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CNN Live Sunday

Dubai Ports World Controversy; AT&T Set to Merge with BellSouth; Searching Ninth Ward In New Orleans; Red Carpet Action at the Oscars; Arizona's Racial Courts Separation

Aired March 05, 2006 - 19:00   ET

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

CAROL LIN, CNN ANCHOR: Tonight, an exclusive interview with the man at the center of the controversy regarding U.S. port security. You will only see this on CNN.
And also coming up on CNN LIVE SUNDAY, Arizona has two DUI courts. One for Spanish speakers and Native Americans, and one for everyone else. Now an Arizona district attorney is suing. You are going to meet him tonight.

And get ready for beautiful people in the most gorgeous dresses and suits walking down the red carpet. It's Academy Awards night and we are going to take you there live.

Good evening. I'm Carol Lin. And this is CNN LIVE SUNDAY. And these are the stories making news right now.

Congress wants more control over who gets to secure U.S. ports, and you're about to see a CNN exclusive. Wolf Blitzer's interview with the CEO of the Arab company at the center of the storm. That is just one minute away.

AT&T is set to merge with BellSouth. The $67 billion deal will streamline ownership of Cingular Wireless. It also reunites AT&T with one of the baby bells it gave up in 1984.

Former Minnesota Twins center fielder Kirby Puckett suffered a stroke today. He's 44 years old and collapsed at home in Arizona.

Uncertain hours in West Virginia. A worker at a power plant is feared dead after a smokestack erupted into flames last night. Crews cannot search for his body until the fire burns itself out. Three other workers were pulled to safety by a helicopter.

And this is our top story. CNN has exclusive access to the Arab company that wants to manage six American ports. The CEO of Dubai Ports World finally tells his side of the story.

(BEGIN VIDEOTAPE)

LIN (voice over): This is the Unite Arab Emirates company under Washington's microscope, Dubai Ports World, now at the center of the storm in Washington. The pressing question, should the company be allowed to run operations at six American ports. In his exclusive interview, CNN's Wolf Blitzer asked about security concerns. WOLF BLITZER, CNN ANCHOR: How can you assure the American public that if this deal goes through, the ports in Baltimore and Miami, New York, New Jersey, New Orleans, these are some of the major ports in the United States, that terrorists won't come in, infiltrate through you, DP World, and create havoc at these ports?

MOHAMMED SHARAF, CEO, DUBAI PORTS WORLD: I would say, number one, we are ISPS approved terminal operator.

BLITZER: What does that mean?

SHARAF: That means international standards for the port security. So we have -- we are approved by the international organization. We are approved by the U.S. authority to come into the U.S. Look at -- we also -- I would say, look at our credentials in different ports around the world, whether it's in Korea, it's in China, it's in Europe.

LIN: Security has been the focus of the firestorm over the deal. Democratic New York Senator Charles Schumer is one of the lead critics.

SEN. CHARLES SCHUMER, (D) NEW YORK: I've been made more dubious today by the interview where, you know, Mr. Sharaf, the head of Dubai Ports World, didn't know basic security criteria that his company should use.

BLITZER: What percentage of the containers here in Dubai are actually physically inspected?

SHARAF: That I don't have the real figure. I think the customs people are the right people . . .

BLITZER: The UAE customs?

SHARAF: The UAE customs, yes, they would be the right people to tell you what percentage.

LIN: The percentage of Americans concerned about the deal is still high. According to a CNN/"USA Today"/Gallup Poll, when asked about whether they were in favor of the proposed sale of cargo operations at the ports to the Arab company, only 17 percent said they favored the deal, 66 percent said they opposed it, with 17 percent saying they were unsure. The deal will undergo a more comprehensive 45-day review. Sharaf indicated his company would agree to additional security.

SHARAF: Yes. And within that 45-days, and later on if they require, we would also go through all the security measures as far as personnels are concerned.

LIN: Critics like Schumer still worry the 45-day review will be little more than a rubber stamp.

Carol Lin, CNN, Atlanta.

(END VIDEOTAPE)

LIN: Now the democrats aren't the only ones complaining. Some Republican lawmakers are also opposed to the port deal, and today two of them called for Congress to have more control. Let's go live now to CNN White House correspondent Dana Bash.

Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Carol.

Well you remember it was a week ago that the White House, Republican leaders and DP World agreed to an extra 45-day review. The hope here at the White House then was that would calm the GOP revolt over the issue. So far, that hasn't happened.

(BEGIN VIDEOTAPE)

BASH, (voice over): President Bush came home from South Asia to a harsh reality, leading Republicans are not backing down in opposing a Dubai company operating six U.S. port terminals, saying an administration that prides itself on protecting America never should have embraced it in the first place.

