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Former Iowa Governor Tom Vilsack Withdraws From Presidential Race; Clinton-Obama Fight Fallout; Top Car Scams To Avoid; Iran's Latest Refusal To U.N. Demands Has Set Off Chain Reaction Perhaps Resulting In Tougher Sanctions; Studios Get Gold At Oscars

Aired February 23, 2007 - 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: Hi, everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta.
DON LEMON, CNN ANCHOR: And I'm Don Lemon.

A Florida family breathes easier, but their community remains on edge -- 13-year-old Clay Moore found alive, but the man who allegedly abducted him at gunpoint is still on the loose.

PHILLIPS: End up feeling hoodwinked when someone looks under the hood of your car? It's "Fight Back Friday." We have got the keys to beating car repair rip-off.

LEMON: And got stars in your eyes thinking about the Oscars? Richard Quest says the studios are keeping their eye on the bottom line. That little gold statue can mean lots of green.

You're live, right here in the CNN NEWSROOM.

We have been following events in Manatee County, Florida, where a teenager is safe, but his kidnapper still on the loose. Classmates say 13-year-old Clay Moore was taken at gunpoint while waiting for the school bus this morning in Parrish, just south of Tampa. Police are still looking for the gunman.

(BEGIN VIDEO CLIP)

CHARLES WELLS, MANATEE COUNTY, FLORIDA, SHERIFF: Our investigation really is as ongoing as it was an hour-and-a-half ago or up until the time that we received this news. We're on the same manhunt that we were. We just have -- we just have Clay.

Our suspect is still at large. We will be doing everything that we can to locate him and bring him to justice.

(END VIDEO CLIP)

PHILLIPS: Details of the case are still being sorted out. We do know the boy doesn't seem to be badly hurt.

LEMON: One baby, two courts on two coasts, and a question of jurisdiction. CNN's Susan Candiotti is live in Fort Lauderdale, Florida, with highlights from today's paternity hearing for the baby of Anna Nicole Smith.

Hi, Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi, Don.

The question is, does a Florida judge have any say at all in an ongoing California paternity suit? Well, this family court judge in Florida says he won't have any decision for anyone about it until Monday, at the very earliest.

This is all about Larry Birkhead, the ex-boyfriend of Anna Nicole Smith, trying to prove that he is the father of Dannielynn, Anna Nicole Smith's 5-month-old daughter. And he has had this ongoing paternity suit filed in California. He has been trying to get a DNA sample from Dannielynn. But, so far, the Bahamas' courts will not allow him to enforce it.

So, because he has a sample of DNA from Anna Nicole Smith, Birkhead is arguing before this judge that gives him the right to come before a Florida judge, since she's in Florida, that he should be able to weigh in on this.

His attorneys explained why they need the sample from Dannielynn.

(BEGIN VIDEO CLIP)

SUSAN BROWN, ATTORNEY FOR LARRY BIRKHEAD: ... California, the -- there was a rumor that there was going to be a bait-and-switch.

If he brought a baby that wasn't Dannielynn, there haven't been many pictures of Dannielynn.

NANCY HAAS, ATTORNEY FOR LARRY BIRKHEAD: Who would know?

BROWN: Who would know? And, then, our client, Larry Birkhead, would be improperly exclude. Also, it's easier and it's sounder practice, as Dr. Baird testified before Judge Seidlin, to have all three parents.

HAAS: Correct. And that is why it was important that we secure Anna Nicole Smith's samples, because the triad for paternity testing is always the way you want to go.

(END VIDEO CLIP)

CANDIOTTI: You know, we have seen a lot of pictures of Anna Nicole Smith over recent weeks, but this is the final image we were shown in court of her yesterday, and one we want to show to you again today.

This is something that was entered into evidence. It's a home video. The shooter of this home video is Howard K. Stern, her partner. And it shows Anna Nicole Smith, her face painted with what appears to be clown makeup. She is pregnant, and she clearly seems to be out of it.

And Stern is asking her whether she has taken any mushrooms, eaten any mushrooms. And she is saying: What? What are you talking about?

Stern then says on the video: "Oh, I'm just joking. I'm just joking."

But it is something that affected a lot of people when they saw it in court. And they are questioning why Howard K. Stern, why he might have made such a video.

I think, in answer to that and in answer to a lot of questions that have been raised throughout about Mr. Stern over time, his sister, Bonnie Stern, issued a statement this afternoon.

And we would like to read a statement -- that -- part of that statement to you. It says: "Howard cared for and loved both Daniel and Anna Nicole with all his heart and soul. He is wholeheartedly dedicating himself to ensure two things: one, that Anna Nicole received an honorable and dignified burial in the Bahamas beside her beloved son, Daniel, as she expressly desired, and continuing to provide Dannielynn with the love, care and support that she so richly deserves."

