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Political Pressure; Princess Diana's Death; Jefferson Reelected; Crisis In Lebanon; Toy Story; Iraq Strategy

Aired December 11, 2006 - 10:00   ET

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

T.J. HOLMES, CNN ANCHOR: It's Monday, December 11th. You are in the NEWSROOM.
Iraq's unity government, anything but unified. And now unconfirmed reports a move is underway to replace Prime Minister Nuri al-Maliki. Our senior international correspondent Nic Robertson is with us now live from Baghdad.

And, Nic, please tell us, have these gone beyond just being rumors? Is there anything to this that possibly there is a movement out there to get Maliki out of office?

NIC ROBERTSON, CNN CORRESPONDENT: Well, there's certainly plenty of behind the scenes political movement and there's certainly plenty of division. But a spokesman from the prime minister's office denies that he's about to be ousted. But what we have seen over the past couple of weeks is a radical Shia clerk, Muqtada al-Sadr, withdrew his politicians from the parliament. We've seen Sunni politicians align with him.

Now that's formed what according to some politicians is an extremist block. We've also heard from very leading senior politicians here that they're trying to form a moderate, cross sectarian block within the government. We've heard talk about a cabinet reshuffle for those top ministry jobs.

But until now, the prime minister's office, at least, denying that he's about to be removed. But plenty of division, plenty of talk about a shake-up. And, of course, at the end of this week, a conference in Baghdad for a national unity government, which could really foreshadow those changes -- T.J.

HOLMES: And, Nic, of course, we've got the Iraq Study Group recommendations came out not to long ago. We've heard, in this country at least, in the U.S., politicians on both sides really not really giving it that warm of a reception. But the Iraqi president, Jalal Talabani, he did not mince words at all. He didn't like this thing one bit. What's behind that?

ROBERTSON: Well, he gave it a real trashing. He said that it is dangerous, unfair and unjust. And the reason he said that was because of leaving so many U.S. military trainers embedded in the Iraqi army, he says, that undermines the sovereignty of the Iraq army, therefore undermines the sovereignty of Iraq.

Now Jalal Talabani, the Iraqi president, is a Kurd and has been a very staunch ally of the United States. But another leading Kurdish politician recently said that the Study Group's report would take away from the Kurds their sort of regional power and their ability to control the oil revenues from the oil fields in the Kurdish area in the north of the country. And perhaps this is more of the heart of the Kurdish issues here, that it would take away some of their regional control, which they've always wanted. They want a more independent area in the north of the country -- T.J.

HOLMES: And, Nic, finally here we want to ask you about one other thing. We hear about all kinds of criminal activity and what not going on there in Baghdad, but we're hearing about a bank robbery as well. We don't hear that too often. So tell us what you know about this.

ROBERTSON: There is a lot of criminality here, but this is the first major heist that we've heard of recently in the center of Baghdad. A criminal gang going into one of the major, private banks here, taking away a million dollars from the bank, just driving off with it, taking it out of the security vehicle, putting it in their own vehicles and making off.

The police force here is under huge pressure. It's criticized being infiltrated with militias. It's under pressure to try and keep the city safe, stop car bombing, stop kidnappings, stop hijackings of vehicles. Now this on top of it. It's an indication here of the weakness of the security structure in Iraq at this time -- T.J.

HOLMES: All right. Our Nic Robertson live for us from Baghdad.

Nic, thank you so much.

BETTY NGUYEN, CNN ANCHOR: President Bush getting some input as he plots the way forward in Iraq. The issue dominates the president's agenda this week. Today, two strategy sessions. This hour, the president meets with State Department diplomats to review some options. And later, in the Oval Office, he is meeting with historians and former generals. Now these strategy sessions come just days after the bipartisan Iraq Study Group recommended major changes in Iraq's strategy.

U.N. Secretary-General Kofi Annan making the final, major speech of his term today. Annan has chosen the Truman Presidential Museum and Library for that address. The 33rd president was key in founding the U.N. Annan's address is expected to focus on government global accountability. Annan believes the U.S. has a special responsibility to the world, due to its role as a superpower. Annan and the U.S. have had an uneasy relationship. During the Clinton year, there was a dispute over U.S. dues to the world body and Annan has been a critic of the Bush administration's handling of the war in Iraq. Annan's term ends December 31st.