REP. DUNCAN HUNTER, (R) ARMED SERVICES CHAIRMAN: I think they looked at it from a very, a very superficial level and they didn't get the intelligence briefs that go to Dubai's activities.

BASH: House Armed Services Committee Chairman Duncan Hunter, a Bush stalwart who's vowing to stop this deal, said the president did not have basic facts about what he calls security red flags because the secretive approval process, led by the Treasury Department, is too weighted toward the business deal, not security. That's something Homeland Security Committee Chairman Susan Collins, another top Republican, says she's introducing legislation to change.

SEN. SUSAN COLLINS, (R) HOMELAND SECURITY CHAIRWOMAN: I think we need to scrap the committee, start again, constituted within the Department of Homeland Security, have the secretary of Homeland Security chair it, have a member of the intelligence community on it.

BASH: While Republicans are distancing themselves from Mr. Bush on the ports issue, one Democratic candidate is already using it in his campaign. Congressman Harold Ford is running for Senate in Tennessee, but made this commercial in Baltimore, one port DP World would operate.

REP. HAROLD FORD, (D) TENNESSEE: President Bush wants to sell this port and five other to the United Arab Emirates. A country that had diplomatic ties with the Taliban, the home of two 9-11 hijackers whose banks wired money to the terrorists.

BASH: Meanwhile, DP World is stepping up its campaign to save the deal. It's CEO telling CNN his company meets security standards on five continents where it operates and they would not get business if they weren't safe. MOHAMMED SHARAF, CEO, DUBAI PORTS WORLD: Any personnel coming in to work in U.S. will have to go through U.S. immigration, will have to go through U.S. security authorities and then only they can come in and work.

(END VIDEOTAPE)

BASH: Now, privately, for a couple of weeks now, Carol, Bush aides have said they understand that eventually the process that allowed this deal to go through will eventually have to be reformed or changed, but specifically in response to Republicans today, saying that they should be -- that this should be reformed immediately. A White House spokeswoman said that they welcomed those discussions and will be talking to lawmakers about their ideas.

Carol.

LIN: Dana, what about the fact that critics like Democratic Senator Charles Schumer from New York, who says that this 45-day process is simply going to be just another rubber stamp on this deal?

BASH: You know, actually, the president, if you talked to even some Republican leaders, Carol, fanned the flames of that skepticism last week after they had agreed to this additional process. He simply said, in the Oval Office, that his mind hasn't changed. That did not go over well with the people who were trying to calm the fear and calm the concern about this particular issue.

The idea now, in talking to people at the White House, is that there is so much scrutiny on this, as you heard, from Republicans, from Republicans across the board, that perhaps this will be a much more exhaustive investigation, an exhaustive search into just exactly what the security concerns exactly are. But I can tell you, in talking to a Republican who has been involved in discussions with the White House, with DP World, he says that they understand that there's a growing understanding that perhaps they are going to have to really change the way this deal is structured, Carol, in order to get this deal through eventually.

LIN: All right, Dana, thank you so much with the latest from the White House.

Now Wolf Blitzer was the one who nailed that exclusive interview with the CEO of Dubai Ports World, so we are going to bring you more of his behind-the-scenes tour of that United Arab Emirates company.

Also a reminder here, stay tuned to CNN day and night for the most reliable news about your security.

This was big news today, the nation's largest telecommunications company wants to get a lot bigger. In a $67 billion merger, AT&T is set to reunite with BellSouth. But it is not a done deal yet. Our Allan Chernoff is on the telephone from New York.

Allan, what does this mean to subscribers of these telephone companies and especially Cingular Wireless? ALLAN CHERNOFF, CNN CORRESPONDENT: Right, Cingular Wireless is really the driving force of all this because, as you know, Carol, Cingular wireless is actually co-owned by AT&T and BellSouth and they've been sharing this business for some time. So this will combine the ownership and that will really allow the companies, both of them, to save some serious money. They're talking about saving $2 billion a year, within two years, of this deal actually closing. So that's a major driver behind this deal.

Now, AT&T buying BellSouth, keep in mind, this is not your parent's AT&T. AT&T itself is a product of a merger of only last year when SBC bought AT&T. And this really is going to be a company to be dominated by the SBC leadership. The CEO is going to be Edward Whitacre, who was head of SBC, now head of AT&T, and it's also going to be based in San Antonio, Texas.

Also, the company here is trying to boost the stock. They announced a $10 billion stock buy-back plan. That's a lot of money being spent on buying stock back. But keep in mind, this does need approval of stockholders and regulators. And if the companies do get the approval, they hope to close this deal within 12 months.

Carol.

LIN: Right. The consumer groups are already expressing their opposition. So is that bad news for consumers? Is there going to be confusion about who to call, what your rates are going to be, and who's going to be accountable for your phone service?

