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ANDERSON COOPER 360 DEGREES

New Al Qaeda Video Released; The Bill Clinton Factor; Was Psychic Correct in Shawn Hornbeck Case?

Aired January 22, 2007 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Good evening, everyone.
Remember these words, "Bring 'em on," President Bush daring insurgents to fight American forces in Iraq? Well, that was back in 2003. Tonight, in a new propaganda video, al Qaeda's second in command throws the president's challenge right back at him.

(BEGIN VIDEO CLIP)

AYMAN AL-ZAWAHRI, DEPUTY AL QAEDA LEADER (through translator): Aren't you aware that the dogs of Iraq are pining for the dead bodies of your troops? Send your entire army to be annihilated at the hands of the mujahedeen.

(END VIDEO CLIP)

COOPER: Tough words from a man in hiding.

In addition, there are reports tonight that al Qaeda in Iraq may have been planning to sneak killers in this country. We will have more of that in a moment.

But, first, the tape -- a short time ago, I asked CNN terrorism analyst Peter Bergen what he makes of its significance and the timing of it.

(BEGIN VIDEOTAPE)

PETER BERGEN, CNN TERRORISM ANALYST: It's interesting, but it's coincidence, that it's near the State of the Union. It's interesting that he's commenting on the situation in Iraq. But he's been commenting on Somalia. He's been commenting Darfur just in the last few weeks. So, this is part of his effort to stay in the news, try and remain relevant.

COOPER: Do you think it is just a coincidence that it was released a day before the State of the Union?

BERGEN: Yes, I think so, because he's releasing a lot of these tapes now. I mean, this is like probably number 22 in the last 13 months. So, he's -- and he's commenting on stuff that's in the news all the time, whether it's Sudan or...

COOPER: Is that trying to stay relevant, trying to show that he's still a force? BERGEN: Yes, I think it is. I mean, stay relevant, stay -- keep -- be part of the conversation. I mean, we have not heard from Osama bin Laden. We have heard a lot from Ayman al-Zawahri.

COOPER: In terms of the message that he's sending on his tape, I mean, he's basically mocking the president. He's essentially kind of saying, bring 'em on. You know, 21,000 troops to Iraq is nothing. Send them all. They will all die there.

BERGEN: Right.

COOPER: They will be eaten by dogs, that sort of thing, which is nothing really new, in terms of rhetoric.

He also speaks directly to the American people.

And I just want to play a little bit of what he has to say.

(BEGIN VIDEO CLIP)

AL-ZAWAHRI (through translator): Security is a shared destiny. If we are secure, you might be secure. And, if we are safe, you might be safe. And, if we are struck and killed, you will definitely, with God's permission, be struck and killed. This is the correct equation.

(END VIDEO CLIP)

BERGEN: That's very similar what Osama bin Laden said four or five days before the U.S. presidential election, basically: Stop attacking us, Muslims, and make -- you know, we will -- we will -- we won't attack you, kind of thing. It's this doctrine of reciprocity.

The flip side of it is, if we are attacked by you, we are going to attack back. And, clearly, we are not going to change our policy in any dramatic way that is going to satisfy al Qaeda. So, they are going to continue attacking us.

COOPER: What continue to try to do, and what the U.S. has sort of helped them to do in one sense, is make this a debate between them, which is -- they, claiming to represent the Muslim world, and the United States, when, in fact, they don't represent the Muslim world. In fact, they are -- some of their greatest enemies are Muslims...

BERGEN: Yes.

(CROSSTALK)

COOPER: ... just who don't follow their brand of Islam.

BERGEN: Indeed. They have got a doctrine called (SPEAKING ARABIC) which means they decide who is a Muslim and who isn't. And they have decided that 99 percent of the world's Muslim are not sufficiently Muslim enough, whether it's Middle East governments in the Middle East or Shia or Sufis, or etcetera.

They have got a long list of people they disagree with. So, yes, they try and speak for the Muslim world. That act is, I think -- is not producing the results they want. Bin Laden's personal popularity is sort of going down somewhat. Muslims' -- Muslim attitude towards suicide attacks against civilians have changed over time, particularly because they -- al Qaeda and its affiliates have killed mostly Muslims over time.

I mean, they -- whether in Indonesia or Saudi Arabia or in Egypt, or -- you know, the list goes on and on. And this is major strategic weakness for them.

COOPER: Al Qaeda today, how is it run differently than it once was?

BERGEN: The kind of conventional wisdom that al Qaeda, the organization, has been very damaged, yes, that's true. But it's showing real life again.

Between these -- all these tapes they are putting out, between the fact that the London attack in July 2005 was an al Qaeda operation, this planes operation, the attempt to bring down American Airlines, was an al Qaeda operation, al Qaeda now runs Anbar Province in western Iraq, according to the U.S. Marines. This is not some sort of liberal view.

And al Qaeda is regrouping on the Afghan-Pakistan border, where we were back in September.

(CROSSTALK)

COOPER: And, in fact, al-Zawahri in this tape sort of crows about that, saying that President Bush has lied when says that the U.S. has deprived al Qaeda safe haven in Afghanistan. He says, in fact, the facts on the ground are very different.

BERGEN: Well, he's partly right, unfortunately.

Al Qaeda is, by -- according to U.S. intelligence officials I have spoken to, 2,000 foreign fighters in the tribal territories on the Afghan-Pakistan border.