HOLMES: Princess Diana's death. Nearly 10 years later, questions about the car crash still swirl. Now a new report may shed light. CNN's Alphonso van Marsh has the story and a new twist involving Americans.

(BEGIN VIDEOTAPE)

ALPHONSO VAN MARSH, CNN CORRESPONDENT, (voice over): According to British newspaper "The Observer," a new government report found U.S. intelligence was eavesdropping on Diana's phone calls hours before her fatal accident in 1997. CNN has not independently confirmed this report, but we continue to try to verify the story.

Meanwhile, other details of the report, led by Britain's former top cop, are leaking out to the British press. Details that could end speculation on how and why one of the world's most recognized women died on August 31st, almost a decade ago.

UNIDENTIFIED FEMALE: It's hard to see how he will conclude the crash was anything other than an accident.

VAN MARSH: A BBC documentary looks at events before and after the car crash that killed Diana, her companion Dodi Fayed, and driver Henri Paul. In the documentary, it is revealed that the report is expected to conclude that -- claims that Diana was pregnant and planning to marry Fayed are not credible and that driver Henri Paul was three times over the French drunk driving limit when their car crashed in a Paris tunnel.

MARTINE MONTEIL, HEAD OF FRENCH INVESTIGATION, (through translator): There was a horde of photographers who were following the couple and they were very close to the Mercedes when the accident happened. Obviously, this causes annoyance and stress. But it is not the only explanation. The driver also lost control of the car. That's obvious.

VAN MARSH: Dodi Fayed's father, a London businessman, Mohammed al Fayed, has long maintained that the crash was no accident, but part of a British agent murder plot to keep Diana from marrying his son, an Egyptian Muslim. Al Fayed believes that the authorities likely switched the driver's blood samples with those of a probable suicide victim with alcohol and drugs in his body. Something he has not been able to prove. He's indicating that the BBC has fallen for a cover- up.

Through a spokesman, al Fayed says, the BBC documentary, "has fallen into a trap deliberately laid for it." Others who knew Diana say people must accept the report results when they are officially released.

ROSA MONCKTON, DIANA'S FRIEND: I hope that now, once and for all, the line can be drawn under this. It was not a conspiracy. It was a tragic accident.

(END VIDEOTAPE)

HOLMES: Alphonso van Marsh . . .

VAN MARSH: Now this report is expected to be entered . . .

HOLMES: Sorry there, Alfonso. You go right ahead, buddy. You go right ahead. Sorry about that. VAN MARSH: Sure. Sure. Just want to tell you a little bit more about this report. It's expected to be entered as evidence, as part of preliminary hearings into an inquest into Diana's death. Now this inquest is expected to be public -- or open to the public and is slated to start in just in the beginning of next year.

T.J.

HOLMES: All right, Alfonso. Sorry about that for stepping on you there again. But let me ask you a question here. The princess, of course, still so widely loved and popular among the public. Do people somewhat have fatigue with all these conspiracy theories and reports over the years or are they looking at this report, looking forward to it and maybe having it be the definitive word finally on what happened to Diana?

VAN MARSH: It probably will not be the definitive word, at least in terms -- in the minds of the public here. Diana is so still well loved and so still well followed. Everybody wanted to know everything about her in life and in death, as it were. People are very much talking about these leaks coming out of this report. People like the idea that this report will be authoritative. It will be definitive. But for those that are convinced that Diana's death was part of a conspiracy to keep her from marrying an Egyptian Muslim, as we mentioned in the story, it's not really sure if any kind of report, regardless of how definitive it may be, will quash any of those conspiracy theories.

HOLMES: All right. Again, Alfonso van Marsh for us from London. Thank you so much.

NGUYEN: Well, the web of intrigue surrounding the death of former spy Alexander Litvinenko spreads to Germany. And his widow, well she is breaking her silence. Marina Litvinenko blames the Kremlin for her husband's death. She talked to the "Sunday Times" about her husband's reaction when he started feeling sick for what police say is radiation poisoning.

(BEGIN VIDEO CLIP)

MARINA LITVINENKO, FORMER SPY'S WIDOW: And he said, Marina, I feel like people who will poison (INAUDIBLE) you know, because they've had it. They've got some tips from (INAUDIBLE). But, of course, I told him, gosh (ph), it's unbelievable. I can't believe what happened.

