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CNN Newsnight Aaron Brown

White House and Justice Department Differ on Terror Message; Enron Fallout Less Than Predicted; American Women Trapped in Saudi Arabia

Aired June 12, 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, NEWSNIGHT ANCHOR: Good evening again, I'm Aaron Brown. The page tonight has nothing to do with nothing, sort of. We've all become prisoners of technology, it seems, and around here today, technology won big.

We've had no e-mail here since 9:00 a.m. this morning, no way to communicate with each other all day, and that is what we do. We e- mail back and forth all morning until we arrive in the afternoon.

No way to communicate with you in the way we try and do each day when you write the program. It has been maddening, not just the inconvenience of it all, but knowing again how dependent we've become on something we neither understand nor control.

There are plenty of disadvantages to e-mail. For one, with the advent of those wireless e-mail devices I wear on my belt, I am always reachable. I was delighted the other day to be in an electronic black hole for an hour, no e-mail at all. But it is also the easiest, most efficient way to communicate, short of actually talking to people and we wouldn't want to have to do that, now would we?

So I have not a clue what our bosses wanted to tell us today, what is in the refrigerator for dinner tonight when I get home, what this really funny artist in Cleveland thinks, and probably about 200 things I didn't receive today, all because a server, whatever that is, decided today it had had enough.

And apparently this server thing, which clearly did no serving today, is no small matter. A new one is being flown up from Atlanta, so no e-mails until it's fixed. We may cancel the program tomorrow and run an old "Spin Room," or maybe we'll just learn to talk to each other. We can try that.

We begin tonight in the whip and the fires that continue to rage in Colorado. Charles Molineaux is there for us, the headline please.

CHARLES MOLINEAUX, CNN CORRESPONDENT: Well, Aaron, the Hayman fire is already the biggest forest fire in Colorado history and now the Forest Service is contemplating a scenario under which it could double in size. Fortunately, reinforcements are on the way that would more than quadruple the number of firefighters working on it. BROWN: Charles, back to you quickly. More reminders from the president that the war on terror is still being fought, our Senior White House Correspondent John King on that tonight, John a headline from you please.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Aaron, the president said bluntly today that America is still under attack, the killers still lurking. The White House scornfully rejected the notion, now heard increasingly on Capitol Hill, that the president is saying these alarming things to try to get his way with Congress on things like the new Department of Homeland Security.

BROWN: John, thank you. And also on the table tonight, whatever happened to Enron outrage and all the legislation, all the reform that Congress was going to pass? Allan Chernoff covering that for us, Allan a headline please.

ALLAN CHERNOFF, CNN CORRESPONDENT: Well, the aftershocks of Enron continue rocking the nation from Wall Street to Main Street. What's Congress doing? They're still thinking about it.

BROWN: Allan, thank you, back with all of you shortly. Quite a bit on the priest abuse scandal tonight as American Roman Catholic bishops begin converging on Dallas for their meeting, and what a meeting that will be. We'll talk with a victim who was also a priest and we'll take a look at a sweeping and disturbing study put together by the Dallas Morning News, a chronicle of the crisis in the Catholic Church.

And in Segment 7 tonight, another story about a kidnapping, families caught in the crosshairs of an extremely delicate, diplomatic relationship between the United States and Saudi Arabia.

We have a wide ranging hour ahead. We begin out West. Last night on the program, Joe Allbaugh who deals with disasters for a living, called the fires in Colorado the worst he's ever seen.

If things keep up in the way they've been going, they could get twice as bad, maybe more, in the days ahead, and Mr. Allbaugh's agency, FEMA, will have an awful lot of work to do. At least 90,000 acres are now burning just south of Denver, Colorado. Again, here's CNN's Charles Molineaux.

(BEGIN VIDEOTAPE)

MOLINEAUX (voice over): The newest scenario in which the Hayman fire bursts out to burn an area full of thousands of homes is based on the idea that sooner or later, the winds will pick up again, but new help is on the way with 1,800 fresh firefighters called in from around the country. Some of them are just in from working on other major fires, including the Coal Seam fire that destroyed dozens of homes in Glenwood Springs, Colorado.

CLEVE WILLIAMS, COLORADO FIREFIGHTER: We're just ready to go anywhere. The fire over there is safe around the houses right now. It's up in the wilderness and can't run our trucks in the wilderness, so we're just going to try and save as much as we can and do what we can to help the people around here.

ANNETTE O'DOAN, SOUTH DAKOTA FIREFIGHTER: We were trying pretty hard to get here. We were just on an incident south of here and we weren't ready to go home, you know. Everyone wants to stay out and help people out. So, we were hoping we'd come here and we were real excited when we heard we were coming here.

