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FBI Interviews Milwaukee Man Regarding Potential NFL Stadium Threat; Will Diplomacy Diffuse North Korean Nuclear Crisis?

Aired October 19, 2006 - 15:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: It's the top of the hour.
Can't figure a better way to start the hour but with you, and great news, the Dow hitting it.

ALI VELSHI, CNN CORRESPONDENT: Dow -- again, we didn't close above 12000 yesterday, but, of course, it was the first time -- and it took seven-and-a-half years from the -- for the Dow to get from 11000 to 12000.

But you know what is interesting here about -- we will watch this and see if it happens in the next hour. What is really interesting here is, it was that rush past 10000. It was that resilience of the markets through 9/11, through all of that.

The one figure -- look at that, 12004 right now. We will be watching that for the hour.

The one figure that was present through all of that to investors was the figure of Dick Grasso, very well known, well -- you know, completely shaved, bald head. This is the guy who was running the New York Stock Exchange for a long time.

And, in 2003, he got a pay packet of above $187 million. That's Dick Grasso.

Now, Eliot Spitzer, who is running for governor of New York, this was one of his first big-profile...

PHILLIPS: Cut his teeth on this case, as you say.

VELSHI: ... man of the -- yes, the man of the investor. You know, he was defending the investor. He has sued to get most of that money back. And there has been a ruling now. The Associated Press is reporting that a judge has ordered Grasso to repay at least a part of that pay package. It's not determined how much of that.

PHILLIPS: Now, just to remind people, though, the crazy market gave him that big paycheck.

VELSHI: Right.

PHILLIPS: We're talking about Grasso.

And, like you were saying, this was Mr. America, after 9/11...

VELSHI: People said...

PHILLIPS: ... all those economic hits.

VELSHI: ... this guy is holding the markets together.

PHILLIPS: He's the one.

So, people love him, hate him, trying to feel sorry for him, not feel sorry for him.

VELSHI: There's a...

PHILLIPS: He helped us out, but too much money. What is fair?

VELSHI: The New York -- a New York Stock Exchange review said that, of the $187 million, $157 million was too much. The guy was still going to walk away with 20 million bucks.

Now, here's the thing. The guy who was involved in his compensation was a guy named Ken Langone. He was one off the founders of Home Depot. Home Depot's CEO, Bob Nardelli, has been on the front pages. He is the poster child for CEOs who seem to get paid too much.

So, what is going here is, Ken Langone and Eliot Spitzer don't like each other. And Ken Langone has never met a CEO who he didn't want to overpay. So, there's a big -- the forefront -- the battle today still is about, are CEOs overpaid? And that what this stems from.

There's a legal distinction about the New York Stock Exchange is a not-for-profit organization or -- or a public company, and how a CEO can be paid. That's Eliot Spitzer's business. He said he was overpaid.

But $187 million? I mean, unless the guy was weeping tears that were becoming bricks of gold...

(LAUGHTER)

VELSHI: ... you know, it's a lot of money.

PHILLIPS: Well, and just looking at the past couple of years, look at -- I mean, when you talk about CEOs being overpaid...

VELSHI: Yes.

PHILLIPS: ... look at how many -- look at corporate corruption, how many men have been exposed...

VELSHI: Right.

PHILLIPS: ... how many men have been accountable.

VELSHI: Right.

And that's the thing. And there's a distinction. If people were making tons of money -- and that's part of why they agreed to pay Dick Grasso this money. Everybody was making money. He was doing well. The stock exchange was doing well. No -- no one has accused Dick Grasso of fraud, which is the good thing.

What really upsets people is when people were lining their own pockets with this. But, fundamentally, the difference between what the average person earns and what a CEO in America earns continues to spread. And it starts to become a little bit -- you know, it's distasteful for some people.

PHILLIPS: We are going to talk again in about 20 minutes or so.

VELSHI: Absolutely. We will be -- we will talk again in 20 minutes. And we're watching that market to see if we close above 12000.

(CROSSTALK)

PHILLIPS: Those crude oil -- rebounding.

VELSHI: Oil is up a little bit. OPEC is cutting back.

PHILLIPS: Great.

Thanks, Ali.

VELSHI: OK.

DON LEMON, CNN ANCHOR: Thanks, Ali Velshi.

Now on to the Mark Foley scandal -- a Washington scandal reverberates across Florida. Sexual encounters allegedly took place between a Catholic priest and former altar boy Mark Foley 40 years ago. Now Miami's archdiocese scrambles for decades-old details and hustles to do damage control.

Let's go to our very own Susan Candiotti. She is on this story in Sarasota, Florida.

What are you learning now, Susan?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi.

Well, we have moved over Palm Beach County, actually, Don. And we can tell you, the latest is that, interestingly, the Archdiocese of Miami says, at last check, that it still had not yet officially received the name from the Palm Beach state attorney's office of this Catholic priest, even though the state attorney's office tells us that the name was faxed over to the archdiocesan attorney by 10:00 this morning.