(END VIDEO CLIP)

NGUYEN: Now, in Germany, Hamburg police are following a trail of radiation left behind by another former spy, Dmitry Kovtun. Police say Kovtun was there before flying to London to meet Litvinenko. They consider Kovtun a possible suspect. We'll have a live update on this developing story. That's next hour right here in the NEWSROOM.

HOLMES: Three brothers shot dead on their way to school. Was it a political message for their father? We take a look at that in the NEWSROOM.

NGUYEN: And, look at this, a controversial return to Congress. Bribery allegations fail to derail one Louisiana politician. But will his Democratic colleague be as supportive as voters? Find out in the NEWSROOM.

(COMMERCIAL BREAK)

NGUYEN: Congressional corruption. A major issue in November's election. But Louisiana voters seem ready to forgive. Yes, they re- elected Representative William Jefferson in a runoff despite bribery allegation. CNN's Gary Nurenberg has the story.

(BEGIN VIDEOTAPE)

GARY NURENBERG, CNN CORRESPONDENT, (voice over): A focus of an ongoing bribery investigation, William Jefferson, nonetheless, handily won re-election to Congress.

REP. WILLIAM JEFFERSON, (D) LOUISIANA: And we love you. We truly do.

NURENBERG: His election is not being warmly received by his party's leadership.

MARK PRESTON, CNN POLITICAL EDITOR: I think the Democrats would have preferred probably to have Mr. Jefferson lose re-election. It would make things a lot easier for them.

NURENBERG: Jefferson has been a subject of a very public corruption investigation for more than a year and a half. Federal agents raided his home and said they found $90,000 in cash in the freezer.

KAREN CARTER, JEFFERSON'S OPPONENT: The biggest difference is ethics and honesty and integrity.

NURENBERG: Jefferson's opponent made corruption a central part of her campaign. But the eight-term congressman was able to capitalize on a long history with voters in his district.

JEFFERSON: I love them completely and totally. And it's just a relationship. People wanted to stand up and put their arms around me.

NURENBERG: That is an embrace he is not likely to get from Democratic leaders who made Republican corruption an important part of their campaign to capture control of Congress.

PRESTON: I think what you'll see is Republicans will say, look, it's a two-way street here in Washington, D.C., and they'll try to point to Mr. Jefferson as an example.

NURENBERG: Jefferson has been charged with no wrongdoing. Some Democrats are frustrated with the uncertainty of the lengthy investigation. SEN. JOE BIDEN, (D) DELAWARE: Get on with it. Federal government, attorney general, make a decision. Charge him or don't charge him. Move on.

NURENBERG: Prosecutors give no indication if charges will be brought.

Gary Nurenberg, CNN, Washington.

(END VIDEOTAPE)

HOLMES: Dozens of bullets, school children dead, a father in anguish. Police say Palestinian gunmen killed three children outside a Gaza City school today, pumping bullet after bullet into their car. Their driver was also killed and three other children were wounded. According to the Associated Press, police say it was an apparent botched assassination attempt on the dead children's father, who is an intelligent officer loyal to the Fatah party of President Mahmoud Abbas. Abbas condemned the attack, calling it "an ugly and inhuman crime."

Meanwhile, a country in crisis. The government of Lebanon, supported by the U.S., facing relentless opposition, lead by the militant group Hezbollah. CNN's Brent Sadler has the details.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT, (voice over): A powerful anti- government demonstration engulfs downtown Beirut. A protest called by an opposition alliance led by the Muslim Shiite militant group Hezbollah. Rivers of men, women and children, Muslim and Christians, pour through the streets. They flow in one direction, creating a sea of Lebanese flags, on the doorstep of the western-backed government, hoping to wash that government away.

To the north of the capitol, in the important Sunni Muslim city of Tripoli, there's another potent demonstration with a strong political message supporting the government. A much smaller gathering, but no less meaningful in a country that is breaking into pieces.

In the capitol, supporters of a Christian faction, led by a general turned politician, Michel Aould (ph), were out in large numbers. Siding with the mass ranks of Hezbollah and their Shiite allies, warning the government's days are numbered, threatening and escalation of unrest. This will be the last time to meet here, warns Aould. The masses need and might expand into the government headquarters. A government that's been vilified by Hezbollah for being led by a prime minister, Fouad Siniora, portrayed here as being too close to U.S. policy in the Middle East.

