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Anderson Cooper 360 Degrees

Striking Back in Baghdad; Only Winners in Rosie O'Donnell Case May be Attorneys

Aired November 12, 2003 - 19:00 ET

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

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

(BEGIN VIDEOTAPE)
ANDERSON COOPER, HOST (voice-over): Bombs over Baghdad: coalition air strikes in Iraq.

America's number one man in Iraq is back in Washington. Is the White House reconsidering its strategy.

The judge in the Rosie O'Donnell trials calls it a draw. Was it worth it?

Home from Iraq: a soldier savagely murdered back in the U.S. allegedly by members of his Army unit.

An heiress caught on a sex tape. It's our midweek crisis.

Our special series, "Sleepless in America." Tonight, keeping the military awake.

And the toddler pulled dead from a pool who survived. Medical tests show shocking results.

(END VIDEOTAPE)

ANNOUNCER: Live from the CNN Broadcast Center in New York, this is ANDERSON COOPER 360.

COOPER: Good evening to you. Thanks for joining us on 360.

We begin in Iraq with attacks by the U.S. that sounded a lot like war. After losing dozens of U.S. troops in just two weeks, the U.S. went after targets in Baghdad, including a facility it says was an enemy staging ground for guerrilla attacks. The crackdown came just hours after a car bombing in Nasiriyah killed dozens, including 17 Italian troops. The worst day for Italy's military since World War II.

We're going to cover the story tonight from Baghdad with Matthew Chance, from the Pentagon with Jamie McIntyre, and from the White House with Dana Bash. We go first to Matthew Chance with the latest on the crackdown that the U.S. military is calling Operation Iron Hammer.

Matthew, tell us exactly what you witnessed in Baghdad this evening. MATTHEW CHANCE, CNN CORRESPONDENT: Well, Anderson, I think what we witnessed here was the start of a much tougher policy towards these anti-U.S. insurgents. Loud explosions reverberating across the night skies of the Iraqi capital. Not Iraqi mortars this time, but U.S. firepower. Two strikes, according to military officials, against suspected militant targets.

The first, a vehicle hit by an Apache attack helicopter in the west of the city. Two people confirmed dead in that attack, suspected of being involved in firing mortars at coalition forces. The second strike saw a powerful AC-130 gun ship that deployed in the skies over Baghdad to destroy a warehouse that coalition officials say was used by these insurgents. The plan, to carry out attacks against U.S. forces.

It certainly sound like a very heavy blow being inflicted -- Anderson.

COOPER: Matthew, just for perspective, when was the last time U.S. forces used this kind of heavy weaponry in Baghdad?

CHANCE: Well, certainly, I've not heard of this kind of heavy weaponry being used since the end of -- or since President Bush, rather, declared an end to major combat operations in this country back in May. This was extremely heavy firepower used by the U.S. forces here. They're telling us that operation dubbed Operation Iron Hammer is an ongoing operation, and we understand there will be more assaults like this in the days and in the weeks ahead -- Anderson.

COOPER: All right. Matthew Chance in Baghdad. Thanks, Matthew.

Operation Iron Hammer actually began days ago, and it is a significant shift that the U.S. is once again going after insurgents from the skies. Now, it comes with, of course, risks of swinging that hammer at the wrong place, hurting the wrong people. Senior Pentagon correspondent Jamie McIntyre looks at the strategy.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): The air war is back. A U.S. Air Force AC-130 gun ship like this one, with a powerful side-mounted 105-millimeter Howitzer, was used to level a warehouse in southern Baghdad Wednesday night. It's said to be used as a base by anti-U.S. insurgents. It's the latest example of how the U.S. military is using precision air strikes to ratchet up the pace and intensity of its counter-insurgency campaign.

LT. GEN. RICARDO SANCHEZ, U.S. COALITION COMMANDER: We are taking the fight into the safe havens of the enemy in the heartland of the country where we continue to face former regime loyalists, criminals and foreign terrorists.

MCINTYRE: Monday night, U.S. F-16s dropped 2,000-pound bombs on an empty house south of the Iraqi capital after local residents were warned to stay clear. The stated purpose for destroying the suspected hideout was to deny sanctuary to the anti-coalition insurgents. And there were similar U.S. air strikes to demolish structures near Saddam Hussein's hometown of Tikrit Friday and Saturday.

Pentagon sources say the stepped-up pace of attacks in recent days is also a result of better intelligence coming from local Iraqis who are supporting the U.S.

COLIN POWELL, SECRETARY OF STATE: We are confident that our commanders will get on top of it and our intelligence experts will be able to penetrate these remnants of the old regime who were trying to destroy the hopes and aspirations of the Iraqi people.

(END VIDEOTAPE)

MCINTYRE: There is another aspect of the reintroduction of air power into the Iraq war, and that is the message it sends. U.S. commanders are well aware they've been losing the battle of perceptions. Air strikes send a signal of U.S. strength, power and reach, and that the United States, too, can strike with impunity -- Anderson.

COOPER: All right. Jamie McIntyre at the Pentagon. Thanks.

As we noted, the increase use of heavy U.S. firepower clearly increases the risk of civilian casualties, which is a point not lost at the White House, as officials try to gauge possible political fallout. White House correspondent Dana Bash is with us now.

Dana, does the White House think this strategy is politically risky?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Anderson what they know here at the White House is that Americans are seeing an increased number of attacks on U.S. troops and feel they have no choice but try to root out the violence, because the biggest political risk for this White House is failure. And that is a big part of what is fueling the new push at the White House to try to push more quickly to expedite the Iraqi government, and that is a big part of the discussion here at the White House today.

(BEGIN VIDEOTAPE)

BASH (voice-over): After two days of White House talks, President Bush is sending his Iraq administrator back to Baghdad with a proposed shift in U.S. strategy to turn governing power over to Iraqis more quickly.

AMB. PAUL BREMER, IRAQ CIVIL ADMINISTRATOR: The stakes are very high for moving toward a sovereign Iraqi government.

BASH: According to senior U.S. official, the president authorized a few major options for the U.S.-picked Iraqi Governing Council to consider, including an interim Iraqi constitution and interim Iraqi leadership. Another possibility, a provisional leader like Afghanistan's Hamid Karzai. But U.S. officials caution Iraqis may not accept that model as legitimate because of the country's diverse ethnic and religious makeup, and also say there is no specific timetable for the plan. During the fall U.N. debate, the White House strongly opposed any return of control to Iraqis without free elections.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The constitution must be written, and there will be free elections. And then sovereignty will occur.

BASH: Now a White House concession.

SCOT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You need to be willing to adjust and adapt to circumstances on the ground in terms of reconstruction and in terms of the political front.

BASH: This adjustment is fueled by increasing attacks against coalition targets and a new grim CIA assessment more Iraqis disillusioned with the U.S.-led occupation are joining the insurgency.

BREMER: The terrorists are trying to encourage the Iraqi people to believe that the United States is not going to stay the course.

BASH: Officials admit the urgent White House push is also aimed at the slow-moving Iraqi Governing Council to meet a December 15 deadline for a permanent transition plan.

(END VIDEOTAPE)

BASH: Bush officials concede they were intentionally vague about the details of the plan until the Governing Council is briefed, hoping Iraqis see their own leaders making the decision about their government, not the White House -- Anderson.

COOPER: All right. Dana Bash at the White House. Thanks very much.

So what is the timetable for turning power over to the Iraqis? Here's a news note. December 15 is the deadline for the Iraqi Governing Council to come up with a timetable and a program for drafting a new constitution and holding Democratic elections. And Secretary of State Colin Powell has said he wants a constitution written within the next six months. Paul Bremer has said he hopes elections could be held as early as next year.

On now to the clash of titans that ended today in a draw. A judge said neither Rosie O'Donnell nor her former publisher could claim damages in their bitter fight over who brought down "Rosie" magazine. The only winners here may be the lawyers, who clearly put in a lot of billable hours.

CNN's Mary Snow reports.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): After seven and a half days of testimony about the fireworks behind the scenes at "Rosie" magazine, the end of the trial took a turn that neither side seemed to expect. Judge Ira Gammerman called publisher Gruner & Jahr's $100 million lawsuit against Rosie O'Donnell ill-conceived, saying neither side proved damages beyond legal fees. And he said the magazine wasn't even profitable.

Both sides, he said, seemed to be looking for bragging rights. Rosie O'Donnell left court saying she's glad it's over.

ROSIE O'DONNELL, FMR. TALK SHOW HOST: The story of this case is not who won or lost, but simply how many times peace was offered and war was chosen by the other side. We can have peace in this world. We can have peace with each other.

