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CNN Newsnight Aaron Brown

One More Shooting in D.C. Area Tied to Sniper

Aired November 01, 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.


ANDERSON COOPER, GUEST HOST: Good evening again, everyone.
We got a strange phone call yesterday. Someone from the "L.A. Times" wanted to know who tonight's guests were going to be. Why is that strange, you might ask? Well, to be honest, we barely know who are guests are going to be in this hour, let alone 24 hours from now. Today, when we picked up "The L.A. Times," the mystery was actually solved. The paper, reporting on a rumor that the merger of CNN and ABC News was going to be announced here on this program tonight. According to the rumor, Ted Turner would be here tonight to announce the merger to Aaron Brown.

Well, the fact that I'm sitting here, by my lonesome, would seem to indicate the rumor is not true, though, like I said, we sometimes don't know who is going to be a guest on this show right before they appear.

But don't get discouraged; we will do a segment tonight on the possible merger. You'll have to stay around until "Segment 7" to see it. What can I say, I'm a major network tease.

As always, we begin with the news and "The Whip," starting with the sniper case that may be expanding again. Kelli Arena is on that story for us. Kelli, the headline.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Anderson, one more shooting in the Washington area has been linked to the sniper attack. This one took place more than two weeks before police realized they had a serial sniper on the loose.

COOPER: All right, we'll be back to you in a moment.

The decision from a federal judge involving the antitrust settlement between the government and Microsoft. Steve Young is following that for us. Steve, a headline, please.

STEVE YOUNG, CNN FINANCIAL NEWS CORRESPONDENT: Anderson, the judge was expected to give holdout states something for their troubles, but instead she gave Microsoft a double victory.

COOPER: And looking ahead to the jam-packed weekend of politics in Minnesota after a very jam-packed week. Bob Franken is on that tonight. Bob, the headline.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And Minnesota, as Yogi Berra might say, Anderson, is back to the future all over the again. And the candidates are being uncommonly polite to one another, because it looks like they'd better be -- Anderson.

COOPER: All right, we will see how long that lasts. Bob, back to you in a moment. Back with all of you.

Also coming up tonight, going to pot in Vegas -- I know, I know, we will try to resist the puns in this story, but it is going to be hard. On election day, will Nevadans decide to let people buy small amounts of pot? And "Their News," or should we say, their soap opera, from Britain. Warning, here comes another pun, the butler didn't do it, Diana's butler, that is. We will have that story.

But we begin tonight with the sniper case. It seems every night we've had a new development to report on, as police all over the country go back over evidence to see if a killing or a shooting can in some way be connected to Malvo and Muhammad. Tonight is no exception. Police putting another pin on the map of murder. Here again, CNN's Kelli Arena.

(COMMERCIAL BREAK)

ARENA (voice-over): The shooting in the Hillendale area of Montgomery County, Maryland took place on September 14. That's more than two weeks before authorities realized they had a serial sniper on the loose.

The victim survived, but the MO was the same, a single shot fired outside a strip mall off the major highway.

ARNIE ZELKOVITZ, LIQUOR STORE OWNER: And there was no robbery attempt. Nobody came up to us. We never saw anything.

ARENA: Police now say the sniper suspect's 1990 Chevy Caprice was in the area that day, allowing them to definitively link the September shooting to the string of attacks. One witness tells CNN that he told police the night of the shooting that he saw a dark- colored older Chevy Caprice driving slowly away from the scene. Montgomery County's police chief was repeatedly asked by the press about any possible link between that shooting and the sniper attacks, but would only say ballistic evidence was inconclusive.

CHIEF CHARLES MOOSE, MONTGOMERY COUNTY: I still have not really comprehended the relevancy of the persistent questioning with regards to that case.

ARENA: It was not the last time police would be told about a dark Caprice. Two witnesses to a sniper shooting in Washington, D.C. on October 3 also described a similar vehicle.

KARL LARGIE, SHOOTING WITNESS: So I was still on the phone, ignoring it, when I just observed the car, a dark colored Caprice.

GAIL HOWAD, SHOOTING WITNESS: It was dark colored. And it looks like an old police car. That's what I (UNINTELLIGIBLE).

ARENA: D.C. Police did issue this lookout on October 7 for that type of vehicle, but when asked about its importance, this is what Chief Moose had to say.

MOOSE: Well, that is also a lookout that has been put out there. And I think there's been more law enforcement focus on that, not a big push for public feedback about that.

ARENA: In fact, Washington area police stopped the alleged sniper's car on numerous occasions, including the evening of October 7, when suspect John Allen Muhammad was found sleeping in the vehicle in Baltimore, Maryland.

Investigators were focused instead on a white van that several witnesses had reported seeing at various crime scenes. Chief Moose said this past Saturday that he believed the possibility of a Caprice being involved in the sniper attacks had been ruled out.

MOOSE: I was also somewhere in the investigation told that we had located that, that it had been somehow abandoned.

(END VIDEOTAPE)

ARENA: A D.C. homicide detective who checked out that abandoned car said that the chief had received, quote, "bad information."

Anderson, back to you.

COOPER: So, Kelli, I mean, I know you went over it in the report, but I mean, is there any more on exactly what the motive of this shooting was, this shooting of the store clerk?

ARENA: We don't know the motive for any of the shootings. So far neither of the suspects is talking, and there hasn't been any hard evidence that's been uncovered to suggest what the motive may have been, although several investigators that we've spoken to, Anderson, have suggested that the money motive maybe was not an afterthought but was something that was part of the equation all along. You know, the suspected snipers had demanded $10 million in two letters. There were phone calls made about, you know, so-called negotiations, and more and more that theory is gaining a bit more momentum.

COOPER: And at this point, I know they're not talking, but do investigators feel like they have a grip on sort of the timeline and the whereabouts of these two individuals, these two suspects? I mean, obviously they were in Maryland, I guess, at this time, and then they were in Alabama and Louisiana and then back to Maryland?

ARENA: That's right. That's right. So far, they have a pretty good grip, but there are certain areas that they're still trying to piece together, and that's why you have all of these jurisdictions that are involved going through a lot of unsolved crimes to find out if there's any connection.

COOPER: So it's very possible we may be hearing about more possible crimes that these two might have been involved in?

ARENA: It's always possible, yes.

COOPER: All right, Kelli Arena, thanks very much tonight.

We move on now to Microsoft. You know how your computer sometimes works, sometimes it doesn't, and you have to reboot it, then it crashes and you have to start it? Isn't that what the Microsoft antitrust case kind of feels like? On again, off again, up and down, for four years now. Well, today, a federal judge gave her approval to an antitrust settlement. End of story.

That, of course, is the theory. The fact is we'll probably be writing the final chapter to this one on Microsoft Word version 72.0. Again, here's CNN financial correspondent Steve Young.

(BEGIN VIDEOTAPE)

YOUNG (voice-over): Microsoft, found earlier to be a predatory monopolist, nevertheless won a double-headed final victory in the four-year long antitrust case. Judge Colleen Kollar-Kotelly approved the deal reached by the company, nine states and the Department of Justice last November, and she rejected a tougher proposed settlement, reached by nine other states in June. The agreement makes it much tougher for Microsoft to retaliate against PC companies that dare to use non-Microsoft products.

Bill Gates and company were muted in taking their victory lap.

BILL GATES, CHAIRMAN, MICROSOFT: This settlement puts new responsibilities on Microsoft, and we accept them. We recognize that we will be closely scrutinized by the government and our competitors.

YOUNG: The Justice Department took a more victorious tone.

JOHN ASHCROFT, ATTORNEY GENERAL: Today, consumers all across American won a great victory.

YOUNG: The so-called holdout states, the losers, declared the outcome a victory, but reading between the lines, it seemed pretty clear they had neither the will nor the money to stage another appeal. They claim the judge is giving consumers and PC companies a few improved rights against Microsoft than the original settlement did.

KEVIN ARQUIT, ATTORNEY CLIFFORD CHANCE: PC manufacturer is given greater freedom in that when the computer is turned on, it's going to be easier for them to have their own software made available to the consumer, and also for the computer manufacturer to make its own offer as to the Internet access provider that the consumer has the alternative to choose.

(END VIDEOTAPE)

YOUNG: Many thought Judge Kollar-Kotelly would quickly exit after her ruling, but she said she'll be watching closely during the antitrust consent decree that runs five years. The judge said she'll personally hold responsible Microsoft directors, especially those who testified before the case, if there are any violations. She adds, quote, "let it not be said of Microsoft that a prince never lacks legitimate reasons to break his promise" -- Anderson. COOPER: So, Steve, the attorney general says, John Ashcroft says that consumers won a great victory. What exactly does this mean for consumers? I mean, is this as simple as something will be different on their computer screens if they buy a Microsoft computer?

YOUNG: Well, for starters, it means that there will be uniform contracts, which means that theoretically Microsoft won't be able to use its club, its pricing club to get PC makers, the Gateways and the Dells, to do its bidding.

COOPER: And that's official (ph). And is this thing over? I mean, is this a done deal?