UNIDENTIFIED MALE: We don't want his region. He's an American agent and an Israel agent.

SADLER: Even as this anti-government rally reached critical mass, pro-government supporters were agitating for more visible expressions of public backing for the embattled prime minister.

In another part of the city, political passions took a very different turn when Prime Minister Siniora addressed a ceremony by video, commemorating the life of MP Jebrin Twani (ph), an ally assassinated last year. One of a series of killings in Lebanon spanning two years, which many in this audience blame, but with no proof, on key Hezbollah ally, Syria.

"It's time the powers that use assassination to terrorize and dominate," explained Siniora, to realize that the Lebanese people insist on freedom, resist domination and sectarianism.

Government supporters claim the opposition is planning to mount a coo from the momentum of the street. Protests, with the start of counter protests, that could plunge Lebanon into even greater, possibly violent turmoil.

Brent Sadler, CNN, Beirut.

(END VIDEOTAPE)

NGUYEN: And on another note, paying through the nose to see the sparkle in a child's eye. So many of us do this. And this year's hot toys, well, they're at the highest prices. Who's cashing in? Find out in the NEWSROOM.

(COMMERCIAL BREAK)

HOLMES: All right. Taking a look at the numbers here on this Monday morning. The Dow up about 34 points there. We're taking a peek. The Nasdaq up about 14 points at this point as well. Slight gains on Friday as well. All eyes investors have on the last meeting of the Fed this week. Certainly hoping for a cut in interest rates. Not really a lot of hope that that's going to happen. But we'll keep an eye on the markets for you.

NGUYEN: Well, as most of us know firsthand, Christmas, not cheap, especially if you want the top toys under the tree and that's led to a sort of black-market, shall we say, for Christmas dreams. CNN's Kyung Lah has the story.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT, (voice over): It's the yearly chase -- getting the hot holiday toy. This year's most prized holiday gift, PlayStation 3. If you snag one, or in Roby Joyce's (ph) case, three, it can mean a big payoff.

ROBY JOYCE: Money, money, money.

LAH: Joyce waited two days in Chicago's frigid temperatures, camping out like numerous, other gamers. Retail price, $599.99. And on Craigslist?

JOYCE: $1,125, I think it is. And the other one for $1,000. I think I made two kids happy for Christmas since they're going to be getting the PlayStation 3. So I'm not an entirely bad person.

LAH: Jay Marasigan was lucky enough to get the PS3, paying $300 more than retail. And that, he says, is a deal.

But that's $300 over what it sells for in the stores.

JAY MARASIGAN, BOUGHT PS3: It is, but you can't get them in the stores.

LAH: This is the black-market for the toys. The Nintendo Wii, the PS3 and, of course, the Tickle Me Elmo TMX.

It's basic economics. Stores have a limited supply. Demand is high, especially with Christmas right around the corner and people are willing to pay more.

SCOTT KRUGMAN, NATIONAL RETAIL FEDERATION: And they're looking to online auctions and they're paying ridiculous amounts of money.

LAH: Do you feel a little like the Grinch at all?

JOYCE: A little bit.

LAH: Roby Joyce is a recent immigrant from South Africa and has learned a lot about the American economy.

JOYCE: It's a very interesting system. There's definitely hundreds of ways to make money.

LAH: As far as feeling like scrooge, making money off someone eles' holiday desperation . . .

JOYCE: I do a little bit, but not so much when I go to Mexico.

LAH: Kyung Lah, CNN, Chicago.

(END VIDEOTAPE)

NGUYEN: OK. I get it. You want it now. You want to play with it now. But I couldn't pay that much more for -- you know, $300. Some people pay thousands over the list price.

HOLMES: We have to admit, though, Chad Myers, at the new weather center there, it's pretty knew and we wanted it right when we wanted it.

CHAD MYERS, CNN METEOROLOGIST: Right.

NGUYEN: And we paid for it.

HOLMES: We had to pay over (INAUDIBLE).

MYERS: We got this box on eBay for $17,000.