SNOW: The judge's conclusions are not final. He still must decide whether Rosie O'Donnell or Gruner & Jahr breached the contract that led to the demise of "Rosie" magazine. O'Donnell claimed that G & J breached it by seizing editorial control. G & J claims O'Donnell breached it by leaving in what executives called a fit of tantrum. Rosie O'Donnell's lawyers were careful to stop short of declaring victory.

MATTHEW FISHBEIN, O'DONNELL'S LAWYER: Whenever you're sued for $100 million and you walk out of the courtroom with the judge basically telling you you're not going to have to pay a penny, it's hard to get any better than that.

SNOW: Lawyers for Gruner & Jahr disagree.

MARTY HYMAN, PUBLISHER'S LAWYER: Gruner & Jahr believe (UNINTELLIGIBLE) lawsuit and believes today that Rosie O'Donnell breached the contract. Gruner & Jahr did not enter into this joint venture with the expectation to lose money or not make money. And the fact that the judge has expressed doubts as to whether or not "Rosie" magazine ultimately would have made money down the road does not render the lawsuit to be an ill-conceived lawsuit.

(END VIDEOTAPE)

SNOW: Lawyers for Gruner & Jahr still plan to seek damages. And as for Rosie O'Donnell, she wants to be reimbursed for her legal fees, $8 million so far; $2 million more than she initially invested in the magazine -- Anderson.

COOPER: All right. Mary Snow, thanks very much. Appreciate it. We're going to have more on Rosie O'Donnell's legal saga. We're going to talk with her attorneys coming up on 360.

We're also following a number of stories right now "Cross Country." Let's take a look.

A 30-hour talkathon is now occupying the Senate. You're looking live at the floor of the Senate. Republicans protesting Democrats preventing a vote on three of President Bush's judicial nominees by filibustering. Cots have even been brought down to the floor so senators can lie down during the filibuster. There are two of the cots. Democrats say they have every right to do this.

San Rafael, California: fallen firefighter remembered. Thousands turned out today to honor the only firefighter to lose his life battling the recent southern California wildfires. Stephen Rucker (ph), that's his name. That's his photo right there. He died October 29 when a firestorm swept over his crew as they were trying to save a house in San Diego County.

Washington: fewer hate crimes. New FBI figures show a sharp drop in hate crimes in the U.S. in 2002. Reports of crimes involving bias against a victim's race, ethnicity, religion, sexual orientation or disability decreased more than 20 percent from 2001. Critics say the stats are unreliable because victims underreport hate crimes.

That's a look at stories right now "Cross Country."

They are accused of terrorizing suburban Washington a year ago. Now they are on trial for their lives. We'll have the very latest on the two sniper trials. We're also going to look at why John Muhammad's defense wasted little time making its case.

Also tonight, you will not believe what happened to an American soldier right after he returned from Iraq. The shocking death of Army specialist Richard Davis after a night out with his fellow soldiers.

And our series "Sleepless in America" continues with a cutting- edge research on how to keep people awake. We'll also give you some pointers on what you can do to keep your eyes wide open.

First, let's take a look "Inside the Box" at the top stories on tonight's network newscasts.

(COMMERCIAL BREAK)

COOPER: Misty night here in New York. On to the trial of the two D.C. sniper suspects. As jury selection was completed in the trial of Lee Boyd Malvo, was there a pretty surprising move by John Allen Muhammad's defense in his trial, which was just 15 miles away. CNN's Jeanne Meserve was there.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice over): The defense case was stunning for its brevity. Just five witnesses in less than three hours. A striking contrast with the prosecution, which called 136 witnesses over 14 days.

PAUL BUTLER, GEORGE WASHINGTON UNIVERSITY: It's a very surprising development. The defense seems to be not that Mr. Muhammad is innocent, but that the government doesn't have enough evidence to prove its case beyond a reasonable doubt.

MESERVE: The defense tried to undermine prosecution witnesses who had placed Muhammad and Malvo or their car near the Iran Brown shooting at a middle school in Bowie, Maryland, the Dean Meyers shooting in Manassas, and the Kenneth Bridges (ph) shooting in Fredericksburg.

They attempted to discredit the testimony of Muhammad's cousin, Charlene Anderson (ph). She had testified that Muhammad showed her a gun during the visit in the months before the sniper slayings. Fifteen miles away from the Muhammad trial, the final selection of jurors and alternates for the Malvo trial. Central to Malvo's defense, his youth and vulnerability to Muhammad. His lawyers talk about it at every opportunity.

UNIDENTIFIED MALE: You see him now. You should have seen him when Mr. Muhammad took him in. He was much smaller, and probably that made him that much more of a target and that much more vulnerable.

(END VIDEOTAPE)

MESERVE: The stage is set for a very busy Thursday. Opening statements in Malvo, closing arguments in Muhammad, and a very good chance the Muhammad case could go to the jury Thursday afternoon.

Anderson, back to you.

COOPER: All right. Jeanne Meserve, thanks very much, covering both trials for us.

Now, the murder mystery that has shocked Fort Benning, Georgia. A day after returning from duty in Iraq, a U.S. soldier is killed, stabbed multiple times, his body then set on fire. Now, four soldiers who actually fought by his side, well, they now face charges in connection with his death.

As CNN's Kris Osborn reports, the soldier's parents are trying to come to grips with it all.

(BEGIN VIDEOTAPE)

LANNY DAVIS, FATHER OF VICTIM: I gave him enough money to cover his ticket, plus some extra money. And he said, "I'll pay you back, dad. And I love you." And he hugged me. That's the last time I got to hug him.

KRIS OSBORN, CNN CORRESPONDENT (voice-over): Lanny Davis remembers the last time he saw his son, Army Specialist Richard Davis. The younger Davis survived not only Operation Iraqi Freedom, but also tours of duty in Bosnia and Kuwait.

Davis' death came much closer to home near his post at Fort Benning, Georgia. He disappeared July 14, one day after returning from Iraq. Police say he went to a strip club with four fellow soldiers, and that Davis made an "inappropriate comment" to a woman. Then Columbus Police say the soldiers were kicked out of the club, fought amongst themselves in the parking lot, then drove to a wooded area.

There, the police say Davis was beaten again and stabbed repeatedly. Investigators tell CNN the group set the body on fire and covered it with debris. Three soldiers who were with Davis that night are now jailed in Columbus, charged with concealing a death. The fourth, who police say stabbed Davis, is being held in California awaiting extradition. (on camera): Military officials here on post say they're shocked and very concerned for the family of Specialist Davis. The district attorney in Muskogee County says murder charges may be filed in the future.

Kris Osborn, CNN, Fort Benning, Georgia.

(END VIDEOTAPE)

COOPER: An unbelievable story.

A number of stories right now we are following around the world. Let's check the "UpLink."

Tikrit, Iraq: round up. U.S. forces pick up dozens of suspects in the downing of a Black Hawk helicopter. That's the one that killed six American soldiers. The U.S. troops captured the suspects during overnight raids in Tikrit, which is, of course, the ancestral home of Saddam Hussein.

Ramallah, West Bank: new Palestinian cabinet. The Palestinian parliament approves the new cabinet led by Prime Minister Ahmed Qorei. Twenty-four new lawmakers were sworn in by Palestinian Authority President Yasser Arafat.

Fiji: overdue apology. A fascinating story, this. Residents of this village in Fiji Islands, gather food, gifts and animals to give to the descendants of a guy named Thomas Baker. When Baker was a missionary in the Pacific Ocean territory, he happened upon some of the ancestors of these very same residents. It turns out they were cannibals and they ate him.

Everything, but his boots, according to someone who was actually there. Now, 136 years later, the descendants are saying they are sorry. Which only goes to prove it is never too late.

That is tonight's "UpLink."

Splitting hairs in the Scott Peterson hearing. We're going to talk about today's DNA evidence and preview possible explosive testimony from Scott Peterson's mistress with legal analyst Kimberly Guilfoyle Newsom.

The judge calls it a draw in the Rosie O'Donnell case. What will her lawyer do next? We'll talk to them.

And staying awake. It can be a matter of life and death. The armed forces go way beyond "Revalee" to keep U.S. fighting men and women awake. Are there less dramatic methods you can use to fight off shut eye? We'll talk about some of them.

But first, today's "Buzz." Should the U.S. Air Force continue to make amphetamines, also known as go pills, available to its pilots? What do you think? Vote now: cnn.com/360. We'll have results at the end of program.

