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CNN Newsnight Aaron Brown

CIA Spree Killer Executed; FBI Has New Warnings on Hospitals at Holiday Time

Aired November 14, 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, HOST: What if we knew more about the comings and goings of the hijackers before they hijacked the planes? The answer, in fact, is we did in bits and pieces, but law enforcement couldn't put the pieces together until after the fact. But what if they could? What if a credit card purchase here, a trip to a toll booth there, government could discern a pattern or a conspiracy?
It doesn't take rocket science. You've probably experienced a form of it already. How do you think Amazon knows what kinds of books you like? Or when you call Domino's, the guys asks, "Would you like the usual, sir?"

Companies already keep track of what you buy so they can sell you something new. It's called data mining. The software to do that is out there. So what if government started using it too?

Now ask yourself, would you feel safer knowing the government also knows you eat twice a week at, let's say, Denny's? That you buy gas at exit 23 and that every other Saturday you rent an X-rated movie? After all, the video store already knows and so does Exxon and the turnpike authority.

We already give them all these bits and pieces of our lives every single day. The question is, do we want, even in the name of national security, to give government the power to put all those pieces together? This isn't some idle question in this post 9/11 time. There is an office at the Pentagon working on the technology to gather and sort and analyze all that information, personal information.

And while the technology isn't there today, tomorrow is another matter. So what if they could gather all this stuff and sort it and analyze it? What ifs have a way of becoming done deal faster, some times, than the implications are understood.

We'll grapple more with that a bit later tonight. But now on to The Whip and the news of the day and an execution that has stirred up worries of terrorism as retaliation. CNN's Bob Franken covering -- Bob, a headline, please.

BOB FRANKEN, CNN CORRESPONDENT: Well Aaron, there's nothing routine about an execution, but there is a grim routine that always goes along with one. This is not an ordinary case, the case of Mir Aimal Kasi. We're going to talk about his death and the fears that follow it. BROWN: Bob, thank you.

Another FBI security alert and some disagreement about going public with it. CNN's Jeanne Meserve on that tonight. Jeanne, a headline from you, please.

JEANNE MESERVE, CNN CORRESPONDENT: As the government ramps up its efforts to protect against terrorism, a dispute within the administration about whether one terror warning should have been issued at all -- Aaron.

BROWN: And to Florida now, and CNN's Mark Potter. The case of two boys, the King boys. Two trials, two theories of the murder of their father. A case now closed. Mark, a headline from you.

MARK POTTER, CNN CORRESPONDENT: Well, Aaron, in the controversial and tragic case of Alex and Derek King, there is now a negotiated settlement. As part of the deal, the boys have confessed and are heading for a Florida state prison -- Aaron.

BROWN: Mark, thank you. Back to you and the rest shortly.

Also tonight, former U.S. weapons inspectors Richard Butler on the games Iraq is likely to play. We'll have the latest chapter of Wall Street businessmen behaving badly, this time over a company worth billions. And nursery school for the twins. And if you drive the twins to nursery school, do the terrorists win?

If you an SUV, columnist Arianna Huffington says the answer is yes. We'll talk with her tonight about that.

And we'll close things out tonight at the whitehouse.gov. An online tour, with the president as your guide. And, as you'll see, never misunderestimate, as the president might say, the power of the Internet.

We begin tonight with an execution that took place just a short time ago in Virginia. Ordinarily these things get barely mentioned these days. This is the fourth killer to be put to death so far in the commonwealth this year. But this time the condemned man was a Pakistani, his crime terrorism. And the fear now is someone will try and avenge his death.

We go back to southern Virginia to start it off tonight and CNN's Bob Franken. Bob, good evening.

FRANKEN: Good evening, Aaron. It was just about an hour ago at 9:03 PM, when the lethal injection was put into the body of Mir Aimal Kasi. It was in some ways like other executions. The demonstrators were here, those who oppose capital punishment. They were here in larger numbers off the prison grounds with their candlelight vigil.

Meanwhile, inside the prison, with witnesses watching, the execution was completed.

(BEGIN VIDEOTAPE) LARRY TAYLOR, VIRGINIA DEPARTMENT OF CORRECTIONS: Death was pronounced at 9:07 PM. There were no complications. Mr. Kasi did make a last statement. He simply said, "There is no god but Allah."

CHRIS GORDON, POOL REPORTER: At one point, and this was at 8:58, just after he walked in, he went like this, twice. He waved what appeared to be two fingers or a victory sign with his right hand.

(END VIDEOTAPE)

FRANKEN: The execution takes place, Aaron, in a room at the back of the prison off to my right. It's for a crime that occurred nearly 10 years ago.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): On January 25, 1993, the morning ambush outside Central Intelligence Agency headquarters in Mclean, Virginia shocked the world and left two CIA employees dead, three others injured.

MIR AIMAL KASI: I was real angry at the policy of the United States government in the Middle East, particularly towards the Palestinian people.

FRANKEN: It took four years, but the relentless pursuit by law enforcement finally paid off. June 15,1997, investigators tracked gunman Mir Aimal Kasi to a hotel in Keta, Pakistan. Among those who crashed into his room, FBI Agent Brad Garrett, who had led the hunt.

BRAD GARRETT, FBI AGENT: And we get into this huge tassel with him. He's screaming at the top of his lungs. We end up gagging him at some point.

FRANKEN: The execution has worried officials both here and abroad. There have been demonstrations for days in Kasi's native Pakistan. The State Department is warning Americans there of possible revenge attacks. Security here at the prison was beefed up. Governments around the world are concerned that this might serve as an excuse for new terrorism, even though Kasi, before his death, said he opposed any violence in his name.

KASI: I think Pakistan (UNINTELLIGIBLE) a lot of people like me. So I think there are very big chances of retaliation against Americans there. But personally, I don't encourage anybody to attack Americans.

(END VIDEOTAPE)

FRANKEN: The execution went on as scheduled after the Supreme Court refused to delay it and after the governor of Virginia, Mark Warner, said that the death penalty was appropriate and he would not provide clemency. And in a poignant note, the man who captured Mr. Kasi, Brad Garrett, the FBI agent, at Kasi's invitation, was in his room at the gurney until moments before the lethal injection.

BROWN: Actually, there's a number of little twists in this. He seemed at least somewhat remorseful over the last months or so.

FRANKEN: He was remorseful for the fact that civilians were killed. He said that he's gotten to know the families and was sad for that, but he said that it was something that he needed to do, he needed to attack the government of the United States. As a matter of fact, when he was asked about the September 11 attacks, he said he opposed the World Trade Center crashes because he believed that innocent civilians were killed. But in the case of the Pentagon, he said that was appropriate.

