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Enron Execs Go To Trial; ABC News Journalists Injured on Patrol in Iraq; Bush Comments on State of the Union Preparations

Aired January 30, 2006 - 11:00   ET

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

DARYN KAGAN, CNN ANCHOR: Let's take a look at what's happening right "Now in the News":
The lead defense attorney in the Saddam Hussein trail says the former Iraqi dictator and his lawyers will boycott the next session of the trial set to get underway on Wednesday, that's according to the Associated Press. The lawyer says the move is a protest against the new chief judge. Hussein's defense accuses the judge of bias.

On this day before he delivers his State of the Union Address, President Bush is meeting with his Cabinet. Aides are calling this morning's get together as strategy session. In tomorrow night's speech Mr. Bush is expected to talk about a number of key issues including energy, education and healthcare.

A U.S. military official says ABC News Anchor Bob Woodruff and cameraman Doug Vogt suffered very significant injuries in a roadside bomb attack in Iraq. The two men are now in an American military hospital in Germany where they are said to be in stable condition. Woodruff and Vogt were traveling with U.S. and Iraqi forces north of Baghdad yesterday, when their convoy was attacked.

A Arkansas woman is scheduled to make her first court appearance this morning in connection with deaths of their three children. Paula Mendez is accused of smothering her eight-year-old son, and six-year- old twins, a boy and girl, over the weekend. Police found the bodies lying in a row on the bed.

In Southern California, a frightening scene in a Los Angeles County neighborhood. Check out this video. A motorist was injured when a car crashed into a house earlier today. The cause of the crash is under investigation.

Good morning. Welcome to next hour of CNN LIVE TODAY. Checking the time around the world, it is just 11:00 a.m. in Washington D.C., just after 10:00 a.m. in Houston. From CNN Center in Atlanta, I'm Daryn Kagan.

Billions of dollars in losses, thousands left without jobs, life savings and retirement accounts wiped out, it is all the result of the spectacular implosion of Enron.

This morning jury selection was underway in the trail of two former corporate titans blamed for the company's collapsed. Business News Correspondent Chris Huntington checks in from Houston.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN BUSINESS NEWS CORRESPONDENT (on camera): You can call this the Super Bowl of white collar criminal trials. Kenneth Lay, the former chairman of Enron, Jeffrey Skilling, the former chief executive officer, finally getting their day in court.

This is the culmination of more than four years of work by the Justice Department. They have an awful lot at stake trying at to get these convictions. There is a lot at stake also for the 10s of thousands of former Enron employees and shareholders, who lost everything when Enron collapsed back in late 2001.

This is a trial that could involve some very complex accounting issues and for that matter, it could be a trial that takes a long time. The judge, though, overseeing the proceedings wants to move things along quickly. He's hoping to get a jury picked within a day or so. A lot of lawyers say that's a tall order, especially since the jury pool is in Houston, and just about everybody in this town either worked for Enron, knew somebody who worked for Enron, or lost money when the company collapsed. Day one of this trial, it's crackling here in Houston. This could go on, though, for about four months. Chris Huntington, CNN, Houston.

(END VIDEOTAPE)

KAGAN: Thank you, Chris.

The follow-up to the Enron collapse shocked Wall Street and led to tougher penalties for corporate crime. Here's a look now at our Enron, by the numbers, in our "CNN Fact Check".

(BEGIN VIDEO CLIP)

ANNOUNCER: Enron was once the nation's seventh largest company. In August of 2000, shares of Enron were trading for $90.75. In January of 2002, those same share were only worth 67 cents. While it was riding high, Enron was taking good care of its top executives, the highest ranking 140 at the company were paid $680 million in 2001. CEO Ken Lay himself received more than $67 million in compensation that year.

But it didn't last. In an interview with CNN's Larry King, Lay said his net worth was more than $400 million in 2001. But most of it was in Enron stock. In 2004, he said his net worth was now about $20 million, but if you take out all the money reserved for legal fees and settlements, he says it's less than a million in liquid assets.