UNIDENTIFIED MALE: Trumbull Fire Department, this is Don.

MOLINEAUX: Some of the firefighters on the case are standing their ground to save their own homes. If the Hayman fire starts raging north again, the tiny town of Trumbull is right in the middle of its path.

UNIDENTIFIED MALE: The 126 and maybe, I'm going to say 20 minutes maybe. So your place is still fine.

MOLINEAUX: The town has been evacuated, but its volunteer firefighters are staying on in a last ditch struggle to protect their neighbors' homes and their own.

UNIDENTIFIED MALE: I might not have a job after this is over with because everything's going to be burned down.

MOLINEAUX: The Forest Service says the arrival of the new reinforcements will make a new strategy possible, a shift from just getting people to safety and staying out of the way to actually stopping the fire, a huge job for even 2,000 troops. The Hayman fire is still only five percent contained.

(END VIDEOTAPE)

MOLINEAUX (on camera): And so they'll watch how the weather continues, this time as an opportunity to be exploited. As the hundreds of new firefighters come on the job, the idea will be to be as - make as much progress as possible containing this fire while the benign weather lasts. Aaron.

BROWN: So they will start now by putting people on the ground, trying to do a line basically, create a line around the fire that it can't jump over. Is that the plan?

MOLINEAUX: That is basically the plan where it is evident that the wind is not going to be carrying the fire right into them. What the mission of these firefighters will be is to, ahead of the fire in appropriate places, maybe a road could be a nice firebreak. If there isn't one, create one, create one taller than the tallest thing growing on the side that might burn, so we're not going to have pieces of fuel falling over their firebreaks and sending the fire forward.

It's a huge job considering this fire is already around 90,000 acres. Draw a circle and try to figure out the radius of something like that. That is how big of a containment line ideally you would be trying to create. They're not going to do anything like that, but containing the fire will be something along that scale. BROWN: You got a lot of people involved. This is very risky work. To this point, have there been any serious injuries on the fire lines?

MOLINEAUX: Not actually serious injuries on the fire lines in this fire, which is something for which of course the Forestry Service is very grateful. They have been taking it very carefully. The wind has been extremely unpredictable, very scary, and the fact is that they now understand how dangerous this can be.

In some cases, the fire is moving in very steep terrain, not where you want to be trying to fight this on the ground. They have been keeping their distance and trying to fight it from the air with some degree of success, but really what they're saying is that this fire is no way under control and they've got a lot of work yet to do and the prospect of this nightmare scenario, a 200-acre fire - a 200,000-acre fire endures.

BROWN: Charles, thank you, Charles Molineaux around Denver tonight on the fires. To Salt Lake City out West next, where police tonight are looking for two missing persons. One is young Elizabeth Smart. The other is a man named Bret Michael Edmunds, who police think may know something about how Elizabeth Smart came to vanish a week ago. They are not calling him a suspect. That has legal implications. But they make it very clear they want to talk with this man and talk with him now.

(BEGIN VIDEOTAPE)

BROWN (voice over): While refusing to describe the man they are looking for as a suspect, it was nevertheless the first real break in the kidnapping.

SERGEANT FRED LOUIS, SALT LAKE CITY POLICE: But he does also, like I said, he does have outstanding warrants, so we want to talk to him to see if he has any information. He was in the avenues area.

BROWN: Authorities describe Bret Michael Edmunds as a transient, but they also describe him as someone who is dangerous.

TOM SMART, ELIZABETH'S FATHER: I'll look at him but I didn't recognize his name.

BROWN: A milkman, it turned out, said he spotted a car in the street where the Smart family lives, very early ten days ago, two days before the kidnapping. He gave police only a partial license plate, and today that partial plate came back with a name.

LOUIS: If he's in the area, he may have seen something, so we want to talk to him and find out if that's a possibility. And besides having outstanding warrants, we want to talk to Mr. Edmunds.

BROWN: Police in Salt Lake City continue to say they are optimistic. They have interviewed hundreds of people, received thousands of leads and been in charge of hundreds and hundreds of volunteer searchers. Today's announcement to be on the lookout for Bret Edmunds, was their first concrete step forward.

(END VIDEOTAPE)

BROWN (on camera): And again, we emphasis at least at this point, Salt Lake Police are not calling him a suspect in Elizabeth Smart's disappearance.

