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Anderson Cooper 360 Degrees

U.S. Renews Efforts to Capture bin Laden, George Tenet Under Fire for Intelligence Failings; Kerry Gets Endorsements, Dean Campaigns in Michigan, Edwards Says South Carolina a Must Win State, Sharpton Focuses on South Carolina; Martha Stewart Case Delayed Over Evidence

Aired January 29, 2004 - 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): Seven U.S. soldiers killed in an explosion in Afghanistan.

Jesse Jackson on Dean, the Democrats and what it takes to win in South Carolina.

A dramatic hostage standoff: 12 days and counting. Will law enforcement move in?

A surprise in the trial of Martha Stewart. What put a star witness's testimony on hold?

A former mob fixer comes clean about gambling's dirty little secrets.

And a cannibal on trial. Did this killer really feed his victim to his co-workers?

(END VIDEOTAPE)

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

COOPER: Good evening. Welcome to 360.

We begin tonight with war on two fronts: Afghanistan and new details about the hunt for Osama bin Laden, and Iraq and the controversy surrounding WMD. Two reports, one from senior Pentagon correspondent Jamie McIntyre, the other from national security correspondent David Ensor.

We begin with Jamie McIntyre on the search for bin Laden -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: The U.S. military is redoubling its efforts to capture or kill Osama bin Laden. But the big question is, how will they find him?

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The U.S. has some high tech tools at its disposal in the search for Osama bin Laden.

Unmanned Predator spy planes can use infrared imaging to look for hot spots in the barren mountains, and computer software can draw links between known fragments of intelligence, such as movement of financial assets and phone logs.

But in the end, the U.S. believes it will get bin Laden the same way it got Saddam Hussein. Someone will turn him in.

All intelligence points to bin Laden hiding somewhere in the mountainous border region between Afghanistan and Pakistan, an area under control of local tribal leaders, who may be giving bin Laden safe harbor. That's made finding the shadowy fugitive extremely difficult.

SEBASTIAN JUNGER, JOURNALIST: There's a reason Pakistan did not want to deal with the tribal territories. And they're heavily armed with a strict sense of loyalty to their tribes.

MCINTYRE: That's making finding bin Laden harder than finding Saddam Hussein, which took only eight months. In fact, it's believed only a few of bin Laden's fanatically loyal supporters know where he is.

So the U.S. would like to send its elite hunter killer teams into Pakistan's Waziristan area. But Pakistan is, so far, refusing permission.

(END VIDEOTAPE)

MCINTYRE: After surviving two assassination attempts, the Pentagon is somewhat hopeful that perhaps Pervez Musharraf, the Pakistani president, might soften his opposition.

But at the same time, the U.S. doesn't want to do anything that would destabilize the regime of its most important ally in the hunt for Osama bin Laden -- Anderson.

COOPER: All right. It's a tough call. Jamie McIntyre at the Pentagon, thanks.

Proof today that Afghanistan is still a very dangerous place for U.S. troops. Seven soldiers are dead after a weapons cache exploded near the town of Ghazni. Three other soldiers and an interpreter were wounded.

Today's deaths bring the total to casualties to 107 since Operation Enduring Freedom began in October 2001.

More fallout today from former WMD hunter David Kay's critique of U.S. intelligence. The director of the CIA is feeling the heat.

The latest from CNN's national security correspondent, David Ensor.

(BEGIN VIDEOTAPE) DAVID ENSOR, CNN CORRESPONDENT (voice-over): George Tenet appears to be in the hot seat like never before.

Not only is his own former chief weapons inspector David Kay charging that U.S. intelligence failed the president before the Iraq war. Now, the current Democratic frontrunner in this election year is call for Tenet to resign.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I think there's been a lack of accountability at the CIA. I regret it. I know him personally. But that's the nature of responsibility.

ENSOR: On Capitol Hill, Democrats and others are calling for an independent probe into why U.S. intelligence may have gotten it so wrong and what role the administration played.

SEN. JOHN MCCAIN (R), ARIZONA: It's inevitable that there will be an outside commission appointed on an issue of this gravity.

ENSOR: But George Tenet is a survivor, appointed by Bill Clinton, kept on and trusted by his Republican successor.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've got great confidence in our intelligence community. They are unbelievably hardworking, dedicated people who are doing a great job for America.

ENSOR: At the CIA, officials say Kay is premature, suggesting no weapons will be found. A U.S. official says there are millions of pages of documents yet to be translated, hundreds of suspect sites yet to be visited and thousands of Iraqi scientists and former officials yet to be interrogated about what they know.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: I don't think one can draw conclusions at this point.

(END VIDEOTAPE)

ENSOR: The White House spokesman said this week that George Tenet retains the president's full confidence. As for Senator Kerry saying he should go, one U.S. Official said that just makes it all the less likely -- Anderson.

COOPER: All right. David Ensor in Washington. Thanks, David.

Now the battle for the White House.

The Democratic contenders are now focused on seven states holding primaries or caucuses on Tuesday. The Southern belle of the battle, of course, South Carolina, where black voters may account for half of the primary votes.

We have a team of reporters in South Carolina tonight. CNN's Kelly Wallace is tracking the Kerry camp. Senior political correspondent, Candy Crowley with Dean and CNN's Frank Buckley following Edwards, Sharpton and Clark.

Let's begin with Kelly -- Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Anderson, a senior Kerry campaign aide saying the senator goes into tonight's debate with the same approach he's taken all along, that he is not taking anything for granted.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): In Columbia, South Carolina, John Kerry had plenty to smile about: winning an endorsement from the state's most popular African-American lawmaker.

REP. JIM CLYBURN (D), SOUTH CAROLINA: John Kerry has the right stuff.

WALLACE: Then the man from the North talked about getting to know his colleague from the South.

KERRY: Danced late at night and had some mighty good fish, too.

CLYBURN: I wouldn't call that dancing if I was you.

KERRY: I thought it was pretty good. I thought for a white guy I showed some rhythm.

WALLACE: What Kerry hopes to show is that he can connect with African-Americans, who could represent up to 50 percent of those who vote Tuesday.

He also wants to prove that, even though he has not campaigned here since shortly after his presidential announcement, he is not writing off the South.

Another challenge for the undisputed frontrunner, how he handles attacks, which could come from his Democratic opponents and have already come from Republicans.

ED GILLESPIE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: John Kerry's record of service in our military is honorable. But his long record in the Senate is one of advocating policies that would weaken our national security.

WALLACE: Asked about that, Kerry seemed to enjoy firing back.

KERRY: It's the greatest form of flattery. Bring it on. Let's have this debate.

(END VIDEOTAPE)

WALLACE: And late today, word of another endorsement expected to go John Kerry's way. Democratic sources telling CNN that Michigan Governor Jennifer Granhohm expected to endorse Senator Kerry as early as tomorrow.

Michigan holding caucuses just days after the February 3 states. And a large number of delegates at stake in Michigan -- Anderson. COOPER: All right. Kelly Wallace, thanks for that.

Howard Dean admits he won't focus too much on South Carolina. Instead, he is eying Michigan, with help from his new campaign CEO.

For the latest, let's go live to CNN senior political correspondent Candy Crowley -- Candy.

CANDY CROWLEY, CNN CORRESPONDENT: Anderson, on the plane from Burlington, Vermont to Lansing, Michigan, Howard Dean said, "That's all yesterday. Today we're putting another foot forward."

Indeed, he went to Lansing, Michigan. And Michigan is not a state that has a contest next Tuesday. But it is a state that increasingly the Dean campaign is looking toward for a breakthrough moment.

Dean, of course, went from Lansing, Michigan, and came here to South Carolina for the debate that's now under way.

But what we saw on that speech in Lansing was a sharper, more focused, sort of a stronger speech, the same basic speech with stronger language.

Tonight, aides say what they want to do and what Howard Dean wants to do is two things.

One, put himself up as someone as a governor who has accomplished things and not just talked about things, as he believes they do in Washington; emphasize his outsider credentials, as opposed to their insider credentials; and also talk about the courage of convictions.

He talked in Lansing about opportunists, about Democrats who have come to his way of thinking about the war and things but voted in an entirely different way.

So he is trying to portray himself as the man who stood up against a lot of things when no one had the courage to do. They hope that's a message that will remind voters why they liked Howard Dean in the first place and will bring them back.

Time, of course, is running out. Right now looking at the seven states on Tuesday, the Dean camp is hard pressed to find one they believe they will come in first. Which is why Howard Dean is looking towards those Saturday votes in Michigan and Washington state where, together, those two states have more delegates involved than the seven states on Tuesday, when you add it all up -- Anderson.

COOPER: All right. Howard Dean looking for a breakthrough. Candy Crowley, thanks for that.

John Edwards, born and reared in the Carolinas, has said South Carolina is must win for him. Reverend Al Sharpton is hoping for the appeal to African-American voters, while Wesley Clark from Arkansas is hoping to have the edge with veterans and with fellow Southerners. With a look at how the three candidates are reaching out to voters, let's check in with CNN's Frank Buckley, also in Greenville, South Carolina -- Frank.

FRANK BUCKLEY, CNN CORRESPONDENT: Well, Anderson, John Edwards is pushing hard here in South Carolina.

He was born in Seneca, South Carolina, as he likes to remind everyone here. And as you say, it's do or die for John Edwards.

And in that context, he got some bad news today, that endorsement that Kelly talked about from Jim Clyburn, the influential African- American congressman here, in a state where nearly half of the primary do not agrees man here in a state where nearly half of the primary voters could be African-American.

I asked John Edwards if he was disappointed in that endorsement.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: I think the world of Congressman Clyburn. And that's just the truth.

If you looked at what's happened in previous states, I mean, Iowa was the perfect example. I think Governor Dean had virtually every endorsement. I mean, he had all the leading endorsements and he did -- he ended up a distant third.

I think voters -- in a presidential election, voters -- you can't tell voters what to do. They're going to evaluate each one of us and decide who they want to be their president.

(END VIDEO CLIP)

BUCKLEY: And while it is a do or die state for John Edwards, in South Carolina, it is also a state in which Al Sharpton is expected to be competitive.

Al Sharpton is spending a great deal of time here, visited South Carolina more than any other candidate. And he hopes to appeal to that large African-American group of voters. Polling shows him getting up to 15 percent of the vote in a recent poll.

And right behind Sharpton in South Carolina in that same recent poll is Wesley Clark, Wesley Clark getting only 14 percent of the vote here in South Carolina, a state in which there are more than 400,000 veterans. Wesley Clark hoping to appeal to the veterans.

At the same time, his campaign has decided to focus more heavily in Oklahoma, Arizona, New Mexico, and North Dakota, all states that his campaign considers to be neutral -- Anderson.