HOLMES: You do what you've got to do, man. MYERS: You know I was just checking. You have to really think about it. Because the Tickle Me Elmo TMX, was going as high as $60. And during this story, I just went on, down to about $21 now.

NGUYEN: Really.

MYERS: So some people went out and bought a bunch of them because they could get them thinking they're going to make money and now they're holding a bunch of Tickle Me Elmos because . . .

NGUYEN: See, it could backfire on you.

MYERS: It certainly can. It's like buying those tickets. When you go to a hockey game and you see the guy that says, I need tickets.

NGUYEN: Right.

MYERS: He probably doesn't.

NGUYEN: No. You know he's trying to sell them.

(WEATHER REPORT)

NGUYEN: Well, President Bush sorting the scenarios. Another week focused on war strategy. Today's Iraq agenda. That's in the NEWSROOM.

HOLMES: And Pinochet's rise to power. Did the U.S. pave the way for his bloody reign in Chile? Answers in the NEWSROOM.

(COMMERCIAL BREAK)

NGUYEN: The way forward in Iraq. At the top of President Bush's agenda again this week. And today, strategy sessions at the State Department and in the Oval Office. CNN's Elaine Quijano is with us now from the White House.

Good morning, Elaine. It's a busy day.

ELAINE QUIJANO, CNN CORRESPONDENT: It is a busy day. Good morning to you, Betty. Starting today, President Bush is embarking on a kind of inside the beltway listening tour as he weighs the various options on Iraq. Now this, of course, coming on the heals of that sobering report by the Iraq Study Group that called the situation in Iraq grave and deteriorating.

Now first up for the president, at this hour, in fact, he is meeting with senior officials at the State Department, including of course Secretary of State Condoleezza Rice, who will make a statement, we're expecting afterwards. And then, this afternoon, he's going to be meeting with a group of about five historians and former generals in the Oval Office.

Now the consultations will go on tomorrow and Wednesday as well. And amid speculation what the president might do, those close to the White House, including the president might do. Those close to the White House, including the president's former chief of staff, say that the administration is open to change.

(BEGIN VIDEO CLIP)

ANDREW CARD, FMR. WHITE HOUSE CHIEF OF STAFF: I'm sure he'll embrace parts of the report that will help him accomplish the mission, and really the primary mission is to make sure Iraq is not a place where the al Qaeda terrorist network can find safe haven and attack the United States or our interests. The secondary expectation is that the Iraqi government will be able to provide the security for its own people, be an ally in the war on terror, and be a source of hope and freedom in that Middle East region that is so troubled.

(END VIDEO CLIP)

QUIJANO: Now the president tomorrow he'll meet via video- conference with top commanders in Iraq, as well as the U.S. ambassador to Iraq, Zalmay Khalizad. And also tomorrow as well, he's going to be sitting down face to face with an Iraqi vice president, a Sunni, Tariq Al-Hashimi (ph), and he'll be heading to the Pentagon Wednesday to hear from top officials there as well. All of this happening as the president is waiting as the president is waiting on the results of three internal administration reviews.

Senior Bush aides say that the goal right now is to make any announcement on changes to Iraq policy in a speech, possibly before Christmas -- Betty.

NGUYEN: Well, Elaine, as the president looks for a way forward, this could possibly put a kink in the plan. We're hearing word that those in the Iraqi government are looking to push out their current prime minister. What do you know about that?

QUIJANO: Well, it's interesting, Tony Snow, the White House press secretary, was just asked that in the off-camera briefing this morning, and he denied it, basically saying that it's just not true. He said that there's no move afoot to oust Prime Minister Nuri Al- Maliki of Iraq. He said there's nothing to it. He said somebody stitched together what he called unrelated threads and jumped to conclusions. And went on to say that President Bush has confidence in the prime minister. But also, he said, so does Mr. Al-Hakim, Abdul Aziz Al-Hakim, who of course the president sat down with at the White House last week. And Tony Snow going on to say that within the Iraqi government, the White House believes that there is emerging moderate corps, a moderate middle, if you will, of Shia, Sunni and Kurds in a move that the White House feels is capable of tackling the problems facing in Iraq, including of course insurgency.

NGUYEN: Very interesting. CNN's Elaine Quijano at the White House.