COOPER: Two thousand?

BERGEN: Yes. And we had 139 suicide attacks in Afghanistan last year, up from 21 the year before. Al Qaeda has a role to play in all that. Taliban and al Qaeda are morphing together ideologically, tactically. They are back in business on the Afghan-Pakistan border.

COOPER: An ominous thought.

Peter, thanks.

BERGEN: Thank you.

(END VIDEOTAPE)

COOPER: As for al Qaeda in Iraq, as we mentioned earlier, details came to light today of a plot to sneak terrorists into America on student visas to carry out attacks right here.

Now, documents laying out the scheme, which never got off the ground, were uncovered by American forces in Iraq six months ago.

Today, meantime, saw yet another wave of carnage. A pair of car bombs in a central Baghdad marketplace killed at least 88 people. Then, a bombing in a market just north of Baquba. The mayor was kidnapped, his office blown up.

Today, a militant group claimed responsibility for the downing of an American Black Hawk helicopter just south of Baquba over the weekend. And a dozen troops died in the crash there, part of a weekend in which 27 American troops lost their lives.

But it is the killing of five of those 27 that is now raising a sickening chill. They were killed by men dressed as Americans.

More from CNN's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): The attack in Karbala comes in late afternoon. A dozen American troops are reviewing security plans for an upcoming Shia pilgrimage to two important shrines there, while 30 gunmen wearing uniforms much like the Americans are heading straight toward them.

The gunmen travel in a convoy of at least seven SUVs, similar to those favored by high-level military brass. Three times, the gunmen encounter checkpoints manned by Iraqi police. Three times, an Iraqi official says, they apparently passed themselves off as American troops. They flash I.D.s, speak a little English, and are waved through.

When they reach the building where U.S. troops are working, they unleash gunfire and grenades. Five U.S. soldiers were killed, the governor of the town reports, and a Humvee was destroyed near the police command headquarters. The Defense Department confirms five soldiers are dead.

The incident has raised new question about whether U.S. soldiers can trust their counterparts, or if they must shoulder even more of the burden for protecting themselves, a costly idea in an already expensive war.

BRIGADIER GENERAL JAMES "SPIDER" MARKS (RET.), CNN MILITARY ANALYST: Now, if you walk down the path, and you say, that is the inevitable end state, and it must be done, because there are too many challenges in each one of these areas, then, you pay the (EXPLETIVE DELETED) bill -- excuse me -- but you pay the bill. And that's -- you can't let the tail wag the dog when soldiers and Marines' lives are at stake.

FOREMAN: This tactic of enemies posing as friends is not new. Two years ago, a suicide bomber dressed as an Iraqi soldier struck a mess tent. In Saudi Arabia, when terrorists hit a U.S. compound, they even made a training tape showing how they painted an SUV to look like a police car.

The police officers who let the gunmen into Karbala also let them flee afterward. So, American investigators must now consider: Did the Iraqi police let the gunmen pass because they did know who they were or where they were going, or because they did?

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

COOPER: It's incredible they were able to gain access to the base.

No one covers Iraq, of course, better than John Burns, Baghdad bureau chief of "The New York Times." And we are very pleased that he joins us tonight live and in person.

John, it's good to see you here.

JOHN BURNS, BAGHDAD BUREAU CHIEF, "THE NEW YORK TIMES": Good to be here.

COOPER: First of all, this attack in Karbala, does it surprise you? Does it tell you something about the enemy?

BURNS: American commanders have always described the insurgents in Iraq as a learning enemy. And this suggests they have made a whole new leap.

(CROSSTALK)

COOPER: This is new? This is something we have not seen?

BURNS: This is something we have not seen before. And especially with the surge in American troops, and American troops in relatively small numbers now, platoon and company sized, going to be deployed out around Baghdad, in the neighborhoods, and staying there 24/7, I think this is going to be a serious concern. It's just a new -- a new anxiety to add to some...

(CROSSTALK)

COOPER: Stunning, not only that they gained access to the base, but that they were able to have a gunfight for some 20 minutes, and then escape, essentially. I mean, there were Iraqi guards who did not stop them. Does that surprise you?

BURNS: Well, of course, you know, I don't know. It happened -- I left Baghdad on the weekend.

COOPER: Right.

BURNS: So, I don't know much more than what I have seen in your report.

But, of course, there are a whole -- all kinds of levels of complexity here, including complicity on the part of Iraqi security forces, either complicity or simply of poor training. But in a sense it replicates the sort of situation that American troops are going to be in under this new deployment in Baghdad, where they are going to be twinned with Iraqi troops in these joint security sites, as they're called, 30 or 40 of them around Baghdad.

They are not going to be operating as American troops have been in the main from so-called forward operating basis. These are heavily secured sites, mostly on the periphery of the city. They are going to be smaller groups deployed around the city in the neighborhoods, and relying heavily on Iraqi security on the approaches to those bases.

So, I think this is going to be rather worrying for American commanders.

COOPER: The Bush administration, we have been hearing the last couple days -- Tony Snow made a statement to the effect that they are starting to see some movement from Maliki in the right direction, that -- a desire to crack down on some of these -- the sectarian groups.

Do you see that? Is that spin? Is that real?

BURNS: No. I think it's real. And I think it's predictable.