COOPER: All right. Frank Buckley in Greenville. Thanks very much, Frank.

Jesse Jackson knows what it takes to win the South Carolina primary. We're going to talk to him about the presidential race, coming up a little bit later on 360.

We're following a number of developing stories right now "Cross Country." Take a look.

Washington. Money, money, money. The White House said today that they expect this year's budget deficit to be more than $520 billion. That's more than the congressional budget office had projected. President Bush sends his fiscal year 2005 budget to Congress next week.

Aiken, South Carolina. The Godfather gets out of jail. James Brown, the Godfather of Soul, was released from jail today without bond. The 70-year-old singer is accused of domestic violence against his 33-year-old wife. Brown says he is innocent.

Miami. Tragic auto accident caused by actress Robin Givens. Givens struck and critically injured an 89-year-old pedestrian in the crosswalk Wednesday.

Maria Antonia Alcover was hit by Givens' SUV during rush hour. Alcover is in extremely critical but stable condition at a Miami hospital.

And that is a look at stories "Cross Country" tonight.

A surprise development in the Martha Stewart trial. Doubts cast on the prosecution's key witness. Find out why the judge kept him off the stand today.

Plus, "Gambling Nation." You'll meet a former mobster who sheds some light on the dark side of an American pastime.

And new allegations in a case that's already stunned a country. A confessed cannibal on trial for murder. You'll never believe what he fed his co-workers for lunch, or so they say. We're going to have more on that coming up.

But first, let's take a look inside the box. The top stories on tonight's network newscasts.

(COMMERCIAL BREAK)

COOPER: Well, big surprise today in the Martha Stewart trial. The government's star witness was ready to take the stand, but the judge said no. now a dispute over a key document may hurt the prosecution's case.

CNN's Allan Chernoff has details.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): A forced shake- up in the prosecution's batting order against Martha Stewart and her co-defendant and stock broker, Peter Bacanovic.

Star government witness Douglas Faneuil, assistant to Bacanovic, may have to wait until next Thursday to testify.

Late last night prosecutors sent defense attorneys an FBI report of an interview with Faneuil's first attorney, a gentleman in his 80s who could not recall if it had been Bacanovic or Sam Waksal, former CEO of ImClone, who instructed Faneuil to pass information about ImClone to Martha Stewart.

The government alleges Stewart sold her shares after Bacanovic ordered Faneuil to share the tip that Waksal was trying to dump his stock. It's a story that Faneuil is expected to tell on the stand.

BENJAMIN BRAFMAN, ATTORNEY: If there is a reasonable doubt as to whether he was the source or not, the government's case against Bacanovic can be undermined just by that little piece of information.

CHERNOFF: Bacanovic's attorney, Richard Strassberg, says, "There is some chutzpah with giving us the documents last night at 10:15."

Judge Cedarbaum said she found it troubling and granted Strassberg a week to investigate, a delay that would force the government to switch the order of its witnesses.

After court, Stewart's attorney was tight-lipped.

ROBERT MORVILLO, MARTHA STEWART'S ATTORNEY: It's not a big deal. I'm not going to be in a position to comment on what happens in the courtroom other than in the courtroom.

(END VIDEOTAPE)

CHERNOFF: Once Faneuil takes the stand, he is likely to face a blistering cross-examination as defense attorneys need to damage his credibility. They've already called him a liar in open court, and they plan to ask him about possible drug use -- Anderson.

COOPER: It's not going to be pretty. Allan Chernoff, thanks for that.

Of course, we want to hear from you. Today's "Buzz" question is this. What do you think? "Is the Martha Stewart trial a waste of taxpayer money?" Vote now: CNN.com/360. We're going to have results at the end of the program tonight.

Emotional testimony in a Florida courtroom today. The mother of a 6-year-old girl killed by then 12-year-old boy Lionel Tate fought back tears as she called her daughter Tiffany's killing a brutal murder.

Tate pleaded guilty to that 1999 murder today. He was released from prison earlier in the week.

Susan Candiotti has the story.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): Dressed in a suit on the eve of his 17th birthday, Lionel Tate showed no emotion as he pleaded guilty to second-degree murder.

UNIDENTIFIED MALE: You are Lionel Tate. You are entering this plea freely and voluntarily. Is that correct?

LIONEL TATE, CONVICTED MURDERER: Yes, sir.

UNIDENTIFIED MALE: I am accepting this plea of guilty. Do you feel it's in your best interest to plead guilty to the charge of murder in the second degree?

TATE: Yes, sir.

CANDIOTTI: Before Tate's plea before a packed courtroom, the victim's mother was invited to speak.

Deweese Eunick's 6-year-old daughter Tiffany was, in the court's words, brutally beaten to death by Lionel Tate, then 12.

To this day, Tate's mother, Kathleen, a Florida highway patrol trooper, continues to insist it was an accident, not murder. Deweese Eunick apparently had had enough.

DEWEESE EUNICK-PAUL, TIFFANY EUNICK'S MOTHER: Kathleen, you can't hide behind the deception any more.

CANDIOTTI: For minutes as Lionel's mother watched, at times irritated, Deweese Eunick made it clear she held Lionel's mother equally responsible for Tiffany's death.

EUNICK-PAUL: This is not child's play. This was not roughhousing. This was a brutal murder. Lionel Tate should accept responsibility for my daughter's murder, not accept responsibility for an accident.

CANDIOTTI: Tiffany's mother, who says she forgives Lionel but has never received an apology, did not hear one from him in court.

EUNICK-PAUL: The last conversation I remember having with Lionel was when Lionel came to my house and asked me for Tiffany's toys, since Tiffany was dead.

CANDIOTTI: His attorney told CNN Lionel's mother decided he would not address the court. Instead, his lawyer spoke.

RICHARD ROSENBAUM, TATE'S ATTORNEY: He would like to talk to Deweese, but only if she wants to and only if it's in private.

(END VIDEOTAPE)

CANDIOTTI: Whatever may be in the teenager's heart remains there for now, despite advice from religious advisers and others to publicly say I'm sorry.

The judge sent off Lionel with these words. "You've been given an opportunity. The decisions you make will decide your future" -- Anderson. COOPER: So tough. Susan Candiotti, thanks for that.

We're keeping track of several developing stories around the globe right now. Let's check the "Up Link."

Guantanamo Bay, Cuba. Teens free. The Pentagon says three teens who spent the last year at GTMO are back home now. They were among hundreds rounded up by the U.S. in Afghanistan. They were held in a separate facility.

And now, to quote the Pentagon, they, quote, "no longer pose a threat to our nation."

Jerusalem, deadly bus bombing. Ten people dead, 45 injured in a suicide bus bombing today. The bomber, a Palestinian policeman who slipped on to the passenger bus undetected.

Despite that bombing, Israel and Hezbollah complete an exchange, with Israel releasing more than 400 Palestinian prisoners, including two senior Hezbollah officials. Hezbollah released an abducted Israeli businessman and the bodies of three Israeli soldiers.

Juarez, Mexico. Cops arrested for murder. Cops arrested. Thirteen Mexican officers are charged with carrying out executions for a drug cartel. The arrests came after at least 11 bodies were found buried outside the home of an alleged drug trafficker in Chihuahua (ph) near the Texas border.

And that's a quick look at the "Up Link" tonight.

Are casinos safe from organized crime? We're going to talk to a former mobster who played the odds. Part of out weeklong series, "Gambling Nation."

Also tonight, the Democrats seven-state swing. Who will appeal to South Carolina's voters? We'll talk live to Reverend Jesse Jackson.

And a dramatic prison hostage standoff. Round the clock negotiations still going on right now. We're going to go live to Arizona, where a female guard has been held captive for almost two weeks.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WARREN BEATTY, AS BUGSY MALONE: The casino, we'll put Monte Carlo to shame. We'll have wall-to-wall carpeting. We'll have Italian marble. We'll have badminton courts, stables. We'll have a lightning fast train going from Los Angeles to Las Vegas in an hour. We'll have planes, back and forth. Mayer, we'll have our own airport.

UNIDENTIFIED MALE: I think what Ben is saying is, it's a good place to trap people in to take their money. Is that what you're getting at here, Benny? BEATTY: Much more. Much more.

(END VIDEO CLIP)

COOPER: The 1991 movie "Bugsy" was about the gangster who put Las Vegas on the gambling map.

As we've been covering in our special series, "Gambling Nation," these days casinos are popping up all over. Some, of course, are run by corporations, others by Native American tribes.

But do they bring riches to the local economy as often advertised? Here's "Fortune" magazine editor-at-large Andy Serwer.

(BEGIN VIDEOTAPE)

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE" MAGAZINE (voice-over): If you build it, they will come. They will gamble. And leave plenty of money behind. At least that's what voters are being told.

UNIDENTIFIED FEMALE: Ninety-one million in new revenues for Madison and Dane County will help support vitally needed human services and public safety programs and help hold down property taxes.

SERWER: Today, ten states allow for corporate run casinos. But the bigger boom is on Indian reservations, with tribes now owning casinos in 25 states.

And it's no small change. Connecticut's Mohegan Sun and Foxwoods resorts now take in more money than any other casinos in America.

But unlike with corporate gaming, states get very little of that money. That's because reservations are sovereign entities.

And when it comes to corporate casinos, even though states collect millions in taxes, opponents say it's a sucker's bet.

UNIDENTIFIED MALE: How deceptive is the Maine Casino's scheme the promoters claim will get a percentage of revenue from the slots? But what about the other games? Blackjack? Maine gets nothing.

SERWER: According to one industry study, casinos get about 70 percent of their business from people living less from 50 miles away. So for all that money generated for the local economy, it's usually coming out of local paychecks and savings accounts.

Perhaps there's more than a bit of truth to the old saying, the house always wins.

Andy Serwer, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, some opponents of legalized gambling say they're a magnet of crime. Today I spoke with Michael Franzese, a one-time made man in the Columbo crime family. He's done time for racketeering and is now the author of "Blood Covenant."

I started by asking him how he and his organized crime cops tried to infiltrate casinos.

(BEGIN VIDEOTAPE)

MICHAEL FRANZESE, FORMER MOBSTER: We found all different ways to take money out of the casinos, and normally it would be with the help of the casino boss or some official in the casino itself.

COOPER: What's wrong with casino gambling, in your opinion?

FRANZESE: Well, you know, I'm not standing on any moral high ground here and saying it's wrong. But -- and obviously, you know, that wouldn't be the right approach. But it certainly does have its harmful effects.

I mean, you know, all sorts of statistics and studies will show that in areas where -- in casino communities, crime is, I believe, about 84, 85 percent higher than the national average.