On to Dallas next, where Catholic bishops are arriving for their twice-a-year meeting, the last one in the fall focused on the church's role after the events of September 11th. Whatever the bishops thought they'd be doing this summer at their meeting, it all changed after day after day of resignations, accusations and expensive settlements made it clear there is an enormous crisis in the Catholic Church and the plan to end that crisis is the issue in Dallas.

Already facing some protesters, who think the plan floated last week does not go far enough, and it gives the diocese too much leeway to give abusive priests another chance. At least one church leader agrees with that assessment, Cardinal Roger Mahony of Los Angeles. He spoke with CNN's Ed Lavandera earlier today.

(BEGIN VIDEO CLIP)

CARDINAL ROGER MAHONY, LOS ANGELES: I'm not happy with it because it allows for exceptions. There can't be any exceptions. This has got to be zero tolerance, past, present and future. It's the only way we can really guarantee our people as humanly as possible as we can that this is a terrible thing. The past, the anguish we have for the victims and all who have suffered, we simply can't allow any exceptions.

(END VIDEO CLIP)

BROWN: Our next guest agrees that the policy has to be stronger, tougher. He always wanted to be a priest and then was abused by two of them as a teenager. We told his story several weeks back on the program. He brought the two threads of his life together, becoming a priest and an advocate for victims. Father Gary Hayes joins us now from Dallas, where he will try and do some business at the bishops' meeting. It's nice to see you, sir.

FATHER GARY HAYES, DIRECTOR: Thank you, Aaron, nice to be here.

BROWN: Tell me what about the policy is not strong enough.

HAYES: Oh, gosh. Accountability for the bishops is not strong enough. Releasing victims from gag orders past and future is not strong enough. The zero tolerance policy, you know, allowing exceptions is not strong enough. So I think those three things.

BROWN: Without going through every detail of what the proposal that was laid out last week, it basically says that in most cases one strike and you're out, in most cases. Are you arguing that it should be in all cases?

HAYES: I think it's the only option that is reasonably left to the bishops. Yes, so I'm - yes, so there should be no exceptions.

BROWN: So where in all of this is there room if any for forgiveness and redemption?

HAYES: Aaron, in our church, forgiveness and redemption come with repentance and atonement and I think that's one of the things that's been lacking for me in the bishops' apologies. It's OK to apologize, but to be repentant is a very different thing. That's the real emotion and when you're really repentant, then forgiveness can kick in and redemption can begin but not until then.

BROWN: And you think that their apologies have been less than sincere or just too late?

HAYES: All of the above. I think some bishops have made some sincere apologies. Today in the meetings with the bishops and with the cardinals, they offered very heartfelt, sincere apologies to all of us and I believe they meant them.

But you know, my father used to say, sorry doesn't cut it kid, and it's actions that count and I think that's what we expressed to them. We were grateful that they expressed their apologies, but we also challenged them to put that apology into action.

BROWN: I want to just look at the other side of this for a second because I think some people have grown concerned --

HAYES: Sure.

BROWN: -- that there is a danger now that priests, priests like yourself, I mean your colleagues are now presumed guilty rather than innocent.

HAYES: Well that could be. I got heckled from some of the protesters outside of the Fairmont this evening when they saw me come out with my collar, so it's possible that we're all going to get painted with the same brush. I don't know how to prevent that.

BROWN: Nor do I have a clue how to present that and another aspect of this, I believe is the archbishop in Kentucky, where you do your work, resigned yesterday. There have been three accusations against him. He denies every one of them but he says to stay on will bring trouble to the church and he doesn't want to do that. If he's being - he or any priest is being wrongly accused, how these days do they defend themselves?

HAYES: If he or any priest is being wrongly accused from what I understand talking to, you know, like prosecutors or investigators, that that should be routinely fairly easy to identify. Any priest who is unjustly accused, gosh he'd certainly have every right that is guaranteed to him, you know, even under our Constitution. There should be some place where a priest, unjustly accused, can vindicate themselves and have their name restored.

BROWN: One quick question because we're pretty much out of time. Do you expect to have in any sense a seat at the table for these meetings?

HAYES: Well, we had seats at the table this afternoon with the bishop's committee and with four cardinals. Both groups committed themselves, as we did, to ongoing regular conversations to continue after this Dallas meeting so that we will be able to give even more input to the bishops.

BROWN: Father Hayes, it's good to talk to you again, thank you very much, Father Gary Hayes who's down in Dallas.

HAYES: Thank you.

BROWN: Where the bishops of the Catholic Church are meeting beginning tomorrow on this most difficult issue. When we come back, the cover-up in the church, it turns out to be much larger than many people imagined, just how large was made clear by an interesting piece of reporting by the Dallas Morning News. We'll talk more about that as NEWSNIGHT continues here on CNN.