Of course, her care and support right now is up to a guardian who has been appointed to represent her interest in the burial of her mother. And that attorney has said that the burial will take place in the Bahamas. But nothing more than can be done about that until we hear more about an appeal, an appeal that has been filed -- or will be filed this afternoon, we expect, in this case by Anna Nicole Smith's mother.

That's supposed to take place in West Palm Beach. She is challenging the right of this guardian to represent Dannielynn. She says she should be considered the next of kin -- Don, back to you.

LEMON: Yes.

And, Susan, just that video of the clown face, just to put that in -- into perspective, as unusual as her behavior might appear there, that face, she was baby-sitting in this. And apparently it was a party, and, like, a 9-year-old girl painted her face that way, so just to put that into some context.

Her behavior is -- does seem a bit strange there, but she didn't do this makeup herself, is what we're trying to get across here.

Susan Candiotti, thank you so much for that report.

PHILLIPS: The U.S. military says it was all a big misunderstanding.

Troops today stopped an armed convoy near the Iranian border, detained the people, and took their weapons. What they didn't know was they had stopped the son of a senior Shiite politician, one of the most powerful men in Iraq.

Amar al-Hakim's father is the leader of the United Iraqi Alliance, Iraq's dominant political coalition. The son and his entourage were held for several hours. The military is investigating, and the U.S. ambassador has apologized.

LEMON: Rape in Iraq as a terror tactic, or simply a brutal crime? Rape is largely invisible, unspoken in Arab and Muslim society. But, since Monday, two Iraqi Sunni women have publicly claimed they were sexually assaulted by Iraqi security forces.

CNN's Carol Costello has the fallout.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): They have become the last pawns in the ugly war between Sunnis and Shiites. Two Iraqi women have come forward with very public claims they were raped.

The first allegation came Monday, when a Sunni Muslim woman appeared on Al-Jazeera TV and declared three Iraqi police officers raped her. The Shiite-led Iraqi government was quick to react -- Prime Minister Nouri al-Maliki calling her allegations fabricated propaganda, aimed at obstructing law enforcement.

What some say is Maliki's rush to judgment sparked protests in support of the alleged victim, heightening tensions between Sunnis and Shiites, and causing concern in the United States about Maliki's leadership.

Congresswoman Ellen Tauscher:

REP. ELLEN TAUSCHER (D), CALIFORNIA: Well, it's kind of shocking. If you can imagine having the head of state in any other country speaking about what should be a local criminal manner -- he should not be involved in this, other than, as the head of state, to demand that the rule of law and the kind of due process that this woman should have should be followed by the local jurisdiction.

COSTELLO: Iraqi newspapers are closely following the story. It's being debated on Arab TV -- some commentators challenging the U.S. military doctors who treated the alleged victim to release her medical records.

MAJOR GENERAL WILLIAM CALDWELL, U.S. ARMY SPOKESMAN, COALITION FORCES IN IRAQ: She was released with her medical records. What she does with those is her own decision. But nothing out of the multinational force would be released from us.

COSTELLO: So far, U.S. officials are staying out of it. But now another Sunni woman has come forward, this time accusing Iraqi soldiers -- her story, again on tape and very public.

And, while four Iraqi soldiers were arrested on this complaint, some U.S. lawmakers say there have been other victims of such abuse in Iraq who are keeping silent. (END VIDEOTAPE)

PHILLIPS: Well, a clash of political titans -- who came out on top in a big-name Democratic dustup? A closer look straight ahead from the NEWSROOM.

LEMON: And, if you blink, well, you may have missed Tom Vilsack's campaign for president. The former Iowa governor has abandoned ship. Find out why next.

PHILLIPS: The victim identified him. The DA prosecuted him. The jury convicted him.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When they said guilty, I couldn't believe it. I thought I was dreaming. And I said, well, I will wake up.

(END VIDEO CLIP)

PHILLIPS: He did, to a nightmare. But he was innocent the whole time -- James Waller's battle for justice straight ahead from the NEWSROOM.

(COMMERCIAL BREAK)

LEMON: The Clinton-Obama drama may be over, or maybe not. Either way, does either campaign have anything to show for it, besides money, of course, raised by the guy who started it? And will any of it matter a year from now, when the presidential primaries are actually under way?

Here is CNN senior political correspondent Candy Crowley.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): And, on the second day, camp Obama was in above-it-all mode. Barack, said an aide, considers Senator Clinton a friend, an ally, and thinks there's bigger stuff to talk about.