(COMMERCIAL BREAK)

COOPER: We continue tonight with our weeklong series, "Sleepless in America." There is one place where keeping people awake and getting them to sleep can make the difference between life and death. We're talking about the military. Pills have long been the crutch of choice, but the military is trying to change that with help from cutting-edge research.

(BEGIN VIDEOTAPE)

COOPER (voice-over): Beginning in World War II, the U.S. military's solution to battle fatigue often came in a pill bottle. Amphetamines, commonly referred to as go pills. Many people close to Elvis Presley say he returned from his stint in the Army hooked on them. Today, you can still find amphetamines being used on missions by Air Force pilots.

But the Pentagon is also helping to fund research for a new safer alternative to go pills. One possible answer, magnets.

DR. SARAH LISANBY, NYS PSYCHIATRIC INSTITUTE: So like before, I'm just going to put the (UNINTELLIGIBLE) on the side of your head.

COOPER: Dr. Sarah Lisanby is researching transcranial magnetic stimulation, or TMS.

LISANBY: The goal of the project is to try to use brain imaging and non-invasive brain stimulation with TMS to understand how brain function changes when a person's sleep deprived that causes them to have trouble concentrating, have trouble with their memory.

The TMS coil delivers a powerful magnetic field, and that rapid rate of change of the magnetic field induces a small electrical current in the brain. And that small amount of electricity that's induced in the brain stimulates the neurons of the brain cells to fire.

COOPER: Dr. Lisanby's hope, that by activating the correct neurons in the brain, the sleep deprived can actually begin to think and function more effectively. That means magnets could one day be used to help soldiers or doctors or anyone else stay awake without the use of pills.

(END VIDEOTAPE)

COOPER: All right. So not all of us have access to transcranial magnetic stimulation. In terms of staying awake, most of us rely on what's on the pharmacy shelf, or maybe a can of red bull (ph) or a pot of coffee. What really works and what are the risks?

Well, joining us now from Philadelphia, David Dinges. He's the chief of the Division of Sleep and Chronobiology at the University of Pennsylvania School of Medicine. Another way of saying I think he knows an awful lot about sleep.

Dr. Dinges, thanks very much for being with us. You know, Americans drink an awful lot of coffee all throughout the day. Let's talk about caffeine and coffee. Is there a way to drink coffee that's more effective in terms of keeping us awake?

DAVID DINGES, UNIVERSITY OF PENNSYLVANIA: Well, the consumption keeps increasing, and it has to do with the fact that so many of us are sleep deprived. Is there a way to drink it that will keep us awake? Well, many people drink it socially, but also for its weight- promoting effects, the effects it has on the brain.

And the real trick to using caffeine responsibly, if you'll pardon that phrase for an uncontrolled substance, is to use it without using it socially. That is, use it pharmacologically. Don't drink it necessarily in the morning when you get up if you know you'll be on a night shift. Use it strategically at night.

COOPER: All right. Then there are these products like the red bull (ph), these sort of high-caffeinated soft drinks, basically. Do they work, and if so, how do they work?

DINGES: Well, to the extent that there are a host of products now being marketed that have basically a certain amount of caffeine in them -- and it's the caffeine combined with some sugar that's used to give you the "jolt" -- they work the same way that a cup of coffee does to the extent that they're binding at a receptor in the brain that is well known to bind -- that caffeine binds to, and has some role in our wake regulation. The important thing to remember about coffee, though, it's no substitute for sleep and isn't going to keep you awake if your sleeve sleep drive is too high.

COOPER: Are there any safe over-the-counter medications people can take?

DINGES: Nothing over the counter other than caffeine that really -- or caffeinated products that has some benefit. There are lots of control substances, lots in the sense that there is at least 20 of them that have been around for varying periods of time. And those are being researched -- particular ones are being researched right now to determine if we can find a safer alternative to amphetamine, which has been around 75 years.

COOPER: All right. Dr. David Dinges, appreciate you joining us. Thanks. It was interesting.

DINGES: Thank you.

COOPER: Our series, "Sleepless in America," continues all week. Tomorrow, when sleep is one long nightmare. We'll go inside the frightening world of sleep disorders.

And on Friday, can a night at a sleep clinic work for you? I'll let you know if it worked for me. Not looking forward to that.

And tonight, be sure to vote on our "Buzz" question. Should the U.S. Air Force continue to make amphetamines, also known as go pills, available to its pilots? Go to cnn.com/360. Results at the end of program. (BEGIN VIDEOTAPE)

COOPER (voice-over): A stalemate in the Rosie O'Donnell trial. What happens next?

A child of privilege caught on tape.

And a medical miracle, surviving death by drowning. We'll be right back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

O'DONNELL: I have no vengeance towards the company. I will never speak about that company again, or any of its employees.

(END VIDEO CLIP)

COOPER: That was Rosie O'Donnell today as her legal battle with her former publisher came to a head. We'll talk with her lawyers in just a moment.

First, here's "The Reset."

Baghdad, Iraq. Iron Hammer. U.S. forces launch an airborne counterattack aimed at insurgents who have been staging attacks in Baghdad, part of an operation code named Iron Hammer. The offensive destroyed a warehouse thought to have been used by the insurgents and killed two suspected guerrillas.

Nasiriyah, Iraq. Police base bombed. A truck, loaded with explosives, drove into a police base in Nasiriyah, killing 26 people, including 18 Italians participating in the U.S.-led effort to rebuild Iraq. It was the worst day for the Italian military since World War II.

Clarksville, Arkansas. Parents arrested. Manslaughter charges are pending against an Arkansas couple after a house fire that killed their 10-year-old daughter. Authorities say the girl had been chained by her ankles to a bed.

And that is "The Reset."

Well, as we said earlier, the curtain has come down with a thud on the Rosie O'Donnell case. The judge ruled that neither O'Donnell nor the former publisher of "Rosie" magazine is entitled to damages. Judge Ira Gammerman called the lawsuits filed by both sides "ill- conceived." Ill-conceived or not, O'Donnell was the queen of nice today, at least where her lawyers were concerned. Take a look.

(BEGIN VIDEO CLIP)

O'DONNELL: I'd like to thank my lawyers from Devoboies & Clinton (ph). If you are ever sued by a corporate giant for $125 million, I highly recommend them. They're incredibly good lawyers. And they are incredibly ethical people.

(END VIDEO CLIP)

COOPER: I guess phones must have been ringing off the hook today.

Joining us in "Justice Served," O'Donnell's attorneys Lorna Schofield and Matthew Fishbein. Appreciate you -- Schofield.

LORNA SCHOFIELD, O'DONNELL ATTORNEY: Schofield.

COOPER: I'm sorry.

SCHOFIELD: Very good.

COOPER: All right. I want to make sure everyone be able to know who to call you accurately.

A victory today for Rosie O'Donnell?

SCHOFIELD: A great victory. And I have to correct one thing. The judge said that the plaintiff's case was ill-conceived, not ours. They picked the fight. They sued us.

COOPER: OK. But you say a victory, even though no money was awarded at this point.

SCHOFIELD: A victory because they sued us for $100 million and Rosie O'Donnell now gets to walk out without having to pay a dime.

COOPER: Where does she go from here, Matt?

MATTHEW FISHBEIN, O'DONNELL ATTORNEY: Well, you know, she's involved in many endeavors. Her show "Taboo" is opening up on Broadway tomorrow night. And one of the things that came out at trial here is that the only business venture she's ever been involved in that was not successful was this magazine. She's been a producer, an actress, she's had a television show and we think that she's going to be continuing to be successful in the future.

COOPER: But she's hoping to recoup -- I mean, basically your fees which are quite hefty. I mean, it's been reported up to $8 million.

SCHOFIELD: We've been working hard for a year and a half and she's wanted to pursue this and we've been happy to do that for her and she's entitled to her legal fees.

COOPER: What do you think the judge saw -- I mean, why didn't G&J -- why weren't they able to prove their case? What did they do wrong?

FISHBEIN: Well, I think, you know, think the facts are sometimes difficult to get around. Their claim here that was she had walked away from this endeavor for no good reason. And the fact of the matter was that they seized the editorial control of this magazine that had her name on it from her.

And...

COOPER: How significant was the e-mail sent to the German head of the corporation, which basically -- I mean, I asked David Carr of "The New York Times" about it. I said, is that a smoking gun? He said that's a smoking Howitzer.

I mean, it basically said-- I mean, I don't want to (UNINTELLIGIBLE) the wording. But it basically said we need to...

