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CNN Newsnight Aaron Brown
E.U. Nations Will Take 13 Militants From Church of Nativity as Standoff End Nears; Mailbox Bomber Was Mapping Out a Smiley Face
Aired May 09, 2002 - 22:00 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.
AARON BROWN, CNN ANCHOR: Good evening again everyone. OK stop me if you've heard this one before. The standoff in Bethlehem could end at any moment. Really? Now I know this is what we said last night on the program, and indeed sort of implied it the night before, but this time it will be different maybe.
If the stakes weren't so high and the site the Church of the Nativity of such historic import, the whole thing would be sort of funny. For two days, the main stumbling block seemed to be that no country was willing to accept 13 men the Israelis have identified as senior terrorists. Well, imagine that.
Or imagine the phone call between government officials trying to convince other government officials that it would be a really good thing to accept these 13 men. It would help bring stability to the Middle East after all. Of course, it might also bring instability to the country accepting the 13. You can not make this stuff up.
So if the stakes weren't so high, if the Mid East wasn't such a sorry mess of death and frustration, this whole Bethlehem thing would be a pretty good laugh. But it's not and it won't be and the best we'll get out of it is a peaceful ending, which given the state of play in the region is a blessing. Stay tuned. It could happen at any minute.
The whip, which of course begins again in the Middle East, Wolf Blitzer is in Jerusalem. Start us off Wolf with a headline from you.
WOLF BLITZER, CNN CORRESPONDENT: Aaron, the stage is set for Israeli military retaliatory strikes against targets in Gaza. The Israeli army has mobilized reserves and Israel's political leaders are uttering ominous warnings. Aaron.
BROWN: Wolf, thank you, back to you shortly. To Bethlehem next, we've given you the advance notice, Walt Rodgers what's happening, a headline please.
WALTER RODGERS, CNN CORRESPONDENT: Hello, Aaron. Bethlehem's police chief is now saying that the evacuation of Palestinians from the Church of the Nativity could take place in a few hours. The Israelis are also behaving as if they believe the end is in sight. As they say in this part of the world, enshala (ph), God willing. Aaron. BROWN: Thank you, Walter. Bracing for the worst today in the Gaza strip, as Wolf indicated, the possibility of military action. Matthew Chance finds himself there tonight, so Matt the headline from you.
MATTHEW CHANCE, CNN CORRESPONDENT: Aaron, as dawn breaks here in Gaza, there's calm on the streets but a lot of anticipation as well about what the coming hours will bring. Israel is massing its forces on the outskirts of Gaza in preparation for possible military action. The residents of this territory are preparing for the worst, back to you.
BROWN: Thank you, sir and to Manomonie, Wisconsin next, the latest on the case of accused pipe bomber Luke Helder. Jeanne Meserve works that for us, Jeanne a headline from you tonight please.
JEANNE MESERVE, CNN CORRESPONDENT: Aaron, Luke Helder studied art in this classroom, now questions about whether he was trying to draw with the placement of pipe bombs, a smiley face on the map of the U.S. -- Aaron.
BROWN: I never thought we'd say this twice, but you can not make this stuff up. Jeanne, thank you. Jeanne Meserve in Manomonie. Back to all of you in a moment. Also coming up on the program, peace seems like the last thing on anyone's mind in the Middle East. Is there any hope for getting the peace process back on track. We'll talk with former Senator George Mitchell of the Mitchell Plan again tonight.
Also trouble in hardware city, that's the nickname for New Briton, Connecticut, and the trouble surrounds a big toolmaker, reincorporating in Bermuda, not for the weather but to avoid paying taxes.
And Gerrick Utley tonight takes us on a hunt for buried treasure in a land of exotic mystery and romantic tales, the Bronx, all that and more in the hour ahead.
We begin again in the Middle East where much is happening and more appears about to unfold. In Israel, thousands spent the day celebrating the 35th anniversary of the reunification of Jerusalem in the Six Day War. Thousands also marked today by answering the call to arms and rejoining their reserve units, perhaps to see action in Gaza.
And as we've indicated, in Gaza tonight there is apprehension and preparation and defiance. There is so much to come and to cover. We begin again tonight with CNN's Wolf Blitzer.
(BEGIN VIDEOTAPE)
BLITZER (voice over): Israeli army troops moved briefly into the Rafah area of Gaza, searching for weapons and explosives. It was a relatively modest operation, widely seen by Israelis and Palestinians alike as a prelude to a much larger strike.
Prime Minister Ariel Sharon and Defense Minister Binyamin Ben- Eliezer received authorization from the Israeli cabinet to take any military action they deem necessary to fight terror, this in the aftermath of Tuesday night's suicide bombing just south of Tel Aviv that left 15 Israelis dead. Palestinians were bracing for the worst.