This priest is Anthony Mercieca. Sources tell us this is the name that was passed on through the attorneys that Mark Foley has identified as the priest who allegedly molested him.

Since then, CNN has contacted the priest, as has CNN affiliate WPTV. The priest told WPTV -- quote -- "Once maybe I touched him" -- this is a quote -- "It's not rape or penetration. We were just fondling."

The priest also told CNN's "PAULA ZAHN NOW" that he and Mr. Foley, as when he was a teenager, between the ages 13 and 15, that it was not uncommon for them to swim naked, that they were in saunas, and he did receive -- give him, the boy, a massage. They were wrapped in a towel at the time, he said.

Now, "Was he molested?" he was asked by CNN. The priest told us that molestation -- quote -- "can be many things."

So, at this time, there is no criminal investigation going on by the state attorney's office. That's because Mr. Foley has said he does not wish to press criminal charges. If, however, the Archdiocese of Miami is able to locate anyone else who does claim that they were molested by this priest, then, theoretically, the state attorney's office could open an investigation, if those alleged victims wish to press charges -- Don.

LEMON: All right, thank you very much, Susan Candiotti, in Palm Beach, Florida. Thanks.

PHILLIPS: Let's get straight to the newsroom.

Thomas Roberts working a breaking story right now -- Thomas.

THOMAS ROBERTS, CNN ANCHOR: Spending a lot of time in Florida today, Kyra. This time, we take you to Orlando, where we are watching what is taking place at a local high school there.

This is in Orlando, once again. According to WESH-TV, WESH, we're learning that a 15-year-old student was stabbed at his high school, this just at dismissal time. The high school in called University High School. It's in Orange County.

And, apparently, all school buses, as you see right there, they have all been stopped. This is so police can investigate and find out exactly what happened to the young student, who has now been taken on to the hospital -- uncertain, though, about exactly what type of stabbing injuries this student received. There are different reports coming out of different media affiliates there.

So, we want to be very careful about what we pass along so far, as we continue to investigate and confirm the details -- but, again, a 15-year-old student suffering some type of stabbing injury as school was being dismissed from University High School in Orange County, Florida.

Kyra, we are going to keep following this story. As soon as we get more details about the injuries to this young student, what the type of stabbing, and where it happened on the body, we will bring it to you.

PHILLIPS: Thomas, thanks.

ROBERTS: Yes.

LEMON: All right, let's go back to the Mark Foley story. It's a scandal that's reached from into Florida, and even the Vatican.

But now we are going to go back to Washington. The big question in the Mark Foley page scandal: Who knew what, when?

CNN's Andrea Koppel has more on today's testimony before the House Ethics Committee -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Don, that's right.

The House majority leader, the second highest ranking House Republican, John Boehner, is now behind closed doors. He has been there for about 40 minutes. The reason that his testimony is so significant is that Boehner claimed in a recent interview that he had told House Speaker Dennis Hastert about the e-mails, that he had mentioned it to him last spring, and that Hastert responded that it had been taken care of.

Now, that would seem to directly contradict the timeline that was released by the speaker's office earlier this month, in which he said Hastert only first learned about the Foley e-mails the day that everyone else learned about it. And that was September the 28th, the day that ABC News broke the story.

Now, earlier today, the committee spent just about four hours with one of the star witnesses of this sordid tale. And that is Jeff Trandahl. He is the former House clerk. And Trandahl, as House clerk, oversaw the entire House page program. He had done so for years and years.

Now, Trandahl is believed to have been among one other person who sat down with Mark Foley in the fall of last year to discuss those inappropriate e-mails that Foley sent that 16-year-old former page in Louisiana.

And his testimony could be key, Don, to unlocking, as you just said, who knew what, when, and just how high up this chain of command the information was known.

LEMON: We have had John Boehner testify. We have had Jeff Trandahl testify. But, of course, everyone is wondering, the big guy, when is he going to testify, Hastert?

KOPPEL: We do not know. And, of course, that's a question that we're asking the speaker's office every day.

It's not just whether or not Speaker Hastert would testify, but whether or not his chief of staff would testify. That is significant, because we, again, have heard from previous witnesses, who claim that they told not just Speaker Hastert, but that they told his chief of staff. So, these are all important witnesses.

We have, as yet, to learn when they will testify. There has even been talk, Don, that they -- the committee might go to Illinois to interview Hastert and his top aides. But they're not saying if that's going to happen.

LEMON: Ah, that is very interesting.

Thank you very much, Andrea Koppel.

PHILLIPS: Seventy-two American military deaths this -- this month alone, half-a-million people too afraid to even go home, and, every day, another rundown of suicide bombings, executions, assassinations, sectarian violence.

A U.S. Army general calls the war in Iraq disheartening.

Joining me now from Baghdad, CNN's John Roberts -- John.

JOHN ROBERTS, CNN SENIOR NATIONAL CORRESPONDENT: Good evening to you from Baghdad, Kyra.