SCHOFIELD: Manipulate the books. I mean, manage the financials were the words. And, I mean, you can imagine our reactions when we first found that months ago.

COOPER: How did you find that? I mean, I guess in the discovery phase.

SCHOFIELD: In the discovery process.

COOPER: Right.

SCHOFIELD: It hasn't -- I mean, both -- the lawyers on both sides have known for months and months that this was part of the case.

COOPER: When you saw that e-mail, what went through your mind?

FISHBEIN: Well, it's the sort of thing -- you know, you -- they always say you can't cross examine a document. I mean, those were the words of the CFO written to the head of the company. And whatever explanations they had ultimately fell flat when they tried to explain those words away at trial.

COOPER: Lorna, when does the judge rule on the $8 million?

SCHOFIELD: It's up to him. We put papers in in a month and then he gets to decide.

COOPER: All right. Lorna Schofield and Matthew Fishbein, I know it's been a long trial for you. Appreciate you joining us. Thanks very much.

(CROSSTALK)

COOPER: All right.

Well, more "Justice Served" now in the Scott Peterson preliminary hearing. Now it is in its eighth day. The proceedings continue to focus one type of DNA testing and there were fireworks over some police videotape.

CNN's David Mattingly has more.

(BEGIN VIDEOTAPE) DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Calling it nothing more than a shell game in a capital case, a frustrated Mark Geragos wanted to know why Scott Peterson's defense team is only now learning about police surveillance tapes of the Peterson Modesto home.

Posted in the neighborhood in January, prosecutor Mark Destasso claimed the camera alerted police to Peterson's comings and goings and only this weekend discovered that two or three tapes exist. But like much of the prosecution's case, the contents of the tapes remains unknown to the public.

So far, we've learned of mops and buckets and a scrunched-up throw rug in the Peterson home. They raised the question, could Scott have killed Laci, dragged her body out of the house, then cleaned up the scene of the crime? Questions, but publicly again, no answers.

And still believed to be waiting in the wings, the possible motive for murder, Scott's girlfriend, Amber Frey. We now know she worked closely with police as she and Scott continued to trade phone calls in the weeks after Laci's disappearance. But what she has to say and the tapes of those conversations remain sealed.

(on camera): In fact, in seven days of testimony, four now have focused on the accuracy of mitochondrial DNA and the single strand of hair found in Scott Peterson's boat. If prosecutors can prove that hair belonged to Laci, it links the murdered housewife to her husband's boat. It remains, so far, the only piece of physical evidence revealed in this much talked about preliminary hearing.

David Mattingly, CNN, Modesto, California.

(END VIDEOTAPE)

COOPER: Weighing in on this case, 360 analyst, Kimberly Guilfoyle Newsom. She joins us live from Modesto, California.

Kimberly, good to see you.

David Mattingly just mentioned Amber Frey. She's expected to testify tomorrow. How important is her testimony going to be?

KIMBERLY GUILFOYLE NEWSOM, 360 LEGAL ANALYST: Well, we definitely expect her this week. Maybe tomorrow, maybe Friday, it could be Monday, we don't know.

Her testimony, I think, is going to be powerful. I think so far people have underestimated the impact that her testimony will bring in this case. And, in fact, I think we're waiting for it here, on Amber alert, anxiously, to see what she has to say.

I expect her to confirm some of the statements we've heard already in terms of the conversation on December 9 with Scott Peterson when she confronted him about being a married man. And in fact, he told her that he was a widower, that he had lost his wife. Those are going to be powerful statements in the courtroom an, I think, persuasive to a jury, ultimately. COOPER: Also a lot of talk about mitochondrial DNA. How important is this piece of evidence, this hair apparently found on a plier in the boat?

NEWSOM: So far, it is the most important piece of physical evidence in this case because it corroborates the prosecution's theory that Scott Peterson is responsible for the death of his wife and the unborn son, Conner. And in fact, their theory that he killed her in the home, that she was transported in the boat and eventually dumped in the bay. This would, in fact, suggest that her body was in that boat that was recently purchased and that she had never been in the boat prior to that particular day of her disappearance and the removal of her body.

COOPER: And, you know, last week, I mean, there was there some pretty damning testimony. You already talked about what he allegedly said to Amber Frey. Some other stuff about cadaver dogs. Was the defense able to deflect any of that today?

NEWSOM: They weren't able to get to much of it.

What was interesting is -- I'd like to bring up, in terms of Amber Frey, one of the defense attorneys, McAllister, brought up that they were using Amber Frey to try and get information from Scott Peterson, telling her what to say. But in addition to Amber, they were using other people. Laci's family, her friends and getting them to try and get incriminating statements from Scott Peterson suggesting things that they could say, and, in fact, ask him to kind of trap him and get information that would show that that he was responsible.

Also they testified that Amber Frey was given -- I guess equipment to do these tapings and things from the Radio Shack, which was kind of interesting. And the defense also suggested that she started to tape her conversations with Scott Peterson prior to them getting her involved in the case. But the prosecution denied that and so did the detective in the case.

COOPER: All right. Kimberly Guilfoyle Newsom, thanks very much.

NEWSOM: Thank you.

All right.

Doctors said the little girl was dead. Wait until you hear what happened next. Dr. Sanjay Gupta will have an update on California's miracle baby.

Also, the idle rich apparently aren't always so idle. We're going to talk about the videotape that has Paris Hilton's parents calling their lawyers.

(COMMERCIAL BREAK)

COOPER: An amazing story of survival now. It seems the little girl in southern California who doctors originally thought had drowned, but was revived is still fighting the odds. CNN's medical correspondent Dr. Sanjay Gupta is here with an update on her condition. How is she doing?

SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: The update looks pretty favorable. She had some brain scans done today that all looked pretty good. Hard to say exactly what that means. She was declared dead on Friday. Talk to doctors today, this is how they think she's doing now.

(BEGIN VIDEO CLIP)

DR. JAMES CAPPON, CHILDREN'S HOSPITAL OF ORANGE CO.: She opens her eyes spontaneously. She is doing all the breathing on her own. She's very capable of moving all of her extremities. She can turn her head from side to side. And while these may seem like simple things, they're actually of some significance neurologically. What we wait for is that level of purposefulness to her behavior.

(END VIDEO CLIP)

GUPTA: She's upgraded from serious condition. Story goes like this, it's sort of fascinating, last Friday she was actually missing for about 10 minutes, subsequently found in the pool face down. Mother calls 911 who got there in two minutes. She was subsequently -- you know, the resuscitation efforts were tried. 40 minutes later she was declared dead and subsequently they were actually taking some pictures, some autopsy pictures, things like that and saw her chest moving. And attempted revival again, this time she woke up.

COOPER: Certainly not a great advertisement for doctors involved in it. How often does something like this actually happen?

GUPTA: I think it's a pretty rare situation. It's sort of interesting. What happens sometimes in a situation where drowning occurs, sometimes you hear about babes ending up in the bottom of the pool. What happens, the body goes into a hibernation-like phase. Your pulse slows way down, your blood pressure goes way down.

If someone were to check those things, they may not even be traceable, so someone could declare somebody dead. After you warm the person up, things like that, the pulse starts to become more brisk, the blood pressure increases and it's remarkable.

COOPER: How long before we know if there's long-term damage?

GUPTA: That's a good question. The brain scans look pretty good today, but that just says there hasn't been anything bad that's happened to the brain scans. She's moving around, but she's probably suffered some degree like a stroke-like injury. The brain went without oxygen into the blood for a long period of time.

COOPER: Can a young child recover from something like that?

GUPTA: A young could recover, an adult could recover as well. This water was 52 degrees -- I asked about that -- not ice cold, about 20 degrees warmer than that, still somewhat protective to the brain when the water's that cold.

COOPER: It's just an unbelievable story. Dr. Sanjay Gupta thanks very much for the update.

GUPTA: Take care.

COOPER: So, have you ever partied with Pairs Hilton? Don't worry, me either, but she's causing quite a stir and trying to stop distribution of a new sex tape that's getting mixed reviews.

Also tonight, is the world ready for a new Rush Limbaugh? We're about to find out. We'll be right back.

(COMMERCIAL BREAK)

COOPER: All right. Our midweek crisis might also qualify as a life crisis if the short, but prematurely eventful life of Paris Hilton had not already had so many other moments. This one, however, has taken the cake, and if you believe the gossip columns, celebrities, the city of Los Angeles, movers and definitely shakers, crowding around monitors to watch a grainy, apparently tawdry romantic encounter that falls somewhat short of merchant ivory standards.