CHERNOFF: Well, Carol, you know, we've had that for quite some time. There's so many different companies in the telecommunications industry, it's all so much more complicated than it was back in the '70s just before the breakup of the old AT&T monopoly in 1982. So, of course, things are much more diffuse right now in this telecom business . . .

LIN: Right.

CHERNOFF: But we certainly do have lots of competition.

LIN: Right.

CHERNOFF: Not only among upstarts, but cable TV companies.

LIN: All right.

CHERNOFF: So you will see big battles between these telecom giants and the cable TV companies who want a piece of that share.

LIN: OK. Let's hope it means cheaper rates, Allan. Thanks very much for the latest.

Now fans and reporters are lined up along the red carpet, and the stars? Well, you're going to see. There they are.

And one man, who might be too busy to watch the Oscars tonight, is former Enron CFO Andrew Fastow. He is getting ready to appear in court tomorrow, this time as a witness. You're watching CNN LIVE SUNDAY.

(COMMERCIAL BREAK)

LIN: All week we've been reporting on the grim task of trying to find any more bodies in the ninth ward in New Orleans. Critical because 400 people are still unaccounted for. Sean Callebs from our Gulf Coast bureau, though, has some new developments in this search.

Sean, what's happened?

SEAN CALLEBS, CNN CORRESPONDENT: Well, Carol, you can see some of the cadaver dogs that have been working the area since March 1st. Well this afternoon the cadaver dogs located the first victims since they were brought in to town late last week. This was an individual found in the Lake View area of the city. The cadaver dogs have also been working in the ninth ward of New Orleans east.

Now State Medical Examiner Lewis Katalvi (ph) tells me that the dogs made an immediate hit when they went into the house on Fleur-de- lis (ph) Street. Apparently the landlord had contacted authorities because he had not heard from his tenant since the storm came through August 29th. And this was a house that was actually checked by police just a few days ago and cleared. But once the cadaver dogs went into the house, the medical examiner says they made an immediate hit. They sat down and looked at the ceiling.

So crews went up into the attic. They found the man who was tucked behind an air-conditioning vent. He apparently had been trying to crawl out of that small vent. Water, at the time, clearly had moved its way all the way up into the top of the house.

Now there are still some 2,000 people listed as missing, but the medical examiner believes he will find between some 300 and 400 bodies as these crews continue their work in the coming weeks. Now on Monday morning, the Army Corps of Engineers is going to be working with the New Orleans Fire Department, its 16 members of the special ops team, as well as these dog teams that are from three states, Maine, Missouri, and Georgia.

Now they will go to areas where people have called before and said, "we haven't heard from a relative or a loved one. We believe the person could be in this home." They'll check those homes and also they'll go back to check areas where dogs have made positive hits before. From October until December the cadaver dogs had been working, but the city simply ran out of money and had to stop all of its searches. FEMA recently approved $400,000 for overtime, so now they're going to go back into these houses and look again.

LIN: Sean, thank you very much.

We've also got some other news across America as well.

The cleanup is continuing in San Bernardino County, California, after a rock concert melee. Did you hear about this one? Authorities say that the punk rock venue turned violent when the crowd began pelting them with rocks and bottles and officers had to respond with tear gas. In the end, several people were injured and businesses were vandalized.

Now, in Boston, cruelty hits a new low. Police say two men attacked a homeless man sleeping in a park and then came back later and set his legs on fire. A 911 caller reported flames five feet tall. The man is being treated at an area hospital. There have been no arrests so far.

And a West Virginia power plant worker is feared dead tonight after a massive smokestack catches on fire. Officials say a crew was replacing the lining on the 100 story tall smokestack when the fire did brake out. Three other workers were saved in a dramatic helicopter rescue.

Well, they were the smartest guys in the room. But tomorrow, they will be in a room of a different kind. Former Enron CFO Andy Fastow takes the stand against his old bosses, Ken Lay and Jeffrey Skilling. CNN's Chris Huntington has this preview.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT, (voice over): The hottest ticket in Houston is to federal court to see Andrew Fastow take the stand in the government's case against Ken Lay and Jeff Skilling. The infamous off-the-book deals that Fastow helped create ultimately sent Enron into collapse. Federal prosecutors hope his testimony will send his former bosses to prison.

JACOB ZAMANSKY, SECURITIES LAWYER: Andy Fastow is going to explain in detail how Enron hid the losses in off-book partnerships that he set up and he's going to say that Lay and Skilling were right there with him, they knew everything, and they approved it.

HUNTINGTON: Fastow was once Enron's financial boy wonder, but became the feds biggest catch when he was charged with a 98-count indictment. In early 2004, he cut a deal, pleading guilty to two counts and agreeing to cooperate in return for a 10-year prison sentence. Fastow was 28 when he joined Enron in 1990. Not renowned for his command of accounting principles, he did have a talent for creating complex transactions that inflated Enron's profits by sweeping losses and debt off of its public financial statements.