YOUNG: Is this over? Well, Microsoft itself actually in their press conference late tonight -- it's a good question -- said that she issued 588 pages. I counted them; they didn't. And that they're not finished going through the pages. They said they may even appeal yet, but it's unlikely.

COOPER: All right. Steve Young, thanks very much.

YOUNG: Sure.

COOPER: Well, at a schoolhouse in a small Italian mountainside village, the rescue work is over. There is simply no one left to pull from the ruins. In the words of a local priest, it looks like the entire first grade class was wiped out. Twenty-nine people died in the earthquake yesterday, and today the earth shook yet again.

CNN's Chris Burns is there.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): The aftershock was strong enough to rattle buildings in this Apinine mountain village, shake the dust off of the rubble and test already frayed nerves.

"I'm demoralized," says this woman. "Since the earthquake beat the walls, I'm too scared to go inside."

"Everything that's happened is too much," says this man. "We can't take this anymore."

The aftershock prompts police to evacuate the historic center. They had just completed rescue efforts at a school, which collapsed with dozens of students inside.

Throughout much of the day, and the night before, rescue workers toiled frantically to save any flickering life trapped below. They pulled out one small lifeless body after another, deepening the agony. Confirming these relatives' darkest fears of a loved one lost. Hopes rose when an 8-year-old boy, his feet trapped into the rubble, was found alive.

But morale faded again, as rescue crews, aided by heavy machinery and search dogs, made more grim discoveries. The bodies are taken to a makeshift morgue, the city's gymnasium. Feeding the sadness and frustration in this town of 1,300 where everyone knows each other, knows the two dozen little lives that perished as their classrooms crumbled around them.

(on camera): Even as this rescue work was going on, one question has been raising a lot of ire here, how could this school have collapsed like such a house of cards, when other buildings nearby were damaged but are still standing? And who is to blame?

(voice-over): Villagers vented their anger when Prime Minister Silvio Berlusconi paid a visit to the shattered school. He was booed. Authorities have opened an investigation into the school's collapse.

The government's relief effort is well underway. Hundreds of civil defense workers, troops, paramedics, as well as rescuers have been deployed. Some comfort for those rattled by the aftershocks, but there's little relief for the other aftershocks. The tremors of the heart as the village reels in grief.

Chris Burns, CNN, San Guliano di Puglia, Italy.

(END VIDEOTAPE)

COOPER: Well, ahead on NEWSNIGHT, no, Ted Turner won't be showing up for a major announcement, but we do have some new insights on that rumored ABC-CNN merger. You'll want to stick around for that. It is our segment seven tonight. But before we do that, a little business. When we return, connecting the dots from Washington State to Alabama, how the evidence against the sniper suspects adds up.

(COMMERCIAL BREAK)

COOPER: More now on the sniper story. We want to look at how investigators actually go about connecting a bullet from a crime scene to the rifle the snipers used.

Questions as well tonight about the possibility a third person was involved in one of the shootings, the one at the liquor store in Montgomery, Alabama.

Joining us tonight from Birmingham, Alabama, Jim Cavanaugh. He is a special agent in charge for the Bureau of Alcohol, Tobacco and Firearms -- Mr. Cavanaugh, thanks for being with us tonight.

JIM CAVANAUGH, SPECIAL AGENT, ATF: Thank you, Aaron.

COOPER: You were part of this press conference earlier today. Clear up for me, if you can -- it seems a little bit confusing. Right now it seems what authorities are saying in Alabama is that at that shooting outside that liquor store, there was both a handgun and a rifle used? Am I correct in that?

CAVANAUGH: Well, I think maybe I can clear some of that up for you. The chief and I have talked extensively about it, and we've reviewed the facts in the case. What happened was Montgomery police officers, uniformed police officers were close to the shooting, and they responded within 30 seconds of that shooting, and two police officers separately reported seeing perpetrators with a silver handgun. So right from the beginning, a handgun came into play in the Montgomery, Alabama case. The cartridge that was recovered -- or the projectile, I am sorry -- that was recovered there was a .22 caliber projectile.

So from September the 21st until the middle of the case in Maryland and Virginia, they didn't exactly know what caliber, what gun shot it. They knew it was a .22, and they suspected it was a handgun because the officers had seen handguns. But of course, after the rifle was recovered, we were able to do forensic firearms examination with the Alabama Department of Forensic Sciences, and the ATF laboratory and conclusively establish that that Bushmaster rifle recovered in Maryland killed the victim in Montgomery, Alabama.

COOPER: So what was initially thought to be a spent projectile or cartridge from a .22 was actually a .223?

CAVANAUGH: Exactly. And all of those are part of the .22 caliber family. We're dealing in thousandths of an inch, the firearms examiners are. It's a real science, it is a real meticulous microscopic examination of a damaged fragment from this .223 rifle that may be distorted because it hit a victim, of course. So they have to -- they can't tell everything they'd like to tell sometimes with just the projectile. But having the rifle, that's the treasure trove. That allows the scientists to really make the match.

COOPER: Now, this handgun that was also found, apparently along the route, that a police officer chased one of the suspects along, do we know for a fact that this handgun was involved in this shooting?

CAVANAUGH: No, that's a good question, Aaron, and the answer is we don't exactly know if it was or not. Here are the facts we know about the handgun. There is a .22 Magnum revolver found two days ago by a citizen and turned into the Montgomery, Alabama police, along the route, near the route where these shooters escaped. We traced that gun to the first retail purchaser through the ATF Gun Trace Center. We put it to the retail purchaser in Oklahoma. He sold it to a man who took it to El Paso, Texas where it was stolen at a gun show on the 20th of July. And that is the last tracking we have of it.

So we're trying to determine how it got there.

COOPER: I know there's a lot that is unknown still at this point, and you are still trying to piece all the pieces together, but do you feel any closer, and maybe it's just the personal opinion, I'm looking for, but do you feel any closer to understanding any of the motives of these two suspects? I mean, does -- as you learn more about the timeline, and the whereabouts, and the possible crimes that they were involved with, does any of it start to make sense to you?

CAVANAUGH: Well, you know, I -- as a policeman and a special agent with the ATF for almost 30 years, I look to the facts first, and I think the motives are clearly laid out in the criminal complaints and affidavits, and those motives are robbery, murder, and extortion, and they've been laid out in the court documents, and I think those are based on the facts that have been presented to the bar of justice.

Now, if you want to speculate past that, you know, anybody could. What other motives or things would drive people? But I think those are the facts at the bar of justice and I probably would not want to speculate further than that.

COOPER: Sure. Well, where do you go from here? I mean, what do you do you most want to know at this point in the investigation?

CAVANAUGH: Well, we want to know, of course, all the rest of the story, as they say. We want to know everywhere the people were, every city and town they went to, and whether they committed any crimes in any of those cities and towns.

And I think police across the nation are doing that based on certainly the active journalists who are putting this story out front, but also the police networks as examples, the ATF's Integrated Ballistic Identification Network. We've put the images of these bullets across the nation and the FBI has the VICAP program, Violent Criminal Apprehension Program, where they can search other murder and assaults. And police departments across the nation are looking at their own unsolved murders and assaults and saying, Are these things connected?

Now that we have the rifle, we can do things like we did with the Louisiana state police just yesterday, where they called and say we think we have a related crime. The ATF laboratory fired two test fires from the Bushmaster rifle. They expressed those overnight to the Louisiana state police laboratory. Their examiners there then made the match on the Baton Rouge killing.

So we'll be able to sort through any possible cases easier now because we have more evidence.

COOPER: All right. James Cavanaugh with the ATF, very much appreciate you coming in and joining us tonight. Thanks very much.

COOPER: Coming up on NEWSNIGHT, legalizing marijuana in Nevada. A grassroots effort we'll look at a little later in the program.

But first, Minnesota's frenzied election face-off. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Fifteen states in five days. No, it's not Alice Cooper's comeback tour. Don't get too excited.

It's the schedule for the president of the United States in the final stretch of a crucial midterm election campaign. Today Mr. Bush appeared at a rally for two Republican candidates in Pennsylvania. Then he flew to New Hampshire to stump for the GOP's nomineee for Senate, Congressman John Sununu. He of course if the son of the elder John Sununu, chief of staff under the first President Bush.

The current President Bush then traveled to Kentucky to plug the campaigns of two Republican candidates there. A very long day indeed.

There was a telling quote today from a volunteer in Minnesota preparing leaflets for Walter Mondale's run for the Senate. "I have no idea what Walter Mondale thinks, " he said. "I'm going to make stuff up, then I'm going to give it to the people who actually know to correct it." This isn't just a run to Election Day in Minnesota. It is a mad dash, set off exactly one week ago when Democratic Senator Paul Wellstone was killed in a plane crash. It is going to be a very hectic weekend for Mr. Mondale and his opponent Norm Coleman.

The latest now from Bob Franken in Minnesota.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): At 74-years-old, Walter Mondale was enjoying life as an icon.

But now that he's back in the fray, his Republican opponent, Norman Coleman, is trying to push hard against the icon, trying to bridge the gap between aggressive and tasteful.

