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PAULA ZAHN NOW

JonBenet Ramsey Murder Suspect Headed to Colorado; Interview With Richard Grasso

Aired August 22, 2006 - 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: Glad to have you out there with us tonight. Appreciate it.
We have some breaking news in our "Top Story" tonight, the JonBenet Ramsey investigation. In just a moment, we will have exclusive new details on what suspect John Mark Karr has told authorities about his involvement with the killing.

This was Karr's first day in court in connection with the case. A judge in Los Angeles cleared the way for Colorado authorities to take custody of him. Karr stood quietly in court, wearing an orange jail jumpsuit, choosing not to fight extradition. His only words were, "Yes, Your Honor," when the judge asked him the routine questions.

But we also heard today that Karr, who has been under incredible media scrutiny, was briefly under a suicide watch in the L.A. jail, because, we are told, he was terrified, exhausted, and confused. Now, that is according to one of the lawyers who has been advising him, who also says Karr is not mentally ill and is not seeking attention.

Tonight, we have all the latest information on the Ramsey case.

But we start with that breaking news right now.

Dan Simon joins us from Los Angeles with the very latest.

Dan, what do you got?

DAN SIMON, CNN CORRESPONDENT: Well, Paula, as far as we know, John Karr is still being held here at the L.A. County jail before going off to Colorado. Today's court hearing paved the way for that. He didn't have much to say in court. But, as we are learning, he had plenty to say when he first touched down on U.S. soil.

(BEGIN VIDEOTAPE)

JOHN MARK KARR, SUSPECT: I love JonBenet, and she died accidentally.

SIMON (voice-over): John Mark Karr's statements about the Ramsey case didn't end in Thailand. CNN has learned, he gave additional details about his supposed involvement to law enforcement here in the U.S.

A source familiar with John Karr's transfer back to the United States says, he began speaking freely.

Referring to the night of JonBenet's murder, the source says Karr blurted out -- quote -- "Everybody says I couldn't know my way around the house, but I got in the house around 5:00 and I stayed there all night. They" -- meaning the Ramseys -- "didn't come back until 10:00."

It is true that the Ramseys were out late the night of the murder, but there's no evidence made public tying Karr to the scene.

UNIDENTIFIED MALE: Remain seated when we order the court to get in session.

SIMON: Karr's latest public outing at a Los Angeles courthouse for an extradition hearing -- he appeared stoic and somber, as he faced a judge for the first time in connection with the Ramsey case.

UNIDENTIFIED MALE: What is it that he would like to do?

UNIDENTIFIED FEMALE: Your Honor, Mr. Karr has elected to waive extradition, and he has filed the paperwork.

UNIDENTIFIED MALE: He has?

SIMON: The judge wanted to make sure Karr fully understood his decision.

UNIDENTIFIED MALE: Do you understand that, by signing this form, you are agreement to be extradited to Colorado?

KARR: Yes, Your Honor.

UNIDENTIFIED MALE: All right. The court finds that the defendant, knowingly and intelligently, waived his right to the issuance and service of a governor's warrant.

SIMON: Karr requested, an L.A. public defender represent him in court. But he has been seeking the advice of two Northern California lawyers, who say they met with him at the jail.

One of them, Jamie Harmon, refused to say that Karr has made a murder confession.

UNIDENTIFIED FEMALE: Are you an innocent man?

KARR: No.

JAMIE HARMON, ATTORNEY: His statements are taken out of context. They're sound bites. I consider them as statements made by Mr. Karr in the throng of the media.

SIMON: Harmon declined to say if she think he was involved in JonBenet's death, but did say Karr is an intelligent person, who is being misportrayed in the media.

HARMON: My overall opinion of him is that he's a very intelligent man, that he's a different sort of person than most of us walking around the face of the planet. And that differentness has been construed in the media as wrong or somehow unbalanced. And I don't find that to be true at all. I found him to be very engaging, very bright, very articulate.

SIMON: She says Karr is anxious and ready to begin the next phase of the case in Colorado. It seems he won't have to wait much longer.

(END VIDEOTAPE)

ZAHN: So, Dan, let's kind of square up some of what he said in the car today, vs. previous statements. Can you make sense of any of that for us?

SIMON: Well, he basically said the same thing, except, this time, he made those statements in front of U.S. law enforcement officials, when he first landed here in Los Angeles.

And -- and, Paula, we're learning something else today. We know that the attorney for Karr's ex-wife put out a statement. And he says that -- that the ex-wife met with Boulder detectives, and basically reiterated her belief that she believes that Karr was with her and the family back in December of 1996.

The problem is, she has not been able to find a photograph, which she suggested -- which she suggested that she might have, of -- of Karr and the family of -- and all of them together on Christmas 19 -- in 1996. She says she is going to continue searching for that -- Paula, back to you.