I think the pressure that has been brought to bear on Mr. Maliki has been very considerable. And I think he was bound to make some movement in this direction. The question is, how far will he carry that? I will put it another way around. How soon will the resistance come? Because there will be resistance at some point, just as a consequence of the basic political arithmetic of Iraq, which is that he cannot afford an open rupture with Muqtada al-Sadr and his Mahdi army.

COOPER: Because the Maliki government says: Well, we have arrested some 400 sectarian leaders and Muqtada al-Sadr's number-two guy.

BURNS: They have. They have.

And the question is, are the American and Iraqi forces in effect doing a job that Mr. Sadr would otherwise have had to do for himself? We know that his Mahdi army has fractured. All of these insurgent groups do.

We know that there were renegade groups that he was happy to toss overboard in effect to feed to the American and Iraqi troops. So, at what point does that end? Because he's protecting the core of his -- his militia. And that's not likely to be something that the American military commander is willing to accept in the long run.

COOPER: And, in the past, we have seen people get arrested and then released, so even though someone is -- 400 people may have been arrested doesn't mean they're going to be held.

BURNS: I think the real test of this will come some time later. There are only 3,000 or 4,000 of the American surge troops of the 17,500 deployed in Baghdad. The operation has not really begun. It is not really likely to begin until mid-February or afterwards. I think it will probably be the springtime before we begin to see really the degree to which President Bush has a partner in Prime Minister Maliki.

COOPER: Well, John Burns, appreciate your reporting. And, as always, thanks for being on the program.

BURNS: It's a pleasure.

COOPER: Thank you.

BURNS: Thank you.

COOPER: Saturday was the third deadliest day, we should point out, for U.S. troops in Iraq since the war began. Here's the "Raw Data" on it.

Twenty-five troops were killed, including, as we mentioned, 12 who died in the Black Hawk helicopter crash and the five who died in the Karbala attack. The second deadliest day for U.S. troops was just three days into the war. That was March 23, 2003. Thirty-one troops were troops, mostly in combat operations. The worst day so far was January 26, 2005. Thirty-seven Americans were killed, 31 in a helicopter crash near Iraq's border with Jordan.

There's more tonight, including a nasty shot at presidential hopeful Barack Obama, allegations of a secret Muslim past and a hidden extremist education. It sounded like a smear to us, so we went looking for the facts on the ground, and we found them. We will have that story coming up, and this:

(BEGIN VIDEOTAPE)

COOPER (voice-over): He used to say: Vote for me and get two for one.

UNIDENTIFIED MALE: We all know, behind the scenes, it will be the Bill Clinton campaign.

COOPER: So, what's different now that she's running? And will voters go for Billary, the sequel?

A missing child, desperate parents, and a self-proclaimed psychic.

UNIDENTIFIED MALE: She even gave a description of a car that she thought that he was taken in.

COOPER: None of what she told them was true, including the heartbreaking bottom line. We are keeping her honest -- ahead on 360.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COOPER: We are covering a breaking news story.

We just received these pictures a few moments ago out of Southern California -- choppers and ground crews working a fast-moving wildfire in Thousand Oaks, California, in Ventura County, just outside Los Angeles.

Dry conditions are fueling these flames -- high winds making the situation very unpredictable. About 20 homes, we are told right now, are in danger. It's hard to see in these pictures exactly the location of the fire. About 200 firefighters now are working this line. As you see, it is spread out over a fairly wide area.

We are going to bring you any developments throughout the night, as they come in, but the flames, clearly, at this moment burning quite through a wide area -- these pictures brought to you by KABC out in Southern California. We will continue to follow this story throughout these next two hours.

Turning to politics, it was a busy weekend. No one was really surprised when Senator Hillary Clinton jumped into the 2008 presidential race. Just a day later, Governor Bill Richardson, of course, threw his hat into the Democratic ring.

Even as her party's field is widening, Senator Clinton has a healthy lead in the latest CNN/Opinion Research poll. Let's take a look at the numbers. More than a third of Democrats surveyed back Senator Clinton. Eighteen percent support Barack Obama. Fifteen percent said they would vote for John Edwards. Just 2 percent chose Bill Richardson.

Of course, the election itself is still 22 months away. And there is, after all, the Bill factor.

Here's CNN Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Here we go again, a new chapter in the Clinton saga, or, dare we call it, melodrama, starring the senator from New York, a former first lady, and her husband, the former president. Sure, he's a genius political strategist and a brilliant fund-raiser. But it's not all good.

ANITA DUNN, DEMOCRATIC MEDIA CONSULTANT: I think President Clinton is a huge asset and a significant liability.

JOHNS: And, if there's one thing that can be said about Senator Clinton, it's that she's also a polarizing figure, if that means a lot of people either love her or hate her.

DUNN: Hillary Clinton is a candidate who many people feel they know very well, because they feel they knew her husband very well, and that people's feelings towards Hillary Clinton are, by and large, determined by her feelings toward her husband, Bill, the former president, so that there may be people out there who hate Hillary Clinton simply because she was married to Bill Clinton, because they ascribe to her things about Bill Clinton they didn't like.

JOHNS: Start with the Clinton administration health care plan that went nowhere. And then there's what you might call the soap opera factor, Gennifer Flowers, Monica Lewinsky, impeachment. Fairly or not, she's been tarred by it, as she stood by her husband's side.

Democratic political media consultant Anita Dunn says, Senator Clinton has gotten the drama in check since going to Capitol Hill.