And we do want to give you this programming note. mentioning the president is meeting at the State Department. And we're going to have a live news conference around 11:45 from the president. And when that does happen, we'll bring it to you right here on CNN.

HOLMES: A rarity in Iran. Protests. News agencies report a group of students from a banned group briefly interrupted a speech by Iranian President Mahmoud Ahmadinejad. They were booing and chanting "death to the dictator." It's reported the president kept his cool and finished his speech. Iran's state-run newspaper picked up on the story, but gave the impressions the students were not referring to Mr. Ahmadinejad as a dictator.

Another dictator now, Augusto Pinochet, divisive in life, now in death, as demonstrators took to the streets Sunday. Pinochet accused of torturing and killing thousands during his 17 years as the leader of Chile, died over the weekend of heart failure. Well, he had many critics. He also had supporters. Some gathered for candle light vigils. Pinochet, who's 91, will be given a military funeral tomorrow, but he won't get the traditional state funeral reserved for former presidents.

Pinochet was known as one of the most controversial and notorious military dictators. We're going to take a look back now at his rise to power and questions about the U.S. connections.

CNN's Jonathan Mann has that for us.

(BEGIN VIDEOTAPE)

JONATHAN MANN, CNN CORRESPONDENT (voice-over): Before Augusto Pinochet even took power, the Nixon administration saw Chile as a challenge it had to address. Chile has set a precedent in 1970 when it's people made Salvador Allende the first Marxist president ever freely elected in Latin America. National security adviser Henry Kissinger reportedly said, "I don't see why we need to stand idly by and watch a country go communist due to the irresponsibility of its own people."

Now declassified, it told him it is firm and continuing policy that Allende be overthrown by a coup. The U.S. ambassador was instructed to approach selected military leaders. They would be given to understand that their involvement in a coup would not jeopardize American military assistance.

And on a date that would eventually meaningful to Americans for a very different reason, the military struck, on September 11, 1973.

PETER KORNBLUH, AUTHOR, "THE CHILE COUP: THE U.S. HAND": The United States, we know from declassified records, did not participate directly in the coup of September 11, 1973, but it was the U.S. effort to create the conditions for that coup, to create the justification, instability that would hasten that coup, those are the efforts that the United States took.

MANN: Allende died in the coup, the first of thousands of deaths in the years that followed. From the start, Washington was supportive of the military junta, even when it was clear that it was carrying out widespread arrests and killings.

Within weeks, the United States sent millions of dollars in aid. Kissinger, by then secretary of state, told those around him, "I think we should understand our policy, that however unpleasant they act, the government is better for us than Allende was."

Over the years, as thousands of Chileans disappeared or were killed, that remained Washington's policy.

KORNBLUH: Augusto's Pinochet's name became synonymous with humans rights violation in the 1970s and 1980s. And the United States had a hand in that, frankly.

MANN: Decades later, Secretary of State Colin Powell said it is not part of American history that we're proud of.

Jonathan Mann, CNN, reporting.

(END VIDEOTAPE)

NGUYEN: OK, you have to check out this video coming in from Plant City, Florida. See that guy right there? He's chipping away at a smokestack. This is part of the Cornett (ph) Industries phosphate plant, just chipping away, chipping away, and then this stack is going to come tumbling down.

There it goes.

He better get out of the way. And boom, there it goes. Interesting how they did this. They had him chipping away at the bottom, actually kind of like cutting a tree down.

To give you background information, though, about it, here's another look.

HOLMES: That doesn't look like the best plan.

NGUYEN: Run! ! Run for it!

HOLMES: Not the best idea really.

NGUYEN: Yes, that can be a little dangerous. Apparently these guys are professionals, T.J.

HOLMES: Yes, obviously, yes.

NGUYEN: This plant closed in March 2004 amid financial problems, and a lawsuit by hundreds of Plant City residents who accused the country of environmental pollution. So today, the stacks came tumbling down. And there you have it.

HOLMES: Well, it worked. I wouldn't have volunteered for that assignment.

NGUYEN: Yes, and no one injured as far as we know.

HOLMES: As far as we know.

All right, well, next thing we need to tell you, heading to Russia now for our culture of contract killings. The Russian streets have become a playground for paid assassins. And many think those who are speaking out about corruption are being targeted. That is ahead in the NEWSROOM.