(COMMERCIAL BREAK)

BROWN: Back now to the bishops' meeting in Dallas. In case the leadership of the church needed some convincing of the problems of priest abuse, past and present, they need look no further than their local paper.

The Dallas Morning News has compiled a devastating look at the problem. The paper collected information nationwide and found that about two-thirds of the top leaders of the church had protected, in one way or another, priests over many decades and perhaps most startling, given the events of the last few months that the practice continues today in many cases. And perhaps the most stunning thing about all of this is the technology, the database they put together.

It is a massive catalogue of a cover-up region-by-region. It allows people anywhere in the country with access to a computer to check on their current diocese and to check on the one they left years ago. One of our staffers found the bishop who gave her her First Communion was one of those involved in protecting priests. Joining us now Pam Maples, who's the Special Projects Editor of the Dallas Morning News and this certainly is a special project, nice to see you.

PAM MAPLES, SPECIAL PROJECTS EDITOR, DALLAS MORNING NEWS: Thanks, Aaron.

BROWN: Tell me the goal. When you sat down and came up with this idea, what was it you were trying to do?

MAPLES: We had one question we thought we wanted to answer going into the bishops' meeting, which was to look at all of these bishops and find out what they would bring to the table at this meeting, what sort of background they might have on this issue.

BROWN: And did you have a sense of where it would end up or were you generally open-minded about how it would end up? MAPLES: I think we were really open-minded. We thought that nobody had really stepped back and tried to do a broad look at it. There were lots of stories and have been over the years in parts of the country, but we just went into it, let's just see what we find.

BROWN: And just to be clear on this for me, this really is not a survey of every priest who was ever involved in an abuse case, as such. You were more focused on the leadership and how leadership handled these issues.

MAPLES: Right, exactly.

BROWN: And you talk about protecting priests who are accused of abuse. Can you tell me what that means?

MAPLES: Well, actually I think the term that we used the most was that they allowed them to remain in the ministry or allowed them to work, and that ranges from they kept them on the job when they had a credible abuse allegation against them, sometimes even to the point of having been put on probation, sent to jail or sent to treatment to actually moving priests and not disclosing to their future parish or diocese their history, a whole range of conduct.

BROWN: When you look at this, and I'm not sure that the reporting here got to this point, when you look at this, do you conclude that there was a policy in the American Catholic Church, as opposed to individual bishops and archbishops making individual decisions, that there was a policy to handle these cases in a certain, and now it seems, troubling way?

MAPLES: You know, Aaron, I don't think that we can say that. I don't think that we can establish that. I tend to think that it's just - it may have just been a way of conducting the church's work and not any sort of official - we certainly can't say that.

BROWN: And it may be, and I don't know this, it may be that they are all, they were all faced with the same set of problems. It's hard to find priests. They were trying to protect the church from scandal. They all have the same issues in front of them and they reacted in the way that people often do in those situations and they reacted similarly. Did you find any heroes in your reporting?

MAPLES: Well, we found certainly that a lot of bishops, particularly from the first of the year in the last few months, have been very diligent about going back and we mentioned in there and going through all of their files and looking for things that a lot of them say they didn't know before, because it may have predated their tenure in some cases, and have really stepped back and tried to look into it.

BROWN: Yes. Just a quick question on reaction, generally what kind of reaction is the piece getting and do you have any idea how many people have gone to the website and done some business there?

MAPLES: You know, I don't know the latest number. It was running quite high this afternoon and I know that our internal system was very slow, to relate to your problem today.

BROWN: Yes.

MAPLES: But we've had a lot of e-mails, a lot of phone calls from people across the country. There are some Catholics who are very upset with us. There are a lot of people who are not affiliated with any victim group that I can tell who are just individuals, a lot of them are not wanting us to even look in to their case. They're just sending us e-mail saying thank you.

BROWN: It's just a terrific piece of journalism and an interesting merging of technology and the work we do. Congratulations to you and your colleagues down there and good luck this week. It's going to be an interesting week down in Dallas.

MAPLES: Thank you.

BROWN: Thank you, Pam, very much. Coming up on NEWSNIGHT: Andersen, Enron and all the fallout that hasn't fallen; but first, an update on the crash of a military transport plane in Afghanistan. The war is still on, that and much more as NEWSNIGHT continues from New York on CNN.