DUNN: Eight years of drama in the White House, eight years of a sense of almost, you know, soap-opera-like: What happens next? You know, who is mad at whom next? Will he survive? Will she survive? Will she stay with him?

JOHNS: And, even though this is Senator Clinton's campaign, don't believe for one minute that the former president is going to have no role.

A veteran Republican campaign manager thinks he saw the very first attempt to break from Bill Clinton's theatrical style events after the senator's more intimate announcement last weekend.

SCOTT REED, REPUBLICAN STRATEGIST: And it showed, this is not going to be Bill Clinton's campaign. We all know, behind the scenes, it will be the Bill Clinton campaign. But he's -- he's now on the outside looking at the forest. And I think they have a clear view on what it really takes to sell Mrs. Clinton to the American people.

JOHNS: What it may take to sell Senator Clinton is to keep Bill Clinton behind the scenes. And, behind the scenes, the former president, as a political operative, may have no equal.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: Hillary Clinton's bid for president comes 15 years after her husband announced the candidacy for the White House. Not to put too fine a point on it, but a lot, of course, has happened between then and now.

Joining me is CNN's John King, Candy Crowley and Bill Schneider, part of the best political team in the business.

John, it's sort of an odd question, but does Hillary Clinton have to distance herself from her own husband?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, not distance herself, per se. But, certainly, she has to campaign on her own.

There's a huge credibility test for any candidate for president. And let's be honest. She would be the first woman president of the United States. That is, fairly or unfairly, a steeper hill for her to climb. She also would be the first woman president of the United States at a time when there will be 50,000, 70,000, maybe 130,000 troops in Iraq when the next president takes over.

So, there are significant credibility challenges for her. She needs to prove she can do this on her own. Yet, at the same time, she can't separate herself. Everybody lived through the eight years of the Clinton presidency, the pluses and the minuses of that. And he will be around in this campaign. So, she needs to be an independent voice. There's no way to escape Bill Clinton.

COOPER: Candy, what do you think her biggest obstacle is?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, her biggest obstacle, I think, that, any time there's a first, the scrutiny is incredible.

I was looking at her in that Internet video, when she announced her presidential exploratory committee. And it's, you know, the warm lighting and the big sofa and the, you know, an -- an obvious attempt to try to connect and relate to people, many of whom think that she comes across as aloof, and that there's some sort of barrier there.

At the same time that she has to show that she's accessible, she also has to show that she can be a tough commander in chief. So, she's walking, you know, a very tough line under a whole lot of scrutiny.

COOPER: Bill, you're -- you say, though, that perhaps her biggest obstacle to becoming commander in chief is what may be President Bush's biggest downfall, the war in Iraq. What do you mean?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, look, there is some sexual stereotyping around any woman candidate for president. We are the only country in the world where, when people vote for a national leader, they think of themselves as voting for a commander in chief.

That's why we have not had a female leader, the way they have in Britain and in Germany and in Israel and in India and maybe this year in France. There's -- there's a certain amount of sexual stereotyping going on here. She has no military experience. She has military expertise, however, which she acquired on the Senate Armed Services Committee.

She has a problem, maybe, with some liberal Democrats on the Iraq issue, because she has not repudiated her initial vote to authorize the war in Iraq. And she's still getting criticism for that.

COOPER: John, do you think Hillary Clinton has to redefine herself or try to reintroduce herself in some way, try to soften her image? What -- if you were -- you know, what -- what are her strategists saying about the road ahead?

KING: One of the reasons she decided to get in a little earlier than most thought she would, Anderson, was to untie her hands, so she can raise the money, go to Iowa this weekend, and just get out on the roads, because anyone close to Hillary Clinton, fans of Hillary Clinton, say she's the most misunderstood person in American politics. No, she's not a cold fish, they would say. No, she's not so abrupt. Yes, she does have some of the political skills that her husband has. You just don't see them, because she has not been in that environment.

Now, he was very helpful when she was campaigning for reelection in New York. She couldn't call into New Hampshire. She couldn't call into Iowa, because she knew what reporters like us would do with a juicy story like that. So, he worked behind the scenes then to say: Be patient. She will be out there eventually.

Now she needs to get out there herself. Is she reintroducing herself? That's hard to do. She was first lady for eight years. And she's been in the news almost every day she's been in the Senate. But she could say, hello again, not reintroduce herself, but maybe show a few sides of her that you haven't seen. But there are pluses to that, but there are potential negatives, too.

COOPER: Candy, Barack Obama, where does he factor into all of this, and especially where money is concerned?

CROWLEY: Well, look, there's a limited pool of money, no matter how you look at it. There are only so many donors that can give the big kind of money that you need.

Now, Barack Obama sort of blew this race wide open in some ways. He is trailing her in the polls. But the polls at this point are all about name recognition. He brings electricity to this race. He brings an alternative to Senator Clinton.

So, he also brings what we look -- when we look at this Democratic race, Anderson, in the last six days, we have seen an Hispanic, a woman, and a black all enter into the Democratic race. So, there's a good deal of excitement, a good deal of firsts surrounding the Democratic side of the ticket.

COOPER: No matter what side of the aisle you're on, I think everyone will agree this is going to be a very exciting presidential race.

Guys, we're going to talk to you in our next hour as well.