NORM COLEMAN (R), MIN. SENATE CANDIDATE: This election is about hope and opportunity and about jobs. It's about quality education for our kids. It's about taking care of our parent and grandparents.

FRANKEN: That's one of the gentle spots the Coleman campaign has decided to run, after aides claim their candidate asked them to pull another one -- an attack ad. It dredged up the economic tribulations when Walter Mondale was Jimmy Carter's vice president.

Mondale made it quite clear that just might back fire.

WALTER MONDALE (D), SENATE CANDIDATE: We got two days to go and I want to stay on the positive issues of what I want to do and people know Paul Wellstone's issues. They know where he stood. They know where I stood. Compare them.

FRANKEN: So instead of negative ads, Coleman is relying on the GOP's heavy hitters. Vice President Dick Cheney made a stop.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: As a senator, he'll be forward looking and effective and a truly independent voice for an independent state.

FRANKEN: President bush and the first lady will make separate appearances for the Republican candidate over the weekend.

At the same time, negotiations continue for a face-to-face debate between Coleman and Mondale. Mondale turned down an encounter tonight, saying he had no time to prepare.

(END VIDEOTAPE)

FRANKEN: For now the two are keeping their distance, politely tiptoeing along the high road to see where it will take them. For now, anyway -- Anderson. COOPER: Yes, we'll see how long that lasts. Although there -- you know, there are only a few more nights left to go. What are the chances of a debate actually happening?

FRANKEN: Well, Mondale says that he's willing to negotiate, but the fact of the matter is is that the president's going to be here on Sunday. That would seem to eliminate Sunday. Tomorrow is Saturday and a Monday night debate, the day before the election, would be uncommon. So what are the chances? Don't hold your breath.

COOPER: All right, Bob Franken. Thanks very much.

We turn now to Nevada. In a state where brothels are legal and you can play the slots in hospital lobbies, some residents want to know, Why can't you light up a doobie as well?

Voters in Nevada have the choice to legalize marijuana use come Election Day. It is, of course, easy to make jokes, but it is also a very serious issues. Serious money is involved and serious questions about the ongoing cost of the war on drugs and the potential risk of easing up a bit.

Here's CNN Frank Buckely.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN CORRESPONDENT: The place they call "Sin City" may someday have yet another vice on offer. Marijuana.

Pot is on the ballot in Nevada in the form of an initiative, Question 9, that would amendment the state constitution.

The amendment would allow buyers here in Nevada who are at least 21-years-old to purchase up to three ounces of marijuana for use in their homes. Any use in a vehicle or in a public place like the Las Vegas strip, would be prohibited.

Assembly Woman Chris Giunchigliani, who wrote the state's medical marijuana law, said patients need legal access to pot.

CHRIS GIUNCHIGLIANI, NEVADA STATE ASSEMBLY: All this simply recognizes that in the privacy of your own home, if you're an adult, you don't get busted for it.

BUCKLEY: But federal drug czar John Walters sees it differently.

JOHN WALTERS, DRUG POLICY CHIEF: We'll hear from John Walters about the dangers of the evil weed.

BUCKLEY: Walter recently toured Nevada to campaign against this initiative and other efforts across the U.S. to decriminalize or legalize pot use.

WALTER: No community, no city, no state is better off with more drug use. We have had two decades of experience in this country with this problem. It's not a victimless crime. Every family's been touched.

BUCKLEY: The pro-pot people are backed by big money, from the Washington-based marijuana policy project.

And they're up on TV in Nevada with ads like this one.

UNIDENTIFIED FEMALE: As a former president of Nevada's largest teacher's association, I'm voting yes.

UNIDENTIFIED MALE: As a retired 27-year street cop, I'm voting yes.

UNIDENTIFIED FEMALE: As medical marijuana patients, we're voting yes.

BUCKLEY: But federal officials are countering with ads of their own.

UNIDENTIFIED MALE: Check this out.

UNIDENTIFIED FEMALE: Cool. Is it loaded?

UNIDENTIFIED MALE: No.

BUCKLEY: Local law enforcement in Nevada have been among the loudest opponents.

SGT. RICK BARELA, LAS VEGAS METRO P.D.: This is a lot of dope. It's a lot of marijuana.

BUCKLEY: It's what three ounces of marijuana looks like, according to Police Sergeant Rick Barela.

But supporters say the federal government is out of touch with the millions of people who've either tried or currently use marijuana.

Frank Buckley, CNN, Las Vegas.

(END VIDEOTAPE)

COOPER: Still to come on NEWSNIGHT, the trial of Princess Diana's butler and a surprise revelation from the queen.

And next, the chorus calling for SEC's Chairman Harvey Pitt's resignation. It just grew a little bit louder.

(COMMERCIAL BREAK)

COOPER: Coming up on NEWSNIGHT, the political storm surrounding Harvey Pitt. Senator John Corzine weighs in.

(COMMERCIAL BREAK)

COOPER: Don't know if you saw it. A priceless headline today on the "Wall Street Journal's" Web site: "Pitt Launches SEC Probe of Self." Pitt would be one Harvey Pitt, the chairman of the Securities and Exchange Commission. A reliable punching bag for Democrats who say that he was too closely connected to the accounting business to push through real reform in the time known as A.E.: After Enron.

Well now comes news that Pitt didn't reveal something about the man he tapped to be the new watchdog for the accounting business. That William Webster was involved in a company accused by share holder of fraud.

Earlier today I spoke with one Democrat who resisted the calls for Pitt to resign, until now. Someone who knows the business world better than most. He used to be the chief of Goldman Sachs. Today he is senator from New Jersey, John Corzine.

(BEGIN VIDEOTAPE)

COOPER: Senator Corzine, there have been a lot of Democrats previously who have come out and said that Harvey Pitt should resign. You have not been among them until now. Why the change?

SEN. JON CORZINE (D), NEW JERSEY: You know, SEC is all about full disclosure. The whole principle of our securities laws is making sure that information is made available to investors so they can make informed decisions.

When Chairman Pitt withheld the information on Judge Webster, he wasn't allowing the other commissioners to make a decision with all the information. I think it sets a horrible example for what the chairman of the SEC is supposed to do, what he's supposed to be practicing. That's what leadership is about.

I think this is sort of the straw that breaks the camel's back, but I think it was very hard to have a judgment made about Judge Webster filling this most important role without having the information available.

COOPER: You say it's the straw that broke the camel's back. Just so I'm clear on your position, the Webster situation, is that alone you think enough to -- that Pitt should resign over is is it that...

CORZINE: Anderson, I think it is enough on its own merits, but you have to put it into the context that it was a very controversial nomination with regard to Judge Webster. Most independent observers would have rather had John Biggs involved in this. There was a lot of presumption of political interference from the accounting industry through congressional sources to change Chairman Pitt's mind with regard to Biggs, who is an absolute ten strike to fill out this new role.

There were other situations where people were concerned about Chairman Pitt's advocating for his own pay increase. I didn't happen to think those things were relevant, per se. I didn't like them, but I didn't think they were as important as when he practices something that is contrary to the basic themes that the SEC is supposed to practice, full disclosure.

COOPER: You and Senator Dodd have written a letter to the president. What did you say in it?

CORZINE: It simply just reflect what is I've suggested to you. It is time for Chairman Pitt to step aside in my view.

We have a crisis of confidence with respect to our financial markets, with regard to the integrity of how corporate America is working. The chief regulator of those activities should be as unimpeachable as possible. When you're not practicing what we're expecting the marketplace to do, what we're expecting corporate America to do in the leadership of the SEC, then it's a troubling message to be sent out to the American public about what we're doing on the day-to-day practices of the SEC.

And it's really unfortunate because the SEC is a -- made up of very, very hard working, committed professionals. I think they're doing a good job. They don't have enough resources but they don't need to have their credibility challenged.

COOPER: Investor confidence is sort an amorphous thing -- it's a hard thing to really gauge and a hard thing I guess to bolster. How do you bolster investor confidence in this market? I mean, is the resignation of an SEC chairman, is that enough?

CORZINE: Well I think that if you have people in place who exhibit through their actions, through their experience, through their background that they have credibility.

For instance, Paul Volcker, if he were Chairman of the SEC, I think people would say, This is an absolute certain credible figure to implement the securities laws of America.

If you had Dick Grasso, some individuals who are absolutely clear cut in their credibility to both the marketplace, to Capitol Hill and to the president, I think you would go a long way toward sending a message to the American public that we're serious about enforcing our securities laws, we're serious about implementing the new corporate accountability law.

COOPER: Does there need to be more stringent oversight of business by the government? You have an interesting perspective, you're in the government now, you were a captain of industry before.

CORZINE: Well I think we need to fully look at all the filings that come into the SEC, the income statements, the balance sheets, the restatements of earnings. We need to understand why that's happening. You need to have the resources and people to be able do that.

