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CNN Newsnight Aaron Brown

White House Criticizes Israeli Attack in Gaza; Dow Staggers to Close; "Turner Diaries" Author Dies

Aired July 23, 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. Here we go.

The Middle East again tonight in this space. And, of course, the notes from many of you that always follow. We said last night, and we believe still, the Israeli government would not launch an assassination attack like the one last night if it believed there was a risk that hundreds of civilians would die. We received scores of notes on that line alone. My mind, despite your best efforts, remains unchanged.

But the e-mail seemed equally divided, as we thought it might be. On the other side, some people were outraged at a question asked of a guest, Daniel Pipes, who essentially blamed the civilian deaths on the Hamas target. He was hiding among civilians, he said. I noted in the question that he seemed to be visiting his wife and children. Some of that mail was especially hurtful, and that happens in this line of work.

What is most troubling from where we sit tonight is the Israeli official reaction. Had we known civilians were in danger, we might have called off the attack. Might have? My goodness. And the Israeli prime minister, no stranger to provocation, while expressing regret, called the mission a great success. Surely, he understands how offensive that sounds. No matter how evil was the Hamas target, and he was a very bad guy, the deaths of these nine children and the other civilians, the injuries to more than 150 others, is unacceptable for a country that wants to own the moral high ground, and has, in fact, owned the moral high ground for 50 years.

If we had been writing the speech for Mr. Sharon, our language would have been simpler. We would have had him say this: The Hamas target was a killer, and he planned to kill again and again. But our attempt to stop him was a terrible mistake. For, as bad as he was, we needed a better and more careful plan, least we look as callous and depraved as those who kill our children. He didn't say that. We wish he had.

We begin "The Whip" in the Middle East tonight. Mike Hanna is in Jerusalem with the reaction and more to last night's strike in Gaza and all that has followed. Mike, the headline from you tonight please. MIKE HANNA, CNN JERUSALEM BUREAU CHIEF: Palestinians continued to rage in the wake of an Israeli military strike into a densely populated Gaza City neighborhood. And Israel braces itself for possible retaliation -- Aaron.

BROWN: Mike, thank you.

Tricky one here for the White House, the White House reaction. Suzanne Malveaux covering for us tonight. Suzanne, a headline from you.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, in a rare move, the administration joined the rest of the world leaders in condemning Israel's attack. This attack seen as really a setback to the Middle East peace process, and now no one knows how to move it forward.

BROWN: Suzanne, thank you.

Off the Middle East now, a story of a young girl abducted. This one though a happy ending for a change. Jason Carroll in Philadelphia reporting for us. Jason, a headline from you.

JASON CARROLL, CNN CORRESPONDENT: Aaron, a family here in Philadelphia had been praying for the safe return of a little girl. Now, their prayers have been answered. Erica Pratt, 7 years old, was abducted on Monday night. Her family received several calls for ransom. Tonight, she was found. She's in good condition. She's here at Children's Hospital. Now, the search is on for the two men who abducted her -- Aaron.

BROWN: Jason, thank you. Back to you in a bit.

Now, to the death of a white supremacist, one who influenced Tim McVeigh. Kathy Slobogin has been working that. So, Kathy, the headline from you.

KATHY SLOBOGIN, CNN CORRESPONDENT: The man who wrote the book said to be the blueprint for the Oklahoma city bombing died today of cancer. We'll tell you why there aren't too many tears being shed -- Aaron.

BROWN: Kathy, thank you. Back with all of you shortly.

Also on the program tonight, quite a bit from the Middle East. Robin Wright is the chief diplomatic correspondent for the "L.A. Times" joins us.

Also, a truly frightening look at a firefight at an Israeli military outpost that was going on as we spoke to you last night.

Also tonight, Anne McDermott takes a looks at how one sleepy town is coping as it prepares to bury one of its children. Stanton, California, the home of Samantha Runnion.

And a look at Wall Street tonight. The best we can say is that today wasn't as bad as yesterday. We'll talk about what's caused the stocks to plummet and keep plummeting. Financial columnist Jim Glassman joins us.

And some businesses that may have a bright future even if the rest of corporate America looks a bit bleak tonight, businesses that want to help the war on terror if the price is right. All of that in the hour ahead.

We begin, though, with the fallout from the Israeli air strike. When we went on the air last night, it was still unclear if the Israelis had even gotten their man, only that more than a dozen others had died, and that many of the dead were children. Scores were injured in the attack.

Now that the target, a very rough character indeed, is dead, the Israeli government is claiming victory. But it's far from clear how many more of these victories like a country like Israel can take. Forget for just a moment just how angry people are on the Palestinian side. There is plenty of anger in Israel itself, public anger, the sort of thing that happens in a free society. One politician, the leader of the Meretz Party, calling it a form of terrorism. We begin tonight with CNN's Mike Hanna.