A significant pronouncement -- an acknowledgement, actually -- today in Baghdad by the U.S. military -- Major General William Caldwell, the chief spokesman for multinational forces here, saying that, despite all of the American military's efforts to try to quell the violence here in Baghdad, things just haven't gone as planned, the violence is still at a peak, and that they have to review the whole situation.

In fact, what Caldwell was saying is, the plan to secure Baghdad is not working, and they may have to come up with another plan.

Here is how he put it at his daily briefing today.

(BEGIN VIDEO CLIP)

MAJOR GENERAL WILLIAM CALDWELL, U.S. ARMY SPOKESMAN, COALITION FORCES IN IRAQ: The violence is, indeed, disheartening. In Baghdad alone, we have seen a 22 percent increase in attacks during the first three weeks of Ramadan, as compared to the three weeks preceding Ramadan.

In Baghdad, Operation Together Forward has made a difference in the focus areas, but has not met our overall expectations of sustaining a reduction in the levels of violence. We are working very closely with the government of Iraq to determine how to -- best to refocus our efforts.

(END VIDEO CLIP)

ROBERTS: Also today, at that press briefing, Caldwell said that he thinks the uptick in violence here in Baghdad is due to three things: one, it being the holy month of Ramadan; the second thing being the increased focus that the U.S. forces are putting on insurgents here in Baghdad; and, also, he said, the upcoming midterm elections, that the insurgents know that they can capture the attention of the American people. And that's why they are engaging in this violence -- and, of course, Caldwell's pronouncement today coming after Peter Pace, the chairman of Joint Chiefs of Staff, said last week that they have to review the whole plan for Iraq, particularly in Baghdad, and, also, a little more than a week after President Bush, at his press conference in the White House, said that he would be open to a change in direction here in Iraq, if his commanders on the ground approved it.

Not to say that something is coming, but certainly, Kyra, it looks like they are definitely reexamining what is going on here, because they say it's not working.

Another day of violence across all of Iraq today. There was at least 44 Iraqis killed, 11 of those in the northern city of Mosul, from a series of three suicide attacks, just south of there, the Kurdish city of Kirkuk. Another 11 died in Diyala Province, about 45 miles north of here -- at least 16 people dead -- six people dead here in Baghdad in attacks -- and, over the course of the day, another 27 bodies discovered in and around the city and suburbs of Baghdad, believed to be victims of sectarian violence.

Also, a very deadly month for U.S. troops -- some 72 have died so far in October, putting October well on to be the deadliest month for U.S. troops since November of 2004, when they launched that major offensive in Fallujah. It could be even deadlier than that.

And a new development going on out in Anbar Province -- that's the Sunni stronghold in the city of Ramadi -- according to the Interior Ministry here in Iraq, some 17 carloads of masked gunmen proclaiming to be members of the Mujahedeen Shura Council -- that's that umbrella terrorist group that is led by al Qaeda -- driving into the very heart of Ramadi, getting out of their cars, firing their guns into the air, proclaiming Ramadi to be part of the Islamic state that they declared, they said was their goal several months ago, when this Mujahedeen Shura Council was put together.

Don't know at this point if this marks the beginning of a new offensive by al Qaeda, particularly in the area of Ramadi. But it would certainly seem, Kyra, as if they are trying to stir things up this week.

PHILLIPS: John Roberts, live from Baghdad -- thanks, John.

LEMON: Let's straight to the newsroom now and details on a developing story.

Thomas Roberts, what do you have?

ROBERTS: Don, want to go back to Florida now, update everybody on that situation that is taking place at a local high school in Orlando, University High School, where things are shut down. You can see the buses completely stopped, after a student is reportedly stabbed as students are being dismissed at the end of the school day there at University High.

This is in Orange County, Florida -- the buses lined up one by one by one, as police called a halt to everyone leaving, so they could investigate properly exactly what happened there.

Now, WESH-TV is reporting that the student was stabbed. Now, WFTV is giving more detailed information about the stabbing itself, saying that the victim may have been stabbed in the abdomen, and, most importantly, may have been stabbed in the head first. They are now reporting that the boy -- or the student -- excuse me -- was taken by ambulance to a local hospital there, the Orlando Regional Medical Center.

Now, important here is the description of the person seen stabbing the young student -- the suspect, seen fleeing on foot, said to have black, curly hair, with blond streaks, roughly about 5 feet, 7 inches tall. And they say that it was a Hispanic male.

Once again, though, all the buses, all the students that were there at this time, they are remaining on campus, so police can fully investigate and, see what anybody, what any of the other students may have seen.

But, again, the suspect, they're saying, is a Hispanic male, around 5 feet, 7 inches tall, with black, curly hair and blond streaks.

Again, we're waiting for more confirmation, though, about the student, to find out exactly what type of injury the student sustained as they were being let out of school today -- Don, back to you.

LEMON: Thomas, it seems these school incidents, we're getting a couple a week.

ROBERTS: Yes.

LEMON: Yes. All right. Thank you very much.

(CROSSTALK)

ROBERTS: Sure.

PHILLIPS: It has the know-how for nukes -- to some degree, anyway -- but North Korea can't feed its own people.