We've tried to send the SEC into battle with far too few resources to do the job we've asked them to do and now we are, I think through the actions of the Chairman, undermining the credibility of the institution as well. I think we need to reestablish that credibility, we need to give the SEC the resources, we need to give the Accounting Oversight Board the right leadership and the resources also to do the job. If they have it, they'll help restore in a matter of a short period of time, in my view, credibility with regard to securities markets. COOPER: Just my last question. This has been obviously a pretty partisan battle up until now. Do you think that's going to change after the November elections? Do you think we're going to see more Republicans coming forward and saying, Yes, maybe we better rethink this?

CORZINE: Anderson, I think that, quietly there are a lot of Republicans that would like to see a change in the leadership of the SEC. I don't expect on a practical basis anybody's going to say anything much about that until November 5. They might even wait until November 7 or 8.

But I think there will be a change in attitude, because I think this really draws into question the fundamental judgment of whether someone is committed to full disclosure.

COOPER: All right. Senator Jon Corzine, thanks very much for being with us.

(END VIDEOTAPE)

COOPER: A few more items now from around the country, starting with Jack Welch. The former General Electric chairman and his estranged wife today announced they've settled on how much alimony she'll get while their divorce makes its way through court. Now, they didn't announce the terms. Today's agreement taking the dispute out of the public eye. We do know Jane Welch has been getting $35,000 a month. She wanted more, and it is safe to say he can afford it. Even in retirement, he makes about $1.4 million a month.

In Southern California, a private plane made a very public landing last night. The plane developed engine trouble. It had to land on I-15 in San Diego. No one was hurt, but the freeway was closed for about an hour.

And from New York, say hello to James W. Broderick, the son of Matthew Broderick and Sara Jessica Parker. They came home from the hospital today. About 100 photographers showed up for the occasion. Happy day for them.

Ahead on NEWSNIGHT, rumors of a merger. Oh, my. ABC and CNN, what a possible marriage would really mean. We will tell it to you straight a little later.

But first, it seems the butler didn't do it, so says the queen. That is her story and she is sticking to it.

(COMMERCIAL BREAK)

COOPER: A few stories now in our world roundup, beginning with a fire in Morocco. At least 49 people were killed and dozens injured in a prison as inmates slept in their cells. Many of the victims suffocated or were trampled during a panic stampede.

A box that some scholars believe is related to Jesus was badly damaged when it was moved from Israel to Canada. Some think the burial box may have contained the bones of James, the brother of Jesus, but that is a matter of hot debate. The box now has wide cracks, but remains intact.

And former South African President Nelson Mandela paid his respects today at the grave of Princess Diana. He said her work in Southern Africa had made a tremendous impression on him. Mandela met Diana after she had traveled to Angola to promote the fight against land mines.

Another story about Princess Diana tonight, and we are trying to imagine the tabloid headlines that Londoners will pick up tomorrow morning. "Bad Boy Butler Gets Queen-Size Reprieve." Actually, they will probably be much raunchier and racier than that.

There's so much to work with here. Diana's ever faithful butler, the guy who literally has the dirty laundry from the royal family accused of actually stealing from her. And then at the very climax of his trial, the queen herself steps in with a revelation that would have prevented this whole sorry saga in the first place. A look now at "Their News" -- not the raunchy kind, more like the stately kind -- from ITV.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Diana's butler walks free after the sensational collapse of his trial.

UNIDENTIFIED FEMALE: What the queen said in this car that brought the case crashing down.

UNIDENTIFIED MALE: Celebration for Burrell as his two-year ordeal comes to an end.

ANNOUNCER: The ITV evening news with Marc Ostin (ph) and Mary Nightingale (ph).

UNIDENTIFIED MALE: Good evening. Welcome to the program.

UNIDENTIFIED FEMALE: Hello. "The queen came through for me." With those words today, Princess Diana's butler, Paul Burrell, signaled the dramatic end to one of Britain's most sensational trials. At the center of it all, the monarch herself. It emerged that Mr. Burrell had told her shortly after Diana died that he had kept some of the Princess' possessions.

UNIDENTIFIED MALE: Thirty-eight years in this job is just not long enough to prepare for a day like today. This was a spectacular displace of failure by the police, by the crown prosecution service.

UNIDENTIFIED MALE: Paul Burrell was charged with theft, but to him, his family and his friends, it was the same as being accused of treachery, of betraying the closest of friends. All his working life he's been in the service of the crown and members of the royal family. And it was the extraordinary intervention of that family, and ultimately the queen, which has set him free. UNIDENTIFIED MALE: He's happy and relieved to have been acquitted on all charges after the terrible ordeal of the last 21 months.

UNIDENTIFIED FEMALE: His supporters were always adamant that the butler didn't do it.

Tonight, there's relief for the outcome of the trial, but there's also anger that the case ever came to court at all. Tim Rogers (ph) joins us now from outside the Burrell family home -- Tim.

TIM ROGERS (ph): Well, there's no sign of the Burrells here at their home in Thoundon (ph) today, but there is much relief at today's result.

UNIDENTIFIED MALE: Outside Paul Burrell's flower shop in the neighboring village, his agent said they'd already received big offers for their story.

UNIDENTIFIED MALE: There's a great saying that says "think before you ink." And so you have got to step back, you've got to take a look at all the offers, and then you've got to sign whatever contracts need to be signed if contracts are going to be signed.

UNIDENTIFIED MALE: Because he does have a remarkably story to tell.

UNIDENTIFIED MALE: He's got a fabulous story to tell.

UNIDENTIFIED MALE: We've had a lot of criticism of the police. And anything I would say, is this was an exceptionally tricky case. And let's go back, put Paul Burrell aside for one minute, and go back and see how this all began. What they were looking for at the Spencers' behest was that secret box in Diana's sitting room. We now know that what was in it was incredibly sensitive: Letters from Prince Phillip, James Hewitt (ph) signet ring, and perhaps the most sensitive at all, an audiotape with some very, very sensitive, I'm sorry to re- use the word, but some very sensitive allegations on it.

Now, the content of that box disappeared. It has never been found. Paul Burrell didn't have it. So where is it? And the intriguing question tonight that we're left with, is what did happen to all that material?

(END VIDEOTAPE)

COOPER: Still ahead on NEWSNIGHT, the ABCs of CNN.

(COMMERCIAL BREAK)

COOPER: Ah, "Segment Seven." Just remember it's all in good fun.

The media world, or at least the lunch crowd at Michael's, is all atwitter with word that CNN and ABC may merge. Now both companies are in discussion though no one is saying when it may happen. Now many of us here were formerly employed by ABC. I worked there, so did Aaron and Connie. Jeffrey Toobin was there, Beth Nissen, Jeff Greenfield, David Ensor, Shelia McVicker, Jeanne Meserve, Tim O'Brien, Jim Bitterman, Mark Potter, Carol Lin -- Oh, I could go on, believe me, but I won't. Many of us fled ABC in the dead of night and at CNN, we found sanctuary.

I'm told in the murder -- in the merger, Freudian slip, refugees like myself would be granted a general amnesty. So I don't think we have too much to worry about. But in the spirit of friendship, I feel some ABC anchors need to be warned. See, CNN is very different than ABC.

First, say goodbye to those $10 million salaries. At CNN $10 million buys more than one Canadian news anchor. Yes, no it does. In fact, for $10 million I think you can probably buy CNN.

Also here, there's no help with hair and makeup in the field. That's going to come as quite a shock to some of my former colleagues.

Also, you can't charge gym memberships to the company. Sorry.

The commissary? No subsidized salads here. For lunch you go to Penn Station or try the street mead in front of the post office. It's pretty good.

Also at CNN cameramen, prefer to be called by their name, not "Hey You." And when an anchor travels, CNN doesn't pick up the extra way for charges for their ego. So that'll be an adjustment for some.

Also at CNN, the cameras don't have those special filters that give on-air talent that million dollar youthful glow. See, this is how I look with the CNN filter. And this is how I look with those special ABC filters. Sure, I look younger but it's really not worth the extra cost.

Sadly some anchors are clearly going to have to go. The question is how to choose. I say the old fashioned way: steelcage death match. At the very least, it would be a ratings winner.

I can see it now. Candy versus Cokie.

Lovable Lou Dobbs against battling Barbara Walters.

How about Stephanopoulos versus Carville? Hey, at least Bill Clinton would want to watch that one.

When you think of it, the merger makes sense. After all, we could combine programming. "Good Morning American Morning." Paula Zahn, Elizabeth Vargas, Dianne Sawyer and Charlie Gibson. Sure, it may be a little unwieldy, but hey, if CBS can have four anchors, why can't we?

What about "Whose Headline Is It Anyway?" Audience members yell our hypothetical news stories, competing anchors have to improvise. It would be fun. I'm telling you, this merger will put the sin in synergy. "Oprah Talksback Live." "Dharma and Larry." How about that? "Live with Regis and Wolf."

How about "CNNPD Blue" Andy Scipowitz finds a new partner in Myron Kandell. And "20/20," it would have to become "50/50" or maybe "60/40," depending which network comes out on top in negotiations.

And I know the merger is big news. The question I have: does this mean I get to go do "The Mole" again? Probably not.