(BEGIN VIDEOTAPE)

HANNA (voice-over): Volleys of gunfire ring out in the streets of Gaza City, a gesture of defiance and also a threat. Being buried in the afternoon, more than 10 people. Among them, a number of children, one a baby of less than three months.

(on camera): The mood of this crowd is grim. There is deep, deep anger, and the word on everyone's lips: revenge.

(voice-over): Crowds gathered at the scene of the Israeli attack throughout the day. This man, who was one of the first on the scene, says it was like a horror movie.

"I saw dead people on the ground," he says. "If you saw animals in this state, it would break your heart. So what about when it is human beings?" The stated target of the Israeli attack was the apartment of the leader of the military wing of the Hamas movement, Salah Shehadeh.

Israel contends Shehadeh was responsible for numerous terror attacks against Israeli civilians, and describes this operation as one of self-defense. Palestinian leaders insist that nothing can justify so many Palestinian civilians being killed and wounded. The Israeli prime minister expressed regret about the loss of civilian life, but describes the killing of the Hamas leader as a major success.

RA'ANAN GISSIN, ISRAELI GOVERNMENT SPOKESMAN: Salah Shehadeh has become a real ticking bomb. He would discharge suicide bombing after suicide bombing. In the past two years, he is responsible for the death and injury of over several hundred Israelis. And it left us with no other choice. HANNA: The question asked here: Why does this attack come at a time when Palestinian militants, including Hamas, were discussing a possible suspension of attacks against Israeli civilians.

YASSER ABED RABBO, PALESTINIAN MINISTER OF INFORMATION: We believe that such a crime will encourage once again the cycle of violence in the region. And we think that Sharon knows very well that there will be a response. And he wants the continuation of the bloodshed because he want to prevent any possibility of a new political process.

(END VIDEOTAPE)

HANNA (on camera): Within the last few hours, reports that at least three mortars, Palestinian mortars who have fired on the southern Israeli town of Stirot (ph). There were no injuries in that attack, but a hint, perhaps, of more direct Palestinian action to come -- Aaron.

BROWN: You can probably bet on that one way or another. Aside from the Israeli government and the official reaction, talk a bit about broader Israeli reaction, reaction in the media, reaction of opposition parties, reaction on the streets?

HANNA: Well, a bit difficult to gauge. I've been down here in Gaza City since the attack occurred some 24 hours ago. But the feeling here, obviously, intense anger. Among Israelis though, even being gleaned here, and this being watched with interest, is there is a great deal of debate. There has sparked off divisions within Israeli society. Many Israelis, of course, welcoming it. Not all Israelis welcoming the killing of a man that Israel says was somebody who planned so many suicide bomb attacks and mortar attacks on Israeli civilians.

At the same time, it's a method of the attack, it's the fact that there were so many civilians killed that has led a number of Israelis to question this type of action, and that is something that the Palestinians for themselves are looking at. They do not lump all Israelis together with the actions of any particular government. And, certainly, that's something, the smallest thing, perhaps, that may emerge out of this, that Palestinians watching Israelis debate this matter and waiting to see which way that debate goes, Aaron.

BROWN: Mike, thank you very much. Mike Hanna in Gaza City tonight covering the reaction to the bombing yesterday.

The White House --- it's a difficult one for the White House. The White House reacted to it. The words chosen, heavy-handed and not helpful to the peace process. Stronger words were being said across Europe and in the U.N. as well, and, as you would imagine, in the Arab world. For more on that, we go to the White House and Suzanne Malveaux. Good evening to you.

MALVEAUX: Good evening, Aaron. The words were very strong today from the White House, condemning the Israelis' attack. That message being delivered through diplomatic channels to Israel Prime Minister Ariel Sharon earlier today. Clearly, the White House is frustrated tonight in what is seen as the latest setback in the Middle East peace process.

(BEGIN VIDEOTAPE)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president has said repeatedly that Israel needs to be mindful of the consequences of its actions in order to preserve the path to peace in the Middle East. The president views this as a heavy-handed action that is not consistent with dedication to the peace in the Middle East.

(END VIDEO CLIP)

MALVEAUX: Now Bush critics say that this Israeli attack is really no different than the U.S. mission inside of Afghanistan going after al Qaeda or Taliban, when in situations that result in civilian casualties. But the White House dismissed that comparison, saying in those instances, in those attacks, there is no former knowledge that there are civilians where attacks have occurred.

It is clear, Aaron, that what is happening here is the White House is really engaged in a fine balancing act. On the one hand, they are going ahead and insisting that Israelis have the right to defend themselves against these suicide/homicide bombers.