LEMON: Will sanctions help or hurt the situation? Ahead: the peculiar challenge of helping those most in need inside the world's most secretive state.

PHILLIPS: Plus, a mind-blowing threat, but is it legit? Ahead in the NEWSROOM, hear why some NFL stadiums are on alert, and what the FBI is saying about it.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Kyra Phillips and Don Lemon.

LEMON: Now the NFL threat and the FBI -- a Milwaukee man was questioned today about a terror threat against football stadiums, specifically, an online posting that warned of attacks this Sunday. Authorities still believe the threat is bogus.

Joining us now live from Milwaukee, CNN's Jonathan Freed.

Jonathan, what is the latest?

JONATHAN FREED, CNN CORRESPONDENT: Good afternoon, Don. That's right.

Sources, law enforcement sources, have told CNN that a 20-year- old man from Milwaukee has been questioned and released today by the FBI. What we're being told is that he is believed to be involved in this threat. The extent of that involvement is not clear at this point, and investigators are looking at the course of the investigation itself to bear that out.

Now, we're being told that a friend actually turned him in. And, after that point, the FBI spoke to him. It's not clear whether he was picked up or whether he came in voluntarily. Although he has been released, the FBI is saying that they know where he is.

And officials keep repeating that they believe that this is not related to terrorism. And they have not, from the beginning, believed that there has been any credible threat. And I was talking to some sources here at the FBI in Milwaukee, and they say that, when you take that a step further, their frame of mind right now, the inference that they are making from all of this is that, if it's not a credible threat, then, it's either a prank or a hoax.

And we're being told that there may be a written statement that comes from the FBI, likely out of Washington today. It may come today. And, if it does, it would likely get at this issue of a prank and a hoax -- Don.

LEMON: That's interesting, because the FBI still hasn't divulged any information.

And, just to be clear on this, they're still saying that there is no credibility to this threat, right?

FREED: That is correct.

From the beginning, they have been telling people, look, this is not credible. They felt that they had to warn the NFL and the teams, just to err on the side of caution. But, all along, they have been saying: Look, go to your games, go to your stadiums. There is no reason to modify your behavior in any way.

LEMON: It will be interesting to see what the FBI has to say.

Thank you very much, Jonathan Freed.

PHILLIPS: Secretary of state on tour in Asia -- straight ahead from the NEWSROOM, can diplomacy defuse the standoff over North Korea's nukes? The latest from Seoul when we return.

(COMMERCIAL BREAK) PHILLIPS: Let's get back to Thomas Roberts in the newsroom.

What are you working, Thomas?

ROBERTS: Kyra, we're still watching this developing story out of Orlando, Florida.

Last time that we checked in on the story, all the buses were halted on the campus. Now some of the buses have started to move. But one thing that caught our eye was the prayer circle that students and maybe some faculty and administrators, they just made a makeshift prayer circle there while they were waiting, praying for this 15-year- old student who was stabbed while waiting at the bus stop.

We can confirm now that it is a male student. The AP is reporting that this young boy was stabbed while standing there just waiting to get on the bus at University High School. This is in Orange County, Florida. It was right when classes let out. All across the Eastern Seaboard right now, most high schools and lower schools are letting out.

But the student has been taken to a local hospital, listed, as the AP is reporting, in serious condition.

Now, WFTV, which is a local affiliate there, they were reporting earlier that the young man was stabbed in the abdomen, also stabbed in the head, as well.

We're trying to work our own sources on this to get more confirmation on exactly what type of injuries that this young boy sustained. But, again, a student, a 15-year-old, is stabbed and in serious condition at a hospital in Orlando.

Students were on kind of a lockdown situation there. Authorities came on scene. They told all the buses to stop. They wanted to investigate. But we were starting to notice some of the buses moving once again.

But there are a lot of students sill sitting around out in front of the school, and, again, just starting a -- you know, an impromptu prayer circle, praying for this young 15-year-old.

As you can see, we take you back there and show you again, as they continue to stand there, holding vigil for a young boy, where they really don't know his condition right now -- everybody hopeful that everything is going to turn out to be OK -- and, again, the suspect still on the loose, Hispanic male, roughly about 5'7''. Not sure if he's a student at the school or not -- Kyra, back to you.

PHILLIPS: All right, Thomas, thanks.

ROBERTS: Yes.

LEMON: Good sanctions make good neighbors, or maybe vice versa. Either way, Secretary of State Condoleezza Rice says North Korea's neighbors are key to resolving the region's nuclear tensions. She's traveling through South Asia this week, solidifying support for U.N. sanctions against Pyongyang.

CNN's Zain Verjee, the only network correspondent traveling with Rice, reports now from Seoul.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN CORRESPONDENT: U.S. Secretary of State Condoleezza Rice says the U.S. is still willing to talk to North Korea. She says that North Korea has to give up its nuclear program and return to six-party talks.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: We want to leave open the path of negotiation. We don't want the crisis to escalate.

And, the sooner that North Korea would choose to unconditionally come back to the table, and take up the very good statement, or very good agreement, that is their framework agreement that is there as of September, it would be to the betterment of everyone.