That is NEWSNIGHT for tonight. I'm Anderson Cooper. Thanks very much for watching. Aaron Brown returns on Monday with complete election coverage. Hope you have a good weekend. Good night.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired November 1, 2002 - 22:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, GUEST HOST: Good evening again, everyone.
We got a strange phone call yesterday. Someone from the "L.A. Times" wanted to know who tonight's guests were going to be. Why is that strange, you might ask? Well, to be honest, we barely know who are guests are going to be in this hour, let alone 24 hours from now. Today, when we picked up "The L.A. Times," the mystery was actually solved. The paper, reporting on a rumor that the merger of CNN and ABC News was going to be announced here on this program tonight. According to the rumor, Ted Turner would be here tonight to announce the merger to Aaron Brown.

Well, the fact that I'm sitting here, by my lonesome, would seem to indicate the rumor is not true, though, like I said, we sometimes don't know who is going to be a guest on this show right before they appear.

But don't get discouraged; we will do a segment tonight on the possible merger. You'll have to stay around until "Segment 7" to see it. What can I say, I'm a major network tease.

As always, we begin with the news and "The Whip," starting with the sniper case that may be expanding again. Kelli Arena is on that story for us. Kelli, the headline.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Anderson, one more shooting in the Washington area has been linked to the sniper attack. This one took place more than two weeks before police realized they had a serial sniper on the loose.

COOPER: All right, we'll be back to you in a moment.

The decision from a federal judge involving the antitrust settlement between the government and Microsoft. Steve Young is following that for us. Steve, a headline, please.

STEVE YOUNG, CNN FINANCIAL NEWS CORRESPONDENT: Anderson, the judge was expected to give holdout states something for their troubles, but instead she gave Microsoft a double victory.

COOPER: And looking ahead to the jam-packed weekend of politics in Minnesota after a very jam-packed week. Bob Franken is on that tonight. Bob, the headline.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And Minnesota, as Yogi Berra might say, Anderson, is back to the future all over the again. And the candidates are being uncommonly polite to one another, because it looks like they'd better be -- Anderson.

COOPER: All right, we will see how long that lasts. Bob, back to you in a moment. Back with all of you.

Also coming up tonight, going to pot in Vegas -- I know, I know, we will try to resist the puns in this story, but it is going to be hard. On election day, will Nevadans decide to let people buy small amounts of pot? And "Their News," or should we say, their soap opera, from Britain. Warning, here comes another pun, the butler didn't do it, Diana's butler, that is. We will have that story.

But we begin tonight with the sniper case. It seems every night we've had a new development to report on, as police all over the country go back over evidence to see if a killing or a shooting can in some way be connected to Malvo and Muhammad. Tonight is no exception. Police putting another pin on the map of murder. Here again, CNN's Kelli Arena.

(COMMERCIAL BREAK)

ARENA (voice-over): The shooting in the Hillendale area of Montgomery County, Maryland took place on September 14. That's more than two weeks before authorities realized they had a serial sniper on the loose.

The victim survived, but the MO was the same, a single shot fired outside a strip mall off the major highway.

ARNIE ZELKOVITZ, LIQUOR STORE OWNER: And there was no robbery attempt. Nobody came up to us. We never saw anything.

ARENA: Police now say the sniper suspect's 1990 Chevy Caprice was in the area that day, allowing them to definitively link the September shooting to the string of attacks. One witness tells CNN that he told police the night of the shooting that he saw a dark- colored older Chevy Caprice driving slowly away from the scene. Montgomery County's police chief was repeatedly asked by the press about any possible link between that shooting and the sniper attacks, but would only say ballistic evidence was inconclusive.

CHIEF CHARLES MOOSE, MONTGOMERY COUNTY: I still have not really comprehended the relevancy of the persistent questioning with regards to that case.

ARENA: It was not the last time police would be told about a dark Caprice. Two witnesses to a sniper shooting in Washington, D.C. on October 3 also described a similar vehicle.

KARL LARGIE, SHOOTING WITNESS: So I was still on the phone, ignoring it, when I just observed the car, a dark colored Caprice.

GAIL HOWAD, SHOOTING WITNESS: It was dark colored. And it looks like an old police car. That's what I (UNINTELLIGIBLE).

ARENA: D.C. Police did issue this lookout on October 7 for that type of vehicle, but when asked about its importance, this is what Chief Moose had to say.

MOOSE: Well, that is also a lookout that has been put out there. And I think there's been more law enforcement focus on that, not a big push for public feedback about that.

ARENA: In fact, Washington area police stopped the alleged sniper's car on numerous occasions, including the evening of October 7, when suspect John Allen Muhammad was found sleeping in the vehicle in Baltimore, Maryland.

Investigators were focused instead on a white van that several witnesses had reported seeing at various crime scenes. Chief Moose said this past Saturday that he believed the possibility of a Caprice being involved in the sniper attacks had been ruled out.

MOOSE: I was also somewhere in the investigation told that we had located that, that it had been somehow abandoned.

(END VIDEOTAPE)

ARENA: A D.C. homicide detective who checked out that abandoned car said that the chief had received, quote, "bad information."

Anderson, back to you.

COOPER: So, Kelli, I mean, I know you went over it in the report, but I mean, is there any more on exactly what the motive of this shooting was, this shooting of the store clerk?

ARENA: We don't know the motive for any of the shootings. So far neither of the suspects is talking, and there hasn't been any hard evidence that's been uncovered to suggest what the motive may have been, although several investigators that we've spoken to, Anderson, have suggested that the money motive maybe was not an afterthought but was something that was part of the equation all along. You know, the suspected snipers had demanded $10 million in two letters. There were phone calls made about, you know, so-called negotiations, and more and more that theory is gaining a bit more momentum.

COOPER: And at this point, I know they're not talking, but do investigators feel like they have a grip on sort of the timeline and the whereabouts of these two individuals, these two suspects? I mean, obviously they were in Maryland, I guess, at this time, and then they were in Alabama and Louisiana and then back to Maryland?

ARENA: That's right. That's right. So far, they have a pretty good grip, but there are certain areas that they're still trying to piece together, and that's why you have all of these jurisdictions that are involved going through a lot of unsolved crimes to find out if there's any connection.

COOPER: So it's very possible we may be hearing about more possible crimes that these two might have been involved in?

ARENA: It's always possible, yes.

COOPER: All right, Kelli Arena, thanks very much tonight.

We move on now to Microsoft. You know how your computer sometimes works, sometimes it doesn't, and you have to reboot it, then it crashes and you have to start it? Isn't that what the Microsoft antitrust case kind of feels like? On again, off again, up and down, for four years now. Well, today, a federal judge gave her approval to an antitrust settlement. End of story.

That, of course, is the theory. The fact is we'll probably be writing the final chapter to this one on Microsoft Word version 72.0. Again, here's CNN financial correspondent Steve Young.

(BEGIN VIDEOTAPE)

YOUNG (voice-over): Microsoft, found earlier to be a predatory monopolist, nevertheless won a double-headed final victory in the four-year long antitrust case. Judge Colleen Kollar-Kotelly approved the deal reached by the company, nine states and the Department of Justice last November, and she rejected a tougher proposed settlement, reached by nine other states in June. The agreement makes it much tougher for Microsoft to retaliate against PC companies that dare to use non-Microsoft products.

Bill Gates and company were muted in taking their victory lap.

BILL GATES, CHAIRMAN, MICROSOFT: This settlement puts new responsibilities on Microsoft, and we accept them. We recognize that we will be closely scrutinized by the government and our competitors.

YOUNG: The Justice Department took a more victorious tone.

JOHN ASHCROFT, ATTORNEY GENERAL: Today, consumers all across American won a great victory.

YOUNG: The so-called holdout states, the losers, declared the outcome a victory, but reading between the lines, it seemed pretty clear they had neither the will nor the money to stage another appeal. They claim the judge is giving consumers and PC companies a few improved rights against Microsoft than the original settlement did.

KEVIN ARQUIT, ATTORNEY CLIFFORD CHANCE: PC manufacturer is given greater freedom in that when the computer is turned on, it's going to be easier for them to have their own software made available to the consumer, and also for the computer manufacturer to make its own offer as to the Internet access provider that the consumer has the alternative to choose.

(END VIDEOTAPE)

YOUNG: Many thought Judge Kollar-Kotelly would quickly exit after her ruling, but she said she'll be watching closely during the antitrust consent decree that runs five years. The judge said she'll personally hold responsible Microsoft directors, especially those who testified before the case, if there are any violations. She adds, quote, "let it not be said of Microsoft that a prince never lacks legitimate reasons to break his promise" -- Anderson. COOPER: So, Steve, the attorney general says, John Ashcroft says that consumers won a great victory. What exactly does this mean for consumers? I mean, is this as simple as something will be different on their computer screens if they buy a Microsoft computer?

YOUNG: Well, for starters, it means that there will be uniform contracts, which means that theoretically Microsoft won't be able to use its club, its pricing club to get PC makers, the Gateways and the Dells, to do its bidding.

COOPER: And that's official (ph). And is this thing over? I mean, is this a done deal?