ZAHN: It's really hard at this hour to see where that is going to lead anybody. Dan Simon, thanks so much.

And our "Top Story" continues with one of the most startling pieces of new information to surface tonight, John Mark Karr's latest claims that he had contact with JonBenet, maybe not his first.

An amazing audiotape said to have been made years ago could prove to be powerful new evidence against him.

Brian Todd has more on that.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Did John Mark Karr discuss the JonBenet Ramsey case with this woman five years before his arrest in Thailand?

Wendy Hutchens is a Northern California resident who says Karr came to her in 2001, just before he was arrested in Sonoma County on charges of possessing child pornography. Karr pleaded not guilty to those charges, but skipped bail, and never stood trial.

Hutchens' representative tells CNN, Wendy Hutchens was a childhood acquaintance of Richard Allen Davis, the man convicted of the 1993 kidnapping and murder of Polly Klaas. Hutchens told "The Santa Rose Press Democrat" newspaper and CNN affiliate KRON that she corresponded and talked on the phone with Karr at that time, initially about Klaas, then about the Ramsey case, conversations, she says, she recorded.

WENDY HUTCHENS, CLAIMS CONTACT WITH JOHN MARK KARR: He knew JonBenet's family, because his brother worked for the Ramseys, worked for Mr. Ramsey.

TODD: According to Hutchens' account to KRON, Karr told her he and his brother went to a Christmas party at the Ramseys' house in 1996.

HUTCHENS: He met JonBenet, sat on the stairs with her by the kitchen, ate pineapple with her, and talked to her, and, you know, did just funny voices, and some magic tricks, you know, quarter-behind- the-ear kind of thing, and, you know, got her confidence at that time. Then he went...

TODD: Then, Hutchens says, Karr claimed he found a storm window in the house, unlocked it, returned later, and snuck in, then hid in a guest bedroom, until JonBenet's parents were asleep.

HUTCHENS: He came -- got out from under the guest bed, and went into her room -- and she was just only barely asleep -- and woke her up, and said, her parents wanted her to come downstairs. And she remembered him from the party, and, so, she willingly went with him.

TODD: Karr has since claimed that JonBenet's death was an accident. Hutchens does not mention any specific confession from Karr.

This is an excerpt from an audiotape she gave to KRON, a voice she claims is Karr's.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: JonBenet. God, what a powerful thing, to just be alone with that little girl, that doll face. You know, she was just so incredible in mind, and so unreal in death. She's just so alive. She's so alive. She's so alive. She's so alive. I mean, she's wonderful.

(END AUDIO CLIP)

TODD: CNN cannot independently verify the authenticity of the tape. When we spoke to Hutchens' representative, asking to interview her, and for copies of the audiotapes and e-mails, the representative indicated she wanted to be paid. CNN declined.

"The Santa Rosa Press Democrat" also says it cannot independently verify the voice on the tapes or the copies of the e-mails. Hutchens told the newspaper and KRON, she recorded Karr at the request of local investigators and FBI. An FBI official in San Francisco first told CNN, the bureau's field office there had nothing to do with this case, then said the bureau had assisted the Sonoma County Sheriff's Office in its 2001 investigation of Karr.

The sheriff's office did not respond to our repeated calls, but Hutchens' name does show up in one document related to Karr obtained by CNN, a Sonoma County judge's order in October 2001, granting Karr's supervised release from jail in the pornography case.

The line reads, "Do not contact victim directly or indirectly," then has Hutchens' name next to it, with a slightly different spelling. That same line appears again in divorce papers filed by Karr's now ex-wife.

(END VIDEOTAPE)

TODD: And regarding that Christmas party that Karr apparently told Wendy Hutchens he attended at the Ramsey household in 1996, we do know that the Ramseys had a Christmas party on December 23 of that year.

So, should investigators have gone after John Mark Karr five years ago? The Sonoma County sheriff told "The Santa Rosa Press Democrat" that his department did not have clear evidence tying Karr to JonBenet Ramsey's killing. Despite extensive efforts, again, CNN has not been able to verify the authenticity of those tapes. And no law enforcement agency involved has been willing to say they're genuine -- Paula.

ZAHN: Certainly not the first time that police department has been questioned about his strategy.

Brian Todd, thanks so much.

(CROSSTALK)

ZAHN: Now, our "Top Story" coverage moves on now to two people who are intimately familiar with this case.

Trip DeMuth was a Boulder deputy district attorney who worked for years on the investigation, and criminal defense attorney Scott Robinson, who has been following the case since the very beginning.

Glad to have both of you with us.

So, Trip, we know that investigators have had a lot of time to talk to Mr. Karr. Once he gets to Boulder, how much do you think the prosecution will be able to get out of him?