VERJEE: She says that she's hoping that a senior Chinese official that has been dispatched to Pyongyang is going to be able to convince North Korea to do just that.

On the way over here, a senior administration official also added that that Chinese official is carrying a very strong message to Pyongyang. It's not clear exactly what that message is.

Secretary Rice also wants South Korea to implement the U.N. Security Council resolution that hits North Korea with sanctions. Specifically, also, she wants South Korea to carry out inspections of North Korean cargo ships coming in and out of the country that may be carrying nuclear materials. Secretary Rice also said that she wasn't in South Korea to dictate to the South Koreans exactly what they needed to do.

The question now, though, is, what will the South Koreans do? How tough will they be on North Korea? Will they squeeze North Korea hard?

One of the analysts we spoke to here said that South Korea would be nervous if North Korea was pushed too hard, for fear that it may collapse and destabilize the region.

Zain Verjee, CNN, Seoul.

(END VIDEOTAPE)

PHILLIPS: United Nations Resolution 1718, tighter sanctions on a country barely surviving as it is, is that the way to punish North Korea? Will the leadership respond? And what about the impact on the North Korean people?

Let's ask our guests, Ming Wan, professor of international affairs at George Mason University, and James Lilley, U.S. ambassador to China in the late '80s and early '90s.

Gentlemen, great to have you both with me.

Ambassador, I want to start with you.

I remember you saying a couple of days ago, simply, U.N. sanctions won't do anything. Why?

JAMES LILLEY, FORMER U.S. AMBASSADOR TO SOUTH KOREA: No, I didn't say quite that. U.N. sanctions are important for moral background. But the essence is in what China and South Korea and the United States and Japan do, turning on...

(CROSSTALK)

PHILLIPS: So, you're talking multilateral sanctions?

LILLEY: I'm touting what?

PHILLIPS: Multilateral sanctions.

LILLEY: Well, multilateral sanctions have never worked very well.

I think we have to look at the history. What you do have, where the North Koreans really are vulnerable, is in their economy. The Chinese absolutely keep them floating, with 90 percent of the oil and 70 percent of their food. This is huge leverage. The North -- the South Koreans are helping them build their industrial complex. The Japanese have a large Korean community.

If you put these together in a consistent way, you have a way of beginning to move North Korea towards a reasonable decision. You can't do it with sanctions, boom, bang. It's done slowly, gradually, in the Asian way.

PHILLIPS: Professor Wan, explain to me what he means by the Asian way.

MING WAN, ASSOCIATE PROFESSOR OF PUBLIC AND INTERNATIONAL AFFAIRS, GEORGE MASON UNIVERSITY: Well, I guess what Ambassador Lilley meant is probably that Asians tend to emphasize sort of a negotiation harmonious.

But, in my own way of thinking is that sanctions are the way to go. And the international community needs to take punitive actions against North Korea for its nuclear tests. And, since no one is threatening war, except North Korea, sanctions are the most punitive action available.

If implemented effectively, sanctions will make it far more difficult, if not impossible, for North Korea to maintain or expand its nuclear program. Equally important, sanctions will widen the divide between North Korea and everyone else, and help forge a coalition.

If North Korea refuses to dismantle its nuclear weapons -- and I suspect that, in the next day, it might be containment -- a coalition...

PHILLIPS: But...

WAN: ... will be important for that purpose.

PHILLIPS: So Professor, just looking at the history of sanctions, if you look at Iran, going to back to 1979 and the sanctions that were in place, the Islamic regime still did not -- it still wasn't toppled. You could look Cuba. Sanctions only strengthened nationalistic support for Fidel Castro. And even looking at Iraq and sanctions, that it didn't have an impact there.

WAN: I think these situations might be different because North Korea's nuclear test has essentially threatened core national interests of everyone involved, including China.

PHILLIPS: Ambassador, do you think this situation is different? If we look at Cuba, Iran, Iraq and how sanctions didn't work?

LILLEY: No, I think sanctions do have a role. I agree with the professor that they do have a role. It certainly gives you the moral high ground. It gets people able to block their bank accounts and cut off certain trade with them. I think this is very important.

But the real guts of the thing, what really gets to them, is what the Chinese do outside of sanctions, or what the South Koreans do outside of sanctions. They've got the real leverage. And it seems to me the Japanese have already taken significant action. And I do disagree with Han Park, the man that was on earlier, talking about the dire consequences of anything you do to North Korea, a war. This is what the North Koreans are saying.

PHILLIPS: Professor...

LILLEY: Go ahead.

PHILLIPS: Well, Professor, do you agree with the ambassador that the key here is what China does and South Korea does, not necessarily what the U.S. does?

WAN: I agree with the ambassador here. I think if you're talking about military force, U.S. has greater capacity than anybody else, including China. But if we are talking about sanctions, I think China has more leverage than anybody else, because China provides food and fuel and some investment and other economic transactions. U.S. has very little dealing with North Korea. China may also bleed North Korea by opening its border and to let refugees in. And so there are different ways China can hurt North Korea.