On the other hand, they're acknowledging that Palestinians need some sort of relief, that seven out of eight of those cities in the West Bank have been reoccupied by Israeli forces for at least a month. They've been under 24 hour curfew, that there is some acknowledgement that life for the Palestinians is becoming unbearable as well -- Aaron.

BROWN: Two things -- did the president talk directly to the Israeli prime minister or was this a message sent to ambassador to ambassador, embassy to embassy?

MALVEAUX: Ambassador to ambassador, embassy to embassy. This is a very hot issue. At the time, they are waiting for an appropriate time for things to cool down. But this is not going to deter the talks that are going to continue. We understand that he's going to be meeting with King Abdullah of Jordan in a couple of weeks. They say there are going to be low level meetings between State officials as well as Arab allies.

This is going to continue behind the scenes. But again, they decided to put that off for a little bit and to let this settle down -- Aaron.

BROWN: Suzanne, thank you. Suzanne Malveaux at the White House tonight. We'll have more on this in a little bit. We'll talk with Robin Wright, the chief diplomatic correspondent for the Los Angeles Times.

One other piece, though, out of the Middle East tonight. We started reporting on this last night at this time. A firefight as we were on the air broke out at an Israeli military post at the southern tip of Gaza, almost the same time as last night's airstrike against the Hamas military leader was taking place.

Last night we spoke to CNN's John Vause just after the shooting stopped. It was quite a battle, it was pretty clear on the phone. tonight we have some pictures of the fight from the Israeli side of the line, and Vause's report.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): From behind heavily fortified positions, an Israeli soldier opens fire. The attack is coming from the north, the Gaza side of Rafah, heavily armed Palestinian militants, nobody here knows how many.

What was that, asked the Israeli commander. It was an anti-tank missile, exploding against the armor-plated wall, the blast shaking the building.

This is the Termit border outpost, one of the most dangerous Israeli military bases. It is a small, narrow strip of land between Egypt and Gaza, no more than 300 feet long, and routinely comes under heavy fire.

The commander here tells us to turn off the camera light. It's drawing fire from the Palestinians. As we switch to night scope, the soldiers watch the battle on thermal imaging cameras, watching the Palestinians throw hand grenades from the abandoned, derelict houses in Rafah.

(on camera): In the last 10 minutes or so at least dozen grenades have been thrown at this base, at least five anti-tank missiles. Two have hit the compound. They are now returning fire in the Rafah refugee camp. And they say it is like this almost every night.

(voice-over): But it soon becomes clear this is no ordinary night. The firefight continues for more than two hours. It is more intense, more fierce than it has been for months. This offensive came just hours after the Israeli air strikes in Gaza City. The commander here tells me the Palestinians he calls terrorists are more motivated than he has ever seen.

As the attacks continue, he issues an order: conserve ammunition. He's worried that the wall, already hit by two anti-tank missiles, may come down, allowing the base to be overrun. So the Israeli soldiers selectively increase their firepower, launching grenades. But, here, one jams.

Outside, reinforcements arrive. A tank and armored personnel carrier move into position, begin shelling the target across the border -- four, five blasts. The Palestinians withdraw. The battle winds down, and it is over for another night. John Vause, CNN, at the Termit border post.

AARON: Pretty fair piece of reporting. Anyone who doubts there is a war going on in Middle East -- NEWSNIGHT continues. We'll talk with Robin Wright, the chief diplomatic correspondent of the "Los Angeles Times" about events in the last 24 hours or so in the Middle East and more.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: We turn to the Middle East now. This question of targeting a single person, the wisdom of doing it, the risks and all other matters yesterday's attack creates. Robin Wright is the chief diplomatic correspondent for the "Los Angeles Times." We're always pleased to have her in the program, and we are tonight as well.

Timing is everything, they say, and the timing on this one is curious at least, right?

ROBIN WRIGHT, CHIEF DIPLOMATIC CORRESPONDENT, "LOS ANGELES TIMES": Absolutely. This comes as the Middle East is really at the cusp. President Bush a month ago put in place a new U.S. strategy, and things had actually begun to move very slowly, very small steps, but the fact is that the Israelis had sent two top officials to Washington for talks with Secretary of State Colin Powell and National Security Adviser Condoleezza Rice just yesterday to deal with what steps could they take to begin a partial withdrawal, kind of pilot project involving the Egyptians and the Jordanians coming in and retraining the new Palestinian security force.

And ideas have been on the table since the Arab foreign ministers from Saudi Arabia, Egypt and Jordan had been at the White House just last Thursday.