PROF. DOUG CARMICHAEL, BARUCH COLLEGE: Someone with some understanding of business should be able to pick up the financial statements, read the notes and understand the full effects of those transactions on the financial statements. With Enron, they couldn't.

HUNTINGTON: In the late '90s, analysts applauded Fastow's financial wizardry as ground breaking and innovative. He won "CFO" magazine's excellence award in 1999. But when Fastow's deals started to fail in late 2001, Enron buckled under its massive debt, imploding into what was then the biggest bankruptcy in U.S. history. Initially Fastow and his lawyers insisted he had just followed orders. DAVID BOIES, FASTOW DEFENSE LAWYER: Those transactions will be transactions that were reviewed by the board of directors of Enron, reviewed by the top management of Enron, and which, I believe the record will show, the audit committee of the board and the outside auditors.

HUNTINGTON: That argument failed to protect Fastow. But it will likely be the crux of his testimony, that Jeff Skilling and Ken Lay knew exactly what the of-the-book deals were used for -- a shell game to fool investors and prop up Enron.

Chris Huntington, CNN, New York.

(END VIDEOTAPE)

LIN: On a much lighter note, it is Oscar night, ladies and gentlemen. Pretty faces, amazing gowns, the whole shebang.

SIBILA VARGAS, CNN ENTERTAINMENT CORRESPONDENT: The beautiful people are definitely out tonight. More from the red carpet at the 78th Annual Academy Awards. That's coming up.

LIN: Thanks, Sibila.

And then a CNN exclusive, Wolf Blitzer talks with the CEO of Dubai Ports World. Hear why he says his company should manage six major U.S. ports.

From the CNN Center in Atlanta, you're watching CNN LIVE SUNDAY.

(COMMERCIAL BREAK)

LIN: All the drama, the makeup, the camera angles. Tonight's Oscar buzz, expect a show like nothing you've ever seen. Sibila Vargas is live at the Kodak Theater in Los Angeles.

Sibila.

VARGAS: Hey, Carol.

The red carpet has been just littered with beautiful people. And my colleague A.J. is down on the red carpet. He just caught up with three-time Oscar Nominee George Clooney.

A.J.

GEORGE CLOONEY, ACTOR: You know, it's a big year for me.

A.J. HAMMER, CNN ANCHOR: Nominated three times. And I'm not a betting man, but if I were to guess which one you would want to win, if only one award could be won, it would be the best screenplay award.

CLOONEY: I don't know, that's a fun one, because you get to sit back and write something and then it get nominated for six Academy Awards. That's pretty fun. Also because I could share it with Grant, who I've worked with for years. That would a fun one. But they're all fun. The truth is, we haven't really been, you know, weighed down with trophies at all these events, so we're pretty good at losing. We've gotten actually very good about it. So I'm not really concerned all that much with this. You know people keep come up and say oh I'm sorry at the (INAUDIBLE) we get wiped out. I go, you know, you're not going to make it a bad year for me.

HAMMER: Yes, I don't think you're having a bad time with them.

CLOONEY: Yes.

HAMMER: George Clooney, best of luck tonight.

VARGAS: Certainly is a good year for Mr. George Clooney, nominated for best director for "Good Night and Good Luck," and also nominated for a completely different movie, "Syriana," best supporting actor.

Carol, back to you.

LIN: Could be his night.

Hey, Sibila, you've got a bird's-eye view of that red carpet. Are you seeing any fashion trends because, man, the beautiful people and the beautiful clothes down there are amazing?

VARGAS: I'm telling you, absolutely gorgeous. But I don't think there's really a trend. I mean, I've seen dark colors and light. Meryl Streep wear something very dark, so did Rachel Weisz. But then you had Michelle Williams, best supporting actress nominee, just in a beautiful canary yellow dress. Keira Knightley was also out on the red carpet. She was wearing sort of a plumb beautiful dress, Vera Wang. Charlize Theron, I hear, is going to be wearing something very light. So, no trends really. I think everybody's just kind of going for it and it just going for whatever makes them look best.

And also got to see Felicity Huffman. Very kind of revealing outfit. She's wearing black. And I'm not sure if she's going to win or not, because a lot of people are thinking that it might be Reese Witherspoon for her works a June Carter Cash in "Walk the Line." But, you know, I did a little research and it seems that a lot of the women who have taken home awards have worn black. So Felicity Huffman is wearing the right color.

LIN: Interesting.

VARGAS: Yes.

LIN: You're right, Julia Roberts, I remember when she wore the Vintage Valentino.