TRIP DEMUTH, FORMER BOULDER, COLORADO, DEPUTY DISTRICT ATTORNEY: Well, I think, once he gets to Boulder, they're not going to be inter -- able to interview him anymore. He will have a lawyer, and -- and they won't be able to contact him, without first going to his lawyer, after that point.

ZAHN: So, basically, they're going to have a build a case on -- on what was discovered in Thailand and -- and what they learned in Los Angeles?

DEMUTH: Well, you know, I'm still very concerned about building a case based on his statements.

I think the physical evidence is what needs to be compared to him. And I think it's what's going to determine whether he's guilty or innocent in this case.

ZAHN: And, Scott, we just heard Dan Simon report that Karr told investigators some new details about what took place the night of the murder and vis-a-vis where he was.

If he was not read -- or re-read his Miranda rights once he got to the United States, is any of what he said admissible?

SCOTT ROBINSON, CRIMINAL DEFENSE ATTORNEY: Oh, everything Mr. Karr has to say is admissible, if there's ever a trial. And that's because he's not been subjected to custodial interrogation.

(CROSSTALK)

ZAHN: What does that mean?

ROBINSON: Without being expressly or implicitly questioned by authorities while in custody, Miranda warnings are not necessary. Any volunteered or spontaneous statement is fair game, and the vast majority of what Mark -- what Karr has had to say has been, in fact, volunteered.

ZAHN: We also know, Scott, today, that the attorney for one of Karr's ex-wives says she has not yet come up with a photo to prove that, in fact, her husband was with her family on that Christmas Day, back in 1996. How much will that compromise his alibi, if no pictures are ever dredged up?

ROBINSON: Well, I guess it look -- depends on if -- whether he's looking for an alibi, or whether he's looking to implicate himself in the murder, because, if he's trying to convince people that he killed JonBenet, then, a photograph placing him anywhere else, obviously, is very injurious.

On the other hand, if he's attempting to show it wasn't him, he's -- he and his lawyer are going to be struggling with the completely voluntary statements he has made up until now. You know, the problem with Karr is there seem to be pieces of information that are inconsistent with what actually happened that have been attributed to him. What we have to wait and see is if any of those attributions are correct.

ZAHN: So, are you saying, Scott, you think the DA got -- has the wrong guy here?

ROBINSON: I don't know. I think the DA is doing exactly the right thing to pursue it further.

The theory is that he must have said something that wasn't known to the great unwashed public. That's why they're going to all this trouble of bringing him back. But there may be very little way to connect him directly to the -- the crime scene, even with the DNA technology that is available, because of problems with the samples themselves.

ZAHN: And let's close on the issue of DNA evidence now with Trip.

We know there has been a lot of talk about potentially doing a DNA match with what was found on her -- her body, but there's also a palm print that's really critical to match up, too.

DEMUTH: That's right, Paula.

I mean, if the DNA matches to him, it puts him in Boulder County, in that house, at the time of the murder. Likewise, there's a palm print that was found in the area where JonBenet was found. And, if he matches that, then, it also puts him in Boulder County, inside that house, at or about the time of the murder, with no other explanation than he was the killer of JonBenet Ramsey.

So, that could be really important evidence for the prosecution.

ZAHN: Something we hope to learn more about in the days to come.

Scott Robinson, Trip DeMuth, thank you for joining us tonight.

DEMUTH: You bet.

ZAHN: Coming up: other top stories we're following tonight, including a closer look at a suspect who seemed to lead two very different lives.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): The John Mark Karr you haven't heard about from those who knew him best, the nice guy. And kids seem to like him. How could he end up here?

Plus: Wall Street's $200 million man, fired for making too much money, called a symbol of corporate greed. Tonight, an exclusive interview, the rise and fall of Richard Grasso -- all that and more just ahead.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAHN: Get ready for some surprises, because our "Top Story" coverage now turns to the early life of John Mark Karr, and some shocking comments from the people who knew him best.

What do former classmates, teachers and girlfriends think of the man who seems sexually obsessed with children and seems to claim he's responsible for the death of one of them?

Dave Mattingly now begins with John Mark Karr as a child.

(BEGIN VIDEOTAPE) DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): According to a longtime family friend, the troubles for John Mark Karr began at a very early age.

GEORGE MCCRARY, KARR FAMILY FRIEND: His mother, who was an evangelist preacher, had become delusionary, and felt that there were demons inside of her children, especially John.

MATTINGLY: George McCrary claims to have known Karr's father for decades. He says Karr's mother needed psychiatric treatment after she tried to kill him with fire.

MCCRARY: She prepared a -- a pyre around him on the bed, and was going to light it, and -- and -- and burn the demons.

MATTINGLY: Neither the family, nor their attorney, have been available to confirm or deny the story.

But Karr's parents divorced when he was just 8 years old. Court documents say, the marriage was irretrievably broken. The father got custody of Karr and his older brother, as well as all the family belongings, a 1962 Chevy, and some furniture.