Things had actually begun to move. There were ideas out there on the table. What's unclear tonight is whether all of that's going to end up being scuttled because of new round of violence precipitated by this attack, or whether these small steps actually have a chance at any kind of movement.

BROWN: You know, I'm a little confused -- it's not unusual that I'm a little confused, but I'm a little confused on this here now -- was the -- does your instinct tell you the Israeli government was in some sense trying to scuttle this early move towards a peace talk or whatever we want to call it, a cessation of the violence that's been going on?

WRIGHT: I have absolutely no idea.

BROWN: OK.

WRIGHT: I'm not part of the Israeli government. Clearly that -- there will be many Palestinians who believe that, and that's really -- in this case perception is more important than reality, because that's what's going to motivate them to retaliate. And the initial indications are the kind of fury this has unleashed, particularly in Gaza, which has really been outside the kind of confrontation we've seen in the West Bank with -- between the Palestinians and Israelis since the Passover massacre in late march.

BROWN: Where does this put the administration now? WRIGHT: In a really awkward position. I think that it had hoped that they could set up some kind of test case to show that there were means of rebuilding confidence, that they could generate some movement -- President Bush's very risky new initiative to try to get the Palestinians to engage in major reforms, both in the political structure and in the security apparatus of the Palestinian Authority as the initial steps to political elections that would then rid the Palestinians of a leadership that has dominated the movement for the past three decades or more as steps along the way to a Palestinian state in three years.

A lot of that now is going to be on hold as we all wait to see how the Palestinian responded, and if this unleashes a new wave of attacks on Israeli soldiers or suicide bombings against civilians.

BROWN: And if it does, in a sense, where does this leave the Israeli government? Given they are already occupying much -- certainly the major portions of the West Bank, the important portions -- where do they go?

WRIGHT: Well, the problem is there aren't many places to go. We've gotten -- the Israelis can't reoccupy all of the West Bank and Gaza Strip without coming under incredible condemnation, including from the United States. That's just not an option.

But if there are a growing number of attacks, they will be, you know, under some pressure, domestically, to do something.

So everybody is in a bit of a pickle at the moment.

(CROSSTALK)

BROWN: You know -- I'm sorry. You know, we tend to get -- whenever there's an incident like this and we focus on it for a couple of days, and it seems huge to us. I'm curious if you have a feeling about how big a moment this is. What happened yesterday, obviously, was an awful thing -- I mean, a lot of innocent people who died.

Is this an important moment in the scheme of things?

WRIGHT: That's probably the most important question you've asked. And it may well be.

This may be to the Palestinian what the Passover Massacre was, the suicide bombing on the eve of Passover in late March that killed, you know, a couple of dozen people in Israel. This may be the equivalent.

I guess the real thing to look at is what kind of debate this generates in Israel about how deeply they want to be involved in clamping down on the Israelis -- I mean, clamping down on the Palestinians. What kind of price they're prepared to pay for their response, and what kind of pressure the government in Israel comes under.

It will be a very interesting, you know, week of debates internally.

BROWN: It will be. And Israel being the way it is, I expect those debates will be loud and well-covered.

Robin, it's always good to talk to you. Robin Wright of the "Los Angeles Times."

WRIGHT: Thank you Aaron.

BROWN: Thank you.

Coming up on NEWSNIGHT, the man who predicted a huge bull market -- and I mean huge. What is he thinking now?

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: We liked the line one financial writer used today to describe the markets: "Wall street staggered to the close."

It was another volatile day, extremely busy, and it ended badly again: the Dow Industrials falling 82 points to 7,702. The index is down a mere 840 points since last Thursday -- but hey, it's only money.

The Nasdaq fared even worse today, down more than 4 percent. As one investment manager put it, "sentiment is still bad; it's about as bad as it gets."

The book was called "Dow 36,000." And boy, back in the fall of 1999, it sure sounded possible. The Dow was around 11,000 at the time. Today "New York Times" columnist Paul Krugman summed it up pretty well: "It looks as if the authors of `Dow 36,000' may have had one digit too many in their title. Let's just hope it was an extra three, and not an extra zero."

We like to think that "Dow 36,000" is most definitely in the future. It might not be my future exactly; perhaps my daughter's, I can only hope.

Anyway, that Jim Glassman, she might say, he really called it right way back then when I was a kid, she would say.

Despite all the sniping about the book, Mr. Glassman is still very much respected for his thoughts on the market, and he joins us today. He writes a financial column for the "Washington Post," syndicated across the country, and he's in Washington.

And it is nice to see you.

JIM GLASSMAN, HOST, TECHCENTRALSTATION.COM: Nice to see you.