(COMMERCIAL BREAK)

BROWN: A reminder today that there is still a war of sorts going on in Afghanistan and it is, we are sad to say, the worst kind of reminder. An MC-130 aircraft crashed on takeoff, ten Americans onboard, three people known to have died, seven others injured but they are alive. Not yet clear what caused the crash and the army has yet to release the names of the victims or their hometowns.

Last week, as being the last week, a fascinating example of the ability of the White House, any White House to control the agenda; since the president's speech on the Department of Homeland Security, that issue and the president's campaign for that issue has been the news in Washington.

Add to that the extraordinary detention of an American citizen in a military brig, an example the government says of the ongoing danger of terrorism, and the better cooperation between law enforcement agencies, and the debate has shifted away from the foul-ups before September 11th.

We are not suggesting that was the plan, OK, but you can't deny it is the reality. Here again, our Senior White House Correspondent John King.

(BEGIN VIDEOTAPE)

KING (voice over): Homeland security yet again the president's focus, here signing a new law providing more than $4 billion to better prepare for the threat of a biological or chemical attack.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Terrorist groups seek biological weapons. We know some rogue states already have them. It's important that we confront these real threats to our country and prepare for future emergencies.

KING: Yet another warning at the first meeting of the president's new Homeland Security Advisory Council, a group that includes a governor, a mayor and two former CIA directors.

BUSH: They're still out there. These people, you know, these killers are still lurking around.

KING: Aides say the president is telling it like it is and that the tough talk about the continued terrorist threat is necessary to keep the American people on alert and not part of a White House political strategy to sell policy initiatives like the proposed new Department of Homeland Security.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: These very few people who want to make such outlandish political accusation represent the most cynical among the most partisan and they're not to be taken seriously.

KING: The administration's lobbying for the new department intensified. Key congressional committee chairmen were called to a meeting with the president and Homeland Security Director Tom Ridge went to Capitol Hill.

While defending the president's warnings, the White House did tell the Justice Department Monday's announcement of the arrest of so- called dirty bomb suspect Abdullah Al Muhajir came across as too alarming. Attorney General John Ashcroft wanted to break the news himself but was traveling in Russia. Some senior White House aides considered this televised statement from a dark studio too ominous.

JOHN ASHCROFT, ATTORNEY GENERAL: We have captured a known terrorist.

KING: And say it would have been best to let top deputies back in Washington handle the announcement.

(END VIDEOTAPE)

KING (on camera): But these same senior aides stress the president has full confidence in the attorney general and even as some tough words exchanged between the White House and the Justice Department, most here say this is just the latest example of how difficult it is for this administration to decide just what to say publicly about intelligence data and what it knows and believes about the continuing terrorist threat -- Aaron.

BROWN: All right, one question on this, and on to another thing. Is the White House upset at simply the form of the attorney general's statement? Or are they upset at the facts that he presented? Because as I listen to the Deputy Defense Secretary Wolfowitz the next day, it did seem to me they were talking about something far less organized, far less along than what the attorney general suggested in his statement.

KING: Certainly if you read the attorney general's statement, it would suggest that he thought this was a very developed plot. Although he did say, if you read the whole statement, that it was in its early stages, in its initial stages. But he used the word "radiological" so many times, that people here at the White House thought it was a little overalarming.

But what they think most of all is that had the attorney general done it like the deputies did back here in Washington, and then taken a couple of questions, it would have much less of the air of oh, my God, excuse the use of the language, but the attorney general in a dark studio from Moscow all of sudden out of the blue...

BROWN: Yes.

KING: ...announcing this -- had this ominous feeling that the White House thinks was exaggerated.

BROWN: OK, now let me throw you one. On the way up, I saw that one of the wires is running a story that the White House is, tomorrow, I gather, going to formally announce that it will ease the rules that govern air pollution control for utilities that upgrade. I know there's shorter way to say that, but tell me what's going on?

KING: I wish there was a shorter way to say that. This is one of those debates that's highly technical, and has one of those only in Washington names about it, "new source review." What it means is this. The Clinton administration was very aggressive in interpreting a rule that says if you have a cold fired power plant, and if you make any changes to it, that you must then install strong anti-pollution devices.

The industry says the Clinton administration went too far. It has appealed to Bush administration for help. And we are told by sources the EPA administrator Christie Whitman tomorrow will say she is significantly lowering the standard.

So coal industries can do some refitting, some technological improvements without having to install these anti-pollution devices. The industry says you will dramatically increase electricity production. Environmentalists say you will dramatically increase pollution. They say this administration is far too cozy with the industry. By this time tomorrow night, the environmental policy to this administration will be back in the headlines.