YOUNG: Is this over? Well, Microsoft itself actually in their press conference late tonight -- it's a good question -- said that she issued 588 pages. I counted them; they didn't. And that they're not finished going through the pages. They said they may even appeal yet, but it's unlikely.

COOPER: All right. Steve Young, thanks very much.

YOUNG: Sure.

COOPER: Well, at a schoolhouse in a small Italian mountainside village, the rescue work is over. There is simply no one left to pull from the ruins. In the words of a local priest, it looks like the entire first grade class was wiped out. Twenty-nine people died in the earthquake yesterday, and today the earth shook yet again.

CNN's Chris Burns is there.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): The aftershock was strong enough to rattle buildings in this Apinine mountain village, shake the dust off of the rubble and test already frayed nerves.

"I'm demoralized," says this woman. "Since the earthquake beat the walls, I'm too scared to go inside."

"Everything that's happened is too much," says this man. "We can't take this anymore."

The aftershock prompts police to evacuate the historic center. They had just completed rescue efforts at a school, which collapsed with dozens of students inside.

Throughout much of the day, and the night before, rescue workers toiled frantically to save any flickering life trapped below. They pulled out one small lifeless body after another, deepening the agony. Confirming these relatives' darkest fears of a loved one lost. Hopes rose when an 8-year-old boy, his feet trapped into the rubble, was found alive.

But morale faded again, as rescue crews, aided by heavy machinery and search dogs, made more grim discoveries. The bodies are taken to a makeshift morgue, the city's gymnasium. Feeding the sadness and frustration in this town of 1,300 where everyone knows each other, knows the two dozen little lives that perished as their classrooms crumbled around them.

(on camera): Even as this rescue work was going on, one question has been raising a lot of ire here, how could this school have collapsed like such a house of cards, when other buildings nearby were damaged but are still standing? And who is to blame?

(voice-over): Villagers vented their anger when Prime Minister Silvio Berlusconi paid a visit to the shattered school. He was booed. Authorities have opened an investigation into the school's collapse.

The government's relief effort is well underway. Hundreds of civil defense workers, troops, paramedics, as well as rescuers have been deployed. Some comfort for those rattled by the aftershocks, but there's little relief for the other aftershocks. The tremors of the heart as the village reels in grief.

Chris Burns, CNN, San Guliano di Puglia, Italy.

(END VIDEOTAPE)

COOPER: Well, ahead on NEWSNIGHT, no, Ted Turner won't be showing up for a major announcement, but we do have some new insights on that rumored ABC-CNN merger. You'll want to stick around for that. It is our segment seven tonight. But before we do that, a little business. When we return, connecting the dots from Washington State to Alabama, how the evidence against the sniper suspects adds up.

(COMMERCIAL BREAK)

COOPER: More now on the sniper story. We want to look at how investigators actually go about connecting a bullet from a crime scene to the rifle the snipers used.

Questions as well tonight about the possibility a third person was involved in one of the shootings, the one at the liquor store in Montgomery, Alabama.

Joining us tonight from Birmingham, Alabama, Jim Cavanaugh. He is a special agent in charge for the Bureau of Alcohol, Tobacco and Firearms -- Mr. Cavanaugh, thanks for being with us tonight.

JIM CAVANAUGH, SPECIAL AGENT, ATF: Thank you, Aaron.

COOPER: You were part of this press conference earlier today. Clear up for me, if you can -- it seems a little bit confusing. Right now it seems what authorities are saying in Alabama is that at that shooting outside that liquor store, there was both a handgun and a rifle used? Am I correct in that?

CAVANAUGH: Well, I think maybe I can clear some of that up for you. The chief and I have talked extensively about it, and we've reviewed the facts in the case. What happened was Montgomery police officers, uniformed police officers were close to the shooting, and they responded within 30 seconds of that shooting, and two police officers separately reported seeing perpetrators with a silver handgun. So right from the beginning, a handgun came into play in the Montgomery, Alabama case. The cartridge that was recovered -- or the projectile, I am sorry -- that was recovered there was a .22 caliber projectile.

So from September the 21st until the middle of the case in Maryland and Virginia, they didn't exactly know what caliber, what gun shot it. They knew it was a .22, and they suspected it was a handgun because the officers had seen handguns. But of course, after the rifle was recovered, we were able to do forensic firearms examination with the Alabama Department of Forensic Sciences, and the ATF laboratory and conclusively establish that that Bushmaster rifle recovered in Maryland killed the victim in Montgomery, Alabama.

COOPER: So what was initially thought to be a spent projectile or cartridge from a .22 was actually a .223?

CAVANAUGH: Exactly. And all of those are part of the .22 caliber family. We're dealing in thousandths of an inch, the firearms examiners are. It's a real science, it is a real meticulous microscopic examination of a damaged fragment from this .223 rifle that may be distorted because it hit a victim, of course. So they have to -- they can't tell everything they'd like to tell sometimes with just the projectile. But having the rifle, that's the treasure trove. That allows the scientists to really make the match.

COOPER: Now, this handgun that was also found, apparently along the route, that a police officer chased one of the suspects along, do we know for a fact that this handgun was involved in this shooting?

CAVANAUGH: No, that's a good question, Aaron, and the answer is we don't exactly know if it was or not. Here are the facts we know about the handgun. There is a .22 Magnum revolver found two days ago by a citizen and turned into the Montgomery, Alabama police, along the route, near the route where these shooters escaped. We traced that gun to the first retail purchaser through the ATF Gun Trace Center. We put it to the retail purchaser in Oklahoma. He sold it to a man who took it to El Paso, Texas where it was stolen at a gun show on the 20th of July. And that is the last tracking we have of it.

So we're trying to determine how it got there.

COOPER: I know there's a lot that is unknown still at this point, and you are still trying to piece all the pieces together, but do you feel any closer, and maybe it's just the personal opinion, I'm looking for, but do you feel any closer to understanding any of the motives of these two suspects? I mean, does -- as you learn more about the timeline, and the whereabouts, and the possible crimes that they were involved with, does any of it start to make sense to you?

CAVANAUGH: Well, you know, I -- as a policeman and a special agent with the ATF for almost 30 years, I look to the facts first, and I think the motives are clearly laid out in the criminal complaints and affidavits, and those motives are robbery, murder, and extortion, and they've been laid out in the court documents, and I think those are based on the facts that have been presented to the bar of justice.

Now, if you want to speculate past that, you know, anybody could. What other motives or things would drive people? But I think those are the facts at the bar of justice and I probably would not want to speculate further than that.

COOPER: Sure. Well, where do you go from here? I mean, what do you do you most want to know at this point in the investigation?

CAVANAUGH: Well, we want to know, of course, all the rest of the story, as they say. We want to know everywhere the people were, every city and town they went to, and whether they committed any crimes in any of those cities and towns.

And I think police across the nation are doing that based on certainly the active journalists who are putting this story out front, but also the police networks as examples, the ATF's Integrated Ballistic Identification Network. We've put the images of these bullets across the nation and the FBI has the VICAP program, Violent Criminal Apprehension Program, where they can search other murder and assaults. And police departments across the nation are looking at their own unsolved murders and assaults and saying, Are these things connected?

Now that we have the rifle, we can do things like we did with the Louisiana state police just yesterday, where they called and say we think we have a related crime. The ATF laboratory fired two test fires from the Bushmaster rifle. They expressed those overnight to the Louisiana state police laboratory. Their examiners there then made the match on the Baton Rouge killing.

So we'll be able to sort through any possible cases easier now because we have more evidence.

COOPER: All right. James Cavanaugh with the ATF, very much appreciate you coming in and joining us tonight. Thanks very much.

COOPER: Coming up on NEWSNIGHT, legalizing marijuana in Nevada. A grassroots effort we'll look at a little later in the program.

But first, Minnesota's frenzied election face-off. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Fifteen states in five days. No, it's not Alice Cooper's comeback tour. Don't get too excited.

It's the schedule for the president of the United States in the final stretch of a crucial midterm election campaign. Today Mr. Bush appeared at a rally for two Republican candidates in Pennsylvania. Then he flew to New Hampshire to stump for the GOP's nomineee for Senate, Congressman John Sununu. He of course if the son of the elder John Sununu, chief of staff under the first President Bush.

The current President Bush then traveled to Kentucky to plug the campaigns of two Republican candidates there. A very long day indeed.

There was a telling quote today from a volunteer in Minnesota preparing leaflets for Walter Mondale's run for the Senate. "I have no idea what Walter Mondale thinks, " he said. "I'm going to make stuff up, then I'm going to give it to the people who actually know to correct it." This isn't just a run to Election Day in Minnesota. It is a mad dash, set off exactly one week ago when Democratic Senator Paul Wellstone was killed in a plane crash. It is going to be a very hectic weekend for Mr. Mondale and his opponent Norm Coleman.

The latest now from Bob Franken in Minnesota.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): At 74-years-old, Walter Mondale was enjoying life as an icon.

But now that he's back in the fray, his Republican opponent, Norman Coleman, is trying to push hard against the icon, trying to bridge the gap between aggressive and tasteful.