BROWN: I assume you're tired of all the "Dow 36,000" jokes. But all I can say is that there is no reward if there is no risk. GLASSMAN: I think that's true. And, in fact, that's what the stock market is all about. And I think it's very important for people to recognize. Kevin Hassett and I said that over and over in our book. We said there would be bear markets, and we said that when you buy stocks you take risks, but the rewards are big.

And don't forget, Aaron, the stock market today is still over 10 times what it was in 1982. So I think -- I don't know how old your daughter is, but I think we'll make it.

BROWN: We'll make it.

You said an interesting thing today, I think -- it was to me -- that all these scandals -- the Enrons, the WorldComs and the rest, really aren't what's spooking the market so much as the sense that government is panicking over the scandals of Enron and WorldCom.

GLASSMAN: I think so. It seems to me there are two periods here. You know, Enron broke November 8, 2001, and then there were a whole bunch of scandals after that: Adelphia, Global Crossing, Xerox, Tyco, and on and on.

And the last one, the last accounting scandal, was WorldCom, which was on June 25. If you look at that period, you find that over that seven-and-a-half-month period the Dow dropped 300 points, which is just 3 percent; it's not all that much.

In the last four weeks, the Dow has dropped 1,600 points. There has not been a serious accounting scandal in the last four weeks.

What's happened in the last four weeks? The politicians have gotten into the act. Now I'm not saying that there shouldn't be changes and regulations and toughening of laws, but I think that this has created lot of uncertainty in the minds of investors. And I think it's increased their panic. And it's not a healthy thing.

BROWN: Is it that they are concerned that government will mess it up worse, or are they looking at Washington saying, man, if those guys are spooked, I should be spooked too?

GLASSMAN: You know, it's both. And I think that the president made a good effort a few weeks ago to calm people down, but he had exactly the opposite effect.

I think it would have been much better for him to simply say, look, the economy is doing well. There are a bunch of crazy things going on in the stock market. It's driven by emotion. We are taking care of changing some regulations.

But I really think that his statement, and then the Democrats kind of upping the ante, really scare people. And I'm not very fond of this Sarbanes bill that zipped through the Senate 97 to nothing. In fact, I'm not fond of anything that passes in a week 97 to nothing.

And I think it's the uncertainty. I'm not saying that they're doing the wrong thing. But it's both the fact they're all excited about it, these politicians, and the fact that it could create a tremendous amount of uncertainty. Brand-new laws, a new regulatory regime; what is going to happen?

BROWN: Are the kinds of people who are selling these days that sophisticated that they're watching, looking at the regulatory environment and saying, wow, this could be dangerous? Or are they people more like me who, frankly, where investments are concerned, aren't terribly sophisticated at all, are we the ones who are bailing out?

GLASSMAN: I think the people who are bailing out are mainly small investors who basically said, I've had enough, I'm throwing in the towel.

Now, there aren't that many of them, but there are -- you know, there are a lot more than there used to be. There is a tremendous amount of fear there.

And let me just add that I think that America has been through a lot in the last couple -- I don't have to tell you that. But, you know, September 11 -- you know, the first terrorist attack on U.S. soil. We had a president impeached. We had an election in which it took a long time to determine the outcome. We've had this terrible scandal in the Catholic Church.

People's foundations had been shaken. And I think a lot of this is now coming out in the stock market. Uncertainty -- I don't know what's going to happen with my stocks, therefore I'll put it all into cash.

This isn't -- by the way, not a good idea for people who are long-term investors. And I think you shouldn't be in the stock market unless you are a long-term investor.

BROWN: Let's end it there. But come back, and let's talk more about -- as this thing plays out over the next several weeks -- both what is happening and what to do if you're holding the bag, as most of us are.

It's nice to talk to you, thank you.

GLASSMAN: Thank you.

BROWN: Jim Glassman from Washington tonight.

On now to a very hot issue. Going into the fall elections, the Senate today defeated two rival drug prescription plans. These were add-ons to Medicare. Talk now is a compromise to avoid, rather, another election-year stalemate. There are a lot of questions to settle. There's no guarantee they're going to find any solution.

Republicans say the plan backed by the Democrats is too expensive. Democrats say the Republican plan in, among other problems, relies too heavily on private sector insurers.

They'll try and work out differences, but there is not certainty that's going to happen.

Still ahead on the program tonight: something that's as American as apple pie, trying to make a buck off a national crisis. That's coming up later.

And after the break, the new normal is Samantha Runnion's hometown, if there could be such a thing.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: The story had some rough and eerie similarities to the case of Samantha Runnion: A 7-year-old playing outside with her little sister when two men drove up, called her name and dragged her into a car as she screamed and fought back.