YASSER ABED RABBO, PALESTINIAN INFORMATION MNISTER: It's clear that Sharon intends to continue the war against the Palestinian people.
BLITZER: Just as it did in advance of its most recent military operation on the West Bank, the Israeli army has now begun mobilizing reserve units. Israeli military sources suggest some sort of combined air and ground assault against selected Palestinian targets is in the works.
It would come even as Palestinian Leader Yasser Arafat has called on all Palestinians to end terror strikes against Israeli civilians. Palestinian Authority security forces have also rounded up more than a dozen Hamas and other militants in Gaza. Still, Israelis are skeptical.
DAVID HOROWITZ, ISRAELI POLITICAL ANALYST: I think the Israeli public shares the government's dilemma about Yasser Arafat. I think there's no doubt that almost all Israelis have given up any hope of reaching a deal with him. They think he's lying when he talks about cracking down on terrorism. They believe very much that he's inciting and financing terrorism, but they don't know what to dot.
BLITZER: In Washington, President Bush was clearly more receptive to what Arafat has said and done.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I said I was pleased that Chairman Arafat spoke in Arabic against terrorism. That's good. That's a positive development. Now it's up to Chairman Arafat to perform, to keep them in jail, arrest them and keep them in jail.
BLITZER: Prime Minister Sharon meanwhile spent this day like so many other Israelis, celebrating what they call Jerusalem Day, marking the 35th anniversary of Israel's unification of Jerusalem.
ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): As the Prime Minister of Israel and in the name of the State of Israel, I swear to defend and protect Jerusalem from every guard post for the Jewish people.
(END VIDEOTAPE)
BLITZER (on camera): But Jerusalem is not necessarily on everyone's mind here indeed. The situation seems to be moving inevitably towards a military strike and, Aaron, I'll hold up the front page of a major Israeli daily (UNINTELLIGIBLE), the headline here.
You always ask about the headline. This is the headline, not only in this paper but in most of the Israeli newspapers today. Destination the Gaza Strip (UNINTELLIGIBLE). It's clear what's going on over here, Aaron. BROWN: Well, or as clear as we can make it in one night. I was interested in that brief part in your report that talked about what the military action might be. It sounded like not the kind of major occupation, I use that word very carefully here, that we saw in the West Bank but something of shorter duration?
BLITZER: Presumably. Remember Gaza is a lot different than the West Bank. In Gaza, there's a million plus Palestinians packed into a tiny, little strip of area and there's huge refugee camps all over Gaza. So it's not as open as the West Bank is, and as a result it's much more difficult to go in there. It's anyone's guess what the military operation will be, but presumably it will target Hamas headquarters, structures where Israeli intelligence believes Hamas, Islamic Jihad, other suspected terrorists might be operating, might be planning future military operations or terrorist operations against Israel.
One other thing, unlike the West Bank, the border around Gaza that separates Gaza from Israel itself, there's barbed wire, there's electronic fences. It's a thick border, although people obviously can still get through. So it's probably going to be different than the military operation that was waged against targets in the West Bank.
BROWN: Wolf, thank you. Wolf Blitzer in Jerusalem for us tonight. In truth, I wish I'd come up with a word other than occupation. Again now to Bethlehem, all the warnings laid down already. The siege appears to be close to ending. Is that 30 minutes or 20 hours? We shall see. The more than 100 people inside are apparently ready to come out, all seems to be in place, but again, this is where we thought we were last night. So we'll go back to CNN's Walt Rodgers to get the state of play at this moment. Walt, good evening.
RODGERS: Good evening, Aaron. Bethlehem's police chief is the latest to now say that the 123 people inside of the Church of the Nativity will be released today and we should also point out that the Israelis are now behaving as if they think the end is in sight.
A short while ago, the Israelis told all reporters who are not currently in Bethlehem if they wish to cover the evacuation of the Church of the Nativity in Manger Square behind me, those reporters should report to a checkpoint an hour from now on the outskirts of this Palestinian town.
Now beyond that, we have other indications that the siege may be coming to an end. There are indications from Cypress, a British military plane at an RAF base there is standing by ready to fly to Israel to evacuate the 13 hardcore Palestinian militants that is the men most wanted by Israel, still inside the Church of the Nativity. Those are the people that Israel insisted must be deported. The Israelis say they are senior Palestinian terrorists and it appears as though there has been a resolution of the third country question that is which countries in Europe will take these men.
The Associated Press reported that Austria, Greece, and Luxembourg are now joining Italy and Spain in agreeing to take the 13 hardcore Palestinians inside the Church. Incidentally, I spoke with one of those Palestinians by telephone within the hour. He identified himself as Abdullah Daoud (ph). The people inside the church know less than anyone about what's happening on the outside.