PHILLIPS: Ambassador, do sanctions, though, when it comes down to it, ultimately hurt the people more than Kim Jong-il?

LILLEY: If you take away his Rennemar tab (ph) brandy and his little -- other little indulges he has, I...

PHILLIPS: Well, we can talk about dealing on the black market. Narcotics.

LILLEY: Of course he can do that. Of course he can get it if he wants.

PHILLIPS: And that only gives him more strength and gives him more ability. He's got one objective, and that is to rule.

LILLEY: He's got an objective to rule. But I think you're able to turn the squeeze on him and make this whole thing a mockery. And let me just -- one more thing about the Chinese role in this thing. The Chinese have already moved up two divisions to the North Korean border. They're building a fence. They're inspecting the trucks. They've shut down bank accounts the North Koreans have.

This is what you call a slow, steady relentless pressure that brings him around. It's not some dramatic move like boarding a ship, shooting him up, that sort of thing. You're going to avoid that. You've got other means to use. You can inspect these ships coming into Chinese port with radiation detectors. You can do that in the south, too, without being offensive, without violating sovereignty.

It seems to me we're working towards a sense of calculated moves in the direction of bringing him around. He's doing going to be very difficult, dangerous, loud, war, all of these things that are going to be pouring out. Brinkmanship. But you've got to have a steady hand and you've got -- you can't lose with China, South Korea, Japan, Russia, United States. If we get some sort of a unity, this little broken down Stalinist failed state of 23 million people is not going to be able to take us on.

PHILLIPS: We're watching all of those countries closely.

U.S. Ambassador to China in the late '80s and early '90s, James Lilley. Thank you, also, professor of international affairs at George Mason University, Professor Ming Wan. Thank you, gentleman.

LEMON: We're following a developing story happening in Orlando, Florida. Let's head to NEWSROOM. Thomas Roberts, what do you know?

ROBERTS: Don, we have an opportunity now to talk with authorities there from the Orange County Sheriff's Department.

We have on the line Deputy Carlos Padilla, who is going to be able to fill in some of the blanks here for us.

Sir, thanks for joining us. And explain what happened this afternoon at University High School there in Orange County, Florida.

DEPUTY CARLOS PADILLA, ORANGE COUNTY SHERIFF'S DEPT: Apparently these two students during lunch got into a verbal altercation and the fight -- they were arguing and when they got out about 2:14 in the afternoon, the fight continued on to the bus stop. There they became involved in a physical fight and one of them produced a knife and stabbed the other one in the chest.

The one that was stabbed in the chest was transported to Florida East Hospital, which is on the east side of Orange County in Orlando. And he's in critical condition. And the student that did the stabbing was actually arrested on campus.

ROBERTS: Sir, can you give us details, though? The suspect, the injuries? Some affiliates there locally were reporting possibly some type of laceration to the head, maybe to the abdomen. But you're saying that there with only just one wound to the chest?

PADILLA: Well, we know of one for sure. There was a possibility that he might have been stabbed in the head also, but that has not been confirmed. But we do know of the one in the chest.

ROBERTS: And you mention the fact that the suspect is now in custody. What details can you give us about the age of this student? Maybe -- I mean, he had a knife on him. I mean, has that been found with the student or that was found maybe nearby?

PADILLA: The knife apparently was found with the student.

ROBERTS: OK.

PADILLA: Again, that's -- we're not sure about that, but they do have the knife and the student in custody. And right now, we have detectives that are responding to the school to interview the students.

ROBERTS: As you understand it, other students around at the time? I mean, a lot of students that we're seeing now filtering around the school. So a pretty crowded bus time with everybody leaving, right?

PADILLA: That's correct. Everybody was leaving. It was about 2:14 in the afternoon, and it happened -- what we call the bus turnaround, where they turn around. And it happened in that area.

ROBERTS: And that's when buses were put on lockdown right after they started. So was the student, the suspect, involved in this, the person that stabbed this other student. Was he found, boarded one of the buses?

PADILLA: The person that did the stabbing was found on campus, and that's correct. And again, the deputies on the scene were able to make a quick arrest.

ROBERTS: Well, we see right now live pictures coming from WESH, W-E-S-H, the affiliate there in Orlando. Parents and students now uniting to leave campus. We saw some buses moving earlier, and we'll follow the young boy, the 15-year-old's, condition to see what happens. Critical condition, though, right now.

Deputy Carlos Padilla from Orange County Sheriff's Department. Thanks for joining us. We appreciate it.

PADILLA: Thank you.

ROBERTS: Don and Kyra, I'll toss it back to you. And if we find out some new information on the young boy's condition, we'll bring that to you here in the NEWSROOM.

LEMON: Yes. It couldn't have happened at a busier time during school.

ROBERTS: Exactly.

LEMON: We saw the pictures there of the people who were just leaving school and they said it went out right to the bus stop.

PHILLIPS: Thanks, Thomas.

LEMON: All right, Thomas, thank you for that.

A new twist in the Mark Foley page scandal.