VARGAS: Beautiful. Oh, wasn't that just gorgeous.

LIN: It was. So do you have any predictions? Because I think the female category, best actress category, is the most competitive. I think it's going to be right down to the wire. VARGAS: I think it is, as well. But, you know, a lot of people have spoken about Reese Witherspoon. She took home the Golden Globe and the S.A.G. Award. She is the favorite right now to win. But, like I said, I mean, Felicity Huffman, she did such a brilliant job. She played a man, a man, that's a preoperative transsexual in "Transamerica." That is quite a leap. That is quite a stretch. But the thing is, Carol, not a lot of people got to see that movie. A lot more people got to see "Walk the Line." So whether that's going to be factor tonight, we don't know. But, again, if she does -- Felicity Huffman does win, it will be for a role that not too many people have seen.

LIN: Right. Right. Gosh, Sibila, it's going to be exciting. Thanks so much for bringing it all to us live.

VARGAS: Sure.

LIN: Well, we're also going to be talking about politics and Hollywood. What are the celebrities talking about on the red carpet. Bill Schneider, yes our political analyst, is actually at the Academy Awards. He gets invited to the best parties. And tonight at 10:00 Eastern, he is going to take us behind the scenes for the latest political buzz at the Oscars.

Well, it looks glamorous, but the motion picture industry is also a powerful force to be reckoned with in Washington. Our Gary Nurenberg shows us more.

(BEGIN VIDEOTAPE)

GARY NURENBERG, CNN CORRESPONDENT, (voice over): Movie making is big money.

UNIDENTIFIED MALE: Take the target out.

JACK VALENTI, FORMER CEO, MPAA: Last year it was over $45 billion.

NURENBERG: A planetary success story.

VALENTI: The American movie industry has a surplus balance of trade with every single country in the world.

NURENBERG: It sometimes needs government help.

PAT CHOATE, AUTHOR, "HOT PROPERTY": They have worked very closely with a succession of administrations.

NURENBERG: And sometimes needs the government to leave it alone.

DAN GLICKMAN, CEO, MPAA: We don't want the government coming in and telling us what we can put on the air.

NURENBERG: That balancing act, we need government help, we need the government to leave us alone, is executing by one of the most successful lobbying shops in Washington, the Motion Picture Association of America.

The MPAA brokered the deal that led to the voluntary movie rating system that's been in place for 38 years. But the issue that consumes it today is piracy, the selling of unauthorized copies of American films.

CHOATE: This cost American companies a great deal of money.

NURENBERG: Pat Choate is the author of "Hot Property: The Stealing of Ideas in an Age of Globalization."

CHOATE: China alone is $3 billion to $5 billion of movies are stolen every year.

NURENBERG: Dan Glickman is the MPAA CEO.

GLICKMAN: Piracy has got the potential of striking a dagger in the heart of this business.

NURENBERG: So part of the MPAA's job is to get the State Department to help, and it does.

ADAM ERELI, STATE DEPARTMENT SPOKESMAN: This is a key topic of discussion between U.S. officials and Chinese officials.

NURENBERG: Officials at the Chinese embassy in Washington did not return CNN's calls about piracy. The Senate plans a hearing on piracy in China later this week. The ease of downloading films to handheld devices also worries the MPAA.

GLICKMAN: At the same time that we're encouraging these new technologies, we've got to do our best to protect them from being pirated.

NURENBERG: It's a digital age problem for an industry that has been dealing with new technology issues since the new technology was talkies (ph).

Gary Nurenberg, CNN, Washington.

(END VIDEOTAPE)

LIN: And much more on our CNN exclusive, the ongoing political storm surrounding port security. Can Dubai Ports World be trusted? We have an exclusive interview with the company's CEO.

And an Arizona court separates defendants by race, now the district attorney is suing.

SHANON COOK, CNN ANCHOR: Hi, I'm Shanon Cook, when we go global, what these thousands of people in Indonesia are demanding from the U.S. You are watching CNN LIVE SUNDAY.

(COMMERCIAL BREAK)

LIN: Welcome back. And here is a quick look at what is happening right now. Some members of Congress want more legal control over who manages U.S. ports, but the CEO of an Arab firm at the center of this controversy has his own message. You are going to hear it in one minute in an exclusive CNN interview.

A University of North Carolina grad heads to court tomorrow. He is accused of trying to deliberately run down nine people. The 22- year-old said he wanted to avenge the death of Muslims around the world.

And former Minnesota Twins baseball star Kirby Puckett is recovering tonight from a stroke. The Twins former team manager says with any luck, doctors think Puckett will be all right. He is only 44 years old.

And Iranians come out in full force to support their country's nuclear policy. Iran is threatening to resume large-scale uranium enrichment if it gets hauled before the U.N. Security Council.