BROWN: And I suspect we'll be back here talking about it. John, nice to see you, our senior White House correspondent, John King.

One more quick note on Mr. Padilla. In federal court today in Manhattan, they unsealed a petition that his lawyer had filed yesterday. In it, she says that the evidence against her client and this dirty bomb plot is weak, that his civil rights have been violated, and he ought to be set free. At a brief hearing today, the judge gave the military until the 21st of the month to respond.

One other item, more in the way of fleshing out the picture of Jose Padilla than anything else. This is courtroom video, Padilla on the right, taken in a south Florida courtroom in 1991. Padilla there for a bond hearing, but that does give you an idea what the young man looks like. He is in a military brig near Charleston, South Carolina tonight, while the legal battle over him goes on.

Still ahead on the program, a little bit later, "Segment 7," mothers who say their children have been kidnapped by Saudi Arabian fathers. What recourse do they have? Not much, it turns out. And up next, the promises of reform after Enron, unkept by Congress. A story about money, power and politics. We'll report the story and talk with columnist Arianna Huffington as well when NEWSNIGHT continues.

(COMMERCIAL BREAK)

BROWN: Jurors in the Andersen accounting trial said today they are deadlocked. They can't decide whether Andersen obstructed justice when it shredded documents related to its client, Enron. Jurors have been working for a week on this, a long time to deliberate. The judge told them to get back to work.

You remember Enron, don't you? You remember it collapsed. You probably remember the beating employees took because they lost their pensions, and were barred from selling the Enron shares in their 401(K), while executives could do that. You probably also remember your elected representatives saying they were going to make sure that nothing like this ever happened again, that employees would never get the short end like the 13,000 Enron employees did. We had them on the program. They had some really nifty ideas. Not a single one of them is law tonight.

The story from CNN's Financial News correspondent, Allen Chernoff.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): Passions were inflamed on Capitol Hill as Enron collapsed, its employees and investors losing billions of dollars. Congress vowed to clean it up.

UNIDENTIFIED MALE: What we have found is nothing short of appalling.

UNIDENTIFIED MALE: This committee and this congress has a duty to find out what happened, and to take all necessary action to correct the situation,

CHERNOFF: But more than six months after Enron filed for bankruptcy, Congress has failed to pass any legislation to prevent a similar corporate scandal.

UNIDENTIFIED MALE: This issue, more than anything else, is an inside Washington, D.C. issue. It causes people in Main Street to sort of glaze over because it's so complex.

CHERNOFF: The story of Congress' inaction is a classic tale of politics involving partisan bickering, the influence of lobbyists, and the importance of having powerful friends. Hearings were plentiful, dozens held by 11 different committees. While congressmen publicly grilled accountants, privately, it was accounting lobbyists who held sway.

UNIDENTIFIED MALE: There might be something passed by the Senate. It might go to a conference committee, but I think it's dead with respect to a accounting reforms and pension reforms.

CHERNOFF: It's not dead yet, but it looks like there's a long fight ahead before there are new rules that could have protected Enron employees, requirements that 401(K) retirement plans be diversified, that employees receive advance notice of blackout periods where they can't sell stock, and that executives be limited in how they control their pension investments. Accountants have already blocked tough legislation.

SEN PHIL GRAMM (R), TEXAS: I don't think congressmen ought to be voting on accounting standards. Most congressmen, quite frankly, don't know a debit from a credit.

CHERNOFF: The Senate is still trying to get bills out of committee. Banking committee chair Paul Sarbanes, a methodical legislator granted Senator Phil Gramm's request for a delay, and has confronted a mountain of 123 amendments proposed to his bill. 77 of the amendments coming from Senators Mike Enzi of Wyoming and Gramm of Texas. Numbers two and four on the list of top recipients of accounting industry campaign contributions.

(END VIDEOTAPE)

CHERNOFF: While nothing has come out of Congress, there have been changes since Enron's collapse. New York state's attorney general forced Merrill Lynch to change the way it compensates analysts. The New York Stock Exchange has proposed new rules that would make corporate boards more accountable to shareholders and more independent. And the Securities and Exchange Commission has stepped up its investigations of accounting scandals.

Aaron?

BROWN: And we'll watch. Thank you, Allen, very much.

Back in January, "The New York Times" columnist Paul Krugman predicted that Enron would be remembered as a greater turning point than the 11 of September. Seemed a bit far-fetched then. More so now, since real Enron reform, so far at least, has been a no-show on Capitol Hill.

We're joined us now from Los Angeles tonight to talk about -- more about "Why the Bang Turned into a Whimper," Arianna Huffington. That was the subtitle of her latest syndicated column.