Pretty much the similarities, though, end there. And the single- most important difference is this: Samantha Runnion was found murdered. Erica Pratt has been found alive, and seemingly happy ending, ending a very disturbing case.

Once again, Jason Carroll joins us from Philadelphia.

Jason, good evening.

CARROLL: And good evening to you, Aaron.

Erica Pratt, 7 years old, is in good condition right here at Children's Hospital, recovering from her frightening ordeal.

She was abducted on Monday night in southwestern Philadelphia. She was walking home with her 5-year-old friend, headed back to her house where her grandmother lives.

Witnesses say two men pulled up in a late-model white car with tinted windows. One of the man got out of the car; they pulled Erica back into the car as she was kicking and screaming. But they still managed to get her, and then they drove away.

But shortly after that, about 20 minutes after that abduction, the family had received a ransom call from someone, for $150,000. They received several calls after that. Police put the word out.

And then tonight, late tonight, just at about 8:00 Eastern time, Erica was found in north Philadelphia, about 20 minutes from where she lived. She was found in the basement of an abandoned building.

Apparently what had happened is she had kicked out a screen door. She was restrained in some way, but she still managed to scream. Some neighbors, some children who were playing there, heard her screams. They broke inside. They found that she was there. They called 911 immediately.

And, of course, as soon as Erica's family heard about what had happened, they were thrilled with the news. (BEGIN VIDEOTAPE)

QUESTION: Did the police call you to let you know?

SARINA GILLIS, MOTHER: Yes, they let the whole family know.

QUESTION: And what did they say about how she...

GILLIS: She's OK. She's fine. She's safe. That's all we're worrying about. She's home! Home!

QUESTION: When do you see her? When do you see her?

GILLIS: We'll see her as soon as she gets here. Everybody is going to see her at the same time.

WILLIAM COLARILLO, PHILADELPHIA POLICE INSPECTOR: She has a -- maybe a little bit of a bloodshot eye. And she has duct tape wrapped around her head.

That's all I'm going to say right now. She's being interviewed. She's being very cooperative. Her family is en route.

(END VIDEOTAPE)

CARROLL: At this point police are looking for two men wanted for questioning in connection with this particular case.

First man that they're looking for, Edward Johnson. The second person that they're looking for, James Burns. Once again, looking for these two men wanted for questioning in connection with this particular case. They believe that the motive for the abduction was money.

Again, Erica is safe. She's in good condition here at Children's Hospital. Again, her family and the community at large thrilled to hear that she is right back in good hands, where she belongs -- Aaron.

BROWN: Jason, thank you. Jason Carroll in Philadelphia tonight.

On to Stanton, California next. A list of events scheduled on the city's Web site reads like this: a concert in the park series, crafts and more family fun, little kids, big show, family night at the movies. Sort of a sleepy summer timeline for your average small town in America, where family seems to matter most.

Except for one entry betrays all the peace and all the quiet: funeral services for Samantha Runnion. Those will happen tomorrow night as we go on the air here at NEWSNIGHT. A family grieves; a town tries to move on with so much less innocence than it had a little more than a week ago.

From Stanton tonight, CNN's Ann McDermott.

(BEGIN VIDEO CLIP) MCDERMOTT (voice-over): Kids still stay close in Stanton, California, when you can find them. On this day, this hour, front yards were empty, a park was empty, so the rec guy came over here for something to do.

JASON FISH, STANTON PARKS AND RECREATION DEPARTMENT: Ever since the whole event took place last week, our park's just been dead.

MCDERMOTT: But some things have changed. The massive tribute to Samantha is gone. The cops? They used to be everywhere, now down to a token few.

Things are changing. People are changing, says a neighbor: They're going through phases.

EDITH FAGAO, NEIGHBOR: They went through it first, the devastation, how could it happen and this type of thing. Then about three days later, say Wednesday or Thursday, the anger.

MCDERMOTT: Some of those who came here to the nearby Orange County fair are angry, all right, after checking out the sheriff's booth, where you can see how many registered sex offenders live in your neighborhood.

RALPH FRANKENFIELD, ORANGE COUNTY RESIDENT: Most of these guys look pretty normal, I mean, you know, you couldn't necessarily look at most of these guys and say, oh yes, this guy's a criminal.

MCDERMOTT: A criminal. But it's over now, isn't it?

ALLAN LEMUS, BARBER: You know, it's still in the back of everyone's mind, I think. And I think everyone's still a little scared.

MCDERMOTT: The barber has a 9-year-old sister.

(on camera): Do you still worry about her?

LEMUS: Oh, yes.

MCDERMOTT (voice-over): But what about the neighborhood kids? Well, some are still scared.

CHRISTINA, AGE 11: A little bit because there's still people out there that can do the same thing to you.