BROWN: Bob, thank you. Bob Franken in Virginia tonight getting us started.

There was another terror alert today, another warning of things perhaps to come, and therein lies the rub. There is friction tonight between the FBI, which went public out of an abundance of caution, and the White House, where the concern is an overabundance of warnings and not enough to back them up. Here again, CNN's Jeanne Meserve.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): The warning from the FBI about a possible December anthrax or bomb attack on hospitals in San Francisco, Houston, Chicago and Washington, D.C., did lead some medical facilities to increase security.

JIM EATON, CALIFORNIA PACIFIC MEDICAL CENTER: We alert our regular staff to be cautious of packages, cautious of things that are out of place.

MESERVE: But displeased White House officials said the alert was based on intelligence with very low credibility that was not corroborated. One official criticized the FBI for, "getting people unnecessarily alarmed." Another said flatly they should not have put this information out. An FBI official in Houston explains why the agency did.

UNIDENTIFIED MALE: The responsible thing to do is, as we gather intelligence information, is to share the intelligence information.

MESERVE: FBI alerts have gone out about items as diverse as the risk to power plants and the threat from scuba divers. Many of them, FBI officials say, based on intelligence of a similar, unsubstantiated nature. And some experts the agency has little choice but to disseminate the information.

RANDALL LARSEN, ANSER INSTITUTE: How about if they had it and didn't give it to the hospitals and something happens tonight? You know, how are the American people going to react to that?

MESERVE : Although officials say there is no specific and credible information to warrant raising the threat warning level from yellow to orange, the release of an audiotape purportedly from Osama bin Laden and other intelligence information has brought changes.

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: Federal agencies are taking a variety of additional steps to ramp up our protection and prevention measures.

MESERVE: Threat collection and analysis is almost certainly operating at full power, according to one former FBI official.

HARRY "SKIP" BRANDON, FMR. FBI DEPUTY CHIEF OF COUNTER-TERRORISM: The threat is out there. The professionals know its out there. They're in a very high state of readiness. Much higher than yellow.

(END VIDEOTAPE)

MESERVE: But even in this very watchful environment, the White House is unhappy about the FBI warning to hospitals. In part, officials say because it did not go through an established interagency process intended to vet the credibility of the threat, to prepare directives for the affected sectors and mold a public message if necessary. A review is under way and intended to ensure that that doesn't happen again -- Aaron.

BROWN: Does the White House -- whose job is it here to issues these warnings? Is it the Justice Department's, the FBI, or is it the White House?

MESERVE: Well, these alerts have gone out in the past from the FBI through the inlet system. It sends out messages to law enforcement around the country. In this instance, we're told the inlet system was not worked. The directive went out to the FBI -- to terrorism task force in these four cities. It's usually a collaborative effort before it gets to the point where the directives are issued and in this case it wasn't.

BROWN: Jeanne, thank you. Jeanne Meserve in Washington tonight.

On to Florida next and the strange and sad case of Derek and Alex King, 12 and 13 years old. They were tried, you'll recall, for killing their father, one of two trials that took place for the same crime. Their conviction based on one of two mutually exclusive theories the prosecutor put forth. To put it mildly, their conviction struck many as problematic, the judge in their case included. He threw out convictions and then ordered both sides to cut a deal. The deal went down today.

Here again, CNN's Mark Potter.

(BEGIN VIDEOTAPE)

POTTER (voice-over): In a mediated settlement between the defense and prosecution, Alex and Derek King, ages 13 and 14, pleaded guilty to arson and third degree murder for the beating death of their father a year ago. Alex was given a seven-year prison sentence. His older brother Derek received eight years.

They will serve their time at a state facility which houses only juveniles. As part of the deal, they also had to confess their roles in killing their father, Terry King. Judge Frank Bell first read Derek's detailed confession. FRANK BELL, CIRCUIT JUDGE: "Alex suggested that I kill dad. I murdered my dad with an aluminum baseball bat. I set the house on fire from my dad's bedroom."

POTTER: The judge then read allowed the confession from Alex, the younger brother.

BELL: "We talked about killing my dad. When we got home, Derek got the bat and hit dad in the head. After a while, dad didn't move. We set the bedroom on fire."

POTTER: Last September, Alex and Derek were tried and convicted of second degree murder and arson. Ricky Chavez, a family friend and convicted child molester, was tried separately on similar charges but was acquitted. Judge Bell, however, through out the boys' verdict, ruling the trial was unfair.

He then appointed a mediator and ordered the defense and prosecution to try to settle the case out of court. Kelly Marino, the boys' biological mother, who gave them up for foster care years ago, opposes the negotiated plea deal. She claims she was cut out of the mediation and argues the boys are too young to make such an important decision.

KELLY MARINO, ALEX AND DEREK KING'S MOTHER: They're 13 and 14 years old. They're not able to make this judgment for the rest of their lives. And none of us were allowed to have a say in that.

POTTER: Defense attorneys and the prosecutor responded harshly to the mother's criticism, arguing she did little to help the boys earlier in their lives.

DAVID RIMMER, PROSECUTOR: They wouldn't be going to the state pen if she had been paying more attention to them when they were in their play pens.

(END VIDEOTAPE)

POTTER: Defense attorneys say it's important for the boys to now find stability and security. In a sad testament to their past, they must now seek that in a Florida state prison -- Aaron.

BROWN: Mark, other than taking a shot at the mother, which may or may not have been appropriate there, the prosecutor who sought a first degree murder conviction in the case and a life sentence, what did he have to say about the outcome?

POTTER: He said he was pleased with it. He said what he really wanted was the truth to come out. He insisted on a confession, which he got from both boys. He always said that he didn't care so much about the sentence, he was always willing to leave that up to the judge. This is not all that far out of line with the lower limits of the sentencing guidelines for the murder, second degree murder. And so he's not that unpleased with it; the defense attorneys are ecstatic.

BROWN: Mark, thank you very much. Mark Potter in Florida tonight.

One more story out of Florida tonight also began with a young teenager and a horrible crime. And as in the King case, the jury had little problem believing a teenager ought to be held responsible. The teenager drew a hefty sentence. But if Florida is a tough law and order state, it is also a big personal injury state, so this time around it was a civil trial. The defendant was a gun distributor and not a teenager.