You know, you can't neglect the fact that there is a substantial minority of people that develop gambling problems and, also, become pathological gamblers.

COOPER: Let's talk about sports gambling a little bit, in particular college sports. I mean, how do mobsters, criminals try to move in, bookies try to move in and beat the odds?

FRANZESE: Well, you know, by gathering information and, hopefully, you know, at some point in time, especially in the college arena, getting an athlete to, you know, gamble with you and eventually compromise the outcome of a game.

It's certainly an easier -- it's an easier mark now in college than it is in pros, because pro athletes make a substantial amount of money. And if they do gamble, you know, they can normally cover their losses and don't have to, you know, resort to any other means to pay a bookmaker.

COOPER: So how does it work? How do you try to get to a college player?

FRANZESE: Normally, they'll develop the habit. They'll have a problem. They'll be gambling with a bookmaker. Somebody will take notice of it and get friendly with them, get close to them.

And maybe that athlete will be told, "Listen, you know, you've got four years in college. You're never going to the pros. Work with us, and we'll let you make some money, you know? Help us out in the outcome of this game."

And normally, it's a question of telling them, "You don't have to blow the game. You don't have to lose it. Just don't cover the spread." COOPER: You actually ended up serving time. I think we have a picture of your mug shot, even. You look a lot different right now, though.

You actually now counsel athletes, you counsel college players about what to watch out for. What do you tell them?

FRANZESE: We tell them that being around gamblers is dangerous for them, because gamblers are normally looking for an edge. And an athlete can certainly provide them an edge in a competition or a sporting event.

And really just to keep their radar and antenna up as to who they're associating with and what problems they could possibly face. And I give them, you know, some examples from my own experiences in that regard.

COOPER: And it's a fascinating experience that you've had. Michael Franzese, we appreciate you joining us. Thank you very much.

FRANZESE: Thank you.

(END VIDEOTAPE)

COOPER: Tomorrow, we're going to wrap up our series, "Gambling Nation." You're going to hear from a gambling addict, a man who was so desperate to bet he once unwrapped his kids' Christmas presents and returned them to get cash. We're going to talk with him about how he is trying to break his addiction.

(BEGIN VIDEO CLIP)

COOPER (voice-over): Jesse Jackson on Dean, the Democrats and what it takes to win in South Carolina.

Twelve days and counting. A dramatic prison hostage drama continues. We'll talk to the warden.

And a surprise in court. What put the Martha Stewart trial on hold?

360 continues.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

COOPER: In the next half hour on 360 the Reverend Jesse Jackson won South Carolina when he ran for president. So what advice does he have for this year's Democratic hopefuls? You'll hear from him in just a moment, joining us live.

Arizona prison standoff still on. A female guard held hostage. We'll hear from a prison official in the efforts to end the ongoing ordeal. Plus the case that has just shocked a country. Cannibal on trial in Germany. A bizarre twist. You won't believe what co-workers are saying about this defendant.

First, let's check our top stories in "The Reset." Merrimack, New Hampshire. President Bush was on the road today pushing his agenda in a state recently overrun by Democratic presidential candidates. He's calling on Congress to make his series of tax cuts permanent. The speech had no new proposals but it was notably upbeat.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's hard to be optimistic during a period when you're marching to war. Marching to war is not a positive thought. Now we're marching to peace. Now times have changed. We're beyond that period. We'll debate about the decision. I look forward to those discussions with the American people.

(END VIDEO CLIP)

COOPER: Also in Washington, Microsoft is offering $250,000 to help anyone who helps authorities find and prosecute whomever is responsible for creating the so-called My Doom.b virus. The fast spreading computer virus is spread by e-mail. Next Tuesday infected systems will launch an electronic attack against Microsoft's website.

Across seven states, the Democratic presidential candidates are trying to win votes. Presidential hopeful Howard Dean says his camp will focus on Michigan where 153 delegates are up for grabs Tuesday. Wesley Clark's team plans to campaign aggressively in four other states. John Edwards, meanwhile, is predicting a victory in South Carolina which he says is a must win. The state's only African- American congressman has backed front-runner John Kerry. And that's a look at "The Reset" tonight.

The real test for the Democratic presidential candidates may come this Tuesday in South Carolina. It is a state that's more urban and industrial than New Hampshire and Iowa. It is where African-Americans could make up half the vote. Joining us now to talk politics is someone who's no stranger to South Carolina voters. He won the state in '84 and '88. The Reverend Jesse Jackson joins us tonight from Chicago. Good to see you, Reverend Jackson, thanks for being with us.

REVEREND JESSE JACKSON, FORMER PRESIDENTIAL CANDIDATE: How are you?

COOPER: Good. Can John Edwards win in South Carolina and slow down John Kerry's momentum?

JACKSON: Well, he has an inside track. He is from the south, North Carolina. He spent a lot of time, invested a lot of time there. Many people there are proud of how well he did in Iowa and even in New Hampshire. So he appears to be crossing racial lines as well. So John Edwards does have a shot. Of course, John Kerry got a very significant boost from Congressman Clyburn. That's a big deal in that state. When I was there two weeks ago, I saw that General Clark had been running lots of ads on a state that is so heavily laden on military. So I really do think you will see a real tight race, I think, between Kerry and Edwards. The Sharpton factor will be a matter as well because about the half African- American population.

COOPER: Do you see -- as you see these candidates go down to South Carolina, campaigning there, do you see a difference in the way they are campaigning in South Carolina than they did in Iowa, in New Hampshire?

JACKSON: They have a different environment. Iowa and New Hampshire are more homogeneous. South Carolina is more diverse, urban and rural, black and white. It's more diverse. But that's some objective conditions. South Carolina has lost 75,000 jobs in the last three years. That's a big deal. Jobs down, mortgage foreclosures are up as well as a hike in tuition. A regressive tax on those going to school. That's a big deal.

South Carolina has had a real heavy loss in the war, which is now losing credibility. A young white lady from Easley, South Carolina was killed, the first female pilot killed in Iraq. Three young men from Wilkinson High in Orangeburg, South Carolina alone were killed.

In spite of that, no weapons of mass destruction. No al Qaeda connection, no imminent threat. And so the diminishing credibility of why we're in Iraq is having an impact on South Carolina as well. I'm convinced.

COOPER: And while that may work in the primary for voters, in a general elections, the Democrats have not done well in the south for years now, for decades. Do you think this year's going to be any different?

JACKSON: It could be. Reactions about the success in the south was that many whites were shifted on people like Strom Thurmond and people like Trent Lott. It kind of led whites en masse driven by their racial fears. Whites in the south must choose their economic interests over their racial fears.

And even South Carolina, for example, given the economic crisis, if there's enough whites who choose economic interests over racial fears, blacks will choose hope over despair. The last election, 208,000 blacks did not vote, 278,000 did vote. They lost the governor's race by 40,000 votes. So if in fact, in the objective condition, if blacks tend to vote hope rather than despair and more whites begin vote economic interest rather than racial fear, we have a new dynamic in the south.

I'm glad the issue in the south is not about the Confederate flag. It is not about race. It is about the trade bill, it is about the tax bill, it is about the war and so they'll see -- if southern campaigns that diverse focus on issues that matter, it will be a positive sign. COOPER: It's going to be a fascinating night on Tuesday. No doubt, you'll be watching as well. Reverend Jackson, we appreciate you joining us tonight.

Right now, there's a lonely and probably very frightened female prison guard being held hostage in Buckeye, Arizona. We don't even know her name at this point. But it is very possible that she's the victim of the longest prison hostage standoff ever in the U.S. CNN's Miguel Marquez is on the story.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT: An inmate in a medium to high security prison takes a walk outside a guard tower. Inside a female corrections officer is held hostage.

UNIDENTIFIED FEMALE: The nights are a little bit quieter now. So the negotiating team is continuing to have some conversation back and forth with the two inmates.

MARQUEZ: It is 12 days and counting. The two inmates, following an altercation in the prison kitchen, made their way into a stand- alone tower in the five-year-old state-of-the-art prison.

UNIDENTIFIED FEMALE: This hostage situation has occurred in probably the worst place we want it to happen and that's a watch tower. That's a facility where we never have intended inmates to be.

MARQUEZ: During the standoff, one hostage, a male corrections officer was released. And on several occasions, negotiators have checked up on the officer that remains.

CAM HUNTER, ARIZONA DEPARTMENT OF CORRECTIONS: We've heard her voice a couple of times. We've been able to see her. When we've seen her, it's been ascending stairs so that we know she's moving on her own accord. She appears to be moving without discomfort

MARQUEZ: Prison officials say they are encouraged that the inmates continue to talk to negotiators. But the inmates' behavior is, at times, unpredictable. On one occasion, an inmate ripped at wires to a nearby surveillance camera. Another time he used binoculars to stare at those staring at him.

The vast majority of the time there is only silence in an isolated guard tower in a vast desert.

(END VIDEOTAPE)

MARQUEZ: And now, the almost 4,500 inmates at Arizona's Lewis state prison complex remain on lockdown in their cells as they have for this entire situation. Negotiators and prison officials saying that because of where this hostage is being held, the only way they will end this thing is by negotiations -- Anderson.

COOPER: All right. Miguel Marquez, thanks for the update. The marathon negotiating sessions at the Lewis facility in Arizona have obviously borne some fruit. As Miguel reported, the first hostage was freed several days ago. With us now from outside the prison is state correctional officer Ivan Bartos. He's runs a prison several hours south of Lewis facility. He's acting right now as a department spokesman. Ivan Bartos, we appreciate you joining us. Can you give us any update on the condition of the female correction officer still being held?

IVAN BARTOS, ARIZONA DEPARTMENT OF CORRECTIONS: I can tell you that we did receive a wellness check on her, an audible one sometime yesterday. Of course, I'm sure negotiators are working for one today.

COOPER: I know there's a lot you can't say. I know you think maybe these two inmates are actually listening. Maybe they have access to television or something. I respect that. So I don't want to push you too much. Have these two inmates formulated any kind of demands? Can you talk about what's been going on in terms of negotiations?

BARTOS: Well, all I can speak to is the comfort items and some of the food items that is they've requested and we've afforded over the course of the past 12 days. Again, due to the sensitivity and the fact that there's a life in the balance, we're keeping a lot of things confidential at this time.

COOPER: Do you know at this point how these two inmates -- do you know much about them? Do you know how they got access to this watch tower?

BARTOS: That is a very valid question. It's something that, obviously, we want to find every detail about. What I can tell you right now is the focus is on resolving the hostage component of this problem. Once that is resolved successfully, we then plan to focus all of our attention on investigating exactly how, why, and every other detail concerning how that happened.