They were less sanguine in camp Hillary, where the feeling is Obama is getting a free ride in the media. The politics of hope, insisted one, is the politics of trash.

DONNA BRAZILE, CNN POLITICAL ANALYST: You know, as someone who is very excited about seeing the first viable woman, the first viable African-American compete for the White House, it was quite disheartening to see this story play out. But I think the -- I think it's over. I think the campaigns are regrouping.

CROWLEY: To review the bidding: David Geffen, a former fund- raiser and friend of the Clintons, is now an Obama supporter. He gave an interview and laid into the Clintons, calling them, among other things, liars. Camp Clinton demanded that Obama immediately condemn Geffen's remarks and give back the money Geffen raised. Obamaville responded with a caustic note, saying the Clintons never had problems with Geffen when he was fund-raising for them and staying in the Lincoln Bedroom.

Anyhoo, add up the score of the first mud-wrestle of the season, you must give camp Clinton points for following the candidate's rules laid out in her first trip to Des Moines in late January.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: When you are attacked, you have to deck your opponent.

CROWLEY: She was talking about Republicans at the time, but if the shoe fits.

On the other side, give Obama props for neatly sidestepping the fact that Mr. Geffen had just helped raise $1.3 million for Obama's presidential bid.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: My sense is that Mr. Geffen may have differences with the Clintons. That doesn't really have anything to do with our campaign.

CROWLEY: So, who won? Answer: Well, naturally John Edwards, Bill Richardson, Tom Vilsack, et al.

BRAZILE: So, I think round one went to what I call the second- tier candidates, who are waiting for the top-tier candidates to stumble, so that they can get on stage.

CROWLEY: And so it goes. Eleven months before anybody casts a vote, they are throwing punches. There are plenty of rounds ahead.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: Just 15 weeks and a day after getting in, Democratic presidential candidate Tom Vilsack is getting out. The former Iowa governor says can't raise the vast amounts of money needed to win his part's nomination.

CNN political editor Mark Preston joins me now from Washington.

So, Mark, let's start with just the fact that he dropped out. Do you think that he would have made a tremendous influence?

MARK PRESTON, CNN POLITICAL EDITOR: Well, look, Tom Vilsack was very clear why he did drop out, and it's something that we're going to hear about over and over and over again. It's all about money right now.

Mr. Vilsack, you know, argues -- he said today that: Look, I had the ideas. I had a plan. I didn't have the money. I just couldn't, you know, continue on with the campaign if I didn't have the money to be able to push the message.

PHILLIPS: Now, the last time we saw a governor -- former governor come out of nowhere and make a splash, it was Howard Dean. And then he sort of fizzled out. Yet, we remember that scream very well.

(LAUGHTER)

PHILLIPS: Is this a cautionary tale for other governors in the hunt?

PRESTON: No, I don't think so, not at all.

Look, in fact, governors have a better track record than senators of being elected president. The last senator that was elected president, of course, was John F. Kennedy. And if you were to, you know, go back through history, governors have a better chance at winning a presidential race.

And the reason being is that they can argue that they are a chief executive, they know how to lead, they know how to legislate. At the same time, they don't have the baggage that, you know, a lot of people call Washington baggage, you know, the inside-the-beltway scar that, you know, a lot of senators, congressmen have.

PHILLIPS: So, are the days gone when someone can just come out of nowhere, like Jimmy Carter and Bill Clinton, for example, and just take the White House?

PRESTON: No, absolutely not.

And I will tell you the reason why. You know, the nature of campaigning has changed dramatically. The nature of fund-raising has changed dramatically just in the last two or three years alone.

You know, you talk about Howard Dean. He was somebody who had very low name I.D., you know, this time back in 2003. Next thing you know, he takes off. And he was able to raise money through the Internet.

You know, look, they called them wheels, the big wheels, the big people who are able to raise, you know, tens of millions of dollars. But you know something? There is also -- there's, you know, the everyday person now, who can go on the Internet and can send $25, $50, contributions, and that can really help fuel campaigns.

PHILLIPS: So, what does Vilsack do now?

PRESTON: You know, who knows? I will tell you right now, though, he is the most popular person in Iowa, in the sense that every campaign is calling him, you know, wishing him well, saying that he was a great guy.

What they want from Vilsack right now, not only do they want his endorsement, because it's very important. He is a former governor of Iowa, which is the first state that is going to votes in the presidential primary. But they want his key staff and they want his supporters. And they want the organization that he has built in Iowa, as a former governor, to help themselves get elected.

So, while Mr. Vilsack is stepping off stage, so to speak, he is really at the forefront, and will continue to be.

PHILLIPS: Mark Preston, thanks.

PRESTON: Thanks.