For example, they don't know if they're coming out today, despite the latest indications that the siege will end. They said they thought that they would be coming out yesterday. I asked Mr. Abdullah Daoud if, in fact, he had any idea where in Europe he would be going. He said no, and he said his highest priority after 38 days inside that church, is to have a bath. He said they've been without electricity for some time now.
Again, we may be getting to the end of this siege, but I really think you have to keep your fingers crossed. Oh, one thing incidentally, I asked Abdullah Daoud, are you a terrorist as the Israelis say? He went on the attack immediately. He said the terrorists are the Israeli soldiers who occupy Palestinian cities. He called himself a freedom fighter. Thus, we have that divergence of views and that's why we've had so many disagreements and postponements here. Aaron.
BROWN: In 15 seconds, are these guys when they are released going to be imprisoned in these countries, or are they going to be free in these countries?
RODGERS: I think that's up to the individual country, plus it also hinges on the contents of their confinement, which was negotiated here and we don't know the answer to that. We did know that one of the Italians was to go to a monastery, which is also a receiving area for immigrants. Beyond that, we really don't know the details. Aaron.
BROWN: Walter, thank you. Walter Rodgers on station again in Bethlehem tonight. Next stop Gaza, the founder of Hamas gave a wedding reception for one of his seven daughters today. His deputy, a university lecturer, spent the afternoon working on exams for his students.
His spokesmen made the rounds with reporters, the message being we are not intimidated, which may or may not be true for the moment of martyrs, but perhaps less so for the hundreds of thousands of ordinary citizens in Gaza, and of course for the Israeli soldiers preparing for whatever it is that comes next. This is the long way of saying in Gaza, they are bracing for days of war. Here again is CNN's Matthew Chance.
(BEGIN VIDEOTAPE)
CHANCE (voice over): Into the Shata (ph) Refugee Camp in Gaza, impoverished, overcrowded, and a center of Palestinian militancy. We drove through these streets to find residents preparing for a fight.
As Israel ponders its next move, there are sandbags on street corners here, makeshift defenses placed in case the troops are sent in. They can't stop the Israeli army, only make their advance more painful and more difficult.
"They won't prevent tanks coming here" Nimma (ph) says "but at least these bags will protect our doorways from bullets, we hope."
Mounds of earth tipped across the roads are set in places to be land mined with homemade devices to slow any Israeli advance. Inside her kitchen Nimma's mother shows me how she's trying to hoard whatever little food she can. Stories of drawn out sieges in Ramallah and Bethlehem and in Jenin have taught these people to expect acute shortages when the Israelis are in town. But she says, every Palestinian living here is willing to fight.
"Everyone who has a weapon will use it to defend those who have not" she says "guns, knives, or anything else."
It may be that Israel's forces will again enter Gaza to dismantle what it says is a terrorist infrastructure here. In places like Shata, it could mean a terrible battle in which lives on both sides are lost.
(END VIDEOTAPE)
CHANCE (on camera): Already about 14 Hamas activists have been taken off the streets by the Palestinians. Their leadership has gone into hiding and been instructed, they told us, at least at the highest level not to talk to journalists.
The Palestinian Authority, Aaron, says that it is now at least tightening its grip on these militant groups, but it's still not clear whether this will be enough to prevent further suicide bombings first of all, or indeed to prevent a heavy Israeli response. Aaron, back to you.
BROWN: I hope this doesn't sound like a dumb question, but I'm not clear on how many sides there are in this thing. You've got the Israelis. I gather you have the Palestinian Security Forces and whatever they may be involved in when the Israelis come in, and then you have the Hamas fighters, right? Three sides?
CHANCE: Immensely complicated situation here, Aaron, you're right. It does seem there are so many different dimensions to the way in which the Palestinians are fighting the Israelis and vice versa. But you do have what the Palestinian Authority are trying to say is a separation between themselves, their own security forces, and more militant Islamist groups, the Hamas and the Islamic Jihad. That's the distinction that Yasser Arafat is trying to draw.
BROWN: Matthew, thank you. Be safe there for whatever happens. Matthew Chance in Gaza tonight, and up next on NEWSNIGHT, we'll talk with former Senator George Mitchell, author of the Mitchell Plan, as we continue our coverage of the Middle East. We'll be right back.
(COMMERCIAL BREAK)
BROWN: Someday, no one knows exactly when, but someday the Palestinians and the Israelis will get back to the peace table and start talking instead of killing and they will be back to where they were some months ago when they were talking about the Mitchell Plan. The problem is that much has changed since the plan was written, the two sides farther apart, angrier, more scarred. So it's time to talk again with former Senator George Mitchell about his plan and redo. It's nice to see you again, sir.
GEORGE MITCHELL, FORMER SENATE MAJORITY LEADER: Thanks, Aaron.