(BEGIN VIDEOTAPE)

COOPER

Aired November 12, 2003 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANDERSON COOPER, HOST (voice-over): Bombs over Baghdad: coalition air strikes in Iraq.

America's number one man in Iraq is back in Washington. Is the White House reconsidering its strategy.

The judge in the Rosie O'Donnell trials calls it a draw. Was it worth it?

Home from Iraq: a soldier savagely murdered back in the U.S. allegedly by members of his Army unit.

An heiress caught on a sex tape. It's our midweek crisis.

Our special series, "Sleepless in America." Tonight, keeping the military awake.

And the toddler pulled dead from a pool who survived. Medical tests show shocking results.

(END VIDEOTAPE)

ANNOUNCER: Live from the CNN Broadcast Center in New York, this is ANDERSON COOPER 360.

COOPER: Good evening to you. Thanks for joining us on 360.

We begin in Iraq with attacks by the U.S. that sounded a lot like war. After losing dozens of U.S. troops in just two weeks, the U.S. went after targets in Baghdad, including a facility it says was an enemy staging ground for guerrilla attacks. The crackdown came just hours after a car bombing in Nasiriyah killed dozens, including 17 Italian troops. The worst day for Italy's military since World War II.

We're going to cover the story tonight from Baghdad with Matthew Chance, from the Pentagon with Jamie McIntyre, and from the White House with Dana Bash. We go first to Matthew Chance with the latest on the crackdown that the U.S. military is calling Operation Iron Hammer.

Matthew, tell us exactly what you witnessed in Baghdad this evening. MATTHEW CHANCE, CNN CORRESPONDENT: Well, Anderson, I think what we witnessed here was the start of a much tougher policy towards these anti-U.S. insurgents. Loud explosions reverberating across the night skies of the Iraqi capital. Not Iraqi mortars this time, but U.S. firepower. Two strikes, according to military officials, against suspected militant targets.

The first, a vehicle hit by an Apache attack helicopter in the west of the city. Two people confirmed dead in that attack, suspected of being involved in firing mortars at coalition forces. The second strike saw a powerful AC-130 gun ship that deployed in the skies over Baghdad to destroy a warehouse that coalition officials say was used by these insurgents. The plan, to carry out attacks against U.S. forces.

It certainly sound like a very heavy blow being inflicted -- Anderson.

COOPER: Matthew, just for perspective, when was the last time U.S. forces used this kind of heavy weaponry in Baghdad?

CHANCE: Well, certainly, I've not heard of this kind of heavy weaponry being used since the end of -- or since President Bush, rather, declared an end to major combat operations in this country back in May. This was extremely heavy firepower used by the U.S. forces here. They're telling us that operation dubbed Operation Iron Hammer is an ongoing operation, and we understand there will be more assaults like this in the days and in the weeks ahead -- Anderson.

COOPER: All right. Matthew Chance in Baghdad. Thanks, Matthew.

Operation Iron Hammer actually began days ago, and it is a significant shift that the U.S. is once again going after insurgents from the skies. Now, it comes with, of course, risks of swinging that hammer at the wrong place, hurting the wrong people. Senior Pentagon correspondent Jamie McIntyre looks at the strategy.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): The air war is back. A U.S. Air Force AC-130 gun ship like this one, with a powerful side-mounted 105-millimeter Howitzer, was used to level a warehouse in southern Baghdad Wednesday night. It's said to be used as a base by anti-U.S. insurgents. It's the latest example of how the U.S. military is using precision air strikes to ratchet up the pace and intensity of its counter-insurgency campaign.

LT. GEN. RICARDO SANCHEZ, U.S. COALITION COMMANDER: We are taking the fight into the safe havens of the enemy in the heartland of the country where we continue to face former regime loyalists, criminals and foreign terrorists.

MCINTYRE: Monday night, U.S. F-16s dropped 2,000-pound bombs on an empty house south of the Iraqi capital after local residents were warned to stay clear. The stated purpose for destroying the suspected hideout was to deny sanctuary to the anti-coalition insurgents. And there were similar U.S. air strikes to demolish structures near Saddam Hussein's hometown of Tikrit Friday and Saturday.

Pentagon sources say the stepped-up pace of attacks in recent days is also a result of better intelligence coming from local Iraqis who are supporting the U.S.

COLIN POWELL, SECRETARY OF STATE: We are confident that our commanders will get on top of it and our intelligence experts will be able to penetrate these remnants of the old regime who were trying to destroy the hopes and aspirations of the Iraqi people.

(END VIDEOTAPE)

MCINTYRE: There is another aspect of the reintroduction of air power into the Iraq war, and that is the message it sends. U.S. commanders are well aware they've been losing the battle of perceptions. Air strikes send a signal of U.S. strength, power and reach, and that the United States, too, can strike with impunity -- Anderson.

COOPER: All right. Jamie McIntyre at the Pentagon. Thanks.

As we noted, the increase use of heavy U.S. firepower clearly increases the risk of civilian casualties, which is a point not lost at the White House, as officials try to gauge possible political fallout. White House correspondent Dana Bash is with us now.

Dana, does the White House think this strategy is politically risky?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Anderson what they know here at the White House is that Americans are seeing an increased number of attacks on U.S. troops and feel they have no choice but try to root out the violence, because the biggest political risk for this White House is failure. And that is a big part of what is fueling the new push at the White House to try to push more quickly to expedite the Iraqi government, and that is a big part of the discussion here at the White House today.

(BEGIN VIDEOTAPE)

BASH (voice-over): After two days of White House talks, President Bush is sending his Iraq administrator back to Baghdad with a proposed shift in U.S. strategy to turn governing power over to Iraqis more quickly.

AMB. PAUL BREMER, IRAQ CIVIL ADMINISTRATOR: The stakes are very high for moving toward a sovereign Iraqi government.

BASH: According to senior U.S. official, the president authorized a few major options for the U.S.-picked Iraqi Governing Council to consider, including an interim Iraqi constitution and interim Iraqi leadership. Another possibility, a provisional leader like Afghanistan's Hamid Karzai. But U.S. officials caution Iraqis may not accept that model as legitimate because of the country's diverse ethnic and religious makeup, and also say there is no specific timetable for the plan. During the fall U.N. debate, the White House strongly opposed any return of control to Iraqis without free elections.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The constitution must be written, and there will be free elections. And then sovereignty will occur.

BASH: Now a White House concession.

SCOT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You need to be willing to adjust and adapt to circumstances on the ground in terms of reconstruction and in terms of the political front.

BASH: This adjustment is fueled by increasing attacks against coalition targets and a new grim CIA assessment more Iraqis disillusioned with the U.S.-led occupation are joining the insurgency.

BREMER: The terrorists are trying to encourage the Iraqi people to believe that the United States is not going to stay the course.

BASH: Officials admit the urgent White House push is also aimed at the slow-moving Iraqi Governing Council to meet a December 15 deadline for a permanent transition plan.

(END VIDEOTAPE)

BASH: Bush officials concede they were intentionally vague about the details of the plan until the Governing Council is briefed, hoping Iraqis see their own leaders making the decision about their government, not the White House -- Anderson.

COOPER: All right. Dana Bash at the White House. Thanks very much.

So what is the timetable for turning power over to the Iraqis? Here's a news note. December 15 is the deadline for the Iraqi Governing Council to come up with a timetable and a program for drafting a new constitution and holding Democratic elections. And Secretary of State Colin Powell has said he wants a constitution written within the next six months. Paul Bremer has said he hopes elections could be held as early as next year.

On now to the clash of titans that ended today in a draw. A judge said neither Rosie O'Donnell nor her former publisher could claim damages in their bitter fight over who brought down "Rosie" magazine. The only winners here may be the lawyers, who clearly put in a lot of billable hours.

CNN's Mary Snow reports.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): After seven and a half days of testimony about the fireworks behind the scenes at "Rosie" magazine, the end of the trial took a turn that neither side seemed to expect. Judge Ira Gammerman called publisher Gruner & Jahr's $100 million lawsuit against Rosie O'Donnell ill-conceived, saying neither side proved damages beyond legal fees. And he said the magazine wasn't even profitable.

Both sides, he said, seemed to be looking for bragging rights. Rosie O'Donnell left court saying she's glad it's over.

ROSIE O'DONNELL, FMR. TALK SHOW HOST: The story of this case is not who won or lost, but simply how many times peace was offered and war was chosen by the other side. We can have peace in this world. We can have peace with each other.