LEMON: All right, from Washington, D.C. to Oklahoma City, our Betty Nguyen is going to take us there with a developing story.

What do you have, Betty?

BETTY NGUYEN, CNN ANCHOR: Oh, you have to look at these pictures, Don. Just check them out. We're going to put them up for you out of Oklahoma City.

Look at the smoke billowing into the air. These are some live pictures. When you get a little bit closer to the scene, which they are zooming in to, you will see, this fire is coming from what we had first thought was a used car lot, but it really appears that it's more like a junkyard, and some old cars have caught on fire. I say some -- many of them, in fact.

And, according to CNN meteorologists, the winds are blowing at 20 miles -- 20 to 25 miles per hour, which is not helping the situation. You can see how that smoke is just blowing across the city there in Oklahoma City.

Hopefully, we can get a little bit closer to the junkyard, where you can see where these cars are on fire, but, no doubt, firefighters have quite a -- a big fire on their hands to try to put out. You see the big black smoke, obviously, because of the cars that are just on fire there.

There you go. We're zooming in a little bit more, so you can see. This appears to be a junkyard, where they have these cars there sitting, maybe some of them used for parts or whatnot. But, as those catch on fire, the tires and all of the other things, the oil within the car, it's just -- this fire -- this could go on for quite some time, and, really, a blaze there in Oklahoma City, causing a lot of problems for firefighters, not really any immediate danger for anyone around.

This is a very large facility. And we're not told exactly how this started, why it started, or if anyone is injured. But, at this point, the pictures speak for themselves.

Don, we will keep a watch of it and bring you the latest.

LEMON: Yes, you don't know what is in those cars, the oil, the tires, and what kind of material may be going into the atmosphere.

NGUYEN: Absolutely. LEMON: Thank you so much for that, Betty.

The Strait of Hormuz, is it a target for Tehran? Security concerns along the waterway that could have a big impact on you -- we will explain, straight ahead in the CNN NEWSROOM.

PHILLIPS: So, you don't know a carburetor from a carbohydrate? That doesn't mean you should get ripped off at the repair shop -- up next, how to avoid underhanded dealings under your hood.

SUSAN LISOVICZ, CNN CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange on this "Fight Back Friday."

When NEWSROOM returns, I will tell you how to protect your greatest asset, your home. We will have tips to avoid financial ruin when it comes to your mortgage.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: It is "Fight Back" Friday here on CNN.

The greatest financial asset for most families is their home, but a recent study says more than two million people will lose them because of predatory lenders.

Susan Lisovicz at the New York Stock Exchange with some tips on how to protect yourself.

That is sad news, Susan.

LISOVICZ: It's sad news. And you know what? There were a lot of folks who were saying that this was going to happen, because money was cheap for some people, and there was so much building going on, and everybody was tempted.

There are people -- the people we're talking about, the 2.2 million people, are people are subprime mortgages. Money is not cheap for them. It's usually the last resort for people with spotty credit. These loans often come with monthly payments that increase over time. So, even if you can afford it at the outset, you may not be able to a year or two later.

A study by the Center For Responsible Lending says that one in five subprime mortgages originated during the past two years will end in foreclosure. That's double the rate from 2002. And it's only expected to get worse. Now that the housing boom has cooled, fewer delinquent borrowers will have the home equity they need to refinance these mortgages.

And since one quarter of all home loans made in the U.S. are subprime, you might want to consider how you can avoid financial ruin. First, make sure you have the means to repay your loan. It's kind of obvious, but what we're talking about, repayment here, we're talking about without resorting to refinancing. Borrowers in the subprime market typically refinance from one bad loan to another, only increasing their chances of foreclosure -- Don.

LEMON: And, Susan, you know what? This is something that affects a lot of people here. And a lot of people are interested in this. We have a little time. Any other things that folks should be watching out for?

LISOVICZ: Don, you want to check and make sure your lender checks whether you will be able to afford the loan after the initial teaser rate expires.

Any good lender should also require escrow payments, put in -- money put in reserve. I should point out that homeowners with higher interest subprime loans like to refinance as their credit improves. But the majority of subprime mortgages carry a prepayment penalty. So, you're getting charged for paying off a loan early.

Before you sign anything, check to see if there is a penalty. If there is, that should be a red flag. And brokers are getting paid more if they deliver a loan with inflated interest payments. So, beware of that trick, too -- Don.

LEMON: All right, Susan Lisovicz, thank you so much. We will check the markets a little bit later on. Thank you.

LISOVICZ: You got it.

LEMON: Well, obesity is reaching epidemic proportions in America's black community. Many of its leaders are dying young from weight-related issues, such as diabetes and heart disease.