PHILLIPS: As a Catholic priest acknowledges his inappropriate relationship with Foley many years ago, we've got all the latest developments straight ahead from the NEWSROOM.

(COMMERCIAL BREAK)

LEMON: New into the CNN NEWSROOM, the first -- the first we've heard from the priest in the Mark Foley scandal. It's from our affiliate in Palm Beach there, WPVTV Television. A short time ago, a reporter from that station phoned Father Anthony Mercieca at his home on the Island of Goza, near Malta.

Now, here's what the priest had to say about his contact with Mark Foley some 40 years ago.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: See abuse, it's a bad work, you know, because abuse -- you abuse someone against his will. But it involved just spontaneousness, you know. But, anyway, whatever it was, you know, molestation I guess. And that's what happened.

And for 40 years it's never bothered him, you know. And now he came up saying that he was molested by a priest or by a clergyman, whatever. Once maybe I touched him or so, but didn't -- it wasn't, because it's not something you call, I mean, rape or penetration or anything like that, you know. We were just fondling.

(END AUDIO CLIP)

LEMON: We apologize for the quality of that but we hoped you followed along with the words there on the screen. Foley's attorneys say the former congressman will not press charges in this matter, but he accepted an offer of counseling from Miami's Catholic Archdiocese.

Now, in stories earlier today about a priest who admits he fondled former U.S. Congressman Mark Foley, CNN and other news organizations published an incorrect photograph showing another employee of the dioceses. CNN profoundly regrets that error.

PHILLIPS: A deadly dive in New Orleans and a suicide note that led to something worse. Armed with a note that was found on a man who jumped to his death on Tuesday, police entered a French Quarter apartment and found a woman who had been dismembered. The apartment was newly rented by the jumper and his girlfriend. The landlord says he sensed trouble from the very beginning.

(BEGIN VIDEO CLIP)

LEO WATERMAIER, LANDLORD: He was very upset because she claimed she had caught him being unfaithful to her and ...

UNIDENTIFIED MALE: He had to go.

WATERMAIER: And he had to go, and she assured me she was going to stay and that -- you know, not to worry. She was going to maintain the apartment and that is the last I saw her.

(END VIDEO CLIP)

PHILLIPS: Police say the remains can't be identified visually, but the girlfriend hasn't been seen since the suicide.

LEMON: Too fat to execute? A cult leader convicted of killing five followers, three of them children, has been allowed to join four other death row inmates in Ohio in challenging that state's method of lethal injection as cruel and unusual.

An execution went awry in Ohio last May when the inmate's vein collapsed. Jeffrey Lundgren now says he's at greater risk of pain because he's obese and diabetic. In his ruling, a federal judge says the potential problem can be fixed and Lundgren's reprieve may be temporary.

We're following a developing story in Orlando, Florida, a school stabbing. We're working the story. Details from the CNN NEWSROOM when we come right back.

(COMMERCIAL BREAK)

PHILLIPS: Well, you remember yesterday when we talked about those threats against NFL stadiums? We're getting word now it was a hoax. Jonathan Freed out of Milwaukee, Wisconsin with the latest information -- Jon.

FREED: That's right.

We are being told by a spokesperson at the FBI that the FBI and the Department of Homeland Security have determined today, after an investigation, that all of this was a hoax. A 20-year-old individual here in Milwaukee was investigated and released earlier today, and the latest word from the FBI telling CNN that the FBI and the Department of Homeland Security have determined that this is a hoax. Back to you.

PHILLIPS: So, John, will this 20-year-old be held accountable? It was an expensive day yesterday for taxpayers as security measures were put into place and they responded. FREED: That is the question that everybody is asking, and what we are hearing from sources at the FBI is that that is going to depend on what the motivation was behind the hoax.

PHILLIPS: Jonathan Freed out of Milwaukee, appreciate it.

LEMON: Impaled by a razor-sharp, venom-laden weapon but saved by doctors who pulled a deadly stingray barb from his heart. One man's amazing survival story coming up right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

LEMON: Ever wonder what it takes to get this show on the air? Well, we'll show you in just a little bit.

We're going to talk about something else. The surgery was a success, and doctors say his survival this far is a good sign. Eighty-two year-old James Pertakis (ph) was enjoying a boat ride when a spotted eagle ray jumped right aboard and then fired a foot-long barb into his chest. Today doctors had to pull that barb through his heart in order to remove it. The

(BEGIN VIDEO CLIP)

DR. EUGENE COSTANTINI, CARDIOVASCULAR AND THORACIC SURGEON: The initial injury was out here into the chest cavity, and probably had just become adjacent to the heart muscle itself. And with movement and breathing of the lung, it got pushed into the pericardial sac and then, with each heart contraction, it just sort of grabbed it and pulled it along further.

(END VIDEO CLIP)

LEMON: Pertakis was on a heart/lung machine while doctors stitched him up. A similar accident killed Crocodile Hunter Steve Irwin about six weeks ago, but Irwin likely died because he yanked the razor-edged stinger out.