When Enron filed for bankruptcy in December of 2001, at least 4,000 employees lost their jobs as well as their life savings. For more on the Enron trial, including a list of the players, and testimony from some former employees, check out the special section on cnnmoney.com.

(END VIDEO CLIP)

KAGAN: This just in, U.S. immigration officials say they made an arrest in connection with that drug tunnel discovered last week, linking warehouses in Mexico and California. The suspect is said to be a Mexican man and, this programming note, catch "Anderson Cooper 360" tonight with an exclusive tour of that tunnel at 10:00 Eastern.

Just weeks after he took over as co-anchor of "World News Tonight", Bob Woodruff is in a military hospital in Germany with what is said to be very significant injuries. He and his cameraman, Doug Vogt, were flown to Germany after they were injured in a roadside bombing in Iraq.

In a statement released just a short time ago, ABC said, quote, "The families and our colleagues have met with the doctors who examined Bob and Doug at Landstuhl. Both have shown some signs of improvement. As we have known, Doug is in somewhat better condition than Bob. But the doctors are pleased with how they came through the transfer and will continue to monitor their condition closely. They may be brought to the U.S. for further treatment as soon as tomorrow. Both Bob and Doug continue to need our thoughts and prayers. We have a long way go, but it appears we may have also come some distance from yesterday."

CNN's Gary Nurenberg has more on the attack and the danger that journalists face in a war zone.

(BEGIN VIDEOTAPE)

ANNOUNCER: This is "World News Tonight".

ANNOUNCER: "ABC News" reported Sunday evening an attack on two of its own.

UNIDENTIFIED FEMALE: My co-anchor Bob Woodruff and cameraman Bob Vogt were on assignment in Iraq with a military convoy near the city of Taji, north of Baghdad, when a road bomb exploded. Bob and Doug were hit by shrapnel and both men sustained head injuries.

GARY NURENBERG, CNN CORRESPONDENT (voice over): The network says the men were traveling with an Iraqi army unit, in one of its mechanized vehicles. ABC reports that the two men were wearing body armor, but received severe injuries in the attack that the U.S. military says also wounded an Iraq national.

CLARENCE PAGE, COMMITTEE TO PROTECT JOURNALISTS: Iraq now leads the planet for most journalists killed in the 24 years our organizations been around.

NURENBERG: Columnist Clarence Page is on the board of the Committee to Protect Journalists and has just returned from the Middle East. He says Iraq poses been particularly hazards for reporters.

PAGE: Journalists are targeted in ways they were never targeted before.

NURENBERG: American Jill Carroll, was kidnapped earlier this month and remains missing.

PAGE: If you kidnap a journalists, naturally you get a lot more attention.

NURENBERG: The host of CNN's "Reliable Sources", Howard Kurtz, wrote about Woodruff in Sunday's "Washington Post". And interviewed him just before he left the United States last week.

HOWARD KURTZ, CNN ANCHOR, RELIABLE SOURCES: He was excited. He thought it was part of his job to go places, to get on a planes and go to places like Israel and Iraq and Pakistan, and be a foreign correspondent in the Peter Jennings mold and he wasn't worried much about the danger.

NURENBERG: Woodruff talked about that recently on a CNN Headline Prime's "Show Biz Tonight."

BOB WOODRUFF, ABC ANCHORMAN, JOURNALIST: Something Peter said to me many times over the years, is be careful about wanting to go into a position like this of anchoring, because it will take away from what is really the greatest things about what we do, which is reporting out in the field.

And it he -- it was his favorite to do and I think it was always a regret that he was not able to get out more as well.

NURENBERG: Woodruff is known as an active reporter, likely not content to stay in the safe environs of Baghdad's protective green zone.

PAGE: If you don't get outside the green zone, you're missing 99 percent of that country. How can we as journalists honestly say we're covering the war, covering what is happening in Iraq if we don't get out and see Iraq?

NURENBERG: That was what Woodruff and Vogt were doing Sunday.

Gary Nurenberg, CNN, Washington.