PHILLIPS: African-American children are continuing the legacy. They are twice as likely as white children to be obese.

But the civic organization 100 Black Men of Atlanta is making its members role models for good health.

Sanjay Gupta reports as part of our series "Fit Nation."

(BEGIN VIDEOTAPE)

JOHN GRANT, EXECUTIVE DIRECTOR, 100 BLACK MEN OF ATLANTA: To really sell in end market.

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): John Grant is a man in motion.

GRANT: I walk at a very fast pace. I often have people telling me who are with me, will you slow down?

GUPTA: As CEO of 100 Black Men of Atlanta, Grant teamed up with former surgeon general David Satcher and the Morehouse School of Medicine to create a health program.

GRANT: I'm much more conscious of the fact that, if one can walk 10,000 steps a day, how much you can lower your incidence of diabetes.

GUPTA: Sixty percent of African-American men are overweight. Forty-one percent have cardiovascular disease. In addition, black men are twice as likely as white men to have diabetes or die of cancer.

DR. DAVID SATCHER, FORMER U.S. SURGEON GENERAL: We felt that, if we started with these men, it would be an investment in their health and in the health of their community.

GUPTA: Initial health screenings found many undiagnosed problems, such as prostate cancer, heart disease and high blood pressure. Each participant was encouraged to increase their physical activity to 10,000 steps a day and eat at least nine servings of fruits and vegetables every day.

Those simple changes lowered their cholesterol, blood pressure and blood-sugar levels over the first two years of the program. And now the group is reaching out to young people in its scholarship program.

DR. WILLIAM ALEXANDER, MOREHOUSE SCHOOL OF MEDICINE: We believe very strongly that, if we can help our students improve their health, then they will improve their academic performance.

GUPTA: Walter Burson is a sophomore at Tuskegee University who is overweight and at risk. He's lost 15 pounds since starting the health challenge.

WALTER BURSON, STUDENT: I want to be healthy. So -- and I want to live a long life. And now is the time to start.

SATCHER: This is the black men playing their role, taking their responsibility in the home and ultimately in the community. That's what this is about.

GUPTA: Dr. Sanjay Gupta, CNN, Atlanta.

(END VIDEOTAPE)

PHILLIPS: Straight ahead: "Monster Garage," military edition. Ahead the in NEWSROOM, we are going to take you to the Red River Army Depot, where a tune-up can mean the difference between life and death.

(COMMERCIAL BREAK)

LEMON: Hello everyone. I'm Don Lemon live in the CNN world headquarters in Atlanta.

Your car conks out and you're just know you're about to get hit by a crafty mechanic. He wait a minute, it's fight back Friday. We've got advice on how to keep the upper hand. You're live right here in the CNN NEWSROOM.

PHILLIPS: Well, 140,000 U.S. troops in Iraq, untold thousands of vehicles, machines, weapon systems right there with them. All that stuff is showing four years worth of war time wear and tear. CNN's Sean Callebs reports from the military's very busy fix-it shop.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT: There aren't many vehicles out here that show damage from an IED or some other ballistic. The reason usually they're so damaged they are usually left overseas or when they come to Red River they're held in another area and the military asked us not to take pictures of them because it could show areas that are vulnerable.

Now why do they refit all of these vehicles? The reason, money. A new humvee is $110,000. To refit one, it's about $50,000 to fix one and get it up and running again. Let me show you, this part alone is $500. This can be salvaged and reused again, the hood, many other parts. The hoses, parts critical are all brand new.

So anybody overseas receiving a vehicle knows that it's going to be as safe as possible.

Sean Callebs, CNN at the Red River Army Depot in Texas.

(END VIDEOTAPE)

LEMON: Car repairs we all need them sometime but how can we avoid being taken for a ride some.

Our consumer reporter Greg Hunter has some tips.

(BEGIN VIDEOTAPE)

GREG HUNTER, CNN CORRESPONDENT (voice-over): There are three top car scams you should always say no to. Number one. Engine oil flushing.

MIKE ALLEN, "POPULAR MECHANICS": The mechanic comes out and says look at this dip stick. Look how filthy your oil is. Your engine is all full of sludge. Just changing your oil isn't going to do it. What you need to do is let me hook your car up to this machine which will run the special solvent through and it will pull all the sledge out of your engine. Your engine will last forever.

HUNTER: Say no to engine flush. "Popular Mechanics" Mike Allen says changing oil regularly is all you need to do. Two -- fuel injector cleaning.

(on camera): When the mechanic asks you would you like to have your injectors cleaned as regular maintenance, do you need that?

ALLEN: Well, no, if your car is running fine, the check engine light is not on, it's not missing or getting poor fuel economy you don't need to do that.