Another "Security Watch" tonight. An exclusive interview with the CEO of the Arab company at the center of the port controversy. He sits down with Wolf Blitzer in Dubai and explains exactly why Americans should trust his company to oversee U.S. ports.

(BEGIN VIDEOTAPE)

BLITZER: We are here in Dubai where officials are making a major push to try to convince the American public that this deal to secure the operational rights to six major ports in the United States is a deal worth making.

We spoke with the CEO of Dubai Ports World, the company that wants to take charge of those ports. Listen to what he said.

SHARAF: Well, as far as we are concerned, the deal is going to go through.

We operate in five continents of the world. We are recognized as the best in the industry.

Obviously, the American people have an issue. We would like to know that and rectify if there are any security measures that we need to take and we have not taken it yet.

BLITZER: But one vocal critic back in the United States, Senator Chuck Schumer of New York, is not convinced. He says the deal still poses significant risks to the American public.

SEN. CHUCK SCHUMER (D), NEW YORK: So I'm very dubious of this deal and I want to see the review, but the strong burden of proof is on those who want the deal to go forward, given the country Dubai's nexus with terrorism in the past, not on those of us who say the deal shouldn't.

BLITZER: We are going to spend the next couple of days taking a much closer look at the overall situation in the United Arab Emirates, and we are going to go back to the port, Dubai Ports World, to see what is being done to secure the overall situation there.

I'm Wolf Blitzer in Dubai.

(END VIDEOTAPE)

LIN: Remember to stay tuned to CNN day and night for the most reliable news about your security.

So do you ever think there is justification for separating people by race when it comes to going to court? An Arizona district attorney is suing to stop the state from offering Native Americans and Hispanics their own DUI court.

He says they are unconstitutional. But the Mexican Legal Defense Fund says it's their legal right. So both are with me tonight. Andrew Thomas is the district attorney from Maricopa County. And John Trasvina is with the Mexican-American Legal Defense Fund -- Legal Defense Aid (sic) Fund.

Welcome to both of you gentlemen tonight. John, let me begin with you, why are these courts necessary?

JOHN TRASVINA, MEXICAN-AMERICAN LEGAL DEFENSE & EDUCATION FUND: These courts are really an extraordinary intention for public safety. And they should be recognized and supported rather than criticized. The National Association of Counties did this.

They are not separated by race, but they are separated by language ability, to make sure that the people who get the information to overcome their drunk driving-ness, to overcome their problems, actually get the information. That's why eight out of nine graduate successively faster than those in the English-speaking therapy programs.

LIN: Andrew, you contend that the felons who go through these courts get lesser sentences than regular DUI courts. Do you have any evidence of this?

ANDREW THOMAS, MARICOPA COUNTY ATTORNEY: Yes, we do. And in fact, the statistics and the information that was just related to you is not accurate as far as we can tell.

What has happened is the superior courts in Maricopa County, which is the greater Phoenix area, the fourth-most populous county in America, has set up DUI courts segregated by race. One is a general DUI court, one is reserved for Hispanic or Spanish-speaking defendants. And then a third is reserved for Native Americans, which is an explicitly race-based court.

The courts have argued that this reduced recidivism rates. They have not provided any evidence of this. The statistic that the gentleman from MALDEF just gave is based on nothing but thin air.

And what we have been able to determine, our office, which is the district attorney's office -- or county attorney's office here is that people who are in the general DUI court are receiving on average more than twice the jail sentences being handed out to Hispanic defendants or Mexican-American defendants, basically people who speak Spanish, in the Hispanic court.

And so there is clear racial discrimination. It is clearly unconstitutional. And I wonder how the representative from MALDEF would feel if it were -- if the shoe were on the other foot, frankly.

LIN: Well, we only have a few second left. But, John, what happens if these courts go away?

TRASVINA: Well, public safety is endangered. Clearly we want to get drunk drivers off the roads and we want to get them into services that they need in order to keep the public safe. This program does it.

The disparities that the district attorney is talking about amount to about four-day difference. And that is just a deceptive use of numbers on his part.

LIN: All right, well...

TRASVINA: And so we need to work together to make this happen, to make Arizona...

LIN: Obviously this is a...

TRASVINA: ... state safe.

LIN: It is a contentious issue, and the district attorney has filed a federal suit, so we will see where it goes in the court system. Thank you very much, gentlemen.

THOMAS: Thank you.

TRASVINA: Thank you.

LIN: I wish we had more time.

Now, is the boss getting under your skin? He might be literally if you work for one Cincinnati company. Coming up, keeping track of employees with chip plants.

COOK: Hi, I'm Shanon Cook. Two years later, indictments may be near in the Madrid terror bombings. The details coming up. CNN LIVE SUNDAY will be right back.