(END VIDEOTAPE)

KAGAN: Former "NBC Nightly News" anchor Tom Brokaw is offering more insight into the attack on Woodruff and Vogt. Brokaw spoke with Woodruff's family upon their arrival in Germany. On "The Today Show" Brokaw spoke about Woodruff's reaction, he said, quote, "Immediately after the explosion he turned to his producer and said, am I alive? And don't tell Lee," who is his wife. And then he began to cry out in excruciating pain, but he was able to walk to the helicopter.

The Woodruff family was accompanied to Germany by Melanie Blum, that is the widow of NBC News Correspondent David Blum, who died in Iraq last year.

Well, the injuries to the ABC journalist put a high-profile face on the casualties of the war, but here is a closer look at the dangers in Iraq. According to Reporters Without Borders, 79 journalists and their assailants (sic) have been killed in Iraq. The Pentagon says 2,240 U.S. troops have been killed there since the war began. Kidnappers holding four Christian peace activists say they're giving U.S. and Iraq authorities one last chance to meet their demands. The kidnapers are threatening to kill the four unless all Iraq prisoners in U.S. or Iraq custody are released. Over the weekend, the Arab language network, Al Jazeera aired video of the hostages, including an American, two Canadians and a Britain. The group Christian Peacemaker Team says it's encouraged the men are apparently still alive.

It has been more than three weeks since American reporter Jill Carroll was kidnapped in Iraq, today, and today there is still no word on her fate. Her kidnapers are demanding release of female Iraqi prisoners.

Militants have freed four oil workers, including an American, kidnapped off the coast of Nigeria nearly three weeks ago. American Patrick Landry and his crew were taken hostage by gunmen armed with rocket propelled grenades and other weapons. The militants were demanding $1.5 billion be paid to local communities for environmental pollution. Landry's son, Dwight, said that he's not sure whether any money changed hands, he was a guest on CNN's "American Morning."

(BEGIN VIDEO CLIP)

DWIGHT LANDRY, SON OF FREED HOSTAGE: At this point, I don't know exactly what took place. I haven't heard if anything at all was actually exchanged. I think what they really, really wanted out of the whole thing is just to show the plight of their people, that their people are starving, that their living conditions are deplorable. They really wanted to get national and world attention, that they need some help in that area.

(END VIDEO CLIP)

KAGAN: That interview with CNN's "American Morning" which airs weekdays from 6:00 to 10:00 a.m. Eastern.

Most of us don't face eminent danger when they go to work each day, but apparently a lot of you face unhappiness on the job. We'll look at the results of a new career survey.

We'll also take a look at the new allegations about FEMA in the days after Katrina hit. Did officials really say no to offers of help from other government agencies?

Later the price of politics, the Palestinian economy really isn't as independent from Israel as you may think.

(COMMERCIAL BREAK)

KAGAN: A new survey out shows there may be a serious disconnect between American workers and the people who manage them. The survey, by the online job site, Salary.com, finds that 80 percent of it's respondents are searching the web for new jobs, that have already updated their resumes. According to the survey the top reasons people leave their job includes boredom, inadequate compensation, and lack of advancement opportunities. Note to managers, half of those surveyed said they would keep a job they don't like if they had more money.

That's one perspective. Allan Chernoff is working for us today, out on Wall Street.

Hi, Allan.

ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: Hi, Daryn.

Well, maybe those folks want to go to work at ExxonMobil. Stock, right now, is up better than 3 percent that is because that oil giant reported the most profitable quarter in the history of corporate America.

ExxonMobil earned $10.7 billion in the fourth quarter. Sales for the period were nearly $100 billion. That's more than the gross domestic product of Sweden. The record report comes after Exxon, on Friday urged a federal appeals court to erase a jury's $5 billion judgment against the oil giant, related to the Exxon Valdez oil spill. Nearly 17 years ago, that tanker ran into a reef spilling 11 million gallons of crude oil into the Alaskan Sound. The case involves about 32,000 fisherman and Alaskan natives whose businesses were crippled by the spill. The court did not say when exactly it would rule.

Let's have a look now at the stock market. Well, stocks are mixed in spite of the push by ExxonMobil. As you can see the Dow industrial average now in negative territory and the Nasdaq composite is now higher by 2 points.