COOPER: I'm sure you know people around the country have been paying attention to this. Their thoughts and prayers are with the corrections officer still being held as well as the corrections officer released. Can you tell us at all about how his condition is? He was released over the weekend.

BARTOS: He was released, I think, yesterday. He had non-life threatening injuries. His wish and his family's wish that his identity remain confidential, at least until the other hostage is released.

COOPER: Well, we respect that as well. I know you've been getting great community support. A lot of people around there, their thoughts and prayers are with all the folks over there. We appreciate you joining us. Ivan Bartos, thanks very much. Good luck.

BARTOS: I thank you.

COOPER: A change of plans in the Martha Stewart case. A star witness does not take the stand. We'll talk to Jeffrey Toobin who was in the courtroom.

Also tonight, he's already admitted to being a cannibal. Tomorrow a jury is expected to say whether this man is a murderer as well.

Later on, story of another sort. Art Garfunkel facing pot charges. Could this be the next trial of the century? We'll check "The Current." We'll be right back.

(COMMERCIAL BREAK)

COOPER: All right. Time now for "Justice Served." A key document in the Martha Stewart trial is preventing a star witness from taking the stand. Testimony from Douglas Faneuil will wait until next week, we're told. The government says Faneuil relayed a tip to Martha Stewart to sell Imclone stock before it declined. Now those documents surfaced that questions exactly who gave that tip to Faneuil? How big a deal is this? CNN's senior legal analyst Jeffrey Toobin was in the courtroom today. Jeff, thanks for being with us.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I would say it is more of a hiccup for the prosecution than a major embarrassment. But you could see in the body language in the court room, the prosecutors were shaking their heads, they were frustrated. The defense was kind of strutting around a little.

COOPER: The prosecution likes to come out of the gate swinging.

TOOBIN: Keep in mind, this opening statements were on Tuesday. Court was canceled on Wednesday. The government has put on two relatively minor introductory witnesses. No court tomorrow. There won't be witnesses again until Monday. Martha Stewart's name has not been uttered in that courtroom yet. So the jurors, six days after hearing opening statements, have not heard Martha Stewart's name. It's not a huge deal but it's not how prosecutors like to open a case.

COOPER: It is a little confusing what exactly the problem with Doug Faneuil is according to -- based on what happened today in court. I guess he had told his 80-year-old...

TOOBIN: His original attorney spoke to the FBI. Itself quite unusual. He said -- Gutman is his lawyer's name -- he said Faneuil couldn't remember whether the instruction to tip off Martha came from Bacanovic or Sam Waksal, the CEO of Imclone. Now this is very significant to the case against Bacanovic. Because the charge is that he lied about instructing Faneuil to instruct Martha. This piece of information, this document that came out late last night really is almost irrelevant to the case against Martha Stewart. It is really much more about the case against Bacanovic.

COOPER: Bottom line, he is still going to testify, he is still the government's star witness.

TOOBIN: He is. He is really a witness who, if believed, buries Peter Bacanovic. Interestingly, in the opening statements...

COOPER: Because he was Peter Bacanovic's assistant.

TOOBIN: Yes. And the charge is that Bacanovic gave him inducements, vacations to lie about what went on in this transaction. The only connection between Faneuil and Martha Stewart is this one- minute phone call while she is on the tarmac.

COOPER: Now the defense is going after this guy, Faneuil. I can only imagine what they will do to this kid. Not kid. Late 20s.

TOOBIN: There was an interesting clue to that in court today. When both lawyers for both defendants said they want to raise the issue of drug use, by Faneuil, which is obviously not a pleasant subject for him and the judge quite properly said if you want to raise that you have to make a showing to me in advance and in private that you have some good-faith basis to do that. You can't just ask someone out of the blue, isn't it true you are a cocaine addict without knowing anything that leads you to that kind of conclusion.

COOPER: I'm envious of you being in the courtroom. It must be fascinating.

TOOBIN: It is a great scene.

COOPER: Now, we're going to talk about today's developments in the Martha Stewart case. We want to talk about the Martha Stewart case. Because usually our Thursday "Overkill" segment focuses on a story that overall has gotten ludicrous amounts of media attention. Tonight that can be said of the coverage of some aspects of the Stewart case and how it compares to arguably more important cases.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Now to the Martha Stewart trial.

UNIDENTIFIED MALE: Prosecutors allege that Ms. Stewart lied.

COOPER (voice-over): The coverage has come even though the case involves less than a quarter million dollars worth of stock, a far cry from say killing a multi billion dollar company or jeopardizing pension plans of employees. Why the Stewart overkill? Maybe a perfect storm of celebrity, a trial and a chance to dissect the private lives of public people.

UNIDENTIFIED MALE: She's all about accessories, right, and those kinds of things. We have the QT on some of these. A couple of Hermes bags, very expensive stuff here. One for $6,000.

COOPER: Few people cared about Sam Waksal's briefcase or shoes or the private lives of the heads of Enron, Worldcom or Tyco. OK, maybe Tyco. With all those parties, Tyco looked like fun. And trials are definitely sexier than asking whether the SEC has let others like New York's attorney general take the lead against corporate wrongdoing. See, as soon as I mention SEC you started to nod off, didn't you? Not exactly ratings gold.

Moving on to the today's buzz question. "Is the Martha Stewart trial a waste of taxpayer money?" What do you think? Vote now. CNN.com/360. Results at the end of this program.

Coming up. The admitted cannibal who trolled the Internet looking for willing victims is on trial. Tomorrow a verdict expected. The new details are unbelievable. That ahead.

Also tonight, what did a judge have to say about Jerry Lee Lewis? Find out in "The Current."

(COMMERCIAL BREAK)

COOPER; All right. Time to check tonight's "Current." A Mississippi judge has sealed the record of Jerry Lee Lewis's divorce proceedings. And no, it is not because his wife is a minor.

Art Garfunkle is fighting a marijuana possession charge. His refusal to pay a $100 fine led the judge to set a date for a hearing which some observers are worried could turn into a wild, out of control, media circus. It won't

Tony Randall is recuperate from pneumonia and bypass surgery. The 83 year old is expected to recover fully, we're glad to say, and will be able to sire more children for decades to come.

Well, the trial of a cannibal named Armin Meiwis, has shocked Germany understandably. The details of the crime are gruesome, almost unbelievable. Tomorrow a five-judge panel is expected to deliver a verdict. Prosecutors say Meiwis, the cannibal, is a murderer. The defense says the victim wanted to be killed and eaten.

Here is CNN's Walter Rodgers.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN CORRESPONDENT (voice-over): The Germans who work in this building have a dark and terrible secret, some are former colleagues of Armin Meiwis, the self-confessed cannibal who used to bring co-workers snacks, meatballs.

KEIKHARD REUBMER, INTERVIEWED MEIWES: Nearly every Monday he brought something special, meat, what he had prepared and brought with him to work and offered it to his colleagues. They ate it. They enjoyed it.

RODGERS: Meiwis now in this prison, awaits a verdict. He's charged with murder for sexual satisfaction and disturbing the peace of the dead, butchering the corpse, storing the meat under pizzas in his freezer.

Meiwis and his lawyer claimed the victim volunteered over the Internet to be devoured, wanted his genitals cut off. Then, the victim allegedly helped Meiwis eat them.

Cannibalism isn't a crime in Germany. Meiwis defense? Not crazy. Guilty only of assisted suicide, killing on demand. He says he visited 430 cannibal Web sites and chat rooms. Experts believe those numbers. MARK BENECKE, FORENSIC BIOLOGIST: Nobody knows how many steps it takes to cross the border from fantasy into reality. So, maybe he's just one of the few who did it, but there are thousands and thousands who are just 1 step away from it.

(END VIDEOTAPE)

COOPER: And Walter Rodgers joins us. Now, Walter, this is just a bizarre trial. Any sense of which way the judges are heading?

RODGERS: Well, the guessing among the reporters here, Anderson, is he'll get off probably fairly lightly. The maximum sentence is 15 years, that's if he's convicted of murder for sexual pleasure. They are expecting less. That's, of course, speculation. He could get off with as little as five to seven years -- Anderson.

COOPER: And any sense of where he'll go? If he gets off after five years, does he just resume his regular life? This has gotten a lot of attention there.

RODGERS: Well, he's doing more than resuming a regular life even when he's in prison. He's writing his memoirs. And that's going to be a hot setter. And there are apparently a number of film companies who want to do the Armin Meiwis story.

COOPER: I'd say, only in America, but only in Germany, I guess. Walter Rodgers, thanks very much for that; bizarre story.

Meiwis isn't the only recent person with such a bizarre tale to tell. A quick news note. Here's a quick news note for you, in 1981 Japanese grad student Isei Sagawa (ph) was arrested in Paris for cannibalism. French courts found him mentally unfit to stand trial and returned him to Japan.

Get this, since his release from a psychiatric hospital in Japan, Sagawa has written several best-selling books on cannibalism, earning him celebrity status. He has direct and appeared in several motion pictures. And you're not going to believe it, he is also a magazine's restaurant critic.

Have you heard of Richard Perle? He's a top Pentagon adviser who just gave a controversial speech. We're going to take him to the "Nth Degree."

Plus tomorrow, sports betting, a multi billion dollar industry. But for some, the cost is just too high. Our series, "Gambling" Nation" continues.

And today's "Buzz". "Is the Martha Stewart trial a waste of taxpayer money?" What do you think? Vote now, CNN.com slash 360. We'll have results when we come back.

(COMMERCIAL BREAK)

COOPER: Time now for "The Buzz." We asked you, "Is the Martha Stewart trial a waste of taxpayer money?" Here's what you said, more than 24,000 voted. 69 percent of you said yes it is, 31 percent said no.

Always point out, not a scientific poll, it is your buzz. Thanks.

Tonight, taking pearl's before swine to the "Nth Degree." The "Washington Post" is reporting that top Pentagon adviser, Richard Perle, a vocal advocate of the war in Iraq, spoke Saturday at a charity event.

And when I say charity event, I mean an event sponsored by groups so strongly suspected of terrorist links that it drew FBI scrutiny, U.S. officials considered blocking it, the Red Cross rejected its money and the Treasury Department froze the top sponsor's asset two days later. That charity event.

Despite his involvement with this event, so far the government has refrained from tossing Perle into a cell and is allowing him access to his family and attorneys. We applaud this restraint and want to assure Mr. Perle that we will continue to be vigilant in scrutinizing his treatment to assure that he is afforded due process and all the rights guaranteed to him by the Constitution.

It may not make us popular, but we think it's the right thing to do.

I'm Anderson Cooper. Thanks for watching. Coming up next, "PAULA ZAHN NOW."