NORM COLEMAN (R), MIN. SENATE CANDIDATE: This election is about hope and opportunity and about jobs. It's about quality education for our kids. It's about taking care of our parent and grandparents.

FRANKEN: That's one of the gentle spots the Coleman campaign has decided to run, after aides claim their candidate asked them to pull another one -- an attack ad. It dredged up the economic tribulations when Walter Mondale was Jimmy Carter's vice president.

Mondale made it quite clear that just might back fire.

WALTER MONDALE (D), SENATE CANDIDATE: We got two days to go and I want to stay on the positive issues of what I want to do and people know Paul Wellstone's issues. They know where he stood. They know where I stood. Compare them.

FRANKEN: So instead of negative ads, Coleman is relying on the GOP's heavy hitters. Vice President Dick Cheney made a stop.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: As a senator, he'll be forward looking and effective and a truly independent voice for an independent state.

FRANKEN: President bush and the first lady will make separate appearances for the Republican candidate over the weekend.

At the same time, negotiations continue for a face-to-face debate between Coleman and Mondale. Mondale turned down an encounter tonight, saying he had no time to prepare.

(END VIDEOTAPE)

FRANKEN: For now the two are keeping their distance, politely tiptoeing along the high road to see where it will take them. For now, anyway -- Anderson. COOPER: Yes, we'll see how long that lasts. Although there -- you know, there are only a few more nights left to go. What are the chances of a debate actually happening?

FRANKEN: Well, Mondale says that he's willing to negotiate, but the fact of the matter is is that the president's going to be here on Sunday. That would seem to eliminate Sunday. Tomorrow is Saturday and a Monday night debate, the day before the election, would be uncommon. So what are the chances? Don't hold your breath.

COOPER: All right, Bob Franken. Thanks very much.

We turn now to Nevada. In a state where brothels are legal and you can play the slots in hospital lobbies, some residents want to know, Why can't you light up a doobie as well?

Voters in Nevada have the choice to legalize marijuana use come Election Day. It is, of course, easy to make jokes, but it is also a very serious issues. Serious money is involved and serious questions about the ongoing cost of the war on drugs and the potential risk of easing up a bit.

Here's CNN Frank Buckely.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN CORRESPONDENT: The place they call "Sin City" may someday have yet another vice on offer. Marijuana.

Pot is on the ballot in Nevada in the form of an initiative, Question 9, that would amendment the state constitution.

The amendment would allow buyers here in Nevada who are at least 21-years-old to purchase up to three ounces of marijuana for use in their homes. Any use in a vehicle or in a public place like the Las Vegas strip, would be prohibited.

Assembly Woman Chris Giunchigliani, who wrote the state's medical marijuana law, said patients need legal access to pot.

CHRIS GIUNCHIGLIANI, NEVADA STATE ASSEMBLY: All this simply recognizes that in the privacy of your own home, if you're an adult, you don't get busted for it.

BUCKLEY: But federal drug czar John Walters sees it differently.

JOHN WALTERS, DRUG POLICY CHIEF: We'll hear from John Walters about the dangers of the evil weed.

BUCKLEY: Walter recently toured Nevada to campaign against this initiative and other efforts across the U.S. to decriminalize or legalize pot use.

WALTER: No community, no city, no state is better off with more drug use. We have had two decades of experience in this country with this problem. It's not a victimless crime. Every family's been touched.

BUCKLEY: The pro-pot people are backed by big money, from the Washington-based marijuana policy project.

And they're up on TV in Nevada with ads like this one.

UNIDENTIFIED FEMALE: As a former president of Nevada's largest teacher's association, I'm voting yes.

UNIDENTIFIED MALE: As a retired 27-year street cop, I'm voting yes.

UNIDENTIFIED FEMALE: As medical marijuana patients, we're voting yes.

BUCKLEY: But federal officials are countering with ads of their own.

UNIDENTIFIED MALE: Check this out.

UNIDENTIFIED FEMALE: Cool. Is it loaded?

UNIDENTIFIED MALE: No.

BUCKLEY: Local law enforcement in Nevada have been among the loudest opponents.

SGT. RICK BARELA, LAS VEGAS METRO P.D.: This is a lot of dope. It's a lot of marijuana.

BUCKLEY: It's what three ounces of marijuana looks like, according to Police Sergeant Rick Barela.

But supporters say the federal government is out of touch with the millions of people who've either tried or currently use marijuana.

Frank Buckley, CNN, Las Vegas.

(END VIDEOTAPE)

COOPER: Still to come on NEWSNIGHT, the trial of Princess Diana's butler and a surprise revelation from the queen.

And next, the chorus calling for SEC's Chairman Harvey Pitt's resignation. It just grew a little bit louder.

(COMMERCIAL BREAK)

COOPER: Coming up on NEWSNIGHT, the political storm surrounding Harvey Pitt. Senator John Corzine weighs in.

(COMMERCIAL BREAK)

COOPER: Don't know if you saw it. A priceless headline today on the "Wall Street Journal's" Web site: "Pitt Launches SEC Probe of Self." Pitt would be one Harvey Pitt, the chairman of the Securities and Exchange Commission. A reliable punching bag for Democrats who say that he was too closely connected to the accounting business to push through real reform in the time known as A.E.: After Enron.

Well now comes news that Pitt didn't reveal something about the man he tapped to be the new watchdog for the accounting business. That William Webster was involved in a company accused by share holder of fraud.

Earlier today I spoke with one Democrat who resisted the calls for Pitt to resign, until now. Someone who knows the business world better than most. He used to be the chief of Goldman Sachs. Today he is senator from New Jersey, John Corzine.

(BEGIN VIDEOTAPE)

COOPER: Senator Corzine, there have been a lot of Democrats previously who have come out and said that Harvey Pitt should resign. You have not been among them until now. Why the change?

SEN. JON CORZINE (D), NEW JERSEY: You know, SEC is all about full disclosure. The whole principle of our securities laws is making sure that information is made available to investors so they can make informed decisions.

When Chairman Pitt withheld the information on Judge Webster, he wasn't allowing the other commissioners to make a decision with all the information. I think it sets a horrible example for what the chairman of the SEC is supposed to do, what he's supposed to be practicing. That's what leadership is about.

I think this is sort of the straw that breaks the camel's back, but I think it was very hard to have a judgment made about Judge Webster filling this most important role without having the information available.

COOPER: You say it's the straw that broke the camel's back. Just so I'm clear on your position, the Webster situation, is that alone you think enough to -- that Pitt should resign over is is it that...

CORZINE: Anderson, I think it is enough on its own merits, but you have to put it into the context that it was a very controversial nomination with regard to Judge Webster. Most independent observers would have rather had John Biggs involved in this. There was a lot of presumption of political interference from the accounting industry through congressional sources to change Chairman Pitt's mind with regard to Biggs, who is an absolute ten strike to fill out this new role.

There were other situations where people were concerned about Chairman Pitt's advocating for his own pay increase. I didn't happen to think those things were relevant, per se. I didn't like them, but I didn't think they were as important as when he practices something that is contrary to the basic themes that the SEC is supposed to practice, full disclosure.

COOPER: You and Senator Dodd have written a letter to the president. What did you say in it?

CORZINE: It simply just reflect what is I've suggested to you. It is time for Chairman Pitt to step aside in my view.

We have a crisis of confidence with respect to our financial markets, with regard to the integrity of how corporate America is working. The chief regulator of those activities should be as unimpeachable as possible. When you're not practicing what we're expecting the marketplace to do, what we're expecting corporate America to do in the leadership of the SEC, then it's a troubling message to be sent out to the American public about what we're doing on the day-to-day practices of the SEC.

And it's really unfortunate because the SEC is a -- made up of very, very hard working, committed professionals. I think they're doing a good job. They don't have enough resources but they don't need to have their credibility challenged.

COOPER: Investor confidence is sort an amorphous thing -- it's a hard thing to really gauge and a hard thing I guess to bolster. How do you bolster investor confidence in this market? I mean, is the resignation of an SEC chairman, is that enough?

CORZINE: Well I think that if you have people in place who exhibit through their actions, through their experience, through their background that they have credibility.

For instance, Paul Volcker, if he were Chairman of the SEC, I think people would say, This is an absolute certain credible figure to implement the securities laws of America.

If you had Dick Grasso, some individuals who are absolutely clear cut in their credibility to both the marketplace, to Capitol Hill and to the president, I think you would go a long way toward sending a message to the American public that we're serious about enforcing our securities laws, we're serious about implementing the new corporate accountability law.

COOPER: Does there need to be more stringent oversight of business by the government? You have an interesting perspective, you're in the government now, you were a captain of industry before.

CORZINE: Well I think we need to fully look at all the filings that come into the SEC, the income statements, the balance sheets, the restatements of earnings. We need to understand why that's happening. You need to have the resources and people to be able do that.

We've tried to send the SEC into battle with far too few resources to do the job we've asked them to do and now we are, I think through the actions of the Chairman, undermining the credibility of the institution as well. I think we need to reestablish that credibility, we need to give the SEC the resources, we need to give the Accounting Oversight Board the right leadership and the resources also to do the job. If they have it, they'll help restore in a matter of a short period of time, in my view, credibility with regard to securities markets. COOPER: Just my last question. This has been obviously a pretty partisan battle up until now. Do you think that's going to change after the November elections? Do you think we're going to see more Republicans coming forward and saying, Yes, maybe we better rethink this?