HUNTER (voice-over): That fuel injector cleaning you probably don't need can cost around $150. Three -- fuel-saving devices and additives. The Environmental Protection Agency and Mike Allen have tested these products for years and say they don't work. Say no to any device or additive that promises better gas mileage.

ALLEN: Like any business, there are unscrupulous people who will try to take money away from you that they really don't deserve.

HUNTER (on camera): So the term you're talking about is called what?

ALLEN: Service merchandising.

HUNTER: So, remember, one sure way not to get ripped off with unnecessary service. Just say so. Another, check your owner's manual. It will tell you exactly when to do it. Greg Hunter, CNN, Clifton, New Jersey.

(END VIDEOTAPE)

PHILLIPS: A controversial new x-ray machine debuted at the Phoenix Airport today. The back scatter is designed to detect weapons and explosives on airline passengers. It's basically a digital strip search. The x-rays are voluntary for now and those singled out for additional screening can choose the back scatter or traditional pat- down.

LEMON: Another ultimatum, another snub, another round of meetings over what to do about it for a standoff, the U.N./Iran controversy never seems to stand still. Iran's latest refusal to make the latest U.N. demands to stop enriching uranium has set off a chain reaction perhaps culminating in tougher sanctions.

As CNN's Tom Foreman reports, Iran has options too that have nothing to do with nukes.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Military analysts are increasingly calling it a genuine and perilous threat that Iran may attempt to disrupt the world's oil supply by attacking the Strait of Hormuz.

GAL LUFT, INST. FOR ANALYSIS OF GLOBAL SECURITY: The Strait of Hormuz is the most potent choke point in the world. We have about 17 million barrels a day floating through this area. It's about 20 percent of the world's oil market.

FOREMAN (on camera): The strait is not very big. At its narrowest point it's only about 30 miles or so across. That's not big at all. But its impact on world oil markets is enormous. Why? Well, because it connects some of the Middle East's most critical oil supplies with the rest of the planet.

These are the Saudi Arabian oil facilities. And every hour of every day, the oil that flows out of here is heading for the Strait of Hormuz. (voice-over): One military leader says concern is that unprecedented levels because the Iranians have been staging naval maneuvers and testing weapons in that area. Then showing their capability on the state-run news network.

The commander of the U.S. Fifth Fleet Vice Admiral Patrick Walsh says, "In the last five months, you see the open display and the implication of the use of mines."

(on camera): Now, should this strait be shut down or even temporarily disrupted, the alternatives for that Saudi oil, for example, are just not good. Yes, there is an old pipeline that stretches all the way over to the red sea but oil industry analysts say it takes longer, it's not used much, and it may not be reliable.

(voice-over): Protecting the strait through war fare with Iran would open another troublesome battlefront but doing nothing could be costly, too.

LUFT: If there is disruption in the Strait of Hormuz, all of us, every American will feel the pain.

FOREMAN: Even if the United States tapped its strategic oil reserves, world markets would become chaotic and industry analysts say the price at the pump could rise dramatically to $7, $8 a gallon. Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: The victim identified him. The D.A. prosecuted him. The jury convicted him but he was innocent the whole time. James Waller's battle for justice straight ahead in THE NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Listen to this.

A group of armed robbers in Costa Rica chose the wrong elderly tourist to target. The body under that sheet, well, that is one of the three attackers. Reports say a retired American serviceman put him in a head lock and broke his clavicle at which point he suffocated. The other two robbers fled as a dozen or so Americans fought back.

And the show of senior strength occurred Wednesday on a cruise ship stop. Authorities deem the travelers acted lawfully in self- defense. And by the way, they continued on to their cruise.

LEMON: The word of a child sent James Waller to prison. DNA set him free.

CNN's Gary Tuchman has the latest case of justice delayed for the wrongly convicted and a new D.A. who is determined to set the record straight.

(BEGIN VIDEOTAPE) GARY TUCHMAN, CNN CORRESPONDENT (voice-over): On a fall day in 1982, police came to James Waller's Dallas home.

JAMES WALLER, WRONGLY CONVICTED: They put handcuffs on me and put me in the back of the patrol car.

TUCHMAN: Did you know what was going on?

WALLER: I didn't know what was going on.

TUCHMAN: Waller learned he was being charged with a horrible crime, the rape of a 12-year-old boy. The primary evidence the child's identification of the rapist.

(on camera): This victim told the police initially you were 5'8", 150 pounds? Roughly. You can be wrong with that.

WALLER: Yes.

TUCHMAN: How tall are you?

WALLER: I'm 6'4".

TUCHMAN (voice-over): The jury deliberated for only 46 minutes.