BROWN: I've been obsessing, I think, a bit on this point the last couple of days that there is in the Middle East always someone who in a heartbeat can change the balance. And so, the other night, after a couple days or weeks of at least a little bit of optimism, boom.
MITCHELL: We benefit enormously from technology every day in our lives, including these cameras and all this elaborate equipment.
BROWN: Yes.
MITCHELL: But we also suffer from the consequences of technology, that it is now easier. It takes fewer people, less skill; fewer resources to kill large numbers of people that at any time in human history. So fewer and fewer, a smaller and smaller minority can have a decisive adverse effect.
BROWN: And so, and it underscores again that there is in the Middle East - there are groups in the Middle East that simply do not want reconciliation period.
MITCHELL: That is correct. Hamas has been opposed to the Oslo process from the very beginning. They've been opposed to Arafat and they have consistently said they do not support the peace process.
BROWN: Given what has gone on in the last couple of months, yesterday Chairman Arafat makes his statement in Arabic and people can debate whether he meant it or not. Is it any longer realistic, given what's happened to his security forces, for him to do a whole lot about terrorism over there?
MITCHELL: When our committee was over there quite a while and we talked with both sides, the Israeli government took the position with us that Arafat does not have complete control, but he has not made a complete effort to exercise the authority that he does have. After a lot of discussion, we accepted that assessment.
He clearly doesn't have complete control and he now has less than he did then but he has not made the 100 percent effort that's required, and so in my view, and this is a personal opinion, he could have a significant effect on reducing it. He can't possibly stop it all, but he's got to make the effort.
BROWN: And what is then required? I mean what is it that he hasn't done that he must do?
MITCHELL: A strong consistent effort to combat terrorism, to arrest and prosecute and punish those who are engaged in such activities and to take more affirmative action to prevent such activities. For example, although this has now faded into the background and it doesn't seem to be much in light of these terrible bombings, but when we were there, there was a constant problem of Palestinian gunmen taking up positions in Palestinian populated areas, firing into Israeli populated areas.
As you know, Aaron, they're very close in many places, up on a hill and down below and so forth. We strongly recommended a very aggressive effort to police those areas to prevent that from occurring, because then the Israelis would come in, fire back at the area, and the only people injured on both sides would be civilians.
And so, that's the kind of effort that has to be undertaken, but it is simply not true, and the Israelis themselves acknowledged it, to think that he could stop it all. And what George Tenet is going to do, I believe, is to help rebuild and reorganize the security forces to have a combined security cooperative effort. That's really the most important thing.
Interesting that's the one thing that both sides agreed on when we were there. They disagreed on everything else, but they said "we want to get back to security cooperation."
BROWN: The last time you were with us, you talked about an odd situation where people generally have a sense of how this ends and they have no clue as to how it begins. We're sort of still there it seems to me. Is it that, forgive the analogy that they have to be like two punch drunk fighters who simply have nothing left to throw at each other before they sit down to do business again?
MITCHELL: I don't know when the moment will come and I don't know what events will precipitate it, but clearly both will come to recognize that the current course is terribly destructive for both. Life is unbearable on both sides. The Israeli government's in a tough position. Any government would have to respond to these attacks. You can't simply let them occur.
On the other hand, the stated purpose of the response is twofold, to prevent further terror attacks; and secondly, to isolate and marginalize Arafat. Well, of course, Arafat's now more popular among his people and the Arab peoples than he has been for a long time and the terror attacks haven't stopped. They continue.
The sad history of the region is that every escalation induces a counter escalation, and at some point there's going to have to be an acceptance of the view that this can't be solved by military means or by any form of violence.
You look at the Palestinian attacks and they are plainly counterproductive. They not only haven't advanced them toward the goal, they've pushed the goal further off and they turned the world against them. And so I think that at some point, I hope it's soon. I keep urging and encouraging that they act on our report now. They're going to have to recognize that and get back to talking. BROWN: I think I said this the last time. One of these days, we'll sit down and they will be talking, and then it will be an interesting conversation.
MITCHELL: It will be a very good conversation.
BROWN: Nice to see you again, senator.
MITCHELL: Thanks, Aaron.
BROWN: Senator George Mitchell, thank you. Later on NEWSNIGHT, we'll take a look at the Skakel trial going on in Connecticut. Up next more on the young man who allegedly went on that pipe bombing spree. This is NEWSNIGHT on CNN.
(COMMERCIAL BREAK)
BROWN: Here we think is your understatement of the day. It comes from a sheriff in Nevada. "Nobody really knows what he meant by that. It is open to interpretation." That is a giant smiley face, and he is a 21-year-old, Luke Helder, who told police he was using pipe bombs to arrange, yep, a happy face across the country.