The mother was allowed visitation, alimony, and money to buy a mobile home. Karr went to live with his grandparents in Hamilton, Alabama, when he was 11 or 12. Former classmates who knew him for years say he kept details of his family life quiet.

CINDY SHAW, FORMER CLASSMATE OF JOHN MARK KARR: It's scary to see him on TV today. You know, it's really scary, because I'm thinking, how did the John Karr that seemed so normal, you know, 20 years ago turn into this person on TV?

MATTINGLY: Former classmates and teachers say Karr was a teenager who loved attention. In high school, Karr drove a bright red DeLorean sports car. Former girlfriend Glenda Edwards says, Karr dreamed of becoming an '80s pop star.

GLENDA EDWARDS, FORMER GIRLFRIEND OF JOHN MARK KARR: He was into music when I first met him. And that's what attracted me to him.

MATTINGLY: Edwards says, Karr gave her a tape and picked out his stage name, Damon (ph) Karr. Teachers remember Karr as intelligent, focused, and persuasive, always very eager to get what he wanted.

Susan Cobb (ph) remembers how Karr lost his temper when she became drum major in the high school band, and he didn't.

UNIDENTIFIED FEMALE: John got angry. He started shouting at me. And that was really about the -- I mean, he just never had anything to do with me after that.

MATTINGLY: Karr seemed to spend his high school years on the go, twice leaving his grandparents in Alabama to live with his father in Georgia. Close long-term relationships seemed difficult for Karr, a problem punctuated by his marriage record. In 1984, Karr was 19 when he married a 14-year-old, Quientana Shotts. Seen here in her Alabama class photo, she says she feared for her life and safety, accusing Karr of using intimidation and fear to make her marry him. Karr denied the allegations, and the marriage was annulled in less than a year.

Five years later, Karr married again. He was 24. She was 16. The couple had three boys, after a miscarriage of twins, and divorced in 2001, after he was accused, in California, of child pornography charges. His wife, Laura, asked for, and got, a restraining order.

Karr had trouble keeping jobs as well. He lost substitute teaching jobs in Alabama, according to administrators, because of complaints from parents. The child porn charges cost him his teaching job in California. And by the time Karr got to Bangkok, on the run from prosecution, he had attempted to teach abroad, getting fired from one job in Honduras.

At the time of his arrest, he had just started teaching in Thailand, where, a doctor tells CNN, he was preparing for a sex-change operation. Those who knew John Mark Karr say they now marvel at the man whose every movement is watched by millions, and they wonder if they ever knew him at all.

(END VIDEOTAPE)

ZAHN: And, David, the one piece of information we got today I think people are going to find surprising, that he may have been involved in the operation of a day care center in Alabama.

MATTINGLY: Well, we were able to...

ZAHN: Is there any truth to that?

MATTINGLY: Well, there is some truth.

We were able to find out, the state of Alabama, in 1997, gave him a license to run a day care in his home. That was for two years. And the day care license allowed him to take care of up to six children at a time in his house.

The state of Alabama says there was no reason not to give it to him. He passed all the background checks. What they can't say now, however, is whether or not he actually had any customers. It was a two-year license. When it came up for renewal in 1999, Karr did not renew the license. And the state says there were no complaints about him.

ZAHN: So, there is no way, then, to -- to prove whether it was ever operational; is that what they're -- they're telling you?

MATTINGLY: The state can't prove it. We have been talking to people in his hometown of Hamilton, Alabama. We have yet to find anyone who was actually taken care -- taken care of by him at that -- at that day care, or any parent who might have had a child there.

ZAHN: David Mattingly, thanks so much.

And our "Top Story" coverage continues in just a moment.

Right now, we're going to go straight to Melissa Long for our nightly countdown of the top 10 most popular stories on CNN.com.

MELISSA LONG, CNN PIPELINE: Mmm-hmm. Hi, Paula.

Quite a bit of traffic on the Web site today -- nearly 18 million people logged on to CNN.com.

A lot were curious about the U.S. Navy's decision not to promote the officer who was the skipper of the USS Cole when terrorists bombed the destroyer six years ago. That attack killed 17 sailors and nearly sank the ship.

Number nine: Prosecutors in Oklahoma say they will seek the death penalty for Ray Underwood. He is accused of killing his 10- year-old neighbor, Jamie Rose Bolin -- Underwood's trial, set for October.

And number eight: A Georgia inmate dies one day after a shoot- out at a Jackson County courthouse. Authorities say, the prisoner was shot and fatally wounded when he tried to escape. A little geography lesson for those not familiar: Jackson County -- Jefferson, in Jackson County, is about 60 miles north -- northeast of Atlanta.

ZAHN: Will there be a pop quiz on this at the end of the show?

LONG: No. Well, I can...

(LAUGHTER)

LONG: I can prepare one, if you want one.