MCDERMOTT: As she says, there's still people out there. Maybe not this one, but they're out there. Anne McDermott, CNN, Stanton, California.

(END VIDEOTAPE)

BROWN: A couple of other items before we go to break. Pope John Paul II is resting tonight on a small island north of Toronto. He arrived in Canada today, looking frail but walking down the stairs. He hasn't done that in awhile. He's 82. He suffers from Parkinson's, arthritis and a number of other ailments.

It is remarkable he still does this sort of thing. This is his 97th trip abroad. Thursday he'll address thousands of young Catholics who've come to Toronto to celebrate World Youth Day. From there the pontiff travels to Mexico and Guatemala.

And federal indictments were unsealed today against leaders of a militant Philippine terrorist group Abu Sayyaf. Five counts in connection with the kidnapping and the murder of Americans there over the last two-and-a-half years.

Still ahead on NEWSNIGHT, the breed of new entrepreneurs and their gadgets being created to help fight the war on terror. That's later. When we come back, a look back at a life of hate. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: A death tonight to note and an ugly legacy that goes along with it. William Pierce died today. He was 69. A notorious neo-Nazi and the writer of some truly bizarre extremist books.

It's tempting to dismiss people like Pierce using rationality, making you think that no one actually could be influenced by this junk. That would be dangerously naive. Pierce did influence people, including an angry young kid who read his work back in the early '90s, a kid named Timothy McVeigh. Kathy Slobogin on the author of "The Turner Diaries."

(BEGIN VIDEOTAPE)

SLOBOGIN (voicer-over): He was called the inspiration for the Oklahoma City bombing.

WILLIAM PIERCE, AUTHOR: They have promoted every sort of diversity.

SLOBOGIN: The intellect behind the racist movement.

PIERCE: Homosexuals, non-white racial minorities, feminists, their fellow Jews, of course, everybody except normal, healthy, decent white men and women.

SLOBOGIN: William Pierce, leader of the white-supremacist group the National Alliance, used radio broadcasts, tapes, writings, anything he could to promote his message to an angry white constituency.

PIERCE: We're engaged in the most desperate war we've ever fought, a war for the survival of our race.

MARK POTOK, SOUTHERN POVERTY LAW CENTER: This is one case in which you could say the world is a better place for the death of this man. This is a truly vile man, a man who spoke of mass murder in dinner table terms. SLOBOGIN: Pierce is most notorious for his 1978 book "The Turner Diaries," a racist fantasy where a small band of revolutionaries committed to a white America overthrow the U.S. government. Along the way they slaughter millions of people -- blacks, Jews, anyone Pierce considered a collaborator.

MORRIS DEES, SOUTHERN POVERTY LAW CENTER: We've come across "The Turner Diaries" in almost every single case that we've had against white supremacy, neo-Nazi, Ku Klux Klan-type activities, that resulted in violence that caused the deaths and injuries to many innocent people.

SLOBOGIN: "The Turner Diaries" is believed to have inspired Timothy McVeigh, the Oklahoma City bomber. According to Army buddies, he carried it with him and recommended it to friends. Details of his crime mimic a similar bombing in the book.

DEES: Guys like McVeigh see themself as the true patriot in "The Turner Diaries," and he doesn't forget about it. He sleeps on it, he becomes obsessed with it and he acts on it. Like I think he did in Oklahoma City.

SLOBOGIN: Pierce himself denied any responsibility for the bombing. But he admitted his book was a call to action.

PIERCE: Probably the most important idea expressed in "The Turner Diaries" is that each of us has a responsibility for what's happening in the world around him, that each person has to stop being a spectator and start being a participant.

SLOBOGIN: In recent years Pierce bought and ran Resistance Records, which produced white power and hate rock, estimated to have grossed more than $1 million a year for his National Alliance.

PIERCE: There are 100,000 or so of us here today listening to this program who aren't confused or ashamed or guilty.

(END VIDEOTAPE)

SLOBOGIN: William Pierce fought his war with words, words that many hope will die with the man -- Aaron.

BROWN: Kathy, is there -- have you had a chance to look at the supremacist Web sites and that sort of thing to see how they're reacting to his death?

SLOBOGIN: I haven't had a chance to look at that tonight, Aaron, but I'm sure that they will be mourning him as hero lost.

BROWN: All right. I suspect you're right. Kathy, thanks. Kathy Slobogin in Washington in Washington tonight.

A couple of other items making news around the country today, starting with plans to put tons of nuclear waste deep inside a mountain in Nevada. President Bush today signed the bill making Yucca Mountain the final resting place for nuclear waste. We note he did it off camera and away for -- away from reporters. Political sensitivity and all.