Here's CNN's John Zarrella.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The case was billed as potentially landmark. Pamela Grewnow sued the company that distributed the handgun used by then 13-year-old Nathaniel Brazill when he killed Grewnow's school teacher husband. It was a courtroom test of whether people kill people or guns kill people. The six-women jury found the gun distributor, Valor Corporation, only partially responsible.

UNIDENTIFIED FEMALE: With the negligence on the part of Valor Corporation in supplying the Raven MP-25 without feasible safety measures, which was a legal cause of damage to plaintiff, yes.

ZARRELLA: But on three other questions regarding whether Valor supplied a dangerous and defective product commonly known as a Saturday night special, the jurors said no and refused to talk about their decision.

UNIDENTIFIED FEMALE: It's been a long day. We need time.

ZARRELLA: The jury found Valor only five percent responsible for teacher Barry Grewnow's death. And of the $24 million it awarded, Pamela Grewnow and her children may only get $1.2 million. That's five percent of the total. Still, according to Grewnow's attorney, a victory and a warning to gun manufacturers and distributors.

UNIDENTIFIED MALE: I hope that this will be a clarion call to other suppliers and distributors get that Saturday night special off your shelves.

ZARRELLA: But the remaining 95 percent of the responsibility for Barry Grewnow's death the jury placed at the feet of the Palm Beach County school board and, the family friend, Elmmore McCray, who stored the gun unlocked in a cookie tin. But neither the school board nor McCray were on trial. Valor's attorneys say the jury's verdict means there's nothing landmark at all about this case.

UNIDENTIFIED MALE: The jury didn't come back and say don't sell this gun, never sell this gun. (UNINTELLIGIBLE)

ZARRELLA: Grewnow's attorney says under Florida law, he may be able to recover the entire $24 million from Valor.

(on camera): Nathaniel Brazill, who is serving 28 years for second degree murder did not testify. When called, he took the fifth. Through his attorney, Brazill said he did not want to do anything that might further hurt the Grewnow family.

John Zarrella, CNN, West Palm Beach.

(END VIDEOTAPE)

BROWN: Next on NEWSNIGHT, we'll talk with the former chief weapons inspector Richard Butler about what happens next in Iraq. Later on, how much information does the government think ought to be collected on individuals in the name of national security? And we'll also tell you about a plan to target your SUV as an instrument of international terror. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: Got a look the other night at some of the new gadgets the U.N. weapons inspectors plan to use for sniffing out Iraqi weapons of mass destruction. We also heard former U.N. Ambassador Bill Richardson say human factors matter more. You can learn more about what's inside a building by sizing up the guy outside than you can by pointing some gizmo at it.

Something to talk about with Richard Butler, who ran the last round of U.N. weapons inspections and joins us -- the ambassador does again tonight from Sydney, Australia. Mr. Ambassador, good to have you with us. How long after they get in do you expect the first crisis to emerge and what will it be?

RICHARD BUTLER, FMR. U.N. WEAPONS INSPECTOR: It will be around the declaration that Iraq has to submit by the 8th of December. There are a lot of eights around, Aaron. The eight of October the inspector general wrote to the Iraqis seeking assurance that he'd be able to do his work properly if they ever got back inside the country. 8th of November the Security Council passed a new resolution and it sets down that 30 days after that Iraq must make a declaration of all of its illegal weapons of mass destruction.

That's the point I see, Aaron, as the next big moment. The inspectors will be back there on Monday. They'll have to set up shop, they'll have to get their vehicles working again and get their office and machines working again.

The big next point is by 8th of December. What will Iraq declare that it has by way of weapons of mass destruction? Any? None? Will it be truthful or not? That's the next big step.

BROWN: Well, they've got themselves in a bit of a box here since they've been saying they have none. So I guess all they can do is hand over a blank piece of paper and say if you think otherwise go find it? Is that what has to happen?

BUTLER: That's a terrific question. And you know it always blew me away, fascinated me when I was dealing with them to discover how they're able to look you in the eye, let's say on a Monday, and call something black. And then on the Tuesday they would call the same thing white.

I don't expect that Iraq would have any difficulty submitting a declaration by the seventh or eighth of December which has on it a list of weapons of mass destruction, even though when it accepted the return of the inspectors two days ago in a nine-page letter, it said, of course, we have no such weapons. They will not blink if they change their position. What is more crucial, Aaron, is what will that piece of paper say?

Will it literally be blank, as you so correctly raised, or will it have some detail in it and above all will it be accurate? Will it be truthful? Because the United States has made clear, others have made clear that they're not going to be messed around with this time. If that declaration is not accurate, then they'll be held to pay pretty well immediately, I would have thought.

BROWN: Maybe this is more of a philosophical question than it ought to be or a more political question than it ought to be, how much do you think the U.N. should allow the Iraqis to huff and puff and create some fuss and save face if, in the end, they comply anyway? Ought they have some room to save face?

BUTLER: Again, you know, I compliment you. That is a terrific question, because you are saying let's be a bit philosophical. The cultures differ. People have different ways of doing business with each other and the notion of face or self-respect is not unimportant. It makes sense.

It's only intelligent to take that into account. I actually think we did a lot of that in the past with respect to Iraq and I expect that there will be more of it in the future. But, Aaron, I would draw a distinction between those cultural differences, to which we should be sensitive, and objective fact.

Look, if Iraq present as piece of paper, as you raised a moment ago, a declaration that says we have no chemical weapons whatsoever, I'm here to tell you, Aaron, that that will be a lie. That is simply not true. And that will cause a very serious problem.

What's more likely is that we'll say we had some of those chemical weapons in the past, we have some residual shells and bombs now, but they're old and they're no good and we'll take you to them and show them to you in this place, but that's all of it. And then the inspectors will have to verify whether that really is all of it or not or whether there's stuff hidden, those new gizmos and machines will be necessary to look underground and so on.

So the distinction I would draw is between the notion of objectivity. There are such things as objective numbers, numbers of chemical weapons, for example. And the fact that, of course, all cultures have their own way of dealing with the truth of any given matter and the sensitivity about how it's exposed in public.

BROWN: Ambassador Butler, it's a pleasure to talk to you. We -- I think the whole world is watching what happens in the next days and we'll talk to you again soon. Thank you very much. Looks like we lost him just at the end.

A couple of other quick items from around the world to get to before we go to break. Who is expected to be named the new leader of China? That is an answer, not a question. The reports are that (UNINTELLIGIBLE) has been chosen as the new top man in the Chinese communist party. He and a batch of other younger party members are taking over from an older generation of rulers.

But the bottom line tonight, Who's on first. Thank you Abbott and Costello. We are shameless.