END

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Under Fire for Intelligence Failings; Kerry Gets Endorsements, Dean Campaigns in Michigan, Edwards Says South Carolina a Must Win State, Sharpton Focuses on South Carolina; Martha Stewart Case Delayed Over Evidence>


Aired January 29, 2004 - 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): Seven U.S. soldiers killed in an explosion in Afghanistan.

Jesse Jackson on Dean, the Democrats and what it takes to win in South Carolina.

A dramatic hostage standoff: 12 days and counting. Will law enforcement move in?

A surprise in the trial of Martha Stewart. What put a star witness's testimony on hold?

A former mob fixer comes clean about gambling's dirty little secrets.

And a cannibal on trial. Did this killer really feed his victim to his co-workers?

(END VIDEOTAPE)

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

COOPER: Good evening. Welcome to 360.

We begin tonight with war on two fronts: Afghanistan and new details about the hunt for Osama bin Laden, and Iraq and the controversy surrounding WMD. Two reports, one from senior Pentagon correspondent Jamie McIntyre, the other from national security correspondent David Ensor.

We begin with Jamie McIntyre on the search for bin Laden -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: The U.S. military is redoubling its efforts to capture or kill Osama bin Laden. But the big question is, how will they find him?

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The U.S. has some high tech tools at its disposal in the search for Osama bin Laden.

Unmanned Predator spy planes can use infrared imaging to look for hot spots in the barren mountains, and computer software can draw links between known fragments of intelligence, such as movement of financial assets and phone logs.

But in the end, the U.S. believes it will get bin Laden the same way it got Saddam Hussein. Someone will turn him in.

All intelligence points to bin Laden hiding somewhere in the mountainous border region between Afghanistan and Pakistan, an area under control of local tribal leaders, who may be giving bin Laden safe harbor. That's made finding the shadowy fugitive extremely difficult.

SEBASTIAN JUNGER, JOURNALIST: There's a reason Pakistan did not want to deal with the tribal territories. And they're heavily armed with a strict sense of loyalty to their tribes.

MCINTYRE: That's making finding bin Laden harder than finding Saddam Hussein, which took only eight months. In fact, it's believed only a few of bin Laden's fanatically loyal supporters know where he is.

So the U.S. would like to send its elite hunter killer teams into Pakistan's Waziristan area. But Pakistan is, so far, refusing permission.

(END VIDEOTAPE)

MCINTYRE: After surviving two assassination attempts, the Pentagon is somewhat hopeful that perhaps Pervez Musharraf, the Pakistani president, might soften his opposition.

But at the same time, the U.S. doesn't want to do anything that would destabilize the regime of its most important ally in the hunt for Osama bin Laden -- Anderson.

COOPER: All right. It's a tough call. Jamie McIntyre at the Pentagon, thanks.

Proof today that Afghanistan is still a very dangerous place for U.S. troops. Seven soldiers are dead after a weapons cache exploded near the town of Ghazni. Three other soldiers and an interpreter were wounded.

Today's deaths bring the total to casualties to 107 since Operation Enduring Freedom began in October 2001.

More fallout today from former WMD hunter David Kay's critique of U.S. intelligence. The director of the CIA is feeling the heat.

The latest from CNN's national security correspondent, David Ensor.

(BEGIN VIDEOTAPE) DAVID ENSOR, CNN CORRESPONDENT (voice-over): George Tenet appears to be in the hot seat like never before.

Not only is his own former chief weapons inspector David Kay charging that U.S. intelligence failed the president before the Iraq war. Now, the current Democratic frontrunner in this election year is call for Tenet to resign.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I think there's been a lack of accountability at the CIA. I regret it. I know him personally. But that's the nature of responsibility.

ENSOR: On Capitol Hill, Democrats and others are calling for an independent probe into why U.S. intelligence may have gotten it so wrong and what role the administration played.

SEN. JOHN MCCAIN (R), ARIZONA: It's inevitable that there will be an outside commission appointed on an issue of this gravity.

ENSOR: But George Tenet is a survivor, appointed by Bill Clinton, kept on and trusted by his Republican successor.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've got great confidence in our intelligence community. They are unbelievably hardworking, dedicated people who are doing a great job for America.

ENSOR: At the CIA, officials say Kay is premature, suggesting no weapons will be found. A U.S. official says there are millions of pages of documents yet to be translated, hundreds of suspect sites yet to be visited and thousands of Iraqi scientists and former officials yet to be interrogated about what they know.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: I don't think one can draw conclusions at this point.

(END VIDEOTAPE)

ENSOR: The White House spokesman said this week that George Tenet retains the president's full confidence. As for Senator Kerry saying he should go, one U.S. Official said that just makes it all the less likely -- Anderson.

COOPER: All right. David Ensor in Washington. Thanks, David.

Now the battle for the White House.

The Democratic contenders are now focused on seven states holding primaries or caucuses on Tuesday. The Southern belle of the battle, of course, South Carolina, where black voters may account for half of the primary votes.

We have a team of reporters in South Carolina tonight. CNN's Kelly Wallace is tracking the Kerry camp. Senior political correspondent, Candy Crowley with Dean and CNN's Frank Buckley following Edwards, Sharpton and Clark.

Let's begin with Kelly -- Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Anderson, a senior Kerry campaign aide saying the senator goes into tonight's debate with the same approach he's taken all along, that he is not taking anything for granted.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): In Columbia, South Carolina, John Kerry had plenty to smile about: winning an endorsement from the state's most popular African-American lawmaker.

REP. JIM CLYBURN (D), SOUTH CAROLINA: John Kerry has the right stuff.

WALLACE: Then the man from the North talked about getting to know his colleague from the South.

KERRY: Danced late at night and had some mighty good fish, too.

CLYBURN: I wouldn't call that dancing if I was you.

KERRY: I thought it was pretty good. I thought for a white guy I showed some rhythm.

WALLACE: What Kerry hopes to show is that he can connect with African-Americans, who could represent up to 50 percent of those who vote Tuesday.

He also wants to prove that, even though he has not campaigned here since shortly after his presidential announcement, he is not writing off the South.

Another challenge for the undisputed frontrunner, how he handles attacks, which could come from his Democratic opponents and have already come from Republicans.

ED GILLESPIE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: John Kerry's record of service in our military is honorable. But his long record in the Senate is one of advocating policies that would weaken our national security.

WALLACE: Asked about that, Kerry seemed to enjoy firing back.

KERRY: It's the greatest form of flattery. Bring it on. Let's have this debate.

(END VIDEOTAPE)

WALLACE: And late today, word of another endorsement expected to go John Kerry's way. Democratic sources telling CNN that Michigan Governor Jennifer Granhohm expected to endorse Senator Kerry as early as tomorrow.

Michigan holding caucuses just days after the February 3 states. And a large number of delegates at stake in Michigan -- Anderson. COOPER: All right. Kelly Wallace, thanks for that.

Howard Dean admits he won't focus too much on South Carolina. Instead, he is eying Michigan, with help from his new campaign CEO.

For the latest, let's go live to CNN senior political correspondent Candy Crowley -- Candy.

CANDY CROWLEY, CNN CORRESPONDENT: Anderson, on the plane from Burlington, Vermont to Lansing, Michigan, Howard Dean said, "That's all yesterday. Today we're putting another foot forward."

Indeed, he went to Lansing, Michigan. And Michigan is not a state that has a contest next Tuesday. But it is a state that increasingly the Dean campaign is looking toward for a breakthrough moment.

Dean, of course, went from Lansing, Michigan, and came here to South Carolina for the debate that's now under way.

But what we saw on that speech in Lansing was a sharper, more focused, sort of a stronger speech, the same basic speech with stronger language.

Tonight, aides say what they want to do and what Howard Dean wants to do is two things.

One, put himself up as someone as a governor who has accomplished things and not just talked about things, as he believes they do in Washington; emphasize his outsider credentials, as opposed to their insider credentials; and also talk about the courage of convictions.

He talked in Lansing about opportunists, about Democrats who have come to his way of thinking about the war and things but voted in an entirely different way.

So he is trying to portray himself as the man who stood up against a lot of things when no one had the courage to do. They hope that's a message that will remind voters why they liked Howard Dean in the first place and will bring them back.

Time, of course, is running out. Right now looking at the seven states on Tuesday, the Dean camp is hard pressed to find one they believe they will come in first. Which is why Howard Dean is looking towards those Saturday votes in Michigan and Washington state where, together, those two states have more delegates involved than the seven states on Tuesday, when you add it all up -- Anderson.

COOPER: All right. Howard Dean looking for a breakthrough. Candy Crowley, thanks for that.

John Edwards, born and reared in the Carolinas, has said South Carolina is must win for him. Reverend Al Sharpton is hoping for the appeal to African-American voters, while Wesley Clark from Arkansas is hoping to have the edge with veterans and with fellow Southerners. With a look at how the three candidates are reaching out to voters, let's check in with CNN's Frank Buckley, also in Greenville, South Carolina -- Frank.

FRANK BUCKLEY, CNN CORRESPONDENT: Well, Anderson, John Edwards is pushing hard here in South Carolina.

He was born in Seneca, South Carolina, as he likes to remind everyone here. And as you say, it's do or die for John Edwards.

And in that context, he got some bad news today, that endorsement that Kelly talked about from Jim Clyburn, the influential African- American congressman here, in a state where nearly half of the primary do not agrees man here in a state where nearly half of the primary voters could be African-American.

I asked John Edwards if he was disappointed in that endorsement.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: I think the world of Congressman Clyburn. And that's just the truth.

If you looked at what's happened in previous states, I mean, Iowa was the perfect example. I think Governor Dean had virtually every endorsement. I mean, he had all the leading endorsements and he did -- he ended up a distant third.

I think voters -- in a presidential election, voters -- you can't tell voters what to do. They're going to evaluate each one of us and decide who they want to be their president.

(END VIDEO CLIP)

BUCKLEY: And while it is a do or die state for John Edwards, in South Carolina, it is also a state in which Al Sharpton is expected to be competitive.

Al Sharpton is spending a great deal of time here, visited South Carolina more than any other candidate. And he hopes to appeal to that large African-American group of voters. Polling shows him getting up to 15 percent of the vote in a recent poll.

And right behind Sharpton in South Carolina in that same recent poll is Wesley Clark, Wesley Clark getting only 14 percent of the vote here in South Carolina, a state in which there are more than 400,000 veterans. Wesley Clark hoping to appeal to the veterans.

At the same time, his campaign has decided to focus more heavily in Oklahoma, Arizona, New Mexico, and North Dakota, all states that his campaign considers to be neutral -- Anderson.