It's always nice to see you. Thank you.

ARIANNA HUFFINGTON, COLUMNIST: Nice to see you.

BROWN: Well, let me guess here. You're being pretty cynical about this. Are you saying that the business lobby bought its way out of this deal? HUFFINGTON: Well, that's how it looks. And if we look at the numbers, the accounting lobby just in this congressional cycle, has given over $5 million in donations, not to mention the amount that goes directly into lobbying. And the result has been, as we just heard, that all reform legislation is stalled. We have Paul Sarbane's bill stalled in the Senate. We have another bill in the Senate by Senators Max Baucus, and Senator Grassley that was intended to close the loopholes in terms of tax offshore havens. And that's also stalled.

And the result is that even though we have 433 public companies that have declared bankruptcy, including of course the largest bankruptcy in American history, even though we have two million people out of work just in the last two years alone, and even though we have $4 trillion lost in market value on Wall Street...

BROWN: Mm-hmm.

HUFFINGTON: ...all those signs are not sufficient for our legislators to do something about it.

BROWN: Do you think that one of the theories here that opponents of this sort of legislation believe in is, if they waited out long enough, you know, there's always a prettier girl that comes by? There's going to be a sexier story, a more interesting story, and people will forget it?

HUFFINGTON: Absolutely. And that's actually happening. And in fact, Senator Corzine said as much. He said that only public outrage will lead to real reform on the Hill. And another event, he said, has to happen before public outrage is stoked again. But do we really need another event? On top of it, Aaron, we have these daily revelations of corruption.

We have Dennis Kozlowski, you know, the former head of Tyco International, who is now being charged for tax evasion on $13 million of paintings that he bought. But you know what? What he did in his personal life is very similar to what many CEOs were rewarded for in their professional lives. In fact, financial journalists are partly responsible for all these incredible articles lauding their practices, their aggressive accounting practice included.

BROWN: You know, this is a little off the point, but Allen and I, Chernoff, were talking about this last week. Do you think that there is within the American business community, a lessening of ethics, less ethical than it used to be?

HUFFINGTON: Well actually ironically, people who really care about the free-market, and who really care about the private enterprise system that Enron celebrated in "Atlas Shrugged" would like something to be done, because they know that an incredible price is being paid in public trust. But unfortunately, what is happening again is that the public interest is being thwarted by all these special interests, holding, swaying Washington.

In fact, Dennis Kozlowski gave a speech, a commencement speech in New Hampshire, just a few weeks before he was charged and indicted. And in that speech, he asked the students to look carefully before they make a decision, and not to take the easy road. Well, you're right. Most CEOs that we read about have been taking the easy road and being enriched in the process.

BROWN: Twenty seconds left. What are the chances are that you think the electorate will hold their representatives responsible for not passing reforms?

HUFFINGTON: The chances will be good only if certain of our political leaders, at least one or two like congressman Ed Markey, for example, who's being great on the subject, use the megaphone they have to keep talking and talking, and disclosing things again and again until the public outrage is stoked again.

BROWN: Ms. Huffington, it is always nice to see you.

HUFFINGTON: Thank you.

BROWN: Thank you, Arianna Huffington tonight on Enron. Whatever happened?

Ahead on NEWSNIGHT, wrenching testimony from American mothers who say their children were kidnapped by their Saudi Arabian fathers, taken to Saudi Arabia. And they stay there. Nothing you can do about it.

Up next, the case of the environmentalists, the bomb, the police, and the multimillion dollar lawsuit. This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: A dozen years ago, two Californian environmentalists plan to spend their summer protecting what they believe -- protesting what they believe was the unwarranted logging of the state's ancient Redwoods. On their way to tell others how do it, their car blew up. And the authorities, police in Oakland, excuse me, and the FBI, claimed that the pair were, in effect, environmental terrorists, that they were the bombers, and that one of their bombs blew up in their car. In short order, the police admitted they were wrong. The two people in the car sued. It has finally come to a verdict.

Here's CNN's Rusty Dornin.

(BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): Environmental radicals of the '80s, Earthfirst members spiked trees to blunt chainsaws, and toppled transmission towers. All in the name of saving trees and the environment.

DARRYL CHERNEY, EARTHFIRST ACTIVIST: Earthfirst used, as shock value, sabotage in defense of the environment could be justifiable, but never the use of explosives.

DORNIN: But in 1990, when explosives went off in the car, Earthfirst organizers Darryl Cherney and Judy Bari were driving down an Oakland street, police and FBI suspected the victims were actually the suspects.