Leaking oil tankers headed out in the open seas tonight away from the northwest coast of Spain. The ship's hull ruptured in a storm yesterday, sending about 3,000 tons of crude oil in the water. This morning the tanker drifted within five miles of the shoreline, but tonight the crew managed to start the engines and turn the ship about.

And in Sicily, Mount Etna seems ready to settle down for a bit. The lava still flows, but slower now, less smoke and ash spewing from the mountain as well. Settled down enough for officials to reopen the airport nearby which had been closed since Sunday.

Later on NEWSNIGHT, the president gives us all a tour of his office. And up next, what information the government thinks might be good to collect on people. This is NEWSNIGHT from New York. (COMMERCIAL BREAK)

BROWN: As expected, Democrats in the House of Representatives have chosen a more liberal and perhaps more confrontational leader than they have had in years. Representative Nancy Pelosi of San Francisco won by a vote of 177-29 over a more conservative Harold Ford Jr. of Tennessee, to be named minority leader.

Congresswoman Pelosi, who currently serves as House Democratic whip, replaces Missouri's Richard Gephardt, who announced last week that he would step down after the election. Miss Pelosi becomes the first woman to lead either party in Congress.

The word "dilemma" doesn't mean what most of think it means. It doesn't mean a tricky problem. What it does mean is a hard choice between equally bad alternatives.

And that is where we seem to find ourselves in the country after 9/11, in a dilemma, or so we are told. Forced to choose between leaving ourselves exposed to our enemies, or just plain leaving ourselves exposed.

Our safety, in other words, versus our privacy. It is an ongoing battle getting more complicated all the time.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Gale Ward is like a lot of Americans. Comfortable with the ease of computers and accustomed, if not altogether comfortable, with the compromises of modern society. GALE WARD, COMPUTER CONSULTANT: We do photographic books, documentaries, things like that, and the Web site is completely geared to that. They can find out a lot about us. Where we go, where we live.

BROWN: But Gale Ward could -- and could is an important word here -- be an unwilling participant in a plan making its way through a little-known Pentagon agency. It is a proposal to see whether mountains of electronic information already stored in computers around the world, information like phone calls made, airline tickets bought, medical treatment sought, all that information, could it be gathered, sorted, stored, and analyzed in an effort to stop terrorists before they strike? It's called Total Information Awareness system, no search warrants required.

WARD: Yes, hi, this is Gale Ward...

BROWN: This is what it's like in the post-9/11 period. Security and privacy in collision. Remember the TIPS program announced by the attorney general? He wanted people like mail carriers and meter readers, people who come into your home to report suspicious activity. Under a wave of public outcry, the idea died.

For the Pentagon's information gathering system, the political problem is down the road. First, the technology issues.

JIM GOODNIGHT, CEO, SAS INSTITUTE: I'm sure it's technically possible. It will take quite a few years. The state of the art of being able to collect and pull all that data together is still -- we're still a ways away from that.

BROWN: Its proponents say if it happens at all, it will only be used overseas.

REP. CURT WELDON (R), PENNSYLVANIA: That capability needs to be in place from an intelligence standpoint, especially with those that we're monitoring on foreign individuals, on bad guys around the world.

BROWN: But critics say that's nonsense, that information on bad guys and good guys both here and around the world would end up in the database, and those who worry about government abusing its power worry what government will do with all that data.

REP. BOB BARR (R), GEORGIA: There are absolutely no checks or balances on what the government is doing here. They're not playing by the rules under which law enforcement has been operating for 30 years now.

BROWN: "New York times" columnist William Sapphire blasted the plan today, calling it an assault on individual privacy, and he railed against the agency's director, former vice admiral William (sic) Poindexter, the National Security Adviser for Ronald Reagan.

Poindexter has told reporters that his office is simply trying to develop the capability to mine all that information. Politicians will have to decide how it's used. WARD: I try to keep as little personal information as possible on the computer that could be easily accessed.

BROWN: Back at her home in Northern California, Gale Ward says she is concerned.

WARD: I'm not crazy about them knowing my every move, what I do or even finding it interesting. I don't like any of the changes, really, that we've had since, you know, the terrorist attack.

(END VIDEOTAPE)

BROWN: And therein lies the dilemma.

Still to come on NEWSNIGHT, the Wall Street analyst and the nursery school. A little bit later, new campaign targeting that SUV in your driveway and mine. Is what you drive supporting terrorism? And also, you probably can't get a real tour of the Oval Office, so why not the next best thing? A tour led by the guy who works there. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: In yesterday's chapter of Jack Grubman's follies, an e- mail from the once star telcom analyst surfaced where he said he had raised the ratings on AT&T stock to please his boss, who in turn was trying to make with the chairman of AT&T.

Today, we learned it was not quite that simple. Mr. Grubman also wrote that by raising the rating of AT&T, his boss promised to help get his kids into a really cool nursery school.

Don't laugh, he took this guy's advice.

"Wall Street Journal" reporter Charles Gasparino has been writing the story, and joins us now to fill in some of the blanks.

Well, actually, we sort of laid it out. We talked a little bit about there was some infighting going on.

CHARLES GASPARINO, "WALL STREET JOURNAL": Sandy was trying to...

BROWN: Sandy Weill.

GASPARINO: ... basically get rid of John Reed, who was his co- chairman.

BROWN: This is at CitiCorp.

GASPARINO: Citigroup was created by the combination of Travelers Corp, which Mr. Weill ran, and CitiCorp, the big bank which John Reid ran. Very -- a guy who has been around for years.

And at some point, Sandy wanted to run the show by himself, and we actually chronicled this in the "Journal" at the time. We never knew this little intrigue involving Grubman and the rating. BROWN: And the hope was, because Michael Armstrong of AT&T was on the board at Citigroup that if -- if they raised rating that Mr. Armstrong would be so pleased and so beholden, he'd toss Reid?

GASPARINO: Right -- well, he would at least vote for Sandy to run the show. You have to put this in the context at the time. Mike Armstrong, from what I understand, was obsessed with that rating. At the time, Jack Grubman was not the disgraced figure he is now. He was the top telecom analyst -- maybe the top analyst on Wall Street, and he had a negative view on AT&T. And Mike Armstrong wanted to change that. Now, as you know, they all deny that there was any plan here, although they don't deny the e-mails.

Jack Grubman says he wrote what he wrote.

BROWN: Right. And then he -- what he said yesterday was, essentially, I was just showing off.

GASPARINO: Right. Right.

BROWN: And so, how do we -- by the way, what has the company officially said in response to these e-mails?