Helder met with his parents today who, at times, seemed as confused about what happened as the rest of us, and his case seems to be playing out in a most unusual way. With each new detail, the picture of Luke Helder, the understanding of why he did this seems less clear, not more. Once again, CNN's Jeanne Meserve.
(BEGIN VIDEOTAPE)
MESERVE (voice over): Cameron Helder may have pointed authorities to his son, but he loves him still. He and his wife tried to comfort Luke and themselves in an emotional half hour meeting conducted by telephone through prison glass.
CAMERON HELDER, FATHER: We are here to see our son in his hour of need. We told him we love him. I feel better, a lot better, after speaking to him.
MESERVE: In an earlier conversation with his mother, Luke did not seem to grasp the severity of his alleged crimes.
REVEREND DENNIS KAMPA, HELDER FAMILY SPOKESMAN: The statement she made to me was that Luke had said that do you think I'll go to jail because of this? And she said he still perhaps doesn't realize that this was not a childish prank but a very serious matter.
MESERVE: If you study the placement of the pipe bombs on a map, you can see what could be two eyes and the beginning of a grin. Was Helder trying to form a smiley face?
UNIDENTIFIED MALE: That's correct. He told that to one of the undercover agents that was actually there.
MESERVE: It is unclear whether Helder was joking, and authorities say his next destination was California, which would not fit the pattern. In any event, Helder is now apparently beginning to realize that the crimes he has admitted to are nothing to smile about.
DENNIS BALAAM, SHERIFF, WASHOF COUNTY, NEVADA: As each moment goes by, I think the consequences are starting to set in with him.
MESERVE: Consequences that could include life in prison if Helder is convicted. At the University of Wisconsin-Stout, acquaintances of Helder's are still baffled that the nice guy they knew could be involved in such a crime. One of Helder's professors says he had an exceptional attendance record through a mid semester review.
PAUL DELONG, ART PROFESSOR: The critique went very well. It was upbeat, positive. He was actually in quite a good mood, I thought, not that he was ever in a sore mood. He's actually a very likeable young man, but that was the last contact I had with him.
MESERVE: Sign-in sheets indicate he never attended that class again. Helder's protracted absences prompted a call from the administration.
JOHN ENGER, UNIV. OF WISC-STOUT: A staff member in the dean's office called him at home. She indicated he seemed somewhat nervous in the whole process.
MESERVE: Helder told the university he just needed a few days off. A few days off, it appears, to plant bombs, and wreak havoc.
(END VIDEOTAPE)
Luke Helder will be taken tomorrow to Cedar Rapids, Iowa, where he will face the first of the criminal charges against him. It's about a five hour drive from this classroom, where he studied art. But if you measure it in something other than miles, it is a long, long way indeed -- Aaron.
BROWN: Boy, it sure is. Jeanne thank you. Jeanne Meserve in Menomonie, Wisconsin tonight.
Later in the program, we'll find out why one congressman is fuming over what Stanley Tools, tool company, is up to. Up next, the latest on the Skakel trial. This is NEWSNIGHT from New York.
(COMMERCIAL BREAK)
BROWN: Here is a simple truth in the case of the state of Connecticut versus Michael Skakel. If the state had had a slam dunk case, it would have brought it to trial a long time ago. Instead, 26 years after 15-year-old Martha Moxley was murdered, the trial is unfolding. And while we've covered enough trials never to guess what a jury is thinking, to our ear, at least, it has not been a great week for the prosecution.
Yesterday, a retired Greenwich, Connecticut police chief testified that he asked for an arrest warrant in 1976 for someone else, Skakel's brother, Tommy. Today, another prosecution witness cast doubt on whether Skakel was at the crime scene when Ms. Moxley was killed. And there is yet another person who may have confessed, though he was dead drunk at the time. And the defense will try and get that confession, or whatever it actually is before a jury, too. Of such things are reasonable doubt made of.
CNN legal analyst Jeffrey Toobin has been in the courtroom and now is with us. Jeffrey, nice to see you.
JEFFREY TOOBIN, CNN LEGAL ANALYST: Hi, Aaron.
BROWN: Well, not an easy case, huh?
TOOBIN: Not an easy case.
BROWN: Former prosecutor you?
TOOBIN: I'll tell you, you know, one of my favorite bizarre facts to come out of this case is Detective Kegan, who is the main investigator in this case. He was the detective in this case in 1976. He later became the police chief of Greenwich, retired in 1988. Moved to South Carolina. And when he took the oath to testify yesterday, he said what's your occupation? I'm a member of the House of Representatives of South Carolina. He has an entire new career in South Carolina as a politician. That's how long he's been out of Greenwich. And that's how long this case been hanging around.
BROWN: Has it -- again, I mean, I think it's important. You never know how juries hear things.
TOOBIN: You sure don't.
BROWN: And you got to always be careful. So these are the opinions of people watching the case from the gallery. Prosecution having a tough week though?