ZAHN: I think we can remember that one.

LONG: OK.

ZAHN: Thanks, Melissa.

LONG: All right.

(LAUGHTER)

ZAHN: See you a little bit later on.

Coming up next, we are going to take a very hard look at a key piece of evidence in the JonBenet Ramsey case, the ransom note, and find out why one handwriting expert says the odds are a million to one that the note does not match Karr's handwriting.

And, then, the tapes we just heard that seem to highlight Karr's obsession with little girls -- I will Marc Klaas, whose own daughter was murdered, what he thinks of those recordings.

(COMMERCIAL BREAK)

ZAHN: There is a surprising new theory resurfacing tonight, raising some serious questions about a key piece of evidence in the JonBenet Ramsey investigation, the cold-blooded ransom note left in the house where JonBenet lived and died.

Well, now a prominent handwriting analyst has a stunning theory. He says he is almost certain it was written by John Mark Karr.

Allan Chernoff has that part of our "Top Story" coverage now.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice-over): The morning Patsy Ramsey discovered her daughter, JonBenet, was missing from their Boulder, Colorado, home, she reported to the police finding a ransom note, demanding $118,000 for JonBenet.

Some handwriting experts who have analyzed the note say there are similarities with John Mark Karr's penmanship, a copy of which CNN obtained from a high school classmate who had Karr sign her yearbook.

(on camera): They certainly look quite different to an untrained eye, like my own.

ELIAS SAMAS, PRESIDENT, QUEENS GRAPHOANALYSIS CENTER: Because the ink is different, and it gives a different impression. But the personality characteristics are similar. Almost every letter is written similarly. I did not find differences.

CHERNOFF (voice-over): And the letters are particularly distinctive, says Dr. Elias Samas, who has been an expert witness in numerous court cases.

SAMAS: This person tends to make his A like this. And a similar A is written here.

CHERNOFF: In both writing samples, Samas says, the top of the F is curved and the D's are written like a Greek delta.

SAMAS: I would write the D like this.

CHERNOFF (on camera): Yes.

SAMAS: But he makes it like this.

CHERNOFF: Mmm-hmm.

SAMAS: He or she, whatever.

CHERNOFF (voice-over): Samas says, he would need two days of study for a full analysis, and the originals would be preferable to photocopies.

Still, several other handwriting analysts came to the same conclusion. BART BAGGETT, PRESIDENT, HANDWRITING UNIVERSITY: And I'm reasonably certain the same author penned these two documents. But, with anything, unless you're witnessing it, it's difficult to be 100 percent of anything, especially without the originals. And, even in court testimonials, I will reserve a margin of error, without seeing the originals.

CHERNOFF: John Mark Karr claims he was with JonBenet Ramsey when she died.

JOHN MARK KARR, SUSPECT: I love JonBenet, and she died accidentally.

CHERNOFF: But he has not been charged in her murder. Rather, he is being held on a warrant for suspicion of murder and kidnapping. If the case were to go to trial, the defense would almost certainly produce handwriting experts who would dispute that Karr wrote the ransom note.

So, it's unlikely that these writing samples, in and of themselves could ever be enough to prove that John Mark Karr actually kidnaps or murdered JonBenet Ramsey. Allen Chernoff, CNN, New York.

(END VIDEOTAPE)

ZAHN: Of course we all have to keep in mind that not all handwriting experts who compare the notes feel there is that strong connection and many legal experts say handwriting analysis is a less than perfect science.

We're going to continue our top story coverage in just a moment. Right now, let's go back to Melissa Long has more of our countdown -- Melissa?

LONG: And Paula, a story at No. 7 is about our U.S. troops. Because of the continued need for marines to fill positions in Iraq and Afghanistan, the U.S. marine corps has been authorized to recall 2,500 troops back to active duty.

No. 6, forecasters are keeping an eye on the latest tropical storm in the midatlantic. They say if it gains strength, could become a tropical storm by late tomorrow. Don't forget CNN.com for an update.

And No. 5 is your top story tonight Paula, today's hearing for John Mark Karr in Los Angeles. The suspect in the JonBenet Ramsey case will be extradited to Boulder, Colorado, in order to face charges connected to her murder -- Paula?

ZAHN: Melissa, thanks so much. Of course we're going to have more on our coverage on that story. Still ahead, our top story coverage continues as the case moves on. I'm going to ask Mark Klaas, whose own daughter was murdered, about those tapes, that supposedly show John Mark Karr's fascination with young girls and in particular, with JonBenet Ramsey. A little bit later, our coverage turns to terrorism. Almost five years after 9/11 and five years of war in Afghanistan, how much power does Osama bin Laden really have now and where is he these days?