GASPARINO: CitiCorp?

BROWN: Yes.

GASPARINO: Citigroup has essentially said the same thing, he said what he said, but he's blowing smoke. Absolutely.

I mean -- here is the thing. I can't get into Jack Grubman's mind, but I can tell you that I've seen the e-mails. It doesn't hook like he was showing off. It basically looks like he was...

BROWN: Who were the e-mails written to?

GASPARINO: They were written to a money manager -- excuse me, an analyst at a money management firm. See, what a lot of people that work at companies like Salomon Smith Barney, which is the unit of Citigroup in question here, what they do is they put out research. The research goes to individual investors like you and I. They also go to institutional investors. This woman worked at a firm that was an institutional investor.

BROWN: And,(UNINTELLIGIBLE) talk about Armstrong, not that he's in some sense complicit in this, except that it's important to understand, it seems to me, the kinds of pressures on these brokerage companies to give these guys good ratings. AT&T Wireless, was it, that was coming out with a big offering?

GASPARINO: Nine times out of ten these companies just roll over. And that's the scandal here that...

BROWN: The brokerage companies?

GASPARINO: Yes, the brokerage can roll. They show all these positive ratings. For years we've been writing about it. No one really cared until the market blew up and now people care about this conflict of interest.

In this case Jack Grubman for years didn't roll over. Now, he at some point changed his rating and people are wondering why. But for years Jack Grubman had a very negative outlook on AT&T.

BROWN: Just before -- tell me again how much time. Just before this stock offering, he did raise the rating.

GASPARINO: Absolutely.

BROWN: A couple months later he lowered it.

GASPARINO: Yes, absolutely. That's what makes this so strange. The whole thing is very bizarre.

BROWN: What's next? You got anything tomorrow?

GASPARINO: We got stuff but we can't talk about it.

BROWN: Come on, sell a few newspapers.

GASPARINO: If I tell you, I got to kill you.

BROWN: No, no, I'm the anchor, OK. It works the other way.

So you got something for the paper tomorrow.

GASPARINO: It's interesting. This is a story that's going to keep going.

BROWN: Is all of this being driven by -- to some degree by the attorney general of New York, Eliot Spitzer?

GASPARINO: Basically, Eliot Spitzer did something no one else did, he actually investigated this and he was one of the first people to do it. Now other people are jumping aboard. The NASD is doing a aggressive investigation, the SEC. But they...

BROWN: The SEC is finally in the game?

GASPARINO: They're in the game with everybody else. But I'm telling you that no one ever thought to do this until Spitzer thought to do it. It's very fascinating. When was the last time the New York state attorney general essentially was the enforcer for Wall Street?

BROWN: It's been a great story for him and obviously it goes on. It's good to see you again. Nice piece of reporting on this. Will you tell me later what tomorrow is?

GASPARINO: Maybe. After the show.

BROWN: For what we pay guests here, that's amazing -- thank you very much -- which is absolutely nothing. A few quick items from around the country. We begin with the sniper case. John Lee Malvo, the young suspect whose court appointed guardian says he plans to ask that Malvo be moved from a Fairfax, Virginia county jail where he's being held in isolation to a juvenile facility. The transfer would mean, according to the guardian, that Malvo could continue his schooling. Whether that happens or not young Malvo will nevertheless be tried as an adult when that begins.

In Miami at the airport, a lot of travelers forced to cool their heels today. (UNINTELLIGIBLE) bad at Miami, I suppose, but at the airport it's kind of a pain. But a couple of passengers somehow got by the screeners causing the shutdown of five concourses, 41 outgoing flights delayed, some inbound flights held up as well. The slippery passengers never located.

And finally the corporate backers of the well-known television psychic Miss Cleo today settled a federal lawsuit against them in part by tearing up a few bills from unhappy customers. The bills added up to -- you ready -- $500 million, money the companies basically extorted from people who were lead to believe they were making free phone calls to Miss Cleo's psychic hotline.

Later on NEWSNIGHT, the inside scoop on the Oval Office from a real insider. Up next, the trouble with SUVs, do they finance terrorism? We'll be right back.

(COMMERCIAL BREAK)

BROWN: We're about to be joined from Los Angeles by the always interesting syndicated columnist Arianna Huffington, who along with some friends and colleagues is about to make a pair of TV commercials, more like public service spots, denouncing what she and her partners believe is one of the great menaces currently facing the country.

You've all heard the three initials Miss Huffington believes should strike fear in our hearts. That's right, three initials: SUV. Really? We're always glad when she joins us. Nice to you have with us tonight.

OK. Make your argument. Actually, you did this in a column the other day that's basically they use so much gas that it finances the people who finance the people who do the terrorism, right?

ARIANNA HUFFINGTON, SYNDICATED COLUMNIST: Well, actually, the idea came to me after I've been watching all the ads the Bush administration has on the air, the drug war ads that actually link taking drugs to financing terrorism.

So I thought if this is legitimate logic when it comes to drug war, what about turning the tables on the administration and ask them to answer the question, then why isn't it putting the kind of money that we put into our cars and the gas that they consume supporting terrorism since clearly there is a link between the amount of money we give to countries like Saudi Arabia and indeed Iraq and the kind of terrorism that they support? BROWN: I was thinking that the script from one of the ads today. In fact, it is a parity, pretty much of the drug ads, which I'm not sure people believe or not.

HUFFINGTON: Well, I don't believe the drug ad myself. Because consuming drugs is an addiction. It takes tremendous determination to get rid of the habit.

But driving SUVs is a lifestyle choice. If we are at war, if indeed we are being called to be patriotic, isn't this one of the most patriotic things we can do immediately at our disposal? You know, it's quite amazing, but when I gave up my SUV, which I was driving up until a year ago and started driving a hybrid car, a little Prius, a Toyota Prius, my life didn't change.

But I went from driving car consuming 13 miles per gallon to driving a car consuming 52 miles per gallon. My kids, 11 and 13 are perfectly content to be driven in a Prius rather than an SUV.

BROWN: The -- and you raise this in the column too -- the underlying issue here is a pretty complicated one. We are in perhaps the most important war of our lifetime. The stakes are high, thousands of Americans have died, thousands of others are overseas defending freedom and that the country itself has not been asked to sacrifice anything.

HUFFINGTON: Exactly. That is really at the heart of what we are trying to say. In the second world war, we are constantly being asked to sacrifice. In fact, we could not consume more than three gallons per week, which is about what it takes to go to Starbucks as few times in an SUV.