WALLER: When they said guilty, I couldn't believe it. I thought I was dreaming. I said, well, I'll wake up.

TUCHMAN: He did wake up. Convicted of rape in a Texas prison.

WALLER: I just knew they had the wrong person but wasn't nothing I could do.

TUCHMAN: But there was. Last month, Waller went back to court and heard a judge apologize to him. The determination? James Waller had, indeed, been innocent all along.

JUDGE JOHN CREUZOT, CRIMINAL DISTRICT COURT: A lot of times, we are tested in life and you certainly had a terrible test, OK? But you persevered also.

TUCHMAN: It has not been easy.

(on camera): When you stand here, how does it make you feel?

WALLER: It really gives me goose bumps. It's really - it's not comfortable standing here.

TUCHMAN (voice-over): This is the first time Waller has been back to the street where he lived when he was arrested. The victim who lived a block away from his apartment complex said the rapist was black.

WALLER: I was the only black living in the complex. They said they had said a black guy did it. They just picked me up for it. TUCHMAN: After nearly 11 years in prison he was paroled but was still considered a sex offender. He continued the battle to clear his name. In the midst of that battle, tragedy. His wife Doris and an unborn child they were going to name Grace was in a car accident.

WALLER: I think about 10, 15 minutes and the doctor came back out, he said we can't save her. And then the next day, they lost the baby also.

TUCHMAN: He buried his wife and daughter and left a spot for himself.

WALLER: That's the only time that I thought about just giving up. I could have gave the whole thing up and just died right there.

TUCHMAN: But he kept fighting to prove his innocence and he was backed by one of the directors of the New York City based Innocence Project.

BARRY SCHECK, INNOCENCE PROJECT: I think anybody who is at all sensible in this country knows that race is always part of the equation in the criminal justice system.

TUCHMAN: Since 2001, 11 people in Dallas County, Texas had been exonerated by DNA testing. More than any other county in the U.S. The Innocence Project got Waller's DNA testing done and showed no match between Waller and the victim. Waller became exoneration number 12.

How did you feel?

WALLER: I screamed! Oh, thank you Lord! I screamed! People started coming from the house next door.

TUCHMAN: The new district attorney in Dallas County also apologized to Waller in court.

CRAIG WATKINS, DALLA D.A.: In my mind, this system has failed us.

TUCHMAN: D.A. Craig Watkins is now asking for an examination of every DNA appellate request in Dallas County.

(on camera): What do you say to your prosecutors we've been raised in this culture we're judged how successful we are based on our percentage of convictions?

WATKINS: I tell them that's not what we're about. We're about justice.

TUCHMAN: This DNA evidence has done more than clear James Waller's name. It has done something when you think about it is quite disturbing. It has established that somebody else has gotten away with raping a child.

WALLER: God bless you. TUCHMAN (voice-over): James Waller has a job, a college degree, and helps feed the homeless but he still doesn't officially have his name back. The governor has to sign off on the exoneration and hasn't done so yet but the now the 50-year-old man is for the first time in a long time planning for the future.

Getting married?

WALLER: Personally I want to get married again and I want a wife and I want a baby and if I will, I will name her grace because that's the name I came up with me and my wife. That one thing I want to do.

TUCHMAN (on camera): Can I tell you one thing? If you have a boy, don't name him Grace.

WALLER: If I have a boy, I may name him mercy.

TUCHMAN (voice-over): Spoken from a man who has been at the mercy of the system.

(END VIDEOTAPE)

PHILLIPS: Well, the Oscars are big entertainment but they are also big money to the studios whose movies are in the running. We will take a look at the business behind the awards when THE NEWSROOM continues.

(COMMERCIAL BREAK)

PHILLIPS: She was a teen athletic phenom and a retiree at at an age many haven't graduated college but Andrea Jaeger wasn't finished with work when she put down her tennis racket. It turns out she was just getting started.

Ali Velshi has her story in this installment of our "Life After Work" series.

(BEGIN VIDEOTAPE)

SISTER ANDREA JAEGER, FORMER TENNIS PLAYER: When you think of retirement you don't think of retirement at 19.

ALI VELSHI, CNN CORRESPONDENT (voice-over): Andrea Jaeger was a teenage phenomenon. Today she is sister Andrea Jaeger. A Dominican Anglican nun. After breaking on the woman's tour at age 14 Jaeger became the number two ranked tennis player in the world before her career was derailed by a series of shoulder surgeries but it was an off-court experience that sent Jaeger on her current path.

JAEGER: The first time I visited a hospital for kids was when I was 15. I went in, had no reason to go in other than I felt like I've had such a great life and a great childhood, I want to bring something and I did. And that changed my life forever.