This caps more than 20 years of study, a formalr protest by the state of Nevada, which does not want the site. Lawsuits are pending, a lot of paperwork to do. That alone could take five more years. All of this means Yucca Mountain may not be open for business until the year 2010 or perhaps later.

We now come up to our snakehead fish update, the fish story that will not die, in part because we refuse to let it die. Today the interior secretary Gail Norton proposed a ban on importing the fish. They've become very hot items at pet stores. One dealer worrying that a few bad snakeheads will lead to a ban on all the other big nasty flesh-eating fishes he sells.

And oh, what a shame that would be. And raising the spinniker won't help here. There beneath the waves off Long Beach California, can you see it? Stars & Stripes, skipper Dennis Connor's latest contender for the America's Cup race. It capsized, then took on water while heading home after a day of training. No one was hurt. These things are expensive. And that would be embarrassing wouldn't it?

Next on NEWSNIGHT, the war on terror and good old fashioned American capitalism. We'll be right back.

(COMMERCIAL BREAK)

BROWN: Finally from us tonight, the inventions of war. Technology and warfare have always gone hand in hand. From barbed wire to radio to the atomic bomb, all came of age during wartime, then changed the world in the end when the war was over. Companies were born, fortunes were made, and it is no different this time around, except for the faces and the gadgets and we suppose the price tags, which do have a way of going up.

(BEGIN VIDEOTAPE)

(voice-over): In a tiny, second-floor set of offices tucked above the parade of summer tourists in Newport, Rhode Island, a small video company is about to join a very long line.

PETER MOTTUR, CEO, LIVEWAVE INC.: There are literally thousands of companies with great ideas that are flocking to Washington to try and demonstrate their technologies and how they can effectively help the government in combating terrorism.

BROWN: In this particular case, the company is called LiveWave Inc., already in business selling computer software that links far- flung robotic cameras. The CEO Peter Mottur has hundreds and hundreds of potential new customers, security services who want to keep an eye on anything and everything in the wake of 9/11.

MOTTUR: It's taking the existing technology and adapting it and applying it to what we see as a very large demand to help strengthen the nation's security for homeland defense.

ANNOUNCER: Our world has entered a new era of unrest, a world where economies and societies are threatened on a global scale.

BROWN: By one count, more than 12,000 applications have flooded into a small Washington agency that funds counter-terrorism research. There's sometimes a hard sell, but all of them are trying to tap into the billions of new dollars suddenly available for homeland security.

REP. DUNCAN HUNTER (R), CALIFORNIA: So this is artificial blood that literally a soldier could carry in his backpack, so when one of his buddies, or he himself got hit and lost blood, you could immediately administer blood to that individual.

BROWN: Whether it's that artificial blood, new DNA technology for police, or ramped-up detection devices at airports.

UNIDENTIFIED MALE: We have an X-ray source which shoots X-rays through the bag.

BROWN: The rush of new, old and sometimes-recycled inventions and technology is unprecedented.

HUNTER: I think that the idea that small companies have the ability or have more focus now in terms of being able to step forward and try to -- try to have a chance to show their technology to the Department of Defense, that's something that we should have in this nation, whether there's an emergency or not.

BROWN: One of those companies is Advanced Ceramics Research of Tucson. It sold the Navy on this small drone aircraft originally designed to spot whales to make sure they weren't around during sonar tests. But now the planes are being pitched to all branches of the military as cheap, unmanned spy planes.

Or, take LiveWave. It has a staff of 12. And, from a laptop in Rhode Island...

JAMIE ENGLER, LIVEWAVE: The camera's approximately two miles from Logan. Right now, I'm driving this camera from, I don't know, 100 miles from Logan Airport, and tracking it in real-time as this looks like a small commuter is taking off.

BROWN: Its software can control live cameras far, far away.

MOTTUR: And what we've done is we've put video and camera control on this for first responders, law enforcement and other military.

BROWN: All of these purchases, all of these products, have some people around Washington concerned.

JILL LANCELOT, PRESIDENT, TAXPAYERS FOR COMMON SENSE: YOu have a new agency that's being created with $37 billion. That's with a B. This is pretty outrageous.

BROWN: But a government less than fully prepared to stop the terrorists last September is not likely to allow money to prevent the next set of terrorist attacks should they come. Congress is in mood to spend, and taxpayers aren't complaining. After all, said one customs service inspector, there is a realization that people are trying to blow us up.

(END VIDEOTAPE)

BROWN: Inventions in the time of war. That's our report for tonight. If you have not, and if you have you have not, why have you not, signed up for our daily e-mail, here's what you have to do. Go to cnn.com and then work your way to the NEWSNIGHT page.

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