Now if you ever wonder what it takes to get this show on the air, well, now you're going to find out.

PHILLIPS: That's right. Our team here in the NEWSROOM is featured in the latest episode of "CNN ALL ACCESS". The new video podcast takes an exclusive behind-the-scenes look at CNN. To check it out at CNN.com/podcasts, or search CNN on iTunes.

LEMON: Still ahead, you've heard of baseball fans who live and die for their teams.

PHILLIPS: Our Ali Velshi has found out just the thing for them. He'll be here to talk about it shortly.

(COMMERCIAL BREAK)

PHILLIPS: Talk about a team to die for.

LEMON: Baseball, look out.

PHILLIPS: I knew I wasn't get in on this action.

LEMON: Got any peanuts?

PHILLIPS: Hey, I know how to do a curveball, FYI.

LEMON: Let's see it. Let's see your curveball.

PHILLIPS: No, knuckleball. I got the knuckleball.

I'll give you a knuckleball.

(CROSSTALK)

VELSHI: You guys know I'm not supposed to say it on TV, because there's a baseball game tonight, probably doesn't show up on your channel.

LEMON: It's not on TV.

VELSHI: But, you know, game seven, these two teams, the Mets and the Cards, one of them wants to, you know, play Detroit and, you know, dreams of a title. Dying for a title, you might say. You've heard of die-hard fans. This is not an entirely new concept, but it is new for major league baseball. Starting in the spring, a bunch of teams, the Yankees, the Red Sox, the Tigers, the Phillies, the Cubs, and the Dodgers -- fans of those clubs will be able to be buried in a casket or an urn with baseball team logos. Somebody is making money off this.

LEMON: I've heard of the casket, but I've never physically...

VELSHI: Yes, look at that. Isn't that something?

PHILLIPS: You know, you could actually use that as a cookie jar.

VELSHI: The company -- you see it says, "Courtesy, Eternal Images"? That company also has Vatican-themed urns.

LEMON: OK.

VELSHI: I mean...

LEMON: What do you put on the top of that? This one's got a baseball.

VELSHI: Yes, that's like a lid, I think.

LEMON: Maybe like a cross or something?

PHILLIPS: This company said that they also are hoping to have agreements with Nascar, NHL, NFL, but baseball was the first to sign on.

VELSHI: Yes, totally. PHILLIPS: I'm kind of digging that. It also says $11 billion a year funeral industry has moved to add more personal touches for the...

LEMON: They got Harley...

PHILLIPS: Harley-Davidson, right?

VELSHI: Harley-Davidson-themed caskets. Apparently it's a big business. I don't understand.

PHILLIPS: Betty Boop. I'm reading a Betty Boop. That's what I want! I want a Betty Boop urn.

VELSHI: You know, I don't understand. At that point I suppose, you might as well blow the money, right?

PHILLIPS: Sure, what the heck?

LEMON: I hope this isn't worth anything, I'm signing it for you.

VELSHI: It's somebody else's wallet. I borrowed that for TV. Don't be signing that.

LEMON: Ali, you rock.

PHILLIPS: The real deal.

VELSHI: So, yes, baseball fans, these guys have deals, they're hoping to make deals with NFL, with NHL.

PHILLIPS: Is it expensive?

VELSHI: I was trying to look around. I sort of got the sense that it's a few hundred bucks more than a normal casket. I don't know what a normal casket is. I'm not big in this.

PHILLIPS: It's a big money-making business.

LEMON: Yes, it is.

PHILLIPS: Let me tell you what. You can really design a pretty kicking casket.

VELSHI: Well, the trend is strong. People continue to buy them.

PHILLIPS: What would be your team?

LEMON: I was just going to ask him the same thing.

VELSHI: I had tickets to game seven of the World Series if the Yankees were in it.

PHILLIPS: OK.

VELSHI: I'm an optimist.

LEMON: So you want tickets...

VELSHI: I mean, I was wiped out a long time ago.

LEMON: You want yours to look like a game seven ticket, is that what you're saying?

VELSHI: Yes, by the time this all happens, by the time it's my time, touch wood, there'll be all sorts of options, I'll be able to be one that's like a vest.

PHILLIPS: Touch wood or jar?

VELSHI: Or jar.

LEMON: What would yours be?

PHILLIPS: Well, see now that I'm seeing they can branch out into other themes besides sports, I'm kind of feeling, you know, hole 13 of August.

VELSHI: But, you know, we're talking about this Dow. This is part of the thing, right? Everybody feels rich.

LEMON: Yes.

VELSHI: You can spend money on these things.

LEMON: Speak for yourself.

VELSHI: Leave some money for the kids. No, no, we're going to blow it on a casket. Yes, this is an interesting trend. I don't know what to make of it. I'm not going to make fun of it because the fact of the matter someone's is making money. This is a public company that the Major League Baseball has made a deal with.

LEMON: It's your last dying wish. Thank you.

VELSHI: It is your dying wish.

Good to see you, guys. Let's take a quick look at this Dow and see how it's doing.

(MARKET REPORT)

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