(COMMERCIAL BREAK)

ZAHN: And we continue our top story coverage of the Ramsey investigation now. Some people are convinced John Mark Karr is guilty of killing JonBenet Ramsey. Others have some serious doubts about the claims he has made so far. And now a bit earlier on, we heard a portion of an audiotape reportedly of Karr, back in 2001, describing his fascination with JonBenet Ramsey.

Now the woman who made those tapes claims she also recorded him talking about another murdered child, Polly Klaas. Joining me now is Polly Klaas' father, Mark. He happens to be the president of beyondmissing.com, a group that is dedicated to protecting America's young children and he has doubts about Mr. Karr's story himself. Mark, always good to see you.

MARK KLAAS, BEYONDMISSING.COM: It's a pleasure, Paula.

ZAHN: I'm going to start off, for our audience now, by replaying a small part of that phone conversation that allegedly took place between John Mark Karr in 2001 and a woman in California. Let's listen together now.

(BEGIN AUDIO CLIP)

CALLER: JonBenet. God, what a powerful thing,to just be alone with that little girl. That doll face. You know, she was just, so incredible in mind, and so unreal in death. She's just so alive. She's so alive. She's so alive. She's so alive. I mean, she's wonderful.

(END AUDIO CLIP)

ZAHN: Mark, I think it makes us all sick to listen to that, and we need to make it very clear CNN can't even confirm if it is John Mark Karr on the tape at this hour. But what do you make of what you just heard?

KLAAS: Well before I get to that, I'd like to just briefly state that if in fact it turns out that John Karr wrote that ransom note, it would probably be the first time in history that a pedophile has ever written a ransom note.

Children are not kidnapped by pedophiles for ransom, they're kidnapped for sexual gratification. The thing that really concerns me however about this woman up in Petaluma is that this unholy trio seems to have been created between Richard Allen Davis, who she claims to be a best friend of, herself and Karr.

So you've got a psychopathic killer, you've got a death row groupie, and then you've got possibly a psychotic pedophile that are being given credibility. And I just think that this has gone on way too long now. I really feel that we should be criticizing this district attorney for allowing this thing to get so out of hand and allowing so many wingnuts to line up to get their 15 minutes worth of fame out of this. You know, Paula, it's like I feel the calliope closing in on me, there's such a circus and carnival atmosphere surrounding this entire case.

ZAHN: Well let's talk about that a moment because you mentioned Richard Allen Davis' name, who is the man who is serving a prison term for killing your own daughter. And one of the ironies of this whole story, the same woman you're talking about in Petaluma, California, as a result of this trio, somehow they ended up searching his cell for any correspondence from John Mark Karr. How have you been dealing with this so-called circus that you're talking about?

KLAAS: I'm absolutely enraged. In fact, after tonight, I'm not going to have anything more to do with this case until something substantive occurs simply because, you know, Paula, I try to dedicate my time and my energy towards protecting children and towards victims rights. And they're -- who are the victims in this thing?

I mean, what's this got to do with JonBenet Ramsey at this point? Polly needs peace, JonBenet needs peace. Neither of them need to be surrounded by these creatures that seem to be coming out of the woodwork and inhabiting this entire situation. From the moment we first saw this guy in that most surrealistic perp walk in Bangkok to right now, it's just getting creepier and creepier.

ZAHN: And you have watched almost every single piece of video that has come down, of him in Thailand, his return home to the United States, what happened at his extradition hearing. As you see and watch what he's told investigators, do you think he had anything to do with the murder of JonBenet Ramsey?

KLAAS: He's an incredibly sick individual. He has a fascination with dead little girls. He may very well be -- and I think it's a wonderful thing that they are going to try to connect him to other cold cases.

But as far as this one, you know what? I really doubt it. I think there are still problems that existed at the beginning of this case that have never been adequately dealt with.

And quite frankly, listen, I believe the great lesson in the JonBenet Ramsey case is conduct. And I and Mark Lunsford and John Walsh and so many others have been faced with the same dilemma as the Ramseys were faced with. They were looked upon as prime suspects in their own children's situations. And all of us put the needs of our child's ahead of ourselves and we went through those incredibly difficult interrogation and those very scary polygraphs. But we were able to put all this stuff aside. We were able to get over those hurdles and then find some way to serve society in response. That never happened in the Ramsey case. And that's why so many questions continue to linger.

So, you know, this guy, did he do it? Maybe he did. If he did, this case is going to be finally finished. But, you know, thus far, everything is based on the speculation of a madman. And really I doubt he did anything.

ZAHN: And of course, we know very little because the arrest warrant has been sealed, some news organizations trying to get them unsealed at this hour. We will hopefully find out more soon.

Mark Klaas, thank you very much for joining us tonight.

KLAAS: It's always a pleasure, Paula.

ZAHN: Thank you.

More top story coverage ahead. First, though, let's go back to Melissa for our countdown.