Don't miss CNN's coverage -- special coverage, I should say -- of the State of the Union address, begins tomorrow night at the -- at 9:00 Eastern, of course. We are going to be on with a special edition of 360 immediately following the speech and the Democratic response.

Just ahead, however, in tonight's program: Could it be the first smear campaign of '08? It's probably not the last one either. Barack Obama's Muslim education in Indonesia -- others are reporting the heat. We are sticking to the facts -- a 360 reality check coming up.

Plus: the psychic whose predictions about Shawn Hornbeck, thankfully, were dead wrong. She told Shawn Hornbeck's parents that he had died. Is she a scam artist? And who else has she misled?

All that ahead on 360.

(COMMERCIAL BREAK)

COOPER: So, was Senator Barack Obama schooled in Islamic radicalism when he was a little boy?

Well, last week, "Insight" magazine, which is owned by the conservative "Washington Times," reported that Obama attended a madrassa, or a Muslim religious school, in Indonesia when he was 6 years old. The article also accused him of supposedly hiding that he was raised as a Muslim.

Obama has acknowledged he went to a predominantly Muslim school in Jakarta, but calls allegations it was a madrassa completely false. Other news organizations ran with "Insight"'s story. They didn't check the facts. We did.

We sent CNN's John Vause all the way to Indonesia to the school for a reality check.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): In the quadrangle of this elementary school, boys and girls, aged from 6 to 12, neatly dressed in uniform, playing together, just as a young Barack Obama would have done almost 40 years ago.

In the late '60s, he moved to Jakarta. His mother had remarried. And Obama's stepfather worked for an oil company. They sent Obama to this public school from 1969 to 1971.

Here, they're taught science and math and practice traditional Indonesian dance. Besuki Elementary follows a national curriculum, just like it did in the '60s and '70s. Take a close look at Obama's teachers, women and men, all in Western-style dress.

There are religion classes once a week. Most of the 450 students are Muslim and are taught about Islam. The handful of Christians learn that Jesus is the son of God. The deputy headmaster tells me he's unaware that his school has been labeled an Islamic madrassa by some in the United States, and bristles at the thought.

"This is a public school. We don't focus on religion," he told me. "In our daily lives, we try to respect religion, but we don't give preference to one or the other."

Bandung Winadijanto attended Besuki with Obama, who, back then, was known as Barry. They were in Boy Scouts together. And he says in all these years not a lot has changed at his old elementary.

BANDUNG WINADIJANTO, BESUKI ALUMNI: It is not an Islamic school. It is common and general because there's also a lot of Christian students, Buddhists, Buddhism students and also other (ph) students.

VAUSE: In fact in almost every way, Besuki is a typical, Indonesian public school, except it's in one of the wealthiest neighborhoods in Jakarta and is probably better off than most.

John Vause, CNN, Jakarta.

(END VIDEOTAPE)

COOPER: Well, that's the difference between talking about news and reporting it. You send a reporter, checks the facts and you decide at home.

Well, just a reminder, the guy whose job Barack Obama wants still has another couple years to go and a big speech coming up tomorrow night. We'll be there in Washington, keeping him honest. We'll lay out some of the issues tonight.

Also ahead this evening, the case of Shawn Hornbeck and the torment his parents endured trying to find out what happened to him. Watch this.

(BEGIN VIDEO CLIP)

COOPER (voice-over): A missing child, his desperate parents and self-proclaimed psychic.

CRAIG AKERS, STEPFATHER OF SHAWN HORNBECK: She even gave a description of a car that she thought that he was taken in.

COOPER: None of what she told them was true, including the heart-breaking bottom line. We're "Keeping Them Honest".

Also, they took bribes. They went to prison, but they're still collecting fat pensions. Your money, capitol crooks. You demanded action. Are your lawmakers listening? "Keeping Them Honest" when 350 continues.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COOPER: Take a look at her face. She's an all-American girl on the run tonight, smart enough to get into Harvard, smart enough to con just about everyone. And her secret, you wouldn't believe.

(BEGIN VIDEO CLIP)

JON CAMPBELL, TRAVELERS REST, SOUTH CAROLINA, POLICE: She was able to take the SAT, the GED in our victim's name and she used those to apply at Columbia.

GARY TUCHMAN, CNN CORRESPONDENT: Do you think she's using another I.D. right now?

CAMPBELL: Most probably.

(END VIDEO CLIP)

COOPER: The truth about Esther, the like she had, the life she created, plus new information we are just getting about her tonight. That's coming up in the second hour of 360. You'll want to stay tuned.

First, though, attorneys for Michael Devlin, the Missouri man accused of kidnapping Shawn Hornbeck and Ben Ownby, are seeking a gag order right now against a "New York Post" reporter who posed as a close family friend in order to secure a jailhouse interview with the accused kidnapper this past week.

Now, in that interview Devlin told a reporter that he's ashamed of his arrest, saying, and I quote, "I don't know how I'm going to explain myself for my parents. It's much easier talking to a stranger about these things than your own parents."

He also talked about losing touch with friends, saying, and I quote, "I guess you could say I was lonely. All my friends started getting married and having kids. Hanging out with friends just becomes a lower priority."

Devlin also said if he wasn't in jail, he' be playing video games, something he and Shawn Hornbeck apparently did together. But Devlin refused to talk specifically about the charges against him or about his relationship with the boys.