TOOBIN: They are having a tough week. The -- and so much of it has to do with the age of the case and how much investigation there's been. You know, when a defense attorney wants to crossexamine, all he really wants is to have the witness have told the story many times, because you know there are going to be different versions. And all of these witness have told the story many times. And details have changed, sometimes significant details. And Mickey Sherman keeps exploiting that.
BROWN: Where does the prosecution go here? I mean, they, today, it today, seemed to establish at least the possibility that Skakel was not at the cousin's house.
TOOBIN: Right.
BROWN: Which is the alibi.
TOOBIN: Right. I mean, in fairness to the prosecution, they had a very good witness today, Andrea Ranna. See, what you have to remember is at the Skakel house that night, there was a gathering of about 10 kids right before the murder, including Tom and Michael Skakel and including Martha Moxley. Did Michael Skakel leave with his cousin? That's the question. One witness said yes, he did. That's bad for the prosecution. But one witness said no. Andrea Ranna testified today. She said, Michael stayed there. And you know, there was some effective crossexamination, but if the jury believes that, that Michael Skakel was at his house at this time, that means that he could have committed the murder.
BROWN: And the witness who says he did not, that he did not stay at the house, that he left, has that witness testified?
TOOBIN: Yes, well that's one of them. That's Helen Fitzpatrick.
BROWN: So there is prosecution witness who says that Skakel was not in his own house at the time?
TOOBIN: Correct. That's what we call a problem for the prosecution. But you know, the fact that witnesses sometimes contradict each other, I mean, it's not good but that's not an automatic acquittal. You know, people's memories are not...
BROWN: Of course not. And the reason this time is important is because, yes, this makes it perfect. There is a barking dog.
TOOBIN: There is a barking dog. And that's when I think everyone agrees, when all these dogs in the neighborhood goes crazy, that's when the murder goes on. And ironically and sort of poignantly, Dorothy Moxley, the mother of the victim, actually gave some very helpful testimony for the defense. Because she said, she remembered the dog barking at around 9:30. And she had said that several times.
If the dog barked at 9:30, and if the murder was at 9:30, and if Skakel's testimony, Michael Skakel's alibi for 9:30 holds up, that's very helpful for the defense. So it was really a poignant moment when Dorothy really did help the defense yesterday.
BROWN: Well now here -- it won't be a helpful moment for the defense.
TOOBIN: Right.
BROWN: There is witness out there who will say that Michael Skakel confessed?
TOOBIN: Several.
BROWN: Yes.
TOOBIN: And that -- the prosecution is putting a lot of hope on those witnesses. And you could tell in the defense opening, they were nervous about those. So Mickey Sherman was saying, these confession witnesses, they're glory seekers, they're liars, they're drug addicts, they're drunks. Well, we'll see. But I mean, that is, I think, the make or break moment for the prosecution, the confessions. Because if the jury believes those, that can take care of a lot of these details. BROWN: Fifteen seconds, has it been a surprisingly to you in any sense, has it played as you thought?
TOOBIN: No, I have to say I've been pretty surprised. I thought, you know, prosecutors always like to start with a bang. That's one of the rules you learn. It's like put your good witnesses up front and you know, let the rest of it take care of itself. I don't think they did that.
BROWN: Nice to see you, Jeffrey. Jeffrey Toobin, our legal analyst, has been up in Connecticut for that trial.
Coming up later on NEWSNIGHT, we'll search for the sunken treasure off the coast of the Bronx. Up next, an uproar over a company's plan to save on taxes. This is NEWSNIGHT on Thursday.
(COMMERCIAL BREAK)
BROWN: Ordinarily, a company's announcement of larger profits in the quarter wouldn't necessarily rate a mention on the program, but the announcement today came from Stanley Tool Company. And it does, because of how it plans to show increased profits. The profits will come less from building a better sliding door and more from slipping through a loophole in the tax code. Stanley Tool of New Britain, Connecticut, is moving the paper part of the company, reincorporating to Bermuda. The announcement formerly came today.
Other companies, of course, have done the same thing. It's going to save Stanley millions in taxes. It's all perfectly legal, may even preserve American jobs. That's what the company says. But is it fair, and is it right, and should this loophole be closed? We'll grapple with those issues in a moment.
But first, the news of day from CNN financial correspondent Allan Dodds Frank.
(BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): Stanleyworks says the move by CEO John Trani will save $30 million a year in taxes, and cut its tax rate by as much as one-third.
PHILIP VITALE, PRESIDENT, SKILLED TRADES UNION: He's just following the dollar. He's just chasing the dollar to whatever means, and I don't think it's right. And the United States needs this money.
FRANK: By reincorporating in Bermuda, a haven with virtually no corporate taxes, Stanley is following competitor Ingersoll Rand, as well as Accenture, Global Crossing, and Tyco.