LONG: And Paula, the future of Iran's nuclear program is number four tonight. Iran says it is willing to return to serious negotiations with the west, but has not said whether it is willing to stop its nuclear activities first.

United Nation's Security Council is demanding Iran suspend all its uranium conversion activities by August 31st.

And number three, a deadly plane crash in Russia, authorities say there were 170 people on board a jet that went down near Russia's border with Ukraine. There were no survivors. The cause is under investigation.

And, Paula, there were reportedly thunderstorms in the area. So investigators will be looking at whether or not that plane was struck by lightning as well.

ZAHN: All right. Thanks, Melissa. Appreciate it.

Coming up next, our top story coverage goes on. And we turn our attention to the world's most wanted terrorist, the hunt for Osama bin Laden. Almost five years after 9/11, what we're only learning now how close the U.S. actually got to catching him.

(COMMERCIAL BREAK)

ZAHN: On to our other top story tonight, we are just a few weeks away from the five year anniversary of 9/11. And shortly after the attacks, the president told the nation that he wanted 9/11 mastermind Osama bin Laden dead or alive.

Well tomorrow night, "CNN PRESENTS" a two-hour special on the hunt for the al Qaeda leader called "In The Footsteps of bin Laden." Tonight, a preview. Chief international correspondent Christiane Amanpour reports from Afghanistan on just how close U.S. forces came to capturing bin Laden just after 9/11.

(BEGIN VIDEOTAPE)

CHRISTIANE AMANPOUR, CNN INTERNATIONAL CORRESPONDENT (voice- over): December, 2001, a relentless bombing campaign. Airstrikes thundered through the treacherous mountains of Eastern Afghanistan. The battle of Tora Bora had begun.

Osama bin Laden, the jackal of 9/11 and hundreds of al Qaeda fighters had finally been cornered, or so it seemed.

GARY BERNTSEN, FORMER CIA OFFICER: We brought in specter gunships, which can put a bullet on every inch of a football field.

AMANPOUR: Gary Berntsen was the leader of a secret CIA paramilitary unit that had pursued bin Laden since he had fled Kabul. And now the CIA was sure it knew where he was, thanks in large part to a radio taken off a dead al Qaeda fighter.

BERNTSEN: We listened to bin Laden for several days, using that radio, listened to his communications among him and his men. We listened to him apologize to them for having led them into this trap, having led them into a location where they were having airstrikes called on them just relentlessly.

AMANPOUR (on camera): The plan was for Afghan and Pakistani soldiers to block any escape routes, but Osama bin Laden managed to slip away through the mountains and the mission to capture or kill the al Qaeda leader failed.

By most accounts, the main problem was not enough American soldiers on the ground.

BERNTSEN: In the first two or three days of December, I would write a message back to Washington, recommending the insertion of U.S. forces on the ground. I was looking for 600 to 800 Rangers, roughly battalion. They never came.

AMANPOUR: Osama bin Laden, looking frail and much older than his 44 years, after the massive onslaught at Tora Bora, had escaped again.

(END VIDEOTAPE)

ZAHN: The question tonight is where is bin Laden now? And is he still calling the shots for al Qaeda?

CNN terrorism analyst Peter Bergen joins me now. Always glad to have you on the air with us.

So, where do U.S. officials think bin Laden is actually hiding?

PETER BERGEN, CNN TERRORISM ANALYST: Well there's universal consensus, he's in Pakistan. He's not in Afghanistan, 20,000 American troops, 15,000 NATO troops. It's just common sense, you'd be on the other side of the border.

ZAHN: Why is he so darned elusive? Why can't they find him?

BERGEN: You know, people stay on the FBI's most wanted list for years or even decades in this country. So extend that problem to the Afghan-Pakistan border, and times it by about 100. And you see it's very difficult to find him.

Also, he's not talking on his SAT phone, his cell phone. You know, people around him not motivated by cash rewards. And he's a smart guy, he's paranoia and he's secretive.

ZAHN: So, how has his life on the run for the last five years or so affected his power and his reach?

BERGEN: He's not running the same organization that attacked us on 9/11.

ZAHN: But that's not necessarily an organization that's less powerful?

BERGEN: Well -- I mean, clearly it has got some life still in it. You know, he released 20 videotapes and audiotapes since 9/11. And these tapes are his way of communicating with his followers and with the al Qaeda organization. And these are the most widely distributed political statements in history, hundreds of millions of people read about these tapes, hear them, see them whenever they come out. And that's the way he maintains control.

ZAHN: So, it's not as centralized, but clearly there's a lot of little satellite tentacles out there.

BERGEN: Yeah. I mean, we've had people in the United States who have -- they believe that they were -- you remember this case in Miami, this group of fairly dim-witted guys believe that they were swearing allegiance to al Qaeda, they were planning to attack federal buildings in Florida.

So, you know, there are like-minded individuals who sign on to this idea.