For years Shawn's parents were desperately trying to find him. They even appeared on "The Montel Williams Show" with self-proclaimed psychic, Sylvia Browne.

Now, Browne told the distraught parents on this TV show that Shawn was dead, and she told him in great detail where to search for his body.

(BEGIN VIDEOTAPE)

COOPER (voice-over): To some, she's a window into the future, a spiritual leader who can communicate with the dead.

UNIDENTIFIED FEMALE: Debbie, I want to thank you for sharing such a special gift for us.

COOPER: To others, Sylvia Browne is nothing but a con artist and a fake.

ROBERT LANCASTER, FOUNDER, STOPSYLVIABROWNE.COM: She's wrong more often than she's right as far as I can tell so far. There have been a number of missing person cases that she's got flat wrong.

COOPER: Case in point, just listen to what Sylvia Browne told Shawn Hornbeck's parents about their son's kidnapper nearly four years ago on "The Montel Williams Show".

SYLVIA BROWNE, PSYCHIC: The guy was dark-skinned, although he wasn't black. He was more Hispanic looking. He had real long, dark hair. And strange enough, Hispanic, but he had dreadlocks.

COOPER: Then Sylvia Browne confirmed their worst fears.

PAM AKERS, MOTHER OF SHAWN HORNBECK: Is he still with us? BROWNE: No.

COOPER: Thankfully, Shawn Hornbeck was found last week alive and well. His alleged abductor, Michael Devlin, is not Hispanic and he didn't have dreadlocks at the time of the abduction.

Browne did says Shawn was abducted by a man named Michael, but she was terribly wrong about the most important detail of all.

AKERS: Hearing that was one of the hardest things we ever had to hear.

COOPER: The search for Shawn was diverted, according to his parents, based on the misinformation Browne had given, costing the effort valuable man hours. Shawn's parents, Craig and Pam Akers, also say Browne offered to help them for money.

(on camera) Is it true she also offered to help for $700?

C. AKERS: Yes, we were told if we wanted to talk with her additionally, that we could at her normal standard fee.

COOPER: And that's $700 an hour?

C. AKERS: I believe that's what it was.

COOPER (voice-over): In a statement issued today, Browne's business manager wrote, "Sylvia has never charged a fee to any law enforcement person, agency or any individual for her work on a missing person's case and has worked on hundreds of such cases over the years with positive results."

The statement goes on to say, quote, "She cannot possibly be 100 percent correct in each and every one of her predictions. She has during a career of over 50 years helped literally tens of thousands of people."

But there are also some people she's hurt. For instance on "The Montel Williams Show" in 1999, Browne shared this information with the grandmother of a missing child named Opal Jo Jennings.

BROWNE: She's not dead. I've never heard of this before. But for some reason, she was taken and put into some kind of slavery thing and taken into Japan.

COOPER: Four years later the little girl's remains were found near Ft. Worth, Texas. An autopsy showed she was killed shortly after vanishing.

Browne often says that only God is right all the time, but her critics insist she preys on people in need, people like Shawn Hornbeck's parents, who were desperate for information.

LANCASTER: People come to her with their problems. They're desperate, and she preys on that, she takes advantage of that. She takes their money. She makes believe that she's psychic, and that's reprehensible. It's evil is what it is. Evil.

(END VIDEOTAPE)

COOPER: Well, earlier I said that her fee was $700 per hour. Subsequently, I received several e-mails from former customers of hers who say it's $7 for about half an hour.

Up next, a man who keeps track of Sylvia Browne's prognostication says her mistake about Shawn Hornbeck is just the tip of the iceberg.

Plus, we've been "Keeping Them Honest" for weeks, and our persistence may have paid off. We'll tell you about a bill on Capitol Hill that could cut off some congressional crooks from fat pensions. Why not all of them? Find out when 360 continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BROWNE: Strange enough, there are two jagged boulders, which look really misplaced, because everything is trees. And then all of a sudden you get these stupid boulders sitting there.

C. AKERS: And he could be found...

BROWNE: He's near the boulders.

P. AKERS: Is he still with us?

BROWNE: No.

(END VIDEO CLIP)

COOPER: As you see right there and as we told you before the break, Shawn Hornbeck's parents went on "The Montel Williams Show" in 2003, just four months after Shawn had disappeared. On the show, you saw there, psychic Sylvia Browne -- or I should say, self-professed psychic or maybe alleged psychic -- Sylvia Browne said that Shawn was dead. She, of course, was wrong. As you know, Shawn was found alive, not where she said he was.

Ms. Browne's mistake doesn't surprise famed debunker of the paranormal, James Rand, who also runs an educational foundation. I spoke to him earlier.

(BEGIN VIDEOTAPE)

COOPER: What is your opinion regarding what we just saw happen with Sylvia Browne on "The Montel Williams Show"? Does it surprise you?

JAMES RANDI, PSYCHIC DEBUNKER: Not, I'm not surprised at all, because all of these people who say that they can speak with the dead, all of them, including Sylvia Browne, of course, are like vultures. They sit in a tree and they wait for the grieving to come by. Grieving people are vulnerable and really need some help and are naive enough to think that, if she appears on "Montel Williams", Montel Williams wouldn't deceive us, of course. She must be the real thing. And that's not necessarily true.

And they jump on these people and charge, as Sylvia does, $700 for a 20-minute reading over the telephone. Incredible, but they believe it.