VELSHI: At 41, Sister Andrea works to brighten the lives of kids with cancer. Their laughter replaces the cheers of the fans she grew up with and that suits her just fine.

JAEGER: I've had such an enormously successful professional tennis career. And I don't think I was supposed to play one moment more. I don't think I was supposed to play one match more.

VELSHI: And instead of serving unfortunate life lessons as her years as a top athlete, Sister Andrea says she's the one learning now.

JAEGER: They are hoping to wake up in the morning. They are hoping to get their pain and suffering eased. And so when I look at these kids or any of the kids that we've helped over the decades, it's about -- they appreciate life every single day.

Give me a high five! Give me a high five!

VELSHI: Ali Velshi, CNN, New York.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

LEMON: The Oscars are about more than stars and gowns and glamour and glitz. Really? Yes. They're about big business as well.

CNN's Richard Quest reports the artists may get the statues but the studios get the gold.

(BEGIN VIDEOTAPE)

JACK NICHOLSON, ACTOR: And the Oscar goes to ...

RICHARD QUEST, CNN CORRESPONDENT (voice-over): When an Oscar is won it's the actor that gets the glory. But it's the studio that makes the money.

Just ask the studio bosses. Sumner Redstone is head of Viacom which owns Paramount Pictures. Its movie "Babel" has won a Golden Globe and nominated for best picture this weekend. Winning awards and nominations has quadrupled its weekly revenue.

SUMNER REDSTONE, CEO OF VIACOM: First it means and foremost a lot of prestige for the movie and the studio which is what I'm most concerned about. Secondly, it does have economic implications. You get awards, you make more money and money is a good objective for our studio.

QUEST: This year, one of Redstone's rivals is Rupert Murdoch, owner of Fox Studios.

UNIDENTIFIED FEMALE: What? Little Miss Sunshine?

QUEST: His movie, "Little Miss Sunshine" is also up for best picture. Since it got the nomination, DVD sales have rocketed the film into the top 20 on Amazon.com. And that means millions of dollars for Rupert Murdoch. RUPERT MURDOCH, NEWS CORP CEO: These are important and the Oscars are very important. The Oscars, win a big Oscar the film gets second release.

QUEST (on camera): Can you tell in a studio the bottom line when a film gets Oscar potential and then goes on to win an Oscar?

MURDOCH: Not really. Not really. I wish I could.

QUEST (voice-over): If Oscar brings gold to the studios, for the actors, the benefit is not about money. When Jeremy Irons won his Oscar in 1990, he certainly noticed more change. Just not in his pay package.

JEREMY IRONS, ACTOR: I think people think, hmm, maybe if we employ him, he might raise our movie, raise the stakes in our movie and maybe we will be nominated for something, maybe his performance or whatever. So I think that's always there. They say it raises your money. It doesn't.

QUEST: Keeping actors costs under control is a trend that's not going to change as long as Sumner Redstone is head of Viacom. He sacked Tom Cruise last year because, among other reasons, he was too expensive.

REDSTONE: We don't want to pay big stars too much money because stars don't make movies, the script does.

QUEST: This weekend, Oscar is nodding his head towards artistic achievement. For the studios involved, they will be counting success in more basic ways, at the box office. Richard Quest, CNN, Hollywood.

(END VIDEOTAPE)

QUEST: You can get more on the Oscars at CNN.com. You'll find a special online report, Academy Award spotlight to the nominees, quiz yourself and tell us who you think will win by playing CNN's "Inside the Envelope" game. That is at CNN.com.

LEMON: Speaking of going for the gold, I don't know. Wolf Blitzer, he is a gold standard.

PHILLIPS: He's a gold star. Hi, Wolf.

WOLF BLITZER, CNN ANCHOR: Once again not nominated this year, unfortunately. Try again next year. Thanks very much.

Coming up at the top of the hour, Senate Democrats are working on a new tactic to influence the war in Iraq. They want to repeal the resolution authorizing it. We'll get the latest from one of the lawmakers behind the effort, presidential candidate Joe Biden.

Also, we will hear from former Green Party presidential candidate Ralph Nader. Many say he cost Democrats the White House in 2000. Will he run again in 2008? I'll ask him. A verdict in the closely watched trial of Lewis "Scooter" Libby it could happen at any time. We're standing by. If that does happen you'll see it here in THE SITUATION ROOM. All that coming up right here. Back to you.

PHILLIPS: Thanks, Wolf.

LEMON: Closing bell and a wrap of the action on Wall Street straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Closing bell about to ring on Wall Street.

LEMON: Susan Lisovicz standing by with a final look at the trading day on this Friday. Happy Friday, Susan.

(MARKET REPORT)

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