SEN CHARLES GRASSLEY (R), IOWA: It just makes a sucker out of those corporations that stay in the America and pay their taxes.
FRANK: The motivation is simple. Stanley can avoid paying taxes on profits outside the United States by having the parent company located in Bermuda. Stanley's numbers outside the United States tell the story. 28 percent of sales, 30 percent of assets, 40 percent of plants and 48 percent of the employees.
UNIDENTIFIED FEMALE: We have to understand the big picture and the reason why all these firms are moving out of the U.S. The U.S. government taxes income on a worldwide bases. It puts U.S. firms on a very uncompetitive position, compared to other firms around the world.
FRANK (on camera): The Treasury Department does not have a handle on how much this kind of tax avoidance is costing. But on Capitol Hill, Senator Grassley and others are determined to stop it. And that could be difficult, since big five accounting firms have been urging clients to take advantage of the loophole.
Allan Dodds Frank, CNN financial news, New York.
(END VIDEOTAPE)
BROWN: So it appears to be back in the hands of Congress. Lawmakers created this loophole, of course. And only they can close it. Congressman James Maloney wants to. He's a Democrat from Connecticut's fifth district, a member of the House Financial Services Committee. And he's in Washington tonight. Nice to see you, sir.
REP JAMES MALONEY (D), CONNECTICUT: Nice to be with you.
BROWN: Well, that's the fact of it, isn't it? I mean, Congress made this happen. There must've been been a good reason. Congress wouldn't do anything without a good reason, would it
MALONEY: Well, actually no. What has happened is that the accounting and legal devices have grown up around the existing tax cut. And people have put different parts of the code together in ways that were never anticipated. Actually, the film you just ran is only a small part of the story. The proxy statement from Stanley says they're also going to move their tax home to Barbados. And that will then allow them, because of a tax treaty that the United States has with Barbados, to also evade or avoid all of their U.S. taxes, even on the profits made here in the United States.
So this is a huge problem. This is a company that is turning its back on the United States. We do need the revenue. We have a federal deficit. Stanley relies on our armed services. We have men and women in uniform in harms way around the globe, that is protecting Stanley. And they are turning their back on those men and women and on this country.
But in addition, they are setting a pattern here that other companies may very well follow. And as Senator Grassley alluded to, where is the end to this? And it'll just leave Mr. Smith and Mrs. Jones to pay the taxes to defend Stanley to pay the bills, to defend Stanley and the other companies who choose to turn their back on this country. It's not the right thing. They're doing the wrong thing here.
BROWN: Congressman, not to sound unduly cynical, I always hate to do that, but here's how it may play out from here on. Someone, perhaps even, you will write a law that will close this loophole. And then the lobbyists will come into Washington. And they will lobby this thing and spend a fortune to kill it. And nothing will change.
MALONEY: Well, we'll see. We have, in fact, filed a bill. Richard Neil, congressman from Massachusetts on the Ways and Means Committee, and I on the financial services committee have filed a bill. We already have 41 co-sponsors. Senator Backus, who's the chairman of the Senate Finance Comittee and Senator Grassley, who's the ranking Republican on the Senate Finance Committee have subsequently filed a Senate counterpart to our legislation.
They've already held a hearing on this. I would tell you that the Congress is outraged at these behaviors that Stanley Works mirrors and demonstrates today. And we are going to try very hard to close this. You may be right, Aaron. There may be too many special interests that want to preserve this terrible device that will bleed the U.S. Treasury in a time when we need it. But I hope not. And we're certainly going to make the case inside the Congress, as well as to the American people.
BROWN: Let me make an argument that I think the company would make if they had agreed to join us today, which they did not after we asked. And that is this, that number one, they are trying to maintain a strong financial position, so they can continue to employ half their workforce in the United States. And they are doing what is best for their shareholders.
That is, they are making the business decisions that they are expected to make by running a large company. And isn't there some truth in that? Whether it's the right thing to do or not? That's not a totally bogus argument is it?
MALONEY: Well, it's more bogus than it sounds. First of all, many of their shareholders are very badly hurt by this proposal. The way it works out, the shareholders will have to recognize a capital gain in the sale of the existing stock to this new Bermuda company that's being created. The large institutional investors can absorb that and can wait down the road to recoup their expenses from the capital gains. But many people, I was at Stanley Works's headquarters in New Britain this morning, many of the smaller stockholders, the retirees, the people who worked for the company and put aside a few dollars during the course of their years working for this company, they have to pay that capital gains now. It invades and raids their retirement fund. They are hurt by this very transaction. So Stanley is not doing this to help all the shareholders, at least.
Secondly, if we close the loophole, everyone's on the same playing field.
BROWN: Yes.