CORZINE: Anderson, I think that, quietly there are a lot of Republicans that would like to see a change in the leadership of the SEC. I don't expect on a practical basis anybody's going to say anything much about that until November 5. They might even wait until November 7 or 8.

But I think there will be a change in attitude, because I think this really draws into question the fundamental judgment of whether someone is committed to full disclosure.

COOPER: All right. Senator Jon Corzine, thanks very much for being with us.

(END VIDEOTAPE)

COOPER: A few more items now from around the country, starting with Jack Welch. The former General Electric chairman and his estranged wife today announced they've settled on how much alimony she'll get while their divorce makes its way through court. Now, they didn't announce the terms. Today's agreement taking the dispute out of the public eye. We do know Jane Welch has been getting $35,000 a month. She wanted more, and it is safe to say he can afford it. Even in retirement, he makes about $1.4 million a month.

In Southern California, a private plane made a very public landing last night. The plane developed engine trouble. It had to land on I-15 in San Diego. No one was hurt, but the freeway was closed for about an hour.

And from New York, say hello to James W. Broderick, the son of Matthew Broderick and Sara Jessica Parker. They came home from the hospital today. About 100 photographers showed up for the occasion. Happy day for them.

Ahead on NEWSNIGHT, rumors of a merger. Oh, my. ABC and CNN, what a possible marriage would really mean. We will tell it to you straight a little later.

But first, it seems the butler didn't do it, so says the queen. That is her story and she is sticking to it.

(COMMERCIAL BREAK)

COOPER: A few stories now in our world roundup, beginning with a fire in Morocco. At least 49 people were killed and dozens injured in a prison as inmates slept in their cells. Many of the victims suffocated or were trampled during a panic stampede.

A box that some scholars believe is related to Jesus was badly damaged when it was moved from Israel to Canada. Some think the burial box may have contained the bones of James, the brother of Jesus, but that is a matter of hot debate. The box now has wide cracks, but remains intact.

And former South African President Nelson Mandela paid his respects today at the grave of Princess Diana. He said her work in Southern Africa had made a tremendous impression on him. Mandela met Diana after she had traveled to Angola to promote the fight against land mines.

Another story about Princess Diana tonight, and we are trying to imagine the tabloid headlines that Londoners will pick up tomorrow morning. "Bad Boy Butler Gets Queen-Size Reprieve." Actually, they will probably be much raunchier and racier than that.

There's so much to work with here. Diana's ever faithful butler, the guy who literally has the dirty laundry from the royal family accused of actually stealing from her. And then at the very climax of his trial, the queen herself steps in with a revelation that would have prevented this whole sorry saga in the first place. A look now at "Their News" -- not the raunchy kind, more like the stately kind -- from ITV.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Diana's butler walks free after the sensational collapse of his trial.

UNIDENTIFIED FEMALE: What the queen said in this car that brought the case crashing down.

UNIDENTIFIED MALE: Celebration for Burrell as his two-year ordeal comes to an end.

ANNOUNCER: The ITV evening news with Marc Ostin (ph) and Mary Nightingale (ph).

UNIDENTIFIED MALE: Good evening. Welcome to the program.

UNIDENTIFIED FEMALE: Hello. "The queen came through for me." With those words today, Princess Diana's butler, Paul Burrell, signaled the dramatic end to one of Britain's most sensational trials. At the center of it all, the monarch herself. It emerged that Mr. Burrell had told her shortly after Diana died that he had kept some of the Princess' possessions.

UNIDENTIFIED MALE: Thirty-eight years in this job is just not long enough to prepare for a day like today. This was a spectacular displace of failure by the police, by the crown prosecution service.

UNIDENTIFIED MALE: Paul Burrell was charged with theft, but to him, his family and his friends, it was the same as being accused of treachery, of betraying the closest of friends. All his working life he's been in the service of the crown and members of the royal family. And it was the extraordinary intervention of that family, and ultimately the queen, which has set him free. UNIDENTIFIED MALE: He's happy and relieved to have been acquitted on all charges after the terrible ordeal of the last 21 months.

UNIDENTIFIED FEMALE: His supporters were always adamant that the butler didn't do it.

Tonight, there's relief for the outcome of the trial, but there's also anger that the case ever came to court at all. Tim Rogers (ph) joins us now from outside the Burrell family home -- Tim.

TIM ROGERS (ph): Well, there's no sign of the Burrells here at their home in Thoundon (ph) today, but there is much relief at today's result.

UNIDENTIFIED MALE: Outside Paul Burrell's flower shop in the neighboring village, his agent said they'd already received big offers for their story.

UNIDENTIFIED MALE: There's a great saying that says "think before you ink." And so you have got to step back, you've got to take a look at all the offers, and then you've got to sign whatever contracts need to be signed if contracts are going to be signed.

UNIDENTIFIED MALE: Because he does have a remarkably story to tell.

UNIDENTIFIED MALE: He's got a fabulous story to tell.

UNIDENTIFIED MALE: We've had a lot of criticism of the police. And anything I would say, is this was an exceptionally tricky case. And let's go back, put Paul Burrell aside for one minute, and go back and see how this all began. What they were looking for at the Spencers' behest was that secret box in Diana's sitting room. We now know that what was in it was incredibly sensitive: Letters from Prince Phillip, James Hewitt (ph) signet ring, and perhaps the most sensitive at all, an audiotape with some very, very sensitive, I'm sorry to re- use the word, but some very sensitive allegations on it.

Now, the content of that box disappeared. It has never been found. Paul Burrell didn't have it. So where is it? And the intriguing question tonight that we're left with, is what did happen to all that material?

(END VIDEOTAPE)

COOPER: Still ahead on NEWSNIGHT, the ABCs of CNN.

(COMMERCIAL BREAK)

COOPER: Ah, "Segment Seven." Just remember it's all in good fun.

The media world, or at least the lunch crowd at Michael's, is all atwitter with word that CNN and ABC may merge. Now both companies are in discussion though no one is saying when it may happen. Now many of us here were formerly employed by ABC. I worked there, so did Aaron and Connie. Jeffrey Toobin was there, Beth Nissen, Jeff Greenfield, David Ensor, Shelia McVicker, Jeanne Meserve, Tim O'Brien, Jim Bitterman, Mark Potter, Carol Lin -- Oh, I could go on, believe me, but I won't. Many of us fled ABC in the dead of night and at CNN, we found sanctuary.

I'm told in the murder -- in the merger, Freudian slip, refugees like myself would be granted a general amnesty. So I don't think we have too much to worry about. But in the spirit of friendship, I feel some ABC anchors need to be warned. See, CNN is very different than ABC.

First, say goodbye to those $10 million salaries. At CNN $10 million buys more than one Canadian news anchor. Yes, no it does. In fact, for $10 million I think you can probably buy CNN.

Also here, there's no help with hair and makeup in the field. That's going to come as quite a shock to some of my former colleagues.

Also, you can't charge gym memberships to the company. Sorry.

The commissary? No subsidized salads here. For lunch you go to Penn Station or try the street mead in front of the post office. It's pretty good.

Also at CNN cameramen, prefer to be called by their name, not "Hey You." And when an anchor travels, CNN doesn't pick up the extra way for charges for their ego. So that'll be an adjustment for some.

Also at CNN, the cameras don't have those special filters that give on-air talent that million dollar youthful glow. See, this is how I look with the CNN filter. And this is how I look with those special ABC filters. Sure, I look younger but it's really not worth the extra cost.

Sadly some anchors are clearly going to have to go. The question is how to choose. I say the old fashioned way: steelcage death match. At the very least, it would be a ratings winner.

I can see it now. Candy versus Cokie.

Lovable Lou Dobbs against battling Barbara Walters.

How about Stephanopoulos versus Carville? Hey, at least Bill Clinton would want to watch that one.

When you think of it, the merger makes sense. After all, we could combine programming. "Good Morning American Morning." Paula Zahn, Elizabeth Vargas, Dianne Sawyer and Charlie Gibson. Sure, it may be a little unwieldy, but hey, if CBS can have four anchors, why can't we?

What about "Whose Headline Is It Anyway?" Audience members yell our hypothetical news stories, competing anchors have to improvise. It would be fun. I'm telling you, this merger will put the sin in synergy. "Oprah Talksback Live." "Dharma and Larry." How about that? "Live with Regis and Wolf."

How about "CNNPD Blue" Andy Scipowitz finds a new partner in Myron Kandell. And "20/20," it would have to become "50/50" or maybe "60/40," depending which network comes out on top in negotiations.

And I know the merger is big news. The question I have: does this mean I get to go do "The Mole" again? Probably not.

That is NEWSNIGHT for tonight. I'm Anderson Cooper. Thanks very much for watching. Aaron Brown returns on Monday with complete election coverage. Hope you have a good weekend. Good night.

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