Now we're being asked to shop, we're being asked to lead normal life but we're not being asked to do anything for the war effort yet we're being constantly told that we are at at war.

And you know what is amazing Aaron? People are ready to sacrifice. I mean, this response to this column, and it starts as a rhetorical question saying, Are we willing to pay for an ad campaign to jolt our leaders into reality? And the response was overwhelming. We got thousands of e-mails. We got thousands of little checks from $10, $20, enough to finance those ads at cost. And if anybody wants to contribute, they can go to my Web site, arrianaonline.com and contribute $5, $10. It's a people's ad campaign and it proves once again that the people are ready to be involved in this war effort in a more real way than simply shopping.

BROWN: Just -- we got literally about 20 seconds left.

Do you really expect that people will give up their SUVs or would you at least be happy if they thought about both the specific issue of how much their car uses and the broad issue of sacrifice?

HUFFINGTON: We want both people to give up their SUVs and we want car makers to put on hybrid SUVs on the road and we want our leaders to think seriously about energy conservation and raising fuel efficiency standards.

BROWN: Arriana, yet again, provocative ideas. Thank you and thanks for joining us.

HUFFINGTON: Thank you.

BROWN: Very much.

Still ahead on NEWSNIGHT, the Oval Office and a heck of a tour guide. We're right back.

(COMMERCIAL BREAK)

BROWN: Finally from us tonight, you may not know the expression house proud, but you certainly know people who are. They're the ones that rush you right into the new kitchen and say, See, we bought the granite. Or, Look, over there at the stainless steal. How about that Viking? Don't even ask what it costs. And by the way, those are custom-made cabinets.

This kind of pride, as it turns out, affect even presidents. Really. Go to the appropriate Web site, whitehouse.gov, be careful here, and take the tour of what we'll called "This Ole White House." Your tour guide will be familiar.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: First thing I see every morning when I come in is the sun shining through these big windows and the windows are magnificent. They let in the sunlight, they're -- it's a great place for me to view the wonderful South Lawn. And the rug we've designed, each president designs a rug and the rug that Laura designed for the Oval Office captures the sun and it helps make this room an open and optimistic place.

The job of a president is to set big goals for the country, big objectives. And in order to achieve those objectives, the country must be united. Abe Lincoln had the toughest job of all as president of the United States in achieving big goals and big objectives because the country was divided. It was fighting itself. And yet when you read his writings, he constantly thought about how best to keep the Union together.

I've also got George Washington on the wall here. And the answer is I don't think you could have the Oval Office without George Washington, the first president of our country. He's just a perfect fit.

This is on loan from the British government. My friend, the prime minister of Great Britain heard me say that I admired -- greatly admired Winston Churchill, and so he saw to it that the government loaned me this. And I'm most honored to have this Jacob Epstein bust of Winston Churchill. I like Churchill because he was a great war leader, he was resolute, he was tough, he knew what he believed and he had a fabulous sense of humor. And in this job, believe me, you've got to have a sense of humor. Otherwise it makes the days awfully long and the nights awfully short.

(END VIDEOTAPE)

BROWN: Whitehouse.gov to see the whole thing.

You have the whole thing from us. We're back tomorrow at 10:00. Among other things tomorrow, the future of professional wrestling. No kidding.

10:00 Eastern time. Until then, goodnight for all of us.

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

Hospitals at Holiday Time>

Aired November 14, 2002 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AARON BROWN, HOST: What if we knew more about the comings and goings of the hijackers before they hijacked the planes? The answer, in fact, is we did in bits and pieces, but law enforcement couldn't put the pieces together until after the fact. But what if they could? What if a credit card purchase here, a trip to a toll booth there, government could discern a pattern or a conspiracy?
It doesn't take rocket science. You've probably experienced a form of it already. How do you think Amazon knows what kinds of books you like? Or when you call Domino's, the guys asks, "Would you like the usual, sir?"

Companies already keep track of what you buy so they can sell you something new. It's called data mining. The software to do that is out there. So what if government started using it too?

Now ask yourself, would you feel safer knowing the government also knows you eat twice a week at, let's say, Denny's? That you buy gas at exit 23 and that every other Saturday you rent an X-rated movie? After all, the video store already knows and so does Exxon and the turnpike authority.

We already give them all these bits and pieces of our lives every single day. The question is, do we want, even in the name of national security, to give government the power to put all those pieces together? This isn't some idle question in this post 9/11 time. There is an office at the Pentagon working on the technology to gather and sort and analyze all that information, personal information.

And while the technology isn't there today, tomorrow is another matter. So what if they could gather all this stuff and sort it and analyze it? What ifs have a way of becoming done deal faster, some times, than the implications are understood.

We'll grapple more with that a bit later tonight. But now on to The Whip and the news of the day and an execution that has stirred up worries of terrorism as retaliation. CNN's Bob Franken covering -- Bob, a headline, please.

BOB FRANKEN, CNN CORRESPONDENT: Well Aaron, there's nothing routine about an execution, but there is a grim routine that always goes along with one. This is not an ordinary case, the case of Mir Aimal Kasi. We're going to talk about his death and the fears that follow it. BROWN: Bob, thank you.

Another FBI security alert and some disagreement about going public with it. CNN's Jeanne Meserve on that tonight. Jeanne, a headline from you, please.

JEANNE MESERVE, CNN CORRESPONDENT: As the government ramps up its efforts to protect against terrorism, a dispute within the administration about whether one terror warning should have been issued at all -- Aaron.

BROWN: And to Florida now, and CNN's Mark Potter. The case of two boys, the King boys. Two trials, two theories of the murder of their father. A case now closed. Mark, a headline from you.

MARK POTTER, CNN CORRESPONDENT: Well, Aaron, in the controversial and tragic case of Alex and Derek King, there is now a negotiated settlement. As part of the deal, the boys have confessed and are heading for a Florida state prison -- Aaron.

BROWN: Mark, thank you. Back to you and the rest shortly.

Also tonight, former U.S. weapons inspectors Richard Butler on the games Iraq is likely to play. We'll have the latest chapter of Wall Street businessmen behaving badly, this time over a company worth billions. And nursery school for the twins. And if you drive the twins to nursery school, do the terrorists win?

If you an SUV, columnist Arianna Huffington says the answer is yes. We'll talk with her tonight about that.

And we'll close things out tonight at the whitehouse.gov. An online tour, with the president as your guide. And, as you'll see, never misunderestimate, as the president might say, the power of the Internet.