(COMMERCIAL BREAK)

LIN: In case you missed it, let's check some of the highlights from the Sunday morning talk shows. Pakistani President Pervez Musharraf didn't hold back when he was asked about his feelings toward Afghanistan's president, Hamid Karzai.

On CNN's "LATE EDITION," Mr. Musharraf angrily accused Mr. Karzai of publicizing intelligence that suggested a Taliban leader is hiding in Pakistan, a move Mr. Musharraf insisted was politically motivated. (BEGIN VIDEO CLIP)

PERVEZ MUSHARRAF, PAKISTANI PRESIDENT: Why were they waiting for a presidential visit to hand me over this list? What was stopping them from giving this list or sharing these numbers immediately on occurrence? Is that the way intelligence functions?

I am totally disappointed with their intelligence. And I feel there is a very, very deliberate attempt to malign Pakistan by some agents, and President Karzai is totally oblivious of what is happening in his own country.

(END VIDEO CLIP)

LIN: Now on NBC's "MEET THE PRESS," two former vice presidential candidates spoke about, well, the controversial deal allowing an Arab company control of operations at several U.S. ports.

(BEGIN VIDEO CLIP FROM "MEET THE PRESS")

JACK KEMP (R), FORMER VICE PRESIDENTIAL CANDIDATE: I think it would be a mistake for us to turn our back on a friendly Arab country that is supporting us in the war on terror.

TIM RUSSERT, NBC HOST, "MEET THE PRESS": Senator Edwards?

JOHN EDWARDS (D), FORMER VICE PRESIDENTIAL CANDIDATE: Well, I don't think we should discriminate against anybody, including Dubai, the UAE. But I have a different view about what we should do.

I think that this is sufficiently important to the safety and security of America that American companies should be doing it. I would start by saying, companies that are owned by foreign governments should not be operating or providing security for our ports.

I would like to go further than that and say, foreign companies shouldn't be doing this. We ought to be doing it ourselves. I think there is a practical issue with that, which Jack just made a reference to, that they are already doing so much.

So that's the starting place. I also would like to see us use this as a vehicle to talk about what is actually happening in our ports, 5 percent of our containers are inspected. We can do much better than we are doing right now.

Number one, we ought to be moving toward the goal of screening all containers. We also ought make sure that we have a tracking system so that we know what has happened to them in transit.

(END VIDEO CLIP)

LIN: Also on "FOX NEWS SUNDAY," you have heard about the criminal -- the DOD criminal investigation into the death of Pat Tillman, well, this is what the chairman of the U.S. Joint Chiefs, General Peter Pace, had to say.

(BEGIN VIDEO CLIP FROM "FOX NEWS SUNDAY")

GEN. PETER PACE, CHAIRMAN, JOINT CHIEFS OF STAFF: I think it's important to chase every single possibility and the inspector generals had decided that there is one more step to take, and they are going to do that to make sure that the entire picture is painted clearly and accurately so the family can have as much information as possible.

(END VIDEO CLIP)

LIN: Now remember, every Sunday at 7:00 Eastern, we are going to bring you the best headlines from the Sunday talk show circuit, so you don't have to watch five hours.

Thousands rally against the U.S. in Indonesia. Shanon Cook has more details on that story and other headlines -- Shanon.

COOK: Hey there, thank you very much, Carol.

Thousands of Muslim Indonesian protesters staged a peaceful demonstration against the United States today, around 5,000 gathered in Jakarta and marched outside the U.S. embassy. They have denounced President Bush as a terrorist and demanded that U.S. troops leave Iraq and Afghanistan. They also protested against published cartoons depicting the Prophet Mohammed. Some 2,000 police officers kept watch on the rally.

To Spain now. The second anniversary of the deadly Madrid train bombings is less than a week away and the judge investigating the case says he is close to issuing indictments against as many as 40 suspects. On March 11th, 2004, bombs went off in -- on four commuter trains, killing 191 people and injuring another 1,741.

And look at these images here. This is Bavaria, Germany, where record snow levels had caused major traffic jams. Trains, buses and trams ground to a halt today, trapping some in their cars for extended periods. The area is experiencing its coldest winter in two decades and has been blanketed by 20 inches of snow in some parts in (INAUDIBLE). Germany not the only area experiencing this bad wintry weather, France, Italy, and Switzerland as well.

LIN: All right. Thanks very much, Shanon.

COOK: Thanks, Carol.

LIN: Now we all know that after 9/11, everything changed, especially when it comes to security. But getting a chip implanted under your skin for security? Has one company gone too far with its employees? That's next on CNN LIVE SUNDAY.

(COMMERCIAL BREAK)

LIN: In this week's "Leading Edge," it sounds like something from a science fiction movie, a computer chip implanted in your skin for security. It is the wave of the future -- or maybe not.