COOPER: Well, that's -- I talked to the Akers yesterday, and they told me that they were only allowed to speak with Sylvia Browne on the show, not before or after. And they were told after the show that if they wanted further communication with her, they would have to pay her going rate, which I thought was $700 for an hour, but you're saying $700 for 20 minutes. And that's a phone consultation.

She denies that. Her manager told us she's never charged at all.

RANDI: Well, I think that's a matter of her opinion against mine.

COOPER: What do you think it is that makes people go back to a person like Sylvia Browne, even though she was wrong about this case and, as we've shown earlier, wrong about a bunch of others.

RANDI: Well, she'll be back on "Montel Williams" or Larry King or some other place again. And that adds to the illusion that she is dependable.

Now I have a collection, Anderson, of all kinds of tapes that have been made of the 20-minute session that she charges $700 for over the telephone. And invariably, every one of people who sent me those tapes wanted their money back and were totally dissatisfied with it.

Most of the tape consist, first of all, of giving the names of these people's guardian angels. That's not what they're looking for. They're not looking for names of other beings that they were in other dimensions and previous ages millions years ago. No, they want information that they have questions, burning questions to which they want answers. And that's not what she answers for them.

COOPER: And you say, though, what a lot of these so-called psychics do are cold readings. What's that?

RANDI: Well, a cold reading is a technique, a specific technique where you just throw all of the ideas and initials, things like -- there's something red connected with this. It's like a ripe -- it might be a roof of some kind and the letter "M" or maybe a double letter "R". I'm not sure.

But there's also something about late at night. And I smell gasoline or turpentine, something like that. And electricity is flowing.

And they go on and on like this, and they'll fill a tape with this sort of nonsense. And afterwards if the victims are gullible enough, what they will do is they'll look back through the tape to find some sort of correlation with what she said.

COOPER: So-called psychics will say, well, look, even though something can't be scientifically proven doesn't mean it's not real or doesn't exist. Do you hold out the possibility that someone could have psychic powers?

RANDI: Well, we've been offering at the James Randi Educational Foundation a $1 million prize now for many, many years. And Sylvia Browne agreed on international television that she would take the challenge. Then she announced to me that she didn't know how to reach me. A psychic didn't know how to reach me? She can't use the telephone book?

And then she said, after we told her how she could reach me so she wasn't inconvenienced, of course, she then said that I'm not a godly man so she wouldn't have anything to do with me.

Now wouldn't she want to take that million dollars, which she could earn inside of 50 minutes or so? We figured that's how long it would take to do a definitive test.

(END VIDEOTAPE)

COOPER: And I should point out, as I did the other night, we invited Sylvia Browne to be on this program. And it's an open invitation any time.

A real mystery coming up. What happened to the twisted young women -- woman who conned her way into Harvard and then vanished? Late details of a new sighting by one of our viewers.

Plus, those crooked congressman and your money. New action to keep them from collecting big bucks from behind bars.

(BEGIN VIDEO CLIP)

COOPER (voice-over): They took bribes. They went to prison, and they're still collecting fat pensions, your money. Capitol crooks. You demanded action. Are your lawmakers listening? "Keeping Them Honest" when 360 continues.

(COMMERCIAL BREAK)

COOPER: It is a story we've been following for weeks, a story viewers brought to our attention in the first place. Former members of Congress, corrupt, convicted but incredibly still collecting pensions, pensions that you're paying for. Call them capitol crooks. It's the shame on Capitol Hill.

The House promised to put an end to it. A vote was set for -- well, for tonight. What happened?

CNN's Drew Griffin, "Keeping Them Honest".

(BEGIN VIDEOTAPE) DREW GRIFFIN, CNN CORRESPONDENT: Former congressman, Randall "Duke" Cunningham, pleaded guilty to accepting more than $2 million in bribes, but he still gets his congressional pension of an estimated $64,000 a year.

Convicted Congressman James Traficant gets an estimated $40,000 a year. Both of them are still in prison. That made no sense to us, and for the last three weeks we've been chasing down senators and congressmen and asking, why?

Senator Daniel Akaka of Hawaii, whose subcommittee failed to act on a bill to ban pensions for felons last year, told us this year he's for it.

(on camera) You support it and you will support it?

SEN. DANIEL AKAKA (D), HAWAII: I will, yes.

GRIFFIN: But, still, I spent two days trying to figure out why nobody supported it last year.

AKAKA: Yes, that's right. I didn't. But this year is different.

GRIFFIN (voice-over): Two more senators on that same subcommittee told us they didn't even remember it last year.

UNIDENTIFIED MALE: The question is what happened to it last year? I don't answer that. I don't know the answer to that question.

UNIDENTIFIED MALE: I can't remember all of the specifics. We had a lot of amendments last year.

GRIFFIN: But since the time we jogged their memory, the full Senate passed the measure 87-0, banning pensions for Congress members convicted of certain crimes.

And tonight in the House -- after a nasty partisan debate, the House talked about passing an almost identical version of the Senate's.

UNIDENTIFIED MALE: It is late in coming, but it is never too late to do the right thing.

GRIFFIN: But in the end the House did not vote. It's been held over until tomorrow so congressmen stuck in bad weather could get back to the Capitol. All of this to pass a bill that the rookie congresswoman who wrote it admits is a little weak.

UNIDENTIFIED FEMALE: It's not perfect. But it's a good first start.