We begin tonight with an execution that took place just a short time ago in Virginia. Ordinarily these things get barely mentioned these days. This is the fourth killer to be put to death so far in the commonwealth this year. But this time the condemned man was a Pakistani, his crime terrorism. And the fear now is someone will try and avenge his death.

We go back to southern Virginia to start it off tonight and CNN's Bob Franken. Bob, good evening.

FRANKEN: Good evening, Aaron. It was just about an hour ago at 9:03 PM, when the lethal injection was put into the body of Mir Aimal Kasi. It was in some ways like other executions. The demonstrators were here, those who oppose capital punishment. They were here in larger numbers off the prison grounds with their candlelight vigil.

Meanwhile, inside the prison, with witnesses watching, the execution was completed.

(BEGIN VIDEOTAPE) LARRY TAYLOR, VIRGINIA DEPARTMENT OF CORRECTIONS: Death was pronounced at 9:07 PM. There were no complications. Mr. Kasi did make a last statement. He simply said, "There is no god but Allah."

CHRIS GORDON, POOL REPORTER: At one point, and this was at 8:58, just after he walked in, he went like this, twice. He waved what appeared to be two fingers or a victory sign with his right hand.

(END VIDEOTAPE)

FRANKEN: The execution takes place, Aaron, in a room at the back of the prison off to my right. It's for a crime that occurred nearly 10 years ago.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): On January 25, 1993, the morning ambush outside Central Intelligence Agency headquarters in Mclean, Virginia shocked the world and left two CIA employees dead, three others injured.

MIR AIMAL KASI: I was real angry at the policy of the United States government in the Middle East, particularly towards the Palestinian people.

FRANKEN: It took four years, but the relentless pursuit by law enforcement finally paid off. June 15,1997, investigators tracked gunman Mir Aimal Kasi to a hotel in Keta, Pakistan. Among those who crashed into his room, FBI Agent Brad Garrett, who had led the hunt.

BRAD GARRETT, FBI AGENT: And we get into this huge tassel with him. He's screaming at the top of his lungs. We end up gagging him at some point.

FRANKEN: The execution has worried officials both here and abroad. There have been demonstrations for days in Kasi's native Pakistan. The State Department is warning Americans there of possible revenge attacks. Security here at the prison was beefed up. Governments around the world are concerned that this might serve as an excuse for new terrorism, even though Kasi, before his death, said he opposed any violence in his name.

KASI: I think Pakistan (UNINTELLIGIBLE) a lot of people like me. So I think there are very big chances of retaliation against Americans there. But personally, I don't encourage anybody to attack Americans.

(END VIDEOTAPE)

FRANKEN: The execution went on as scheduled after the Supreme Court refused to delay it and after the governor of Virginia, Mark Warner, said that the death penalty was appropriate and he would not provide clemency. And in a poignant note, the man who captured Mr. Kasi, Brad Garrett, the FBI agent, at Kasi's invitation, was in his room at the gurney until moments before the lethal injection.

BROWN: Actually, there's a number of little twists in this. He seemed at least somewhat remorseful over the last months or so.

FRANKEN: He was remorseful for the fact that civilians were killed. He said that he's gotten to know the families and was sad for that, but he said that it was something that he needed to do, he needed to attack the government of the United States. As a matter of fact, when he was asked about the September 11 attacks, he said he opposed the World Trade Center crashes because he believed that innocent civilians were killed. But in the case of the Pentagon, he said that was appropriate.

BROWN: Bob, thank you. Bob Franken in Virginia tonight getting us started.

There was another terror alert today, another warning of things perhaps to come, and therein lies the rub. There is friction tonight between the FBI, which went public out of an abundance of caution, and the White House, where the concern is an overabundance of warnings and not enough to back them up. Here again, CNN's Jeanne Meserve.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): The warning from the FBI about a possible December anthrax or bomb attack on hospitals in San Francisco, Houston, Chicago and Washington, D.C., did lead some medical facilities to increase security.

JIM EATON, CALIFORNIA PACIFIC MEDICAL CENTER: We alert our regular staff to be cautious of packages, cautious of things that are out of place.

MESERVE: But displeased White House officials said the alert was based on intelligence with very low credibility that was not corroborated. One official criticized the FBI for, "getting people unnecessarily alarmed." Another said flatly they should not have put this information out. An FBI official in Houston explains why the agency did.

UNIDENTIFIED MALE: The responsible thing to do is, as we gather intelligence information, is to share the intelligence information.

MESERVE: FBI alerts have gone out about items as diverse as the risk to power plants and the threat from scuba divers. Many of them, FBI officials say, based on intelligence of a similar, unsubstantiated nature. And some experts the agency has little choice but to disseminate the information.

RANDALL LARSEN, ANSER INSTITUTE: How about if they had it and didn't give it to the hospitals and something happens tonight? You know, how are the American people going to react to that?

MESERVE : Although officials say there is no specific and credible information to warrant raising the threat warning level from yellow to orange, the release of an audiotape purportedly from Osama bin Laden and other intelligence information has brought changes.

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: Federal agencies are taking a variety of additional steps to ramp up our protection and prevention measures.

MESERVE: Threat collection and analysis is almost certainly operating at full power, according to one former FBI official.

HARRY "SKIP" BRANDON, FMR. FBI DEPUTY CHIEF OF COUNTER-TERRORISM: The threat is out there. The professionals know its out there. They're in a very high state of readiness. Much higher than yellow.

(END VIDEOTAPE)

MESERVE: But even in this very watchful environment, the White House is unhappy about the FBI warning to hospitals. In part, officials say because it did not go through an established interagency process intended to vet the credibility of the threat, to prepare directives for the affected sectors and mold a public message if necessary. A review is under way and intended to ensure that that doesn't happen again -- Aaron.

BROWN: Does the White House -- whose job is it here to issues these warnings? Is it the Justice Department's, the FBI, or is it the White House?

MESERVE: Well, these alerts have gone out in the past from the FBI through the inlet system. It sends out messages to law enforcement around the country. In this instance, we're told the inlet system was not worked. The directive went out to the FBI -- to terrorism task force in these four cities. It's usually a collaborative effort before it gets to the point where the directives are issued and in this case it wasn't.

BROWN: Jeanne, thank you. Jeanne Meserve in Washington tonight.

On to Florida next and the strange and sad case of Derek and Alex King, 12 and 13 years old. They were tried, you'll recall, for killing their father, one of two trials that took place for the same crime. Their conviction based on one of two mutually exclusive theories the prosecutor put forth. To put it mildly, their conviction struck many as problematic, the judge in their case included. He threw out convictions and then ordered both sides to cut a deal. The deal went down today.