MALONEY: There's no reason not to make the law right and then everyone, can in fact, compete on an equal basis.
BROWN: Congressman, let's do this. Let's watch the progress of the bill, as it goes through committee hearings and the markups and votes and all the rest. And just periodically, we'll keep track of it. And we'll invite you back to tell us how it's going. I suspect a lot of people are interested in this. Congressman...
MALONEY: Happy to do that. And I think you make a good point. It will be an object lesson, however it transpires, it will be an object lesson in whether the Congress of the United States is willing to stand up for the people of this country or not.
BROWN: Sir, thank you for your time.
MALONEY: Thank you.
BROWN: We appreciate it a lot tonight. Thank you, sir.
Up next, on NEWSNIGHT, we go searching for sunken treasure in a most unlikely place. Yes, this is NEWSNIGHT.
(COMMERCIAL BREAK)
BROWN: Finally, from us tonight, when I was a kid, everything I knew about New York I learned an hour at a time, once a week, in black and white. I was addicted to the naked city and the eight-million stories in it. TV program is long gone, of course, but the stories remain in this one.
Reported by Garrick Utley, has all the makings of a great New York story: the Bronx, sunken treasure, and of course, a guy named Joe.
(BEGIN VIDEOTAPE)
GARRICK UTLEY, CNN CORRESPONDENT (voice-over): We all have dreams. And Joe Governali has his out there. Down there, beneath the passing tug boats and barges, are the remains of a British warship, the H&S Hussard (ph) that sank more than 200 miles ago.
JOE GOVERNALI: I mean, it's right here. It's in our backyard. We don't have to go traveling to Key West, Florida. We don't have to travel to the Nile River. We have it here.
UTLEY: Right here in the Bronx, the part of New York City most wildly known for its urban blight. Joe Governali wants his community to be remembered for its rich history. He works as a real estate agent. He's also a part-time actor in commercials and movies. Joe and few friends have been exploring the wreck, that lies 80 feet down in the murky water. The wooden ship has rotted away. Much of what remains is buried under clay, but here and there, Joe says, is a glimpse of a piece of decking or the remnants of the hull.
What has not been found yet, may be a fortune in gold and silver. But there are other things he has brought up. Stone ballast, a ship's nail. And his main prize so far.
This is the evidence; right? And what is this?
GOVERNALI: This is a 10 pint pitcher probably used to serve beer.
UTLEY: It's in good condition?
GOVERNALI: It's in excellent condition. Anything that's embedded in clay would be.
UTLEY: The Hussard (p) was similar to this frigate of the same period. At the time, New York was an occupied village in the war for American independence, occupied by the British. A safe port for their ships.
(on camera): It was November 23rd, 1780, His majesty's ship Hussard (ph) was being prepared for its voyage. It wasn't a big ship. Only 114 feet long. On board was a crew of 100, under the command of Captain Maurice Poll. And it's believed, 70 American prisoners of war, being held in chains. And also, that mysterious treasure, a British army payroll in gold and silver coins. Then the Hussar (ph) set sail into the East River.
(voice-over): Here in the map room of the New York Public Library, Matthew Knutson helps us follow the last voyage of the Hussard (ph).
The British had good maps of what was then New York City. This was from what, 1776?
MATTHEW KNUTSON: 1776.
UTLEY: An important year in American history. New York was this tiny hamlet.
KNUTSON: The Hussard (ph) would have been docked somewhere around lower Manhattan.
UTLEY: And then the captain would sail up the East River.
KNUTSON: That's right.
UTLEY: And he knew where he was going?
KNUTSON: That's right.
UTLEY: And what did he hit?
KNUTSON: He hit a place called Hellgate, which is the confluence of the Long Island Sound and New York Harbor. Two different tides coming together and making swirling cloudy water.
UTLEY: And there are rocks underneath.
KNUTSON: There are rocks underneath. And the Hussard (ph) hit one.
UTLEY: And sank here. The American prisoners, it's believed, perished. There have been many salvage attempts over the past two centuries. One of the first was back by Thomas Jefferson. And now, there's Joe Governali. He has filed in Admiralty Court for salvage rights. But if there was a fortune in gold and silver on board, why hasn't there it found?
There are doubters who say there's no treasure out there, but you believe there is. Why?
GOVERNALI: The British led three major expeditions over the last 200 years looking for that ship and to salvage her. Now they believe there's something very important on that ship, and very valuable. So do I.
UTLEY: What keeps Joe Governali searching? Perhaps it's the money. Perhaps it is to do something for the Bronx. Perhaps as a part-time actor, he knows finding the treasure would be his biggest role yet. He's ready for it. Joe's stage name is "Joey Treasures."
Garrick Utley, CNN, the Bronx.
(END VIDEOTAPE)
BROWN: More treasures from us tomorrow at 10:00. Good night.
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