SNOW: The judge's conclusions are not final. He still must decide whether Rosie O'Donnell or Gruner & Jahr breached the contract that led to the demise of "Rosie" magazine. O'Donnell claimed that G & J breached it by seizing editorial control. G & J claims O'Donnell breached it by leaving in what executives called a fit of tantrum. Rosie O'Donnell's lawyers were careful to stop short of declaring victory.

MATTHEW FISHBEIN, O'DONNELL'S LAWYER: Whenever you're sued for $100 million and you walk out of the courtroom with the judge basically telling you you're not going to have to pay a penny, it's hard to get any better than that.

SNOW: Lawyers for Gruner & Jahr disagree.

MARTY HYMAN, PUBLISHER'S LAWYER: Gruner & Jahr believe (UNINTELLIGIBLE) lawsuit and believes today that Rosie O'Donnell breached the contract. Gruner & Jahr did not enter into this joint venture with the expectation to lose money or not make money. And the fact that the judge has expressed doubts as to whether or not "Rosie" magazine ultimately would have made money down the road does not render the lawsuit to be an ill-conceived lawsuit.

(END VIDEOTAPE)

SNOW: Lawyers for Gruner & Jahr still plan to seek damages. And as for Rosie O'Donnell, she wants to be reimbursed for her legal fees, $8 million so far; $2 million more than she initially invested in the magazine -- Anderson.

COOPER: All right. Mary Snow, thanks very much. Appreciate it. We're going to have more on Rosie O'Donnell's legal saga. We're going to talk with her attorneys coming up on 360.

We're also following a number of stories right now "Cross Country." Let's take a look.

A 30-hour talkathon is now occupying the Senate. You're looking live at the floor of the Senate. Republicans protesting Democrats preventing a vote on three of President Bush's judicial nominees by filibustering. Cots have even been brought down to the floor so senators can lie down during the filibuster. There are two of the cots. Democrats say they have every right to do this.

San Rafael, California: fallen firefighter remembered. Thousands turned out today to honor the only firefighter to lose his life battling the recent southern California wildfires. Stephen Rucker (ph), that's his name. That's his photo right there. He died October 29 when a firestorm swept over his crew as they were trying to save a house in San Diego County.

Washington: fewer hate crimes. New FBI figures show a sharp drop in hate crimes in the U.S. in 2002. Reports of crimes involving bias against a victim's race, ethnicity, religion, sexual orientation or disability decreased more than 20 percent from 2001. Critics say the stats are unreliable because victims underreport hate crimes.

That's a look at stories right now "Cross Country."

They are accused of terrorizing suburban Washington a year ago. Now they are on trial for their lives. We'll have the very latest on the two sniper trials. We're also going to look at why John Muhammad's defense wasted little time making its case.

Also tonight, you will not believe what happened to an American soldier right after he returned from Iraq. The shocking death of Army specialist Richard Davis after a night out with his fellow soldiers.

And our series "Sleepless in America" continues with a cutting- edge research on how to keep people awake. We'll also give you some pointers on what you can do to keep your eyes wide open.

First, let's take a look "Inside the Box" at the top stories on tonight's network newscasts.

(COMMERCIAL BREAK)

COOPER: Misty night here in New York. On to the trial of the two D.C. sniper suspects. As jury selection was completed in the trial of Lee Boyd Malvo, was there a pretty surprising move by John Allen Muhammad's defense in his trial, which was just 15 miles away. CNN's Jeanne Meserve was there.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice over): The defense case was stunning for its brevity. Just five witnesses in less than three hours. A striking contrast with the prosecution, which called 136 witnesses over 14 days.

PAUL BUTLER, GEORGE WASHINGTON UNIVERSITY: It's a very surprising development. The defense seems to be not that Mr. Muhammad is innocent, but that the government doesn't have enough evidence to prove its case beyond a reasonable doubt.

MESERVE: The defense tried to undermine prosecution witnesses who had placed Muhammad and Malvo or their car near the Iran Brown shooting at a middle school in Bowie, Maryland, the Dean Meyers shooting in Manassas, and the Kenneth Bridges (ph) shooting in Fredericksburg.

They attempted to discredit the testimony of Muhammad's cousin, Charlene Anderson (ph). She had testified that Muhammad showed her a gun during the visit in the months before the sniper slayings. Fifteen miles away from the Muhammad trial, the final selection of jurors and alternates for the Malvo trial. Central to Malvo's defense, his youth and vulnerability to Muhammad. His lawyers talk about it at every opportunity.

UNIDENTIFIED MALE: You see him now. You should have seen him when Mr. Muhammad took him in. He was much smaller, and probably that made him that much more of a target and that much more vulnerable.

(END VIDEOTAPE)

MESERVE: The stage is set for a very busy Thursday. Opening statements in Malvo, closing arguments in Muhammad, and a very good chance the Muhammad case could go to the jury Thursday afternoon.

Anderson, back to you.

COOPER: All right. Jeanne Meserve, thanks very much, covering both trials for us.

Now, the murder mystery that has shocked Fort Benning, Georgia. A day after returning from duty in Iraq, a U.S. soldier is killed, stabbed multiple times, his body then set on fire. Now, four soldiers who actually fought by his side, well, they now face charges in connection with his death.

As CNN's Kris Osborn reports, the soldier's parents are trying to come to grips with it all.

(BEGIN VIDEOTAPE)

LANNY DAVIS, FATHER OF VICTIM: I gave him enough money to cover his ticket, plus some extra money. And he said, "I'll pay you back, dad. And I love you." And he hugged me. That's the last time I got to hug him.

KRIS OSBORN, CNN CORRESPONDENT (voice-over): Lanny Davis remembers the last time he saw his son, Army Specialist Richard Davis. The younger Davis survived not only Operation Iraqi Freedom, but also tours of duty in Bosnia and Kuwait.

Davis' death came much closer to home near his post at Fort Benning, Georgia. He disappeared July 14, one day after returning from Iraq. Police say he went to a strip club with four fellow soldiers, and that Davis made an "inappropriate comment" to a woman. Then Columbus Police say the soldiers were kicked out of the club, fought amongst themselves in the parking lot, then drove to a wooded area.

There, the police say Davis was beaten again and stabbed repeatedly. Investigators tell CNN the group set the body on fire and covered it with debris. Three soldiers who were with Davis that night are now jailed in Columbus, charged with concealing a death. The fourth, who police say stabbed Davis, is being held in California awaiting extradition. (on camera): Military officials here on post say they're shocked and very concerned for the family of Specialist Davis. The district attorney in Muskogee County says murder charges may be filed in the future.

Kris Osborn, CNN, Fort Benning, Georgia.

(END VIDEOTAPE)

COOPER: An unbelievable story.

A number of stories right now we are following around the world. Let's check the "UpLink."

Tikrit, Iraq: round up. U.S. forces pick up dozens of suspects in the downing of a Black Hawk helicopter. That's the one that killed six American soldiers. The U.S. troops captured the suspects during overnight raids in Tikrit, which is, of course, the ancestral home of Saddam Hussein.

Ramallah, West Bank: new Palestinian cabinet. The Palestinian parliament approves the new cabinet led by Prime Minister Ahmed Qorei. Twenty-four new lawmakers were sworn in by Palestinian Authority President Yasser Arafat.

Fiji: overdue apology. A fascinating story, this. Residents of this village in Fiji Islands, gather food, gifts and animals to give to the descendants of a guy named Thomas Baker. When Baker was a missionary in the Pacific Ocean territory, he happened upon some of the ancestors of these very same residents. It turns out they were cannibals and they ate him.

Everything, but his boots, according to someone who was actually there. Now, 136 years later, the descendants are saying they are sorry. Which only goes to prove it is never too late.

That is tonight's "UpLink."

Splitting hairs in the Scott Peterson hearing. We're going to talk about today's DNA evidence and preview possible explosive testimony from Scott Peterson's mistress with legal analyst Kimberly Guilfoyle Newsom.

The judge calls it a draw in the Rosie O'Donnell case. What will her lawyer do next? We'll talk to them.

And staying awake. It can be a matter of life and death. The armed forces go way beyond "Revalee" to keep U.S. fighting men and women awake. Are there less dramatic methods you can use to fight off shut eye? We'll talk about some of them.

But first, today's "Buzz." Should the U.S. Air Force continue to make amphetamines, also known as go pills, available to its pilots? What do you think? Vote now: cnn.com/360. We'll have results at the end of program.

(COMMERCIAL BREAK)

COOPER: We continue tonight with our weeklong series, "Sleepless in America." There is one place where keeping people awake and getting them to sleep can make the difference between life and death. We're talking about the military. Pills have long been the crutch of choice, but the military is trying to change that with help from cutting-edge research.

(BEGIN VIDEOTAPE)

COOPER (voice-over): Beginning in World War II, the U.S. military's solution to battle fatigue often came in a pill bottle. Amphetamines, commonly referred to as go pills. Many people close to Elvis Presley say he returned from his stint in the Army hooked on them. Today, you can still find amphetamines being used on missions by Air Force pilots.

But the Pentagon is also helping to fund research for a new safer alternative to go pills. One possible answer, magnets.

DR. SARAH LISANBY, NYS PSYCHIATRIC INSTITUTE: So like before, I'm just going to put the (UNINTELLIGIBLE) on the side of your head.

COOPER: Dr. Sarah Lisanby is researching transcranial magnetic stimulation, or TMS.

LISANBY: The goal of the project is to try to use brain imaging and non-invasive brain stimulation with TMS to understand how brain function changes when a person's sleep deprived that causes them to have trouble concentrating, have trouble with their memory.

The TMS coil delivers a powerful magnetic field, and that rapid rate of change of the magnetic field induces a small electrical current in the brain. And that small amount of electricity that's induced in the brain stimulates the neurons of the brain cells to fire.

COOPER: Dr. Lisanby's hope, that by activating the correct neurons in the brain, the sleep deprived can actually begin to think and function more effectively. That means magnets could one day be used to help soldiers or doctors or anyone else stay awake without the use of pills.

(END VIDEOTAPE)

COOPER: All right. So not all of us have access to transcranial magnetic stimulation. In terms of staying awake, most of us rely on what's on the pharmacy shelf, or maybe a can of red bull (ph) or a pot of coffee. What really works and what are the risks?

Well, joining us now from Philadelphia, David Dinges. He's the chief of the Division of Sleep and Chronobiology at the University of Pennsylvania School of Medicine. Another way of saying I think he knows an awful lot about sleep.

Dr. Dinges, thanks very much for being with us. You know, Americans drink an awful lot of coffee all throughout the day. Let's talk about caffeine and coffee. Is there a way to drink coffee that's more effective in terms of keeping us awake?

DAVID DINGES, UNIVERSITY OF PENNSYLVANIA: Well, the consumption keeps increasing, and it has to do with the fact that so many of us are sleep deprived. Is there a way to drink it that will keep us awake? Well, many people drink it socially, but also for its weight- promoting effects, the effects it has on the brain.

And the real trick to using caffeine responsibly, if you'll pardon that phrase for an uncontrolled substance, is to use it without using it socially. That is, use it pharmacologically. Don't drink it necessarily in the morning when you get up if you know you'll be on a night shift. Use it strategically at night.

COOPER: All right. Then there are these products like the red bull (ph), these sort of high-caffeinated soft drinks, basically. Do they work, and if so, how do they work?

DINGES: Well, to the extent that there are a host of products now being marketed that have basically a certain amount of caffeine in them -- and it's the caffeine combined with some sugar that's used to give you the "jolt" -- they work the same way that a cup of coffee does to the extent that they're binding at a receptor in the brain that is well known to bind -- that caffeine binds to, and has some role in our wake regulation. The important thing to remember about coffee, though, it's no substitute for sleep and isn't going to keep you awake if your sleeve sleep drive is too high.

COOPER: Are there any safe over-the-counter medications people can take?

DINGES: Nothing over the counter other than caffeine that really -- or caffeinated products that has some benefit. There are lots of control substances, lots in the sense that there is at least 20 of them that have been around for varying periods of time. And those are being researched -- particular ones are being researched right now to determine if we can find a safer alternative to amphetamine, which has been around 75 years.

COOPER: All right. Dr. David Dinges, appreciate you joining us. Thanks. It was interesting.

DINGES: Thank you.

COOPER: Our series, "Sleepless in America," continues all week. Tomorrow, when sleep is one long nightmare. We'll go inside the frightening world of sleep disorders.

And on Friday, can a night at a sleep clinic work for you? I'll let you know if it worked for me. Not looking forward to that.

And tonight, be sure to vote on our "Buzz" question. Should the U.S. Air Force continue to make amphetamines, also known as go pills, available to its pilots? Go to cnn.com/360. Results at the end of program. (BEGIN VIDEOTAPE)

COOPER (voice-over): A stalemate in the Rosie O'Donnell trial. What happens next?

A child of privilege caught on tape.

And a medical miracle, surviving death by drowning. We'll be right back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

O'DONNELL: I have no vengeance towards the company. I will never speak about that company again, or any of its employees.

(END VIDEO CLIP)

COOPER: That was Rosie O'Donnell today as her legal battle with her former publisher came to a head. We'll talk with her lawyers in just a moment.

First, here's "The Reset."

Baghdad, Iraq. Iron Hammer. U.S. forces launch an airborne counterattack aimed at insurgents who have been staging attacks in Baghdad, part of an operation code named Iron Hammer. The offensive destroyed a warehouse thought to have been used by the insurgents and killed two suspected guerrillas.

Nasiriyah, Iraq. Police base bombed. A truck, loaded with explosives, drove into a police base in Nasiriyah, killing 26 people, including 18 Italians participating in the U.S.-led effort to rebuild Iraq. It was the worst day for the Italian military since World War II.

Clarksville, Arkansas. Parents arrested. Manslaughter charges are pending against an Arkansas couple after a house fire that killed their 10-year-old daughter. Authorities say the girl had been chained by her ankles to a bed.

And that is "The Reset."

Well, as we said earlier, the curtain has come down with a thud on the Rosie O'Donnell case. The judge ruled that neither O'Donnell nor the former publisher of "Rosie" magazine is entitled to damages. Judge Ira Gammerman called the lawsuits filed by both sides "ill- conceived." Ill-conceived or not, O'Donnell was the queen of nice today, at least where her lawyers were concerned. Take a look.

(BEGIN VIDEO CLIP)

O'DONNELL: I'd like to thank my lawyers from Devoboies & Clinton (ph). If you are ever sued by a corporate giant for $125 million, I highly recommend them. They're incredibly good lawyers. And they are incredibly ethical people.

(END VIDEO CLIP)

COOPER: I guess phones must have been ringing off the hook today.

Joining us in "Justice Served," O'Donnell's attorneys Lorna Schofield and Matthew Fishbein. Appreciate you -- Schofield.

LORNA SCHOFIELD, O'DONNELL ATTORNEY: Schofield.

COOPER: I'm sorry.

SCHOFIELD: Very good.

COOPER: All right. I want to make sure everyone be able to know who to call you accurately.

A victory today for Rosie O'Donnell?

SCHOFIELD: A great victory. And I have to correct one thing. The judge said that the plaintiff's case was ill-conceived, not ours. They picked the fight. They sued us.

COOPER: OK. But you say a victory, even though no money was awarded at this point.

SCHOFIELD: A victory because they sued us for $100 million and Rosie O'Donnell now gets to walk out without having to pay a dime.

COOPER: Where does she go from here, Matt?

MATTHEW FISHBEIN, O'DONNELL ATTORNEY: Well, you know, she's involved in many endeavors. Her show "Taboo" is opening up on Broadway tomorrow night. And one of the things that came out at trial here is that the only business venture she's ever been involved in that was not successful was this magazine. She's been a producer, an actress, she's had a television show and we think that she's going to be continuing to be successful in the future.

COOPER: But she's hoping to recoup -- I mean, basically your fees which are quite hefty. I mean, it's been reported up to $8 million.

SCHOFIELD: We've been working hard for a year and a half and she's wanted to pursue this and we've been happy to do that for her and she's entitled to her legal fees.

COOPER: What do you think the judge saw -- I mean, why didn't G&J -- why weren't they able to prove their case? What did they do wrong?

FISHBEIN: Well, I think, you know, think the facts are sometimes difficult to get around. Their claim here that was she had walked away from this endeavor for no good reason. And the fact of the matter was that they seized the editorial control of this magazine that had her name on it from her.

And...

COOPER: How significant was the e-mail sent to the German head of the corporation, which basically -- I mean, I asked David Carr of "The New York Times" about it. I said, is that a smoking gun? He said that's a smoking Howitzer.

I mean, it basically said-- I mean, I don't want to (UNINTELLIGIBLE) the wording. But it basically said we need to...

SCHOFIELD: Manipulate the books. I mean, manage the financials were the words. And, I mean, you can imagine our reactions when we first found that months ago.

COOPER: How did you find that? I mean, I guess in the discovery phase.

SCHOFIELD: In the discovery process.

COOPER: Right.

SCHOFIELD: It hasn't -- I mean, both -- the lawyers on both sides have known for months and months that this was part of the case.

COOPER: When you saw that e-mail, what went through your mind?

FISHBEIN: Well, it's the sort of thing -- you know, you -- they always say you can't cross examine a document. I mean, those were the words of the CFO written to the head of the company. And whatever explanations they had ultimately fell flat when they tried to explain those words away at trial.

COOPER: Lorna, when does the judge rule on the $8 million?

SCHOFIELD: It's up to him. We put papers in in a month and then he gets to decide.

COOPER: All right. Lorna Schofield and Matthew Fishbein, I know it's been a long trial for you. Appreciate you joining us. Thanks very much.

(CROSSTALK)

COOPER: All right.

Well, more "Justice Served" now in the Scott Peterson preliminary hearing. Now it is in its eighth day. The proceedings continue to focus one type of DNA testing and there were fireworks over some police videotape.

CNN's David Mattingly has more.

(BEGIN VIDEOTAPE) DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Calling it nothing more than a shell game in a capital case, a frustrated Mark Geragos wanted to know why Scott Peterson's defense team is only now learning about police surveillance tapes of the Peterson Modesto home.

Posted in the neighborhood in January, prosecutor Mark Destasso claimed the camera alerted police to Peterson's comings and goings and only this weekend discovered that two or three tapes exist. But like much of the prosecution's case, the contents of the tapes remains unknown to the public.

So far, we've learned of mops and buckets and a scrunched-up throw rug in the Peterson home. They raised the question, could Scott have killed Laci, dragged her body out of the house, then cleaned up the scene of the crime? Questions, but publicly again, no answers.

And still believed to be waiting in the wings, the possible motive for murder, Scott's girlfriend, Amber Frey. We now know she worked closely with police as she and Scott continued to trade phone calls in the weeks after Laci's disappearance. But what she has to say and the tapes of those conversations remain sealed.

(on camera): In fact, in seven days of testimony, four now have focused on the accuracy of mitochondrial DNA and the single strand of hair found in Scott Peterson's boat. If prosecutors can prove that hair belonged to Laci, it links the murdered housewife to her husband's boat. It remains, so far, the only piece of physical evidence revealed in this much talked about preliminary hearing.

David Mattingly, CNN, Modesto, California.

(END VIDEOTAPE)

COOPER: Weighing in on this case, 360 analyst, Kimberly Guilfoyle Newsom. She joins us live from Modesto, California.

Kimberly, good to see you.

David Mattingly just mentioned Amber Frey. She's expected to testify tomorrow. How important is her testimony going to be?

KIMBERLY GUILFOYLE NEWSOM, 360 LEGAL ANALYST: Well, we definitely expect her this week. Maybe tomorrow, maybe Friday, it could be Monday, we don't know.

Her testimony, I think, is going to be powerful. I think so far people have underestimated the impact that her testimony will bring in this case. And, in fact, I think we're waiting for it here, on Amber alert, anxiously, to see what she has to say.

I expect her to confirm some of the statements we've heard already in terms of the conversation on December 9 with Scott Peterson when she confronted him about being a married man. And in fact, he told her that he was a widower, that he had lost his wife. Those are going to be powerful statements in the courtroom an, I think, persuasive to a jury, ultimately. COOPER: Also a lot of talk about mitochondrial DNA. How important is this piece of evidence, this hair apparently found on a plier in the boat?

NEWSOM: So far, it is the most important piece of physical evidence in this case because it corroborates the prosecution's theory that Scott Peterson is responsible for the death of his wife and the unborn son, Conner. And in fact, their theory that he killed her in the home, that she was transported in the boat and eventually dumped in the bay. This would, in fact, suggest that her body was in that boat that was recently purchased and that she had never been in the boat prior to that particular day of her disappearance and the removal of her body.

COOPER: And, you know, last week, I mean, there was there some pretty damning testimony. You already talked about what he allegedly said to Amber Frey. Some other stuff about cadaver dogs. Was the defense able to deflect any of that today?

NEWSOM: They weren't able to get to much of it.

What was interesting is -- I'd like to bring up, in terms of Amber Frey, one of the defense attorneys, McAllister, brought up that they were using Amber Frey to try and get information from Scott Peterson, telling her what to say. But in addition to Amber, they were using other people. Laci's family, her friends and getting them to try and get incriminating statements from Scott Peterson suggesting things that they could say, and, in fact, ask him to kind of trap him and get information that would show that that he was responsible.

Also they testified that Amber Frey was given -- I guess equipment to do these tapings and things from the Radio Shack, which was kind of interesting. And the defense also suggested that she started to tape her conversations with Scott Peterson prior to them getting her involved in the case. But the prosecution denied that and so did the detective in the case.

COOPER: All right. Kimberly Guilfoyle Newsom, thanks very much.

NEWSOM: Thank you.

All right.

Doctors said the little girl was dead. Wait until you hear what happened next. Dr. Sanjay Gupta will have an update on California's miracle baby.

Also, the idle rich apparently aren't always so idle. We're going to talk about the videotape that has Paris Hilton's parents calling their lawyers.

(COMMERCIAL BREAK)

COOPER: An amazing story of survival now. It seems the little girl in southern California who doctors originally thought had drowned, but was revived is still fighting the odds. CNN's medical correspondent Dr. Sanjay Gupta is here with an update on her condition. How is she doing?

SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: The update looks pretty favorable. She had some brain scans done today that all looked pretty good. Hard to say exactly what that means. She was declared dead on Friday. Talk to doctors today, this is how they think she's doing now.

(BEGIN VIDEO CLIP)

DR. JAMES CAPPON, CHILDREN'S HOSPITAL OF ORANGE CO.: She opens her eyes spontaneously. She is doing all the breathing on her own. She's very capable of moving all of her extremities. She can turn her head from side to side. And while these may seem like simple things, they're actually of some significance neurologically. What we wait for is that level of purposefulness to her behavior.

(END VIDEO CLIP)

GUPTA: She's upgraded from serious condition. Story goes like this, it's sort of fascinating, last Friday she was actually missing for about 10 minutes, subsequently found in the pool face down. Mother calls 911 who got there in two minutes. She was subsequently -- you know, the resuscitation efforts were tried. 40 minutes later she was declared dead and subsequently they were actually taking some pictures, some autopsy pictures, things like that and saw her chest moving. And attempted revival again, this time she woke up.

COOPER: Certainly not a great advertisement for doctors involved in it. How often does something like this actually happen?

GUPTA: I think it's a pretty rare situation. It's sort of interesting. What happens sometimes in a situation where drowning occurs, sometimes you hear about babes ending up in the bottom of the pool. What happens, the body goes into a hibernation-like phase. Your pulse slows way down, your blood pressure goes way down.

If someone were to check those things, they may not even be traceable, so someone could declare somebody dead. After you warm the person up, things like that, the pulse starts to become more brisk, the blood pressure increases and it's remarkable.

COOPER: How long before we know if there's long-term damage?

GUPTA: That's a good question. The brain scans look pretty good today, but that just says there hasn't been anything bad that's happened to the brain scans. She's moving around, but she's probably suffered some degree like a stroke-like injury. The brain went without oxygen into the blood for a long period of time.

COOPER: Can a young child recover from something like that?

GUPTA: A young could recover, an adult could recover as well. This water was 52 degrees -- I asked about that -- not ice cold, about 20 degrees warmer than that, still somewhat protective to the brain when the water's that cold.

COOPER: It's just an unbelievable story. Dr. Sanjay Gupta thanks very much for the update.

GUPTA: Take care.

COOPER: So, have you ever partied with Pairs Hilton? Don't worry, me either, but she's causing quite a stir and trying to stop distribution of a new sex tape that's getting mixed reviews.

Also tonight, is the world ready for a new Rush Limbaugh? We're about to find out. We'll be right back.

(COMMERCIAL BREAK)

COOPER: All right. Our midweek crisis might also qualify as a life crisis if the short, but prematurely eventful life of Paris Hilton had not already had so many other moments. This one, however, has taken the cake, and if you believe the gossip columns, celebrities, the city of Los Angeles, movers and definitely shakers, crowding around monitors to watch a grainy, apparently tawdry romantic encounter that falls somewhat short of merchant ivory standards.

(BEGIN VIDEOTAPE)

COOPER