ZAHN: Peter Bergen. Great to see you. We look forward to seeing the rest of your special tomorrow night, along with Christiane Amanpour. It's a two hour special. It is called "In The Footsteps of Bin Laden." It gets underway in the 9:00 p.m. time slot.

Now, we move on. And we're going to wrap up our countdown now with Melissa Long -- Melissa.

LONG: Story number 2 is about a reclusive Russian professor who says he doesn't want a medal after all for solving one of histories toughest math problems.

And number one, a frightening prediction from the head of the National Hurricane Center. He says there's plenty of potential for a storm worse than Hurricane Katrina. You can read more online at cnn.com, Paula.

ZAHN: And he's predicting a lot of storms this year. Not good.

Melissa, thanks.

Coming up next, does anyone deserve $200 million for doing their job? An exclusive interview with Dick Grasso, the former stock exchange chairman whose huge payday caused a public uproar. He lost his job over it. And now he could lose absolutely everything, everything even the folks who signed onto the pay package thought was OK.

(COMMERCIAL BREAK)

ZAHN: Tonight, outrage over greed. Imagine getting a paycheck that's about a thousand times higher than the average American worker. Well Richard Grasso earned that, he says, for running the New York Stock Exchange, but he had to resign over a public uproar over his salary. And now he is getting ready to get to court.

Tonight, Grasso is defending himself in his first exclusive, on- camera interview since his ouster. Susan Lisovicz talked to him for tonight's "Biz Break."

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): Few people have risen higher or fallen faster than Dick Grasso, which may be one reason why he finds Coney Island's famous stomach turning cyclone no big deal.

DICK GRASSO, FORMER CEO, NEW YORK STOCK EXCHANGE CHAIRMAN: I had 35 and a half great years as a career, one bad day.

LISOVICZ: Grasso's long climb began in this working class neighborhood in Jackson Heights, New York. Grasso dropped out of college and after starting out as an $81 a week clerk, became the first to work his way up to become chairman of the New York Stock Exchange.

GRASSO: This is the American dream. Someone in this community will some day do what I did, no doubt in my mind, because when you start here, you work hard.

Welcome back to the greatest market on the face of the earth.

LISOVICZ: Dick Grasso led the exchange during the great bull market of the 1990s. He was a crusader, working with New York state attorney general Eliot Spitzer to clean up Wall Street corruption and hailed as a national hero for working around the clock to reopen the NYSE after 9/11.

Grasso became such a celebrity, that he played himself in a cameo in "Sex & the City," turning the markets opening bell into a daily parade of VIPs, hoping for a piece of the action. Grasso himself made money, a lot of it. Paid $30 million in one year alone and accumulated about $200 million in deferred compensation.

When word of all that money became public, the outrage led to an ugly firing. Adding insult to injury, his former ally, Eliot Spitzer went to court to get money back for the New York Stock Exchange.

ELIOT SPITZER, NEW YORK STATE ATTORNEY GENERAL: It's simply too much. It's not reasonable, it's not right, it violates the law.

LISOVICZ: It isn't just the $200 million. A lawyer knowledgeable with the case gave CNN a copy of Grasso's last contracts, which measured his life expectancy as 50 percent male and 50 percent female. Since women lived longer that meant even more money in his pension.

Now to some, Dick Grasso is among those on the list of executives under the general heading of wretched excess.

(on camera): In some circles, you are lumped in with Dennis Kozlowski, Bernie Ebbers, Jeffrey Skilling. What do you say to that?

GRASSO: Just flat wrong to do that. Those are people who committed crimes according to the courts and according to their own admissions. That's not me. If you can say to me, "Dick, the crime you committed was cashing the check, then let's stop the whole American capitalist system." Because when the smartest, most admired, most successful people in the world, who are your bosses, say, "We think you're worth X," then you have to take that as fact.

LISOVICZ (voice-over): Some of the people on the stock exchange board who signed off on Grasso's pay included Hank Paulson before he became treasury secretary and former secretary of state, Madeleine Albright.

(on camera): You're going to court. The judge has asked you to settle.

GRASSO: Settle means I've done something wrong. And I've done nothing wrong.

LISOVICZ (voice-over): Grasso says he's confident of vindication.

(on camera): Could you see your life as a metaphor with the roller coaster, big highs, some lows?

GRASSO: And more mountains to climb.

LISOVICZ (voice-over): Dick Grasso knows first hand how long the climb to the top can be, and he's painfully familiar with the speed of the descent. Susan Lisovicz, CNN, Coney Island, New York.

(END VIDEOTAPE)

ZAHN: And that wraps it up for all of us here. Thanks so much for being with us. "LARRY KING LIVE" is next with more on the JonBenet Ramsey case. Again, thanks for dropping by here. Have a great night.

(COMMERCIAL BREAK)

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