: No. I'm just looking for clarification, which has always been granted to therapists in terms of privilege. And why the military thinks they can take that away.

KAYE: And so for that, you yourself are willing to go to jail? BIER: What I'm willing to go to jail for is not just this client, but all clients. And the total foundational principle of the field is that in order to be able to do therapy with any sort of integrity, it has to be confidential.

KAYE (voice-over): Colorado law prohibits therapists from releasing counseling records without permission from their clients.

BIER: So I sent off this nice little letter saying, I'm sorry, I can't, you know, I can't comply with the subpoena. Here's the statutes which protect client -- patient privilege. Have a nice day.

KAYE: But because the case is being heard in this military court, the defense says military rules of justice apply, and so far, the appeals court has agreed that in a court-martial, all therapy records are subject to subpoena.

After the military judge reviews them, he decides whether to turn them over to the defense.

(on camera): What could happen to your client?

SHELDON: He could go to jail for the rest of his life.

KAYE (voice-over): Lawyer David Sheldon is defending 1st Lieutenant Harding, the accused rapist.

(on camera): What is it do you think in those records? What's so important to you and your client?

SHELDON: There's always an issue with a witness as to whether the person can recall, retell, and perceive events. To the extent that any witness makes inconsistent statements, those statements, if they're material to the defense, those should be discovered.

KAYE: If she doesn't turn them over, do you think she should go to jail?

SHELDON: Yes, yes, absolutely. Anyone who finds themselves ordered by a court and is, in essence, in contempt of court, and not following a court -- a lawful court order, should be held in contempt.

KAYE: I mean, we're not just talking here about you spending a few days in jail. We're talking about you losing what you've worked for -- losing your career, losing an income for your family.

BIER: Right.

KAYE: And that's still OK with you?

BIER: Well, it's -- it's not OK with me, but it's demanded of me. Because the flipside of it is, for me to give up everything that I believe in. I don't know how to be the therapist that says, yes, come, talk to me, we'll work things out. And then I say to you, but if it gets too tough for me and I have to make a decision, sorry, you lose. KAYE: What would you want to ask the lawyer for the defendant in this case?

BIER: I would ask him, are you really telling me that you can't do your job without violating this woman again?

KAYE (voice-over): Bier is concerned the military's practice of going after private records sets back the healing process for victims.

BIER: Private thoughts, intimate details, deeply painful information does not need to be shared. It's completely unacceptable. It's another intrusion, it's another violation.

KAYE: But the defense says keeping the records sealed means an officer facing life in prison may not be able to fully defend himself.

SHELDON: So to do my job, we need access to those records.

KAYE: Bier says turning over those records inadvertently sends another message to future victims -- you can choose justice or you can choose healing. But if the military gains access to your private files, you may not be able to have both, which is why she says she's choosing jail.

(END VIDEOTAPE)

ZAHN: Randi Kaye, bringing us up to date on this controversial story. Late word from Texas is that the military court has adjourned for the day. That hearing continues tomorrow.

Still to come, a fight that pitted a city government and big business against some home owners.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We're supposed to have our own little castle, that's the American dream. We lost ours. It went bust.

(END VIDEO CLIP)

ZAHN: Coming up next, why the Supreme Court said this is a case where the little guys shouldn't win.

(COMMERCIAL BREAK)

ZAHN: So the question tonight is how far can the government go to force you out of your own home? Well, some residents of New London, Connecticut, have been waging a legal battle with town officials over that very controversial question.

Eminent domain, let's communities seize private property for public use. But New London wants to take people's property and give it to developers.

Well, today, the Supreme Court weighed in on that, and sided with the town, ruling 5-4 against the homeowners. Maria Hinojosa now with some background on this case.

(BEGIN VIDEOTAPE)

MARIA HINOJOSA, CNN CORRESPONDENT (voice-over): Susette Kelo has a stunning water view, it goes along with her equally charming Victorian cottage.

SUSETTE KELO, HOMEOWNER: The best way to describe this place is when I came in with the real estate agent to look at this house, it was almost like I'd been here all my life. It was just so warm and inviting, I guess.

UNIDENTIFIED MALE; We made a cathedral ceiling in this room and we put the fireplace in.

HINOJOSA: Susette's neighbor, Matt Derry (ph), has lived in his home for almost 20 years. It was a wedding gift from his grandmother, and is part of property that has been in his family for more than a century.

UNIDENTIFIED MALE: We're on a first name basis with every piece of wood in this house.

HINOJOSA: But five years ago, the city of New London decided to clear out Matt and Susette's tranquil neighborhood house by house.

UNIDENTIFIED MALE: They would reach in and grab the rafters, sort of like disemboweling. Kind of like watching a cheetah eat a wildebeast or something. They drive the bulldozer on top of it to let you know that yours may be next.

KELO: They were pretty rough on us down here. I mean really, they wanted us to go. And they made it as difficult and as miserable and as unhabitable as you can possibly ever imagine.