That is the quick on Wall Street. Daryn, back to you.

KAGAN: Allan, thank you.

And we're just about a moment away from seeing video tape, just shot from inside the White House. President Bush at his Cabinet meeting. Let's listen in.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRES. OF THE UNITED STATES: I want to thank the members of my Cabinet for being here.

We just had a really good discussion about the year 2006. Tomorrow night, I'm going to be speaking to the Congress, giving the country my State of the Union address.

I can't tell you how upbeat I am about our future, so long as we're willing to lead.

We talked about how to make sure that America continues to spread the peace and to protect ourselves. I heard from the secretary of defense and deputy secretary of state about very positive initiatives, not only in the Middle East, but in the Far East, as well.

We talked about how to make sure this economy of ours stays the strongest economy in the world and that we recognize we can't just sit back and hope for the best; that we've got to lead. And so we had a good discussion about matters such as health care and energy and education, all of which I will address tomorrow night.

I'm looking forward to speaking to the country. We got a lot to be proud of. We got a lot of work to do.

One of the things I will do is call for Congress and the executive branch to have a good, honest dialogue, to speak candidly with each other, but to do so in a way that brings credit to the process. And I'll do my best to elevate the tone here in Washington, D.C., so we can work together to achieve big things for the American people.

I'll answer a couple of questions.

QUESTION: The talks between Iran and the E.U.-3 appear to be making little progress. A senior British official there said that they detect nothing new in their approach.

What can be done now?

BUSH: Well, obviously, one option is for the PERM 5 to work together to bring Iran to the U.N. Security Council. That's an option. And we're going to continue to work with our friends and allies to present a united front to the Iranians.

And the message is, "Give up your nuclear weapons ambitions."

The good news is, most of the world recognizes that Iran, being the nontransparent society that it is, a government that had violated IAEA rules, is one that cannot be trusted with technology that could enable it to develop a nuclear weapon.

And so we're united in our goal to keep the Iranians from having a weapon, and we're working on the tactics necessary to continue putting a united front out.

The other thing is that we want the people of Iran to be able to live in a free society. And so tomorrow night, I am going to talk about this issue and make clear the policy of the United States.

QUESTION: Mr. President, Israeli officials are seeking an international boycott of a Palestinian government that includes Hamas. Do you support this?

And if so, isn't that punishing Palestinian people for exercising the democratic rights that you called for in the region?

BUSH: The Hamas Party has made it clear that they do not support the right of Israel to exist. And I have made it clear, so long as that's their policy, that we will not support a Palestinian government made up of Hamas.

We want to work with a government that is a partner in peace, not a government whose declared intentions might be the destruction of Israel. Secondly, this new democracy that's emerging in the Palestinian territories must understand that you can't have a political party that also has got an armed wing to it.

Democracies yield peace. And so the second half of our message to Hamas is, "Get rid of your arms, disavow terrorism, work to bring what you promised to the people of the Palestinian territories."

Listen, these folks ran on the campaign, "We're going to get rid of corruption and that we're going to provide services to the people." And that's positive.

But what isn't positive is that they've got parts of their platform that will make it impossible for them to be a peaceful partner.

Thank you all very much.

(END VIDEOTAPE)

KAGAN: All right. We've been listening in to video tape that was just shot moments ago within the White House. President Bush at a Cabinet meeting, taking questions and talking about topics like the economy, Iran and potential nuclear weapons and the idea of cutting off aid to Palestinians now that Hamas has been voted into power there.

The president also looking forward to tomorrow's State of the Union" address, which of course, full coverage here on CNN. We're back after this.

(COMMERCIAL BREAK)

KAGAN: When it comes to the massive destruction caused by Hurricane Katrina, some Louisiana residents apparently think Congress doesn't get it. A group of about 120 women from the storm ravaged region are in Washington today to personally invite members of Congress to visit New Orleans.

The group calls itself "Women of the Storm" and want lawmakers to see first hand the devastation affecting their state. The group plans a news conference this hour.