(COMMERCIAL BREAK)

HOLMES: Massive brush fires blackening the skies in southeastern Australia today. Several blazes burning near Melbourne. Right now lightning, arson and blistering heat are being blamed.

Parts of the country recorded their highest temperatures in more than 50 years. So far, more than a half million acres have burned along with some homes as well. The fires are so big and spread out, state officials say it may take until next March to get them all under control.

NGUYEN: Well, no fire but a culture of killing in Russia. A bloody trail, contract killings, former spy Alexander Litvinenko just one of many victims. He believed his outspoken criticism of the government made him a target and CNN's Matthew Chance has the story.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): It can silence the harshest critics or clear the way for a lucrative business deal. Contract killing in Russia is an all too common tool. This, a police sting operation, to stop one of them.

Police video is used in evidence to convict would be assassins. This suspect was arrested with a pistol fitted with a silencer. Prosecutors say as many as 5,000 killings are carried out to order across Russia every year.

Investigative journalist Anna Politkovsky was one high-profile target gunned down outside her Moscow apartment. Now her family struggles to understand their loss and why these kinds of murders are so common here.

"How are those things possible in Russia," her son Ilya asks. "It is terrible and strange that those things are happening more often here than in other countries."

A fierce critic of the Kremlin and Russia's war with Chechnya, her killing bolstered Russia's position as one of the most dangerous countries for journalists to work.

So many others have died before her, like U.S. journalist Paul Klemnikof (ph), editor of the Russian edition of "Forbes" magazine, shot dead in Moscow in 2004. He often wrote about corruption in Russia and his family believes that's why he was killed.

CHANCE (on camera): One grim statistic of Vladimir Putin's Russia is that in the six years since he became president, more than 13 journalists have been killed like Anna Politkovsky and Paul Klemnikof (ph), apparently for their work. Despite official pledges to find those responsible, most of the crimes remain unsolved. And it's not just journalists in Russia who are under threat.

CHANCE (voice-over): Former KGB agent Alexander Litvinenko believes he was poisoned in London last month because of his outspoken Kremlin criticism. The Kremlin denies involvement. Andre Kozlof was the deputy chairman of Russia's central bank trying to form the country's murky financial system -- shot dead earlier this year after a football match.

And in the Russian far east, a popular opposition politician was gunned down amid an election runoff. Police say the assassin used an assault rifle fitted with a silencer.

On Russian television, crime shows feed a public fascination with the murderous phenomenon. Former detective turned TV host Sergei Advienko has been tracking contract killings for decades. In Putin's Russia, he says, criminal gangs, disgruntled individuals, or in some cases, even corrupt officials have been involved.

SERGEI ADVIENKO, HOST, "DEADLY DANGEROUS": Public officials are looking for money, they are looking for, sort of, not for doing their job properly, but using their positions to gain money for their personal needs. And definitely people, of that sort of psychology, that sort of way of thinking, they would never hesitate to solve any sort of problem by contracting a person to kill somebody.

CHANCE: It's that perception of official involvement that's become a hot political issue in Russia. The Russian president has vowed to solve the crimes.

VLADIMIR PUTIN, PRESIDENT OF RUSSIA: When such gory crimes take place, it is quite understandable they attract people's attention. However, I should tell you the number of contract killings is declining. It is the duty of the state to bring to an end any investigations of this kind. This concerns both the murders of members of the press and the crimes in the economic sector.

CHANCE: But Russia's culture of killings, be it politicians, businessmen, or journalists may have a devastating impact. Human rights workers say for one it sends a clear and chilling message about freedom of speech here.

ALEXEI SIMONOV, GLASNOST DEFENSE FOUNDATION: People do understand that to survive, they have to be loyal. To make their media work, they have to be loyal to what is said by those who pay money for that, and as soon as you are not loyal you might be driven out of your -- of your editorial.

CHANCE: There are still many Russians prepared to speak out, to oppose the powerful despite the risks. But with every killing, every act of intimidation, they become fewer.

Matthew Chance, CNN, Moscow.

(END VIDEOTAPE)

HOLMES: Annan and America. The departing U.N. secretary general says farewell. Some critics say, good riddance. That story in the NEWSROOM. SUSAN LISOVICZ, CNN CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange where we're watching on-line retailers two weeks before the big day. You're watching CNN, the most trusted name in news.