HINOJOSA: What brought about this state of siege? In 1998 pharmaceutical giant Pfizer built a major research facility next to Matt and Susette's neighborhood. Two years later, the city decided to seize the properties in the area and lease them to a commercial developer.

KELO: They had these articles where they were going to turn New London into a hip little city. And to me, hip little city means higher income people. They wanted higher income people here, a better class of people.

HINOJOSA: But first, the city had to condemn and then tear down more than 100 homes and buildings, using a legal tool called eminent domain. Traditionally that's meant building public projects, such as roads or schools. What makes this case controversial is the fact that the property will be leased to a private developer for profit.

SCOTT BULLOCK, ATTORNEY FOR HOMEOWNERS: This is a gross misuse of eminent domain power, and a terrible violation of people's constitutional rights. HINOJOSA: But Wesley Horton, attorney for New London, says the city desperately needs the money. And that economic development is a legitimate public use.

WESLEY HORTON, ATTORNEY: What we're saying is that developing property, in order to bring back a depressed city, that's producing jobs and producing taxes and doing what cities are supposed to be doing is no different from building a road or being a school or building a courthouse.

HINOJOSA: But Susette Kelo, Matt Derry (ph) and several of their neighbors, disagree.

New London is not the only city where the use of eminent domain is being questioned. Carl and Joy Gamble (ph) lived in the same house in Norwood, Ohio for 35 years. And were planning to spend their golden years in the place they loved most.

CARL GAMBLE, FORMER NORWOOD, OHIO HOMEOWNER: Well, I worked for 48 years. And then we quit, and was going to do a lot of things in life. And a couple of days later, we hear that our home was going to be taken away from us for a shopping center.

HINOJOSA: Back in 2002, the city of Norwood and a local developer announced plans to transform the Gamble's modest, middle class neighborhood into a business and residential complex. Carl and Joy fought to stay in their home, but finally moved out earlier this year, after the city, using eminent domain, transferred the title to their home to the developer.

GAMBLE: I got mad. I'm still mad.

HINOJOSA (on camera): Is it only mad or are you hurt?

GAMBLE: It hurt to walk out of the house. There are a lot of feelings here. You know...

HINOJOSA: Joy, when you see your husband so upset.

JOY GAMBLE, WIFE: He loved the house just as much as I love it.

HINOJOSA (voice-over): And yet, many of their neighbors supported the new project.

MAYOR THOMAS WILLIAMS, NORWOOD, OHIO: The neighborhood had deteriorated, the noise and traffic and everything else. And 95 percent of the people over there said, let's move on. I'm ready.

HINOJOSA: But at least one family wasn't ready.

J. GAMBLE: Our home was not for sale. It still isn't for sale. You're not supposed to have to sale something in this country if you don't want to. We're supposed to have our own little castle. That's the American dream. We lost ours. It went bust.

WILLIAMS: Do I see their point of view? I guess I do. But there again, we go back to the same thing, what's my responsibility? This was something that would be beneficial to the city financially and aesthetically.

HINOJOSA: Not all property owners agree with that, certainly not Matt Derry (ph), back in New London.

(on camera): The city of New London is saying, what we can do with this land is going to bring a lot more good to everybody.

UNIDENTIFIED MALE: It will be better if I leave? I don't buy that. My personal property rights, guaranteed by the constitution, are not to be sacrificed. I don't care if it's just for the 25,000 people in New London, I don't care if it was going to benefit 25 million people. The rights of those 25 million do not trump the rights of the one.

(END VIDEOTAPE)

HINOJOSA: Maria Hinojosa with a very personal story. The New London homeowners say this is definitely not the last word. And some say they'll continue to file lawsuits to save their homes.

Still to come, a woman set out to prove that a steady diet of fast food can actually help downsize you.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What would happen if I ate at McDonald for 30 days straight?

(END VIDEO CLIP)

ZAHN: Well, our Jeannie Moos explains why and shows what happened. You might actually be surprised.

And please remember to vote for our person of the day. Your choice is Britain's Prince William, who's now a university graduate. And sort of an open target for the press. And the fire crews battling wildfires in California and Arizona, or the Indonesian carpenter who's just been reunited with his daughter six months after she was lost in the tsunami. Please vote at CNN.com/Paula. We'll be right back.

(COMMERCIAL BREAK)

ZAHN: Before we get there, actually, a glorious shot of New York City tonight on a beautiful summer night. Perfect temperatures, no one complaining about the balmy weather of last week.

Coming up, Jeanne Moos has a double order, competing documents on whether a steady diet of fast food will super size you or downsize you.

And at the top of the hour, members of the Michael Jackson jury are guests on "LARRY KING LIVE."

First though, time for another look at 10 minutes before the hour at the headlines with Sophia Choi of Headline News.

CHOI: Thanks, Paula. While the numbers of Americans wounded in Iraq is growing, money for their medical care is running low. A Veterans Administration report says the budget for vet's health is already $1 billion short because of increases costs. In the meantime, four more car bombs rocked Baghdad today, including a suicide attack in a shopping mall. At least 17 died and as many as 60 were injured. A fifth bomb was defused.