Here again, CNN's Mark Potter.

(BEGIN VIDEOTAPE)

POTTER (voice-over): In a mediated settlement between the defense and prosecution, Alex and Derek King, ages 13 and 14, pleaded guilty to arson and third degree murder for the beating death of their father a year ago. Alex was given a seven-year prison sentence. His older brother Derek received eight years.

They will serve their time at a state facility which houses only juveniles. As part of the deal, they also had to confess their roles in killing their father, Terry King. Judge Frank Bell first read Derek's detailed confession. FRANK BELL, CIRCUIT JUDGE: "Alex suggested that I kill dad. I murdered my dad with an aluminum baseball bat. I set the house on fire from my dad's bedroom."

POTTER: The judge then read allowed the confession from Alex, the younger brother.

BELL: "We talked about killing my dad. When we got home, Derek got the bat and hit dad in the head. After a while, dad didn't move. We set the bedroom on fire."

POTTER: Last September, Alex and Derek were tried and convicted of second degree murder and arson. Ricky Chavez, a family friend and convicted child molester, was tried separately on similar charges but was acquitted. Judge Bell, however, through out the boys' verdict, ruling the trial was unfair.

He then appointed a mediator and ordered the defense and prosecution to try to settle the case out of court. Kelly Marino, the boys' biological mother, who gave them up for foster care years ago, opposes the negotiated plea deal. She claims she was cut out of the mediation and argues the boys are too young to make such an important decision.

KELLY MARINO, ALEX AND DEREK KING'S MOTHER: They're 13 and 14 years old. They're not able to make this judgment for the rest of their lives. And none of us were allowed to have a say in that.

POTTER: Defense attorneys and the prosecutor responded harshly to the mother's criticism, arguing she did little to help the boys earlier in their lives.

DAVID RIMMER, PROSECUTOR: They wouldn't be going to the state pen if she had been paying more attention to them when they were in their play pens.

(END VIDEOTAPE)

POTTER: Defense attorneys say it's important for the boys to now find stability and security. In a sad testament to their past, they must now seek that in a Florida state prison -- Aaron.

BROWN: Mark, other than taking a shot at the mother, which may or may not have been appropriate there, the prosecutor who sought a first degree murder conviction in the case and a life sentence, what did he have to say about the outcome?

POTTER: He said he was pleased with it. He said what he really wanted was the truth to come out. He insisted on a confession, which he got from both boys. He always said that he didn't care so much about the sentence, he was always willing to leave that up to the judge. This is not all that far out of line with the lower limits of the sentencing guidelines for the murder, second degree murder. And so he's not that unpleased with it; the defense attorneys are ecstatic.

BROWN: Mark, thank you very much. Mark Potter in Florida tonight.

One more story out of Florida tonight also began with a young teenager and a horrible crime. And as in the King case, the jury had little problem believing a teenager ought to be held responsible. The teenager drew a hefty sentence. But if Florida is a tough law and order state, it is also a big personal injury state, so this time around it was a civil trial. The defendant was a gun distributor and not a teenager.

Here's CNN's John Zarrella.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The case was billed as potentially landmark. Pamela Grewnow sued the company that distributed the handgun used by then 13-year-old Nathaniel Brazill when he killed Grewnow's school teacher husband. It was a courtroom test of whether people kill people or guns kill people. The six-women jury found the gun distributor, Valor Corporation, only partially responsible.

UNIDENTIFIED FEMALE: With the negligence on the part of Valor Corporation in supplying the Raven MP-25 without feasible safety measures, which was a legal cause of damage to plaintiff, yes.

ZARRELLA: But on three other questions regarding whether Valor supplied a dangerous and defective product commonly known as a Saturday night special, the jurors said no and refused to talk about their decision.

UNIDENTIFIED FEMALE: It's been a long day. We need time.

ZARRELLA: The jury found Valor only five percent responsible for teacher Barry Grewnow's death. And of the $24 million it awarded, Pamela Grewnow and her children may only get $1.2 million. That's five percent of the total. Still, according to Grewnow's attorney, a victory and a warning to gun manufacturers and distributors.

UNIDENTIFIED MALE: I hope that this will be a clarion call to other suppliers and distributors get that Saturday night special off your shelves.

ZARRELLA: But the remaining 95 percent of the responsibility for Barry Grewnow's death the jury placed at the feet of the Palm Beach County school board and, the family friend, Elmmore McCray, who stored the gun unlocked in a cookie tin. But neither the school board nor McCray were on trial. Valor's attorneys say the jury's verdict means there's nothing landmark at all about this case.

UNIDENTIFIED MALE: The jury didn't come back and say don't sell this gun, never sell this gun. (UNINTELLIGIBLE)

ZARRELLA: Grewnow's attorney says under Florida law, he may be able to recover the entire $24 million from Valor.

(on camera): Nathaniel Brazill, who is serving 28 years for second degree murder did not testify. When called, he took the fifth. Through his attorney, Brazill said he did not want to do anything that might further hurt the Grewnow family.

John Zarrella, CNN, West Palm Beach.

(END VIDEOTAPE)

BROWN: Next on NEWSNIGHT, we'll talk with the former chief weapons inspector Richard Butler about what happens next in Iraq. Later on, how much information does the government think ought to be collected on individuals in the name of national security? And we'll also tell you about a plan to target your SUV as an instrument of international terror. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: Got a look the other night at some of the new gadgets the U.N. weapons inspectors plan to use for sniffing out Iraqi weapons of mass destruction. We also heard former U.N. Ambassador Bill Richardson say human factors matter more. You can learn more about what's inside a building by sizing up the guy outside than you can by pointing some gizmo at it.

Something to talk about with Richard Butler, who ran the last round of U.N. weapons inspections and joins us -- the ambassador does again tonight from Sydney, Australia. Mr. Ambassador, good to have you with us. How long after they get in do you expect the first crisis to emerge and what will it be?

RICHARD BUTLER, FMR. U.N. WEAPONS INSPECTOR: It will be around the declaration that Iraq has to submit by the 8th of December. There are a lot of eights around, Aaron. The eight of October the inspector general wrote to the Iraqis seeking assurance that he'd be able to do his work properly if they ever got back inside the country. 8th of November the Security Council passed a new resolution and it sets down that 30 days after that Iraq must make a declaration of all of its illegal weapons of mass destruction.

That's the point I see, Aaron, as the next big moment. The inspectors will be back there on Monday. They'll have to set up shop, they'll