Our Daniel Sieberg checks out who is using it. (BEGIN VIDEOTAPE)

SEAN DARKS, CEO, CITYWATCHER.COM: There is my chip right there.

DANIEL SIEBERG, CNN CORRESPONDENT: So you can actually see it.

(voice-over) : It is about the size of a grain of rice and it feels like it too. But what that tiny chip can and can't do has become the source of much concern and confusion.

DARKS: I was in a grocery store and a couple of ladies said, hey, you are the guy with the chip in your arm, aren't you? You know, run it across the scanner so we can see if you get a discount on groceries.

SIEBERG: Sean Darks is the CEO of CityWatcher.com, a small company in Cincinnati that is the first U.S. business to use chip implants in its employees.

DARKS: What you are looking here is recorded footage back in August of a number of drug deals.

SIEBERG: CityWatcher provides video surveillance for clients and for the police. And the video that it collects, like this drug bust, is the company's biggest asset. And they say they need to keep it under more than just lock and key.

(on camera): You might have one of these where you work, a key card that allows access to different parts of the office. A lot of businesses use them. But here at CityWatcher, there is one particular room where you need either the implanted chip in your arm or a key chain.

And Sean says the choice is up to the employee.

(voice-over): CityWatcher employees Chuck Gordon and Khary Williams require access to the secure server room where the video is stored. One got the implant, and the other decided not to. He carries the chip in a key chain instead.

KHARY WILLIAMS, CHOSE NOT TO GET IMPLANT: That's one of the reasons that I don't want to do it. It is just -- it's creepy to have, knowing that something is there the entire time.

SIEBERG (on camera): But, Chuck, you could get over that feeling?

CHUCK GORDON, CHIP IMPLANTED IN HIS ARM: Right now I guess the big thing is, Big Brother is to be watching (ph) you (ph) over this. Basically the chip is dormant except unless you go in front of the access panel. And that's the only time it activates. So other than that, I really have no worries about it.

SIEBERG (voice-over): Chip implants have been common in pets for several years, giving the owner peace of mind that their lost animal could be identified. And for retail giant Wal-Mart, the chips are used as smart bar codes to keep track of thousands of products.

But for use in people, well, privacy advocates think we shouldn't open that door.

MARC ROTENBERG, ELECTRONIC PRIVACY INFO. CTR.: The concern is a privacy concern, because when that chip is placed in you it becomes a permanent form of identification. If it were a bracelet, for example, or an I.D. card, you might choose not to carry it or not to wear it, but if it is in your skin, you are pretty much stuck with it.

SIEBERG: CityWatcher employee Chuck Gordon was so stuck on the idea that he accompanied his wife Mary as she got the implant for medical reasons...

UNIDENTIFIED MALE: Why don't go ahead and lay down up here for a minute.

SIEBERG: ... so doctors can pull up a record of her allergies in a emergency.

UNIDENTIFIED MALE: You are going to feel like a little stick and then a bee sting, OK? And that is going to numb the skin up for us, OK?

SIEBERG: At this point, if you are squeamish about needles, it's best to turn away for a second. Getting an implant is not a pretty sight.

UNIDENTIFIED MALE: A tiny little incision here. Put the needle in. We pull the needle out. We put a Band-Aid on her and she's chipped.

SIEBERG: The doctor will send the unique 16-digit number on Mary's chip to the chipmaker for safekeeping. But critics question the security of the system.

ROTENBERG: It is the case that chips have been hacked. It's possible to duplicate them. It's possible to commit fraud with them. And those are also risks for people who are using this chip.

SIEBERG: Three out of the five CityWatcher employees who need access to the video room have opted to have the chip implanted. The other two carry their chips on a key chain. Either way, Sean Darks says his company's secrets are safe and let the chips fall where they may.

DARKS: You can't be read. You can't be tracked. It doesn't have GPS. It doesn't emit a signal. I do not know where my employees are during the course of the day unless I call them on their cell phone. What we like to say here at CityWatcher, that it helps with employee retention because our valued employees don't want to leave their arm if they decide to leave the company.

SIEBERG: Like it or not, we are in that brave new world, and it might not be long before your boss is literally getting under your skin. Daniel Sieberg, CNN, Cincinnati.

(END VIDEOTAPE)

LIN: One more thing, you might wonder what happens if you leave the company. Well, if you don't want the chip anymore, you have to cut it out.

All right. There is still much more ahead on CNN. Up next, "CNN PRESENTS: Saving My Town." After being destroyed by Hurricane Katrina, Bay Saint Louis, Mississippi, is trying to rebuild and move forward. CNN's Kathleen Koch takes us on a personal journey back to her hometown to see the progress. That's next on "CNN PRESENTS."

This hour's headlines when I come back.

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