Also on Katrina, documents obtained by CNN show that immediately after the Hurricane Katrina pummeled the Gulf Coast, critically need resources, like trucks and helicopters, were offered to FEMA -- and FEMA did not accept. The documents are expected to be the focus of a Senate committee hearing today on Katrina's search & rescue. Our Homeland Security Correspondent Jeanne Meserve joins us with more on that.

Jeanne, hello.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Hi, Daryn. These documents you mentioned are another indication how opportunities were missed in the chaotic response to Katrina. (BEGIN VIDEOTAPE)

MESERVE (voice over): In the aftermath of Hurricane Katrina, there was an urgent need for shallow bottom boats and experienced personnel to do water rescues; for helicopters, heavy equipment and rooms. The Department of Interior had all that and more and offered it to the Federal Emergency Management Agency immediately after the storm.

But FEMA never took Interior up on the offer according to documents obtained by CNN.

"Although we attempted to provide these assets we were unable to efficiently integrate and deploy these resources," an interior official wrote the Senate committee investigating the Katrina response.

SEN. SUSAN COLLINS, (R) MAINE: It makes no sense to me. You might be able to understand it if it came from outside government, but this is another federal agency, an agency offering trained personnel and exactly the assets the federal government need.

MESERVE: One example, e-mails document FEMA's decision to ground its search and rescue teams three days after the hurricane because of security concerns, but the Interior Department had already offered FEMA 100s law enforcement officers trained in search and rescue, emergency medical services and evacuation. The Department of the Interior was not called upon to assist until late September, the Interior official writes.

COLLINS: It is indeed possible that there was additional suffering and maybe even the loss of life that might not have occurred if these assets had been deployed.

MESERVE: A FEMA document also provided to the Senate Homeland Security and Governmental Affairs Committee indicates many of Interior's resources, including transportation, communications and engineering were never integrated into FEMA's planning for a catastrophic hurricane, planning which was still incomplete when Katrina roared ashore.

(END VIDEOTAPE)

MESERVE: A spokesman for the Department of Homeland Security, which includes FEMA, says the administration is currently examining how to better utilize the resources in the federal government and elsewhere in the next catastrophe. But, he says, were there federal assets not used in Katrina, of course.

Daryn, back to you.

KAGAN: Jeanne Meserve -- Jeanne, Thank you.

Hurricane Katrina and Rita evacuees living in hotels paid for by FEMA face an important deadline today. They must contact the agency to get the go ahead to extend their hotel stay beyond February 7th. Evacuees can call FEMA at 1-800-621-FEMA, to get the necessary authorization codes. FEMA says it will fund hotel rooms at least until February 13th.

When we come back, they want their own government, but don't want to do business with Israel. You may be surprised how much of the Palestinian economy is supported by its Jewish neighbors. A look at politics of money just ahead.

(COMMERCIAL BREAK)

KAGAN: We're coming up on the half hour. I'm Daryn Kagan. Here's a look at what's happening right "Now in the News":

It's been a long time coming but today jury selection is finally under way in the upcoming trial of former Enron head Kenneth Lay and Jeffrey Skilling. The two arrived in court two hours ago. Enron was once the nation's seventh largest company. It went bankrupt after allegations of fraud, conspiracy and insider trading surfaced; 4,000 Enron employees lost their jobs and life savings. The trial could start as early as tomorrow.

The Senate appears primed to confirm Judge Alito to the Supreme Court. One senator says he'll vote against his nomination but it's not enough to end efforts by Democrats John Kerry and Edward Kennedy to start a filibuster, that would keep debate in the Senate going and block the confirmation vote tomorrow. Alito supporters and many opponents say they expect the Senate to vote this afternoon to end that debate.

All 72 miners trapped in Western Canada have been rescued and are in good health. They spent 24 hours underground, trapped by a fire that broke out Sunday. Officials say they took refuge in several safe rooms while crews put out the fire.

And there is word this morning that award-winning playwright Wendy Wasserstein has died. Wire services report that she Wasserstein had been battling cancer and focused on love, motherhood and marriage, in such works as "The Heidi Chronicles" which won the Pulitzer and a Tony award. She was 55 years old.

(COMMERCIAL BREAK)

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