COOPER: All right. Frank Buckley in Greenville. Thanks very much, Frank.

Jesse Jackson knows what it takes to win the South Carolina primary. We're going to talk to him about the presidential race, coming up a little bit later on 360.

We're following a number of developing stories right now "Cross Country." Take a look.

Washington. Money, money, money. The White House said today that they expect this year's budget deficit to be more than $520 billion. That's more than the congressional budget office had projected. President Bush sends his fiscal year 2005 budget to Congress next week.

Aiken, South Carolina. The Godfather gets out of jail. James Brown, the Godfather of Soul, was released from jail today without bond. The 70-year-old singer is accused of domestic violence against his 33-year-old wife. Brown says he is innocent.

Miami. Tragic auto accident caused by actress Robin Givens. Givens struck and critically injured an 89-year-old pedestrian in the crosswalk Wednesday.

Maria Antonia Alcover was hit by Givens' SUV during rush hour. Alcover is in extremely critical but stable condition at a Miami hospital.

And that is a look at stories "Cross Country" tonight.

A surprise development in the Martha Stewart trial. Doubts cast on the prosecution's key witness. Find out why the judge kept him off the stand today.

Plus, "Gambling Nation." You'll meet a former mobster who sheds some light on the dark side of an American pastime.

And new allegations in a case that's already stunned a country. A confessed cannibal on trial for murder. You'll never believe what he fed his co-workers for lunch, or so they say. We're going to have more on that coming up.

But first, let's take a look inside the box. The top stories on tonight's network newscasts.

(COMMERCIAL BREAK)

COOPER: Well, big surprise today in the Martha Stewart trial. The government's star witness was ready to take the stand, but the judge said no. now a dispute over a key document may hurt the prosecution's case.

CNN's Allan Chernoff has details.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): A forced shake- up in the prosecution's batting order against Martha Stewart and her co-defendant and stock broker, Peter Bacanovic.

Star government witness Douglas Faneuil, assistant to Bacanovic, may have to wait until next Thursday to testify.

Late last night prosecutors sent defense attorneys an FBI report of an interview with Faneuil's first attorney, a gentleman in his 80s who could not recall if it had been Bacanovic or Sam Waksal, former CEO of ImClone, who instructed Faneuil to pass information about ImClone to Martha Stewart.

The government alleges Stewart sold her shares after Bacanovic ordered Faneuil to share the tip that Waksal was trying to dump his stock. It's a story that Faneuil is expected to tell on the stand.

BENJAMIN BRAFMAN, ATTORNEY: If there is a reasonable doubt as to whether he was the source or not, the government's case against Bacanovic can be undermined just by that little piece of information.

CHERNOFF: Bacanovic's attorney, Richard Strassberg, says, "There is some chutzpah with giving us the documents last night at 10:15."

Judge Cedarbaum said she found it troubling and granted Strassberg a week to investigate, a delay that would force the government to switch the order of its witnesses.

After court, Stewart's attorney was tight-lipped.

ROBERT MORVILLO, MARTHA STEWART'S ATTORNEY: It's not a big deal. I'm not going to be in a position to comment on what happens in the courtroom other than in the courtroom.

(END VIDEOTAPE)

CHERNOFF: Once Faneuil takes the stand, he is likely to face a blistering cross-examination as defense attorneys need to damage his credibility. They've already called him a liar in open court, and they plan to ask him about possible drug use -- Anderson.

COOPER: It's not going to be pretty. Allan Chernoff, thanks for that.

Of course, we want to hear from you. Today's "Buzz" question is this. What do you think? "Is the Martha Stewart trial a waste of taxpayer money?" Vote now: CNN.com/360. We're going to have results at the end of the program tonight.

Emotional testimony in a Florida courtroom today. The mother of a 6-year-old girl killed by then 12-year-old boy Lionel Tate fought back tears as she called her daughter Tiffany's killing a brutal murder.

Tate pleaded guilty to that 1999 murder today. He was released from prison earlier in the week.

Susan Candiotti has the story.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): Dressed in a suit on the eve of his 17th birthday, Lionel Tate showed no emotion as he pleaded guilty to second-degree murder.

UNIDENTIFIED MALE: You are Lionel Tate. You are entering this plea freely and voluntarily. Is that correct?

LIONEL TATE, CONVICTED MURDERER: Yes, sir.

UNIDENTIFIED MALE: I am accepting this plea of guilty. Do you feel it's in your best interest to plead guilty to the charge of murder in the second degree?

TATE: Yes, sir.

CANDIOTTI: Before Tate's plea before a packed courtroom, the victim's mother was invited to speak.

Deweese Eunick's 6-year-old daughter Tiffany was, in the court's words, brutally beaten to death by Lionel Tate, then 12.

To this day, Tate's mother, Kathleen, a Florida highway patrol trooper, continues to insist it was an accident, not murder. Deweese Eunick apparently had had enough.

DEWEESE EUNICK-PAUL, TIFFANY EUNICK'S MOTHER: Kathleen, you can't hide behind the deception any more.

CANDIOTTI: For minutes as Lionel's mother watched, at times irritated, Deweese Eunick made it clear she held Lionel's mother equally responsible for Tiffany's death.

EUNICK-PAUL: This is not child's play. This was not roughhousing. This was a brutal murder. Lionel Tate should accept responsibility for my daughter's murder, not accept responsibility for an accident.

CANDIOTTI: Tiffany's mother, who says she forgives Lionel but has never received an apology, did not hear one from him in court.

EUNICK-PAUL: The last conversation I remember having with Lionel was when Lionel came to my house and asked me for Tiffany's toys, since Tiffany was dead.

CANDIOTTI: His attorney told CNN Lionel's mother decided he would not address the court. Instead, his lawyer spoke.

RICHARD ROSENBAUM, TATE'S ATTORNEY: He would like to talk to Deweese, but only if she wants to and only if it's in private.

(END VIDEOTAPE)

CANDIOTTI: Whatever may be in the teenager's heart remains there for now, despite advice from religious advisers and others to publicly say I'm sorry.

The judge sent off Lionel with these words. "You've been given an opportunity. The decisions you make will decide your future" -- Anderson. COOPER: So tough. Susan Candiotti, thanks for that.

We're keeping track of several developing stories around the globe right now. Let's check the "Up Link."

Guantanamo Bay, Cuba. Teens free. The Pentagon says three teens who spent the last year at GTMO are back home now. They were among hundreds rounded up by the U.S. in Afghanistan. They were held in a separate facility.

And now, to quote the Pentagon, they, quote, "no longer pose a threat to our nation."

Jerusalem, deadly bus bombing. Ten people dead, 45 injured in a suicide bus bombing today. The bomber, a Palestinian policeman who slipped on to the passenger bus undetected.

Despite that bombing, Israel and Hezbollah complete an exchange, with Israel releasing more than 400 Palestinian prisoners, including two senior Hezbollah officials. Hezbollah released an abducted Israeli businessman and the bodies of three Israeli soldiers.

Juarez, Mexico. Cops arrested for murder. Cops arrested. Thirteen Mexican officers are charged with carrying out executions for a drug cartel. The arrests came after at least 11 bodies were found buried outside the home of an alleged drug trafficker in Chihuahua (ph) near the Texas border.

And that's a quick look at the "Up Link" tonight.

Are casinos safe from organized crime? We're going to talk to a former mobster who played the odds. Part of out weeklong series, "Gambling Nation."

Also tonight, the Democrats seven-state swing. Who will appeal to South Carolina's voters? We'll talk live to Reverend Jesse Jackson.

And a dramatic prison hostage standoff. Round the clock negotiations still going on right now. We're going to go live to Arizona, where a female guard has been held captive for almost two weeks.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WARREN BEATTY, AS BUGSY MALONE: The casino, we'll put Monte Carlo to shame. We'll have wall-to-wall carpeting. We'll have Italian marble. We'll have badminton courts, stables. We'll have a lightning fast train going from Los Angeles to Las Vegas in an hour. We'll have planes, back and forth. Mayer, we'll have our own airport.

UNIDENTIFIED MALE: I think what Ben is saying is, it's a good place to trap people in to take their money. Is that what you're getting at here, Benny? BEATTY: Much more. Much more.

(END VIDEO CLIP)

COOPER: The 1991 movie "Bugsy" was about the gangster who put Las Vegas on the gambling map.

As we've been covering in our special series, "Gambling Nation," these days casinos are popping up all over. Some, of course, are run by corporations, others by Native American tribes.

But do they bring riches to the local economy as often advertised? Here's "Fortune" magazine editor-at-large Andy Serwer.

(BEGIN VIDEOTAPE)

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE" MAGAZINE (voice-over): If you build it, they will come. They will gamble. And leave plenty of money behind. At least that's what voters are being told.

UNIDENTIFIED FEMALE: Ninety-one million in new revenues for Madison and Dane County will help support vitally needed human services and public safety programs and help hold down property taxes.

SERWER: Today, ten states allow for corporate run casinos. But the bigger boom is on Indian reservations, with tribes now owning casinos in 25 states.

And it's no small change. Connecticut's Mohegan Sun and Foxwoods resorts now take in more money than any other casinos in America.

But unlike with corporate gaming, states get very little of that money. That's because reservations are sovereign entities.

And when it comes to corporate casinos, even though states collect millions in taxes, opponents say it's a sucker's bet.

UNIDENTIFIED MALE: How deceptive is the Maine Casino's scheme the promoters claim will get a percentage of revenue from the slots? But what about the other games? Blackjack? Maine gets nothing.

SERWER: According to one industry study, casinos get about 70 percent of their business from people living less from 50 miles away. So for all that money generated for the local economy, it's usually coming out of local paychecks and savings accounts.

Perhaps there's more than a bit of truth to the old saying, the house always wins.

Andy Serwer, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, some opponents of legalized gambling say they're a magnet of crime. Today I spoke with Michael Franzese, a one-time made man in the Columbo crime family. He's done time for racketeering and is now the author of "Blood Covenant."

I started by asking him how he and his organized crime cops tried to infiltrate casinos.

(BEGIN VIDEOTAPE)

MICHAEL FRANZESE, FORMER MOBSTER: We found all different ways to take money out of the casinos, and normally it would be with the help of the casino boss or some official in the casino itself.

COOPER: What's wrong with casino gambling, in your opinion?

FRANZESE: Well, you know, I'm not standing on any moral high ground here and saying it's wrong. But -- and obviously, you know, that wouldn't be the right approach. But it certainly does have its harmful effects.

I mean, you know, all sorts of statistics and studies will show that in areas where -- in casino communities, crime is, I believe, about 84, 85 percent higher than the national average.