MIKE SIMS, LT., OAKLAND POLICE: We don't have enough information at this time to determine whether it was a bomb being carried by them, or one that was planted in the car.

DORNIN: Twelve years later, the car sits in this garage in Oakland, an eerie reminder of that day.

CHERNEY: There was no warning. One minute, Judi Bari and I are talking about how fast the lead car in front of us is driving, the one we're following. And the next minute, reality is altered forever. You know, my head's ringing, the car's grinding, I have no idea what's going on. My first thought was that I was dead.

DORNIN: The activists were arrested days after the bombing. Judi Bari was still in the hospital.

JUDY BARI, EARTHFIRST ACTIVIST: I was terrified, not just because of the bombing. I was equally terrified that I would be framed for this bombing, and spend my children's childhood in prison.

DORNIN: The charges were soon dropped when police and FBI determined Bari and Cherney didn't plant the bomb. Bari and Cherney claimed the investigators never looked for who did do it. So they sued the FBI and Oakland police for violating their constitutional rights. After 12 years of legal wrangling, this week, a jury awarded $4.4 million to the activists. Attorneys for the FBI have refused to comment. Judi Bari died of cancer in 1997.

Rusty Dornin, CNN, San Francisco.

(END VIDEOTAPE)

BROWN: And up next from us, mothers desperately trying to get their children back home. We'll be right back.

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BROWN: Finally from us tonight, children held against their will. We began the program with a story about kidnapping, and we close with another. This one's been around for a long time. It is complicated and always controversial, because it involves one of the most important allies the United States has, Saudi Arabia. Saudi men, estranged from their American wives, kidnap their children and take them back to Saudi Arabia.

A violation of U.S. law, but the U.S. government says it's helpless to do anything for the 90 or so American families living through this particular form of hell. And the Saudi government won't help, nor would they talk to CNN about the problem, which in the Saudi view may not be a problem at all. They have different standards where women are concerned, our Saudi friends do. And so this is how it's sometimes plays out.

Here's CNN's Kathleen Koch.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Dria Davis considers herself lucky to be alive. She says she was kidnapped from Florida and beaten and held in Saudi Arabia for two years by her Saudi father.

DRIA DAVIS, HELD IN SAUDI ARABIA: This man I knew as my father began beating me every time I begged to go home or begged to speak to my mother.

KOCH: Her parents were divorced. A U.S. court gave her mother custody. Miriam-Hernandez Davis says she helped arrange her daughter's escape, after finally being able to visit her in Saudi Arabia.

MIRIAM HERNANDEZ-DAVIS: All I could say, and had time to say was to be patient and strong. The same way that I sneaked in to see you, and let you know that I did not abandon you or given up, I'll find a way to get you out. I'm not going to leave you here. I promise.

PAT ROUSH, MOTHER OF KIDNAP VICTIM: I've made this a mission impossible assignment that I refuse to give up on.

KOCH: Pat Roush says in 1986, her two daughters were kidnapped from Chicago by their Saudi father and taken to Saudi Arabia. She is still fighting for their return.

ROUSH: My daughters are just gone, and I'm supposed to just go on with my life. And my daughters are just treated as Saudi citizens, Saudi women who have no rights.

KOCH: Roush had hoped President Bush could help.

(on camera): He met with the Saudi prince. Have you appealed to the president himself? Can he do anything?

ROUSH: Oh, yes. I've appealed to the president. I've lobbied four State Departments. I've hand-delivered letters to three presidents of the United States.

KOCH (voice-oever): All the women say they've gotten the same response from U.S. embassy officials in Saudi Arabia.

M. DAVIS: We're visitors here, we can't help you.

ROUSH: They have told me that we cannot tell the Saudi government what to do.

KOCH: The State Department says the problem is Saudi law. Women or children need a father's, husband's or brother's permission to travel anywhere, especially out of the country.

RYAN CROCKER, DEPUTY ASSISTANT SECRETARY OF STATE: We have been up against that challenge throughout. And as the very sad record shows, it has not been something we have been able to move very far on.

KOCH: It is cold comfort to the families of the estimated 92 Americans being held in Saudi Arabia.

ROUSH: I have tremendous hope. I'm a devout Catholic. And I know that the Lord will bring my daughters home.

KOCH: Kathleen Koch, CNN, Washington.

(END VIDEOTAPE)

BROWN: That's the report for tonight. We'll fix that e-mail thing eventually. And we hope to be back here tomorrow at 10:00 p.m. We will. Good-night for all of us at NEWSNIGHT.

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