GRIFFIN: The catch is that the legislation, even if becomes law, only revokes a congressional pension if a lawmaker is convicted of one of five specific felonies. Get convicted of any other felony -- yes, even murder -- you get your pension. Get a plea bargain to reduce a felony to a misdemeanor, yes, you get a pension, too.

Case in point, convicted congresswoman Mary Rose Oakar. She served 16 years in Congress before being indicted on seven counts, all felonies. But Mary Rose Oakar wasn't convicted of any felonies. Instead, she pleaded guilty to two misdemeanors and, according to the National Taxpayers Union, is now collecting an estimated $54,000 a year pension.

DAVE DURENBERGER, FORMER MINNESOTA SENATOR: The Department of Justice has charged me and two of my friends with...

GRIFFIN: Former Minnesota Senator David Durenberger was another lawmaker originally charged with felonies, in this case fraud, but he pleaded guilty to five misdemeanors. Since 1995 he's been eligible for a federal pension that the Taxpayers Union now values at $86,000 a year.

The point is the bills will not prevent all congressional crooks from collecting pensions in the future, and they most certainly will not stop the pension checks of those already convicted, yet still collecting.

(END VIDEOTAPE)

COOPER: It's amazing. Drew, you mentioned this bitter partisan fight tonight. What are they fighting about? It seems like a no- brainer.

GRIFFIN: Anderson, it is a no-brainer. Believe it or not, Republicans were trying to argue for more time to get a tougher bill to add more felonies. Standing in the way the Democratic leader said, "You know what, you guys? You should have done that last year when you were in power. We're in power now. Pass this bill."

In the end they're going to wait for the 22 congressmen who couldn't get back because of the snow.

COOPER: So what felonies now will matter? What felonies will account for this?

GRIFFIN: Well, they're saying the five biggies that involve ethics in office: bribery, lying, getting your staff to lie, committing some kind of fraud or conspiring to commit some kind of fraud. All of those that involve what they call the ethics bill.

But you know, you've still got congressmen who've been convicted of things such as mail fraud that are still getting their pensions and other kind of stealing issues. And they'll still get their pensions.

So really, it is a narrow list of these felonies. And, Anderson, you know you get a good lawyer, you're just going to try to get a plea bargain of anything but those five felonies so you collect your money.

COOPER: Not to mention, I mean, if you, you know, God forbid, murder somebody, you still get your pension?

GRIFFIN: Yes, you surely do. You surely do.

COOPER: It's amazing. And this is also back -- or it's grandfathered so that all the people who are crooks thus far, they're OK?

GRIFFIN: Yes. They're OK. And you know, that's really the law of the land, you know. For most laws, you can't just go back in time. But ironically, they had to add an amendment to this bill tonight to make sure it went into effect immediately.

If this bill had passed on Friday, let's say, the measure called for it not to go into effect until after this congressional session. So all these people commit their felonies and still get the pensions.

COOPER: Just in case.

GRIFFIN: Yes.

COOPER: All right. Drew, "Keeping Them Honest" for us. Drew, thanks very much. We'll continue to follow this story.

Coming up, our "Shot of the Day". Makeover for a CNN workhorse helps bring in big bucks for a very good cause. First, Randi Kaye joins us with the "360 News and Business Bulletin" -- Randi.

RANDI KAYE, CNN ANCHOR: Hi, Anderson.

We begin with a breaking story we've been following out of California. A wildfire just outside Los Angeles. It is burning in Thousand Oaks, Ventura County. Fueled by winds and dry conditions, the flames are inching closer to about 20 homes now. About 200 firefighters are trying to contain it.

Opening statements in the case against Vice President Cheney's former chief of staff could begin tomorrow. Jury selection for the Lewis "Scooter" Libby trial wrapped up today. Libby is charged with obstruction of justice and four other charges in connection with the leak of CIA operative Valerie Plame's name.

A rocky start to the week on Wall Street. Concern over technology companies led to the biggest one-day loss since November. The Dow fell more than 88 points. The NASDAQ dropped 20. The S&P 500 lost 7 1/2 points.

And a black Monday for a major drug company. Pfizer is cutting 10,000 jobs and closing five facilities. The downsizing comes amid growing competition for Pfizer and questions over drug safety and effectiveness -- Anderson.

COOPER: Randi, thanks.

Time for "The Shot". A sturdy, well traveled part of our family was auctioned off this weekend. We're talking about CNN's Warrior One.

In 2003, CNN used this Hummer to cover the first phase of the war in Iraq. Warrior One was battered and bruised. No longer. After a renovation on the Learning Channel, it's brand new, basically.

On Saturday Warrior One fetched $1,250,000. The winning bid came from co-founder of ReMax, Dave Liniger. Another quarter of million was thrown in by businessman Dave Resler. Proceeds of the auction go to the Fisher House Foundation which houses families of U.S. troops receiving hospital care.

Our top story ahead: al Qaeda's second in command says, essentially, bring it on. A taunting new threat in a propaganda tape. Is it just words or can he back it up? We'll have a reality check.

Also, can your tax dollars be used to house and feed the next generation of Islamic fanatics? You bet. We'll explain how.

Plus, a shadowy con artist. This woman fooled friends and lovers at two Ivy League universities. Now she's vanished; she's on the run. The details of her remarkable double life are surfacing. Her story when 360 continues.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com

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