You know, you can't neglect the fact that there is a substantial minority of people that develop gambling problems and, also, become pathological gamblers.

COOPER: Let's talk about sports gambling a little bit, in particular college sports. I mean, how do mobsters, criminals try to move in, bookies try to move in and beat the odds?

FRANZESE: Well, you know, by gathering information and, hopefully, you know, at some point in time, especially in the college arena, getting an athlete to, you know, gamble with you and eventually compromise the outcome of a game.

It's certainly an easier -- it's an easier mark now in college than it is in pros, because pro athletes make a substantial amount of money. And if they do gamble, you know, they can normally cover their losses and don't have to, you know, resort to any other means to pay a bookmaker.

COOPER: So how does it work? How do you try to get to a college player?

FRANZESE: Normally, they'll develop the habit. They'll have a problem. They'll be gambling with a bookmaker. Somebody will take notice of it and get friendly with them, get close to them.

And maybe that athlete will be told, "Listen, you know, you've got four years in college. You're never going to the pros. Work with us, and we'll let you make some money, you know? Help us out in the outcome of this game."

And normally, it's a question of telling them, "You don't have to blow the game. You don't have to lose it. Just don't cover the spread." COOPER: You actually ended up serving time. I think we have a picture of your mug shot, even. You look a lot different right now, though.

You actually now counsel athletes, you counsel college players about what to watch out for. What do you tell them?

FRANZESE: We tell them that being around gamblers is dangerous for them, because gamblers are normally looking for an edge. And an athlete can certainly provide them an edge in a competition or a sporting event.

And really just to keep their radar and antenna up as to who they're associating with and what problems they could possibly face. And I give them, you know, some examples from my own experiences in that regard.

COOPER: And it's a fascinating experience that you've had. Michael Franzese, we appreciate you joining us. Thank you very much.

FRANZESE: Thank you.

(END VIDEOTAPE)

COOPER: Tomorrow, we're going to wrap up our series, "Gambling Nation." You're going to hear from a gambling addict, a man who was so desperate to bet he once unwrapped his kids' Christmas presents and returned them to get cash. We're going to talk with him about how he is trying to break his addiction.

(BEGIN VIDEO CLIP)

COOPER (voice-over): Jesse Jackson on Dean, the Democrats and what it takes to win in South Carolina.

Twelve days and counting. A dramatic prison hostage drama continues. We'll talk to the warden.

And a surprise in court. What put the Martha Stewart trial on hold?

360 continues.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

COOPER: In the next half hour on 360 the Reverend Jesse Jackson won South Carolina when he ran for president. So what advice does he have for this year's Democratic hopefuls? You'll hear from him in just a moment, joining us live.

Arizona prison standoff still on. A female guard held hostage. We'll hear from a prison official in the efforts to end the ongoing ordeal. Plus the case that has just shocked a country. Cannibal on trial in Germany. A bizarre twist. You won't believe what co-workers are saying about this defendant.

First, let's check our top stories in "The Reset." Merrimack, New Hampshire. President Bush was on the road today pushing his agenda in a state recently overrun by Democratic presidential candidates. He's calling on Congress to make his series of tax cuts permanent. The speech had no new proposals but it was notably upbeat.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's hard to be optimistic during a period when you're marching to war. Marching to war is not a positive thought. Now we're marching to peace. Now times have changed. We're beyond that period. We'll debate about the decision. I look forward to those discussions with the American people.

(END VIDEO CLIP)

COOPER: Also in Washington, Microsoft is offering $250,000 to help anyone who helps authorities find and prosecute whomever is responsible for creating the so-called My Doom.b virus. The fast spreading computer virus is spread by e-mail. Next Tuesday infected systems will launch an electronic attack against Microsoft's website.

Across seven states, the Democratic presidential candidates are trying to win votes. Presidential hopeful Howard Dean says his camp will focus on Michigan where 153 delegates are up for grabs Tuesday. Wesley Clark's team plans to campaign aggressively in four other states. John Edwards, meanwhile, is predicting a victory in South Carolina which he says is a must win. The state's only African- American congressman has backed front-runner John Kerry. And that's a look at "The Reset" tonight.

The real test for the Democratic presidential candidates may come this Tuesday in South Carolina. It is a state that's more urban and industrial than New Hampshire and Iowa. It is where African-Americans could make up half the vote. Joining us now to talk politics is someone who's no stranger to South Carolina voters. He won the state in '84 and '88. The Reverend Jesse Jackson joins us tonight from Chicago. Good to see you, Reverend Jackson, thanks for being with us.

REVEREND JESSE JACKSON, FORMER PRESIDENTIAL CANDIDATE: How are you?

COOPER: Good. Can John Edwards win in South Carolina and slow down John Kerry's momentum?

JACKSON: Well, he has an inside track. He is from the south, North Carolina. He spent a lot of time, invested a lot of time there. Many people there are proud of how well he did in Iowa and even in New Hampshire. So he appears to be crossing racial lines as well. So John Edwards does have a shot. Of course, John Kerry got a very significant boost from Congressman Clyburn. That's a big deal in that state. When I was there two weeks ago, I saw that General Clark had been running lots of ads on a state that is so heavily laden on military. So I really do think you will see a real tight race, I think, between Kerry and Edwards. The Sharpton factor will be a matter as well because about the half African- American population.

COOPER: Do you see -- as you see these candidates go down to South Carolina, campaigning there, do you see a difference in the way they are campaigning in South Carolina than they did in Iowa, in New Hampshire?

JACKSON: They have a different environment. Iowa and New Hampshire are more homogeneous. South Carolina is more diverse, urban and rural, black and white. It's more diverse. But that's some objective conditions. South Carolina has lost 75,000 jobs in the last three years. That's a big deal. Jobs down, mortgage foreclosures are up as well as a hike in tuition. A regressive tax on those going to school. That's a big deal.

South Carolina has had a real heavy loss in the war, which is now losing credibility. A young white lady from Easley, South Carolina was killed, the first female pilot killed in Iraq. Three young men from Wilkinson High in Orangeburg, South Carolina alone were killed.

In spite of that, no weapons of mass destruction. No al Qaeda connection, no imminent threat. And so the diminishing credibility of why we're in Iraq is having an impact on South Carolina as well. I'm convinced.

COOPER: And while that may work in the primary for voters, in a general elections, the Democrats have not done well in the south for years now, for decades. Do you think this year's going to be any different?

JACKSON: It could be. Reactions about the success in the south was that many whites were shifted on people like Strom Thurmond and people like Trent Lott. It kind of led whites en masse driven by their racial fears. Whites in the south must choose their economic interests over their racial fears.

And even South Carolina, for example, given the economic crisis, if there's enough whites who choose economic interests over racial fears, blacks will choose hope over despair. The last election, 208,000 blacks did not vote, 278,000 did vote. They lost the governor's race by 40,000 votes. So if in fact, in the objective condition, if blacks tend to vote hope rather than despair and more whites begin vote economic interest rather than racial fear, we have a new dynamic in the south.

I'm glad the issue in the south is not about the Confederate flag. It is not about race. It is about the trade bill, it is about the tax bill, it is about the war and so they'll see -- if southern campaigns that diverse focus on issues that matter, it will be a positive sign. COOPER: It's going to be a fascinating night on Tuesday. No doubt, you'll be watching as well. Reverend Jackson, we appreciate you joining us tonight.

Right now, there's a lonely and probably very frightened female prison guard being held hostage in Buckeye, Arizona. We don't even know her name at this point. But it is very possible that she's the victim of the longest prison hostage standoff ever in the U.S. CNN's Miguel Marquez is on the story.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT: An inmate in a medium to high security prison takes a walk outside a guard tower. Inside a female corrections officer is held hostage.

UNIDENTIFIED FEMALE: The nights are a little bit quieter now. So the negotiating team is continuing to have some conversation back and forth with the two inmates.

MARQUEZ: It is 12 days and counting. The two inmates, following an altercation in the prison kitchen, made their way into a stand- alone tower in the five-year-old state-of-the-art prison.

UNIDENTIFIED FEMALE: This hostage situation has occurred in probably the worst place we want it to happen and that's a watch tower. That's a facility where we never have intended inmates to be.

MARQUEZ: During the standoff, one hostage, a male corrections officer was released. And on several occasions, negotiators have checked up on the officer that remains.

CAM HUNTER, ARIZONA DEPARTMENT OF CORRECTIONS: We've heard her voice a couple of times. We've been able to see her. When we've seen her, it's been ascending stairs so that we know she's moving on her own accord. She appears to be moving without discomfort

MARQUEZ: Prison officials say they are encouraged that the inmates continue to talk to negotiators. But the inmates' behavior is, at times, unpredictable. On one occasion, an inmate ripped at wires to a nearby surveillance camera. Another time he used binoculars to stare at those staring at him.

The vast majority of the time there is only silence in an isolated guard tower in a vast desert.

(END VIDEOTAPE)

MARQUEZ: And now, the almost 4,500 inmates at Arizona's Lewis state prison complex remain on lockdown in their cells as they have for this entire situation. Negotiators and prison officials saying that because of where this hostage is being held, the only way they will end this thing is by negotiations -- Anderson.

COOPER: All right. Miguel Marquez, thanks for the update. The marathon negotiating sessions at the Lewis facility in Arizona have obviously borne some fruit. As Miguel reported, the first hostage was freed several days ago. With us now from outside the prison is state correctional officer Ivan Bartos. He's runs a prison several hours south of Lewis facility. He's acting right now as a department spokesman. Ivan Bartos, we appreciate you joining us. Can you give us any update on the condition of the female correction officer still being held?

IVAN BARTOS, ARIZONA DEPARTMENT OF CORRECTIONS: I can tell you that we did receive a wellness check on her, an audible one sometime yesterday. Of course, I'm sure negotiators are working for one today.

COOPER: I know there's a lot you can't say. I know you think maybe these two inmates are actually listening. Maybe they have access to television or something. I respect that. So I don't want to push you too much. Have these two inmates formulated any kind of demands? Can you talk about what's been going on in terms of negotiations?

BARTOS: Well, all I can speak to is the comfort items and some of the food items that is they've requested and we've afforded over the course of the past 12 days. Again, due to the sensitivity and the fact that there's a life in the balance, we're keeping a lot of things confidential at this time.

COOPER: Do you know at this point how these two inmates -- do you know much about them? Do you know how they got access to this watch tower?

BARTOS: That is a very valid question. It's something that, obviously, we want to find every detail about. What I can tell you right now is the focus is on resolving the hostage component of this problem. Once that is resolved successfully, we then plan to focus all of our attention on investigating exactly how, why, and every other detail concerning how that happened.