Bidil (ph) get FDA approval. The heart drug is the first medication made specifically for use by black patients. Tests show Bidil (ph) reduced heart attacks by 43 percent among those patients who took the medication. It did not have the same effect on others, although, no one knows why.

And Yahoo has shut down all of its private chat rooms, because some were being used by adults trolling for underaged sex. Last month Yahoo was the target of a $10 million lawsuit filed by the parents of a minor.

And take a look at this, everyone has some pennies socked away, right. But an Alabama man started collecting pennies from spare change back in 1967. Edmond Knowles finally cashed them in. It took seven hours for a coin machine to count them all. The total, $13,084.59. You could use the 59 cents to start all over, but he says he won't.

And those are the headlines -- Paula.

ZAHN: Thanks, Sophia. That could buy a lot of bubble gum.

So, who's your choice for person of the day? Britain's Prince William who graduated from university, firefighters in California and Arizona battling the season's first big wildfires, or the Indonesian carpenter reunited with his daughter who was lost in the tsunami. You picked by 75 percent the firefighters.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): It's summer in central Arizona, temperatures are over 100 degrees. The last thing anyone would want to do is get close to a roaring, crackling fire. But it's their job.

About 300 firefighters are working in Arizona right now. At least 1,000 are on duty today in neighboring California. Wherever they are, it's dangerous work.

UNIDENTIFIED FEMALE: The fire itself, because of the dryness of the vegetation, the heat, and the wind, has been very unpredictable.

ZAHN: At least they haven't lost their sense of humor.

UNIDENTIFIED MALE: We hear all sorts of things.

UNIDENTIFIED FEMALE: We've had a little bit of excitement here since yesterday afternoon, late in the afternoon we had two lightning strikes, at least one of them resulted in what you see behind me now, which is the Bronco fire.

ZAHN: More work to do on the ground and from the air. And for taking on a hot dangerous job, you've made all the western firefighters the people of the day.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAHN: Well, fast food takes an awful lot of abuse from the food police lately. And given some of the menu choices it's a pretty easy target. Many chains have started adding salads and other healthy items in an effort to win over those who are worried about your waistlines and to try to fend off some criticism along the way.

But now it seems that someone has set out to prove that burgers and fries may not be that bad after all. Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Call it the Big Mac counter attack.

UNIDENTIFIED FEMALE: What would happen if I ate at McDonald's for 30 days straight?

MOOS: Yes, but didn't this guy already do that?

MORGAN SPURLOCK, FILMMAKER: "Super Size Me."

MOOS: Morgan Spurlock gorged himself on nothing but McDonald's, got fatter and sick, and made an Oscar-nominated documentary.

SPURLOCK: See, now's the time of meal when you getting the Mcstomachache.

MOOS: He vomited on camera, but his documentary made Soso Whaley sick.

SOSO WHALEY: Spurlock made it look like he almost died while he was eating there.

MOOS: So this New Hampshire animal trainer...

WHALEY: Just like a kid.

MOOS: Made a film of her own, 30 day McDonald's, binge in which she lost weight?

WHALEY: That's right, I lost weight.

MOOS: Whaley lost ten pounds while Spurlock gained 24 1/2.

SPURLOCK: It just keeps getting bigger.

MOOS: His cholesterol jumped 65 points. Hers dropped 40. WHALEY: I love bacon!

SPURLOCK: Oh, I love Big Macs.

MOOS: Well, no wonder Whaley and Spurlock got opposite results. He ate about 5,000 calories a day, while she ate 2,000 or less. He stuffed, she dieted.

(on camera): So his meal might be a double quarter pounder with cheese, large fries, large soda for a total of over 1,500 calories, while her typical meal might be double cheese burger, fruit and yogurt parfait, and a diet coke for a total of 620 calories.

Now I have to eat them both. Super size me!

(voice-over): Downside me could have been the title, though she chose "Me and Mickey D." Her point is, blame yourself not McDonald's for overeating. She considers Spurlock's film misinformation.

WHALEY: It's not what you don't know that hurts you. It's what you know that isn't so.

MOOS: Spurlock wouldn't comment on her film. She says McDonald's in no way supported her documentary. It's her very first film. And, boy, does it look it. Though there are flashes of humor, like the killer pizza. And the Mark Twain quote, "eat what you like and let the food fight it out inside." Now, that's a Mcnugget of wisdom.

SPURLOCK: Boy, that's miserable.

(END VIDEOTAPE)

ZAHN: Yes, we're hungry. Thank you, Jeanne Moos.

It's always nice when she reminds us of the whole issue of personal responsibility and accountability. What a revolutionary concept.

And we wanted to thank you all for dropping by this evening. Prime time continues. Larry King joins us at the top of the hour. His guest, jurors in the Michael Jackson case.

And tomorrow night, we will introduce you to a new side of Lindsay Lohan as we wrap up the week. Thanks again for dropping by tonight. We will be back same time, same place for TGIF. Have a good night everybody.

END

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