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HOLMES: Well, the U.N. Secretary General Kofi Annan is expected to be very critical of the U.S. policies in Iraq in a speech he delivers today. And that's maybe not surprising because Annan's decade-long tenure has been marked by a strained relationship with the U.S. CNN's Richard Roth reports.

RICHARD ROTH, CNN CORRESPONDENT: Kofi Annan was America's candidate to become secretary general of the United Nations. Ten years later, some in the Bush Administration can't wait until he leaves office. The U.S. ambassador himself on the way out was asked his sense of the Annan-American years.

JOHN BOLTON, OUTGOING U.S. AMBASSADOR TO THE U.N.: I'll pass.

ROTH: There were quarrels during the Clinton years over finances, with veteran Senator Jesse Helms, but Annan's relationship with Washington became down right frosty during the Bush years as the more conservative wing of the Republican Party roared to power.

ADAM LEBOR, "TIMES OF LONDON": Dealing with America is the most difficult thing I think, for Kofi Annan. Because, firstly within the administration and especially within the Republican Party, there is a lot of visceral anti-U.N. feeling. People really don't like the U.N., they don't quite understand what it is.

ROTH: Much of the strain is due to Iraq. The secretary general sharply opposed the United States invasion and was described as depressed after U.N. efforts to head off the conflict were ignored. Annan called it an illegal war.

DAVID MALONE, FORMER CANADIAN AMBASSADOR TO THE U.N.: I think Kofi Annan felt very strongly this division amongst the great powers and when after the deadlock in the Security Council on Iraq in 2003, the U.N. headquarters in Baghdad was blown up and a number of people he knew and valued were killed. I think he did take it very personally.

ROTH: Then there was another Iraq-related debacle, the Oil for Food scandal. The program's director was accused of misconduct and Annan's son was implicated.

SEN. NORM COLEMAN (R), MINNESOTA: I've called for Kofi Annan's resignation. I called for it early on.

ROTH: But the Bush Administration didn't lower the boom on Annan since U.N. countries themselves, including the U.S. had looked the other way as Saddam Hussein reaped millions of dollars in kickbacks. There were at least six different U.S. congressional investigations of Oil for Food. Annan stressed cooperation.

KOFI ANNAN, U.N. SECRETARY GENERAL: The U.S. needs the U.N. and the U.N. needs the U.S. And we need to find a way of working together.

JAMES TRAUB, AUTHOR, "THE BEST INTENTIONS": There's going to be the temptation to not do that. There going to be the temptation to basically get up on your hind legs and tell Washington or whomever to come off it. It turns out that you can't do that in this job.

ROTH: So Annan's deputy secretary general did it for both of them, criticizing U.S. foreign policy and select U.S. media outlets that they felt targeted the U.N..

MARK MALLOCH BROWN, DEPUTY U.N. SECRETARY GENERAL: Much of the public discourse that reaches the U.S. heartland, has been largely abandoned through it's loudest detractors, such as Rush Limbaugh and Fox News.

BOLTON: Secretary General Kofi Annan, we think, has to personally and publicly repudiate this speech at the earliest possible opportunity.

ROTH: The rancor continued to the end, though the Annans, the Boltons and Bushes gathered for dinner last week at the White House.

BOLTON: Nobody sang cumbiya.

ROTH (on camera): Annan's successor Ban Kim-Moon could be more fortunate as the Bush Administration may increasingly need the U.N. to save Iraq.

Richard Roth, CNN, United Nations

(END VIDEOTAPE)

NGUYEN: And Kofi Annan will be speaking at 12:30 today at the Truman Museum and Library in Independence, Missouri. We're going to monitor that speech and bring you portions of it live right here.

Also, options on Iraq on the table. President Bush, another week focused on the war and where to next? President Bush, live in the NEWSROOM, next hour.

HOLMES: And then this story folks can't get enough of right now. It's not Christmas yet. I don't have my tree up.

NGUYEN: You don't even have a tree.

HOLMES: I don't have a tree. Yes, a lot of people don't have the trees up. But the tress are actually coming down at one busy airport already. So, what's the dealio?

NGUYEN: Yes, why?

HOLMES: We'll try to explain that, coming up in the NEWSROOM (COMMERCIAL BREAK)

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