COOPER: I'm sure you know people around the country have been paying attention to this. Their thoughts and prayers are with the corrections officer still being held as well as the corrections officer released. Can you tell us at all about how his condition is? He was released over the weekend.

BARTOS: He was released, I think, yesterday. He had non-life threatening injuries. His wish and his family's wish that his identity remain confidential, at least until the other hostage is released.

COOPER: Well, we respect that as well. I know you've been getting great community support. A lot of people around there, their thoughts and prayers are with all the folks over there. We appreciate you joining us. Ivan Bartos, thanks very much. Good luck.

BARTOS: I thank you.

COOPER: A change of plans in the Martha Stewart case. A star witness does not take the stand. We'll talk to Jeffrey Toobin who was in the courtroom.

Also tonight, he's already admitted to being a cannibal. Tomorrow a jury is expected to say whether this man is a murderer as well.

Later on, story of another sort. Art Garfunkel facing pot charges. Could this be the next trial of the century? We'll check "The Current." We'll be right back.

(COMMERCIAL BREAK)

COOPER: All right. Time now for "Justice Served." A key document in the Martha Stewart trial is preventing a star witness from taking the stand. Testimony from Douglas Faneuil will wait until next week, we're told. The government says Faneuil relayed a tip to Martha Stewart to sell Imclone stock before it declined. Now those documents surfaced that questions exactly who gave that tip to Faneuil? How big a deal is this? CNN's senior legal analyst Jeffrey Toobin was in the courtroom today. Jeff, thanks for being with us.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I would say it is more of a hiccup for the prosecution than a major embarrassment. But you could see in the body language in the court room, the prosecutors were shaking their heads, they were frustrated. The defense was kind of strutting around a little.

COOPER: The prosecution likes to come out of the gate swinging.

TOOBIN: Keep in mind, this opening statements were on Tuesday. Court was canceled on Wednesday. The government has put on two relatively minor introductory witnesses. No court tomorrow. There won't be witnesses again until Monday. Martha Stewart's name has not been uttered in that courtroom yet. So the jurors, six days after hearing opening statements, have not heard Martha Stewart's name. It's not a huge deal but it's not how prosecutors like to open a case.

COOPER: It is a little confusing what exactly the problem with Doug Faneuil is according to -- based on what happened today in court. I guess he had told his 80-year-old...

TOOBIN: His original attorney spoke to the FBI. Itself quite unusual. He said -- Gutman is his lawyer's name -- he said Faneuil couldn't remember whether the instruction to tip off Martha came from Bacanovic or Sam Waksal, the CEO of Imclone. Now this is very significant to the case against Bacanovic. Because the charge is that he lied about instructing Faneuil to instruct Martha. This piece of information, this document that came out late last night really is almost irrelevant to the case against Martha Stewart. It is really much more about the case against Bacanovic.

COOPER: Bottom line, he is still going to testify, he is still the government's star witness.

TOOBIN: He is. He is really a witness who, if believed, buries Peter Bacanovic. Interestingly, in the opening statements...

COOPER: Because he was Peter Bacanovic's assistant.

TOOBIN: Yes. And the charge is that Bacanovic gave him inducements, vacations to lie about what went on in this transaction. The only connection between Faneuil and Martha Stewart is this one- minute phone call while she is on the tarmac.

COOPER: Now the defense is going after this guy, Faneuil. I can only imagine what they will do to this kid. Not kid. Late 20s.

TOOBIN: There was an interesting clue to that in court today. When both lawyers for both defendants said they want to raise the issue of drug use, by Faneuil, which is obviously not a pleasant subject for him and the judge quite properly said if you want to raise that you have to make a showing to me in advance and in private that you have some good-faith basis to do that. You can't just ask someone out of the blue, isn't it true you are a cocaine addict without knowing anything that leads you to that kind of conclusion.

COOPER: I'm envious of you being in the courtroom. It must be fascinating.

TOOBIN: It is a great scene.

COOPER: Now, we're going to talk about today's developments in the Martha Stewart case. We want to talk about the Martha Stewart case. Because usually our Thursday "Overkill" segment focuses on a story that overall has gotten ludicrous amounts of media attention. Tonight that can be said of the coverage of some aspects of the Stewart case and how it compares to arguably more important cases.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Now to the Martha Stewart trial.

UNIDENTIFIED MALE: Prosecutors allege that Ms. Stewart lied.

COOPER (voice-over): The coverage has come even though the case involves less than a quarter million dollars worth of stock, a far cry from say killing a multi billion dollar company or jeopardizing pension plans of employees. Why the Stewart overkill? Maybe a perfect storm of celebrity, a trial and a chance to dissect the private lives of public people.

UNIDENTIFIED MALE: She's all about accessories, right, and those kinds of things. We have the QT on some of these. A couple of Hermes bags, very expensive stuff here. One for $6,000.

COOPER: Few people cared about Sam Waksal's briefcase or shoes or the private lives of the heads of Enron, Worldcom or Tyco. OK, maybe Tyco. With all those parties, Tyco looked like fun. And trials are definitely sexier than asking whether the SEC has let others like New York's attorney general take the lead against corporate wrongdoing. See, as soon as I mention SEC you started to nod off, didn't you? Not exactly ratings gold.

Moving on to the today's buzz question. "Is the Martha Stewart trial a waste of taxpayer money?" What do you think? Vote now. CNN.com/360. Results at the end of this program.

Coming up. The admitted cannibal who trolled the Internet looking for willing victims is on trial. Tomorrow a verdict expected. The new details are unbelievable. That ahead.

Also tonight, what did a judge have to say about Jerry Lee Lewis? Find out in "The Current."

(COMMERCIAL BREAK)

COOPER; All right. Time to check tonight's "Current." A Mississippi judge has sealed the record of Jerry Lee Lewis's divorce proceedings. And no, it is not because his wife is a minor.

Art Garfunkle is fighting a marijuana possession charge. His refusal to pay a $100 fine led the judge to set a date for a hearing which some observers are worried could turn into a wild, out of control, media circus. It won't

Tony Randall is recuperate from pneumonia and bypass surgery. The 83 year old is expected to recover fully, we're glad to say, and will be able to sire more children for decades to come.

Well, the trial of a cannibal named Armin Meiwis, has shocked Germany understandably. The details of the crime are gruesome, almost unbelievable. Tomorrow a five-judge panel is expected to deliver a verdict. Prosecutors say Meiwis, the cannibal, is a murderer. The defense says the victim wanted to be killed and eaten.

Here is CNN's Walter Rodgers.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN CORRESPONDENT (voice-over): The Germans who work in this building have a dark and terrible secret, some are former colleagues of Armin Meiwis, the self-confessed cannibal who used to bring co-workers snacks, meatballs.

KEIKHARD REUBMER, INTERVIEWED MEIWES: Nearly every Monday he brought something special, meat, what he had prepared and brought with him to work and offered it to his colleagues. They ate it. They enjoyed it.

RODGERS: Meiwis now in this prison, awaits a verdict. He's charged with murder for sexual satisfaction and disturbing the peace of the dead, butchering the corpse, storing the meat under pizzas in his freezer.

Meiwis and his lawyer claimed the victim volunteered over the Internet to be devoured, wanted his genitals cut off. Then, the victim allegedly helped Meiwis eat them.

Cannibalism isn't a crime in Germany. Meiwis defense? Not crazy. Guilty only of assisted suicide, killing on demand. He says he visited 430 cannibal Web sites and chat rooms. Experts believe those numbers. MARK BENECKE, FORENSIC BIOLOGIST: Nobody knows how many steps it takes to cross the border from fantasy into reality. So, maybe he's just one of the few who did it, but there are thousands and thousands who are just 1 step away from it.

(END VIDEOTAPE)

COOPER: And Walter Rodgers joins us. Now, Walter, this is just a bizarre trial. Any sense of which way the judges are heading?

RODGERS: Well, the guessing among the reporters here, Anderson, is he'll get off probably fairly lightly. The maximum sentence is 15 years, that's if he's convicted of murder for sexual pleasure. They are expecting less. That's, of course, speculation. He could get off with as little as five to seven years -- Anderson.

COOPER: And any sense of where he'll go? If he gets off after five years, does he just resume his regular life? This has gotten a lot of attention there.

RODGERS: Well, he's doing more than resuming a regular life even when he's in prison. He's writing his memoirs. And that's going to be a hot setter. And there are apparently a number of film companies who want to do the Armin Meiwis story.

COOPER: I'd say, only in America, but only in Germany, I guess. Walter Rodgers, thanks very much for that; bizarre story.

Meiwis isn't the only recent person with such a bizarre tale to tell. A quick news note. Here's a quick news note for you, in 1981 Japanese grad student Isei Sagawa (ph) was arrested in Paris for cannibalism. French courts found him mentally unfit to stand trial and returned him to Japan.

Get this, since his release from a psychiatric hospital in Japan, Sagawa has written several best-selling books on cannibalism, earning him celebrity status. He has direct and appeared in several motion pictures. And you're not going to believe it, he is also a magazine's restaurant critic.

Have you heard of Richard Perle? He's a top Pentagon adviser who just gave a controversial speech. We're going to take him to the "Nth Degree."

Plus tomorrow, sports betting, a multi billion dollar industry. But for some, the cost is just too high. Our series, "Gambling" Nation" continues.

And today's "Buzz". "Is the Martha Stewart trial a waste of taxpayer money?" What do you think? Vote now, CNN.com slash 360. We'll have results when we come back.

(COMMERCIAL BREAK)

COOPER: Time now for "The Buzz." We asked you, "Is the Martha Stewart trial a waste of taxpayer money?" Here's what you said, more than 24,000 voted. 69 percent of you said yes it is, 31 percent said no.

Always point out, not a scientific poll, it is your buzz. Thanks.

Tonight, taking pearl's before swine to the "Nth Degree." The "Washington Post" is reporting that top Pentagon adviser, Richard Perle, a vocal advocate of the war in Iraq, spoke Saturday at a charity event.

And when I say charity event, I mean an event sponsored by groups so strongly suspected of terrorist links that it drew FBI scrutiny, U.S. officials considered blocking it, the Red Cross rejected its money and the Treasury Department froze the top sponsor's asset two days later. That charity event.

Despite his involvement with this event, so far the government has refrained from tossing Perle into a cell and is allowing him access to his family and attorneys. We applaud this restraint and want to assure Mr. Perle that we will continue to be vigilant in scrutinizing his treatment to assure that he is afforded due process and all the rights guaranteed to him by the Constitution.

It may not make us popular, but we think it's the right thing to do.

I'm Anderson Cooper. Thanks for watching. Coming up next, "PAULA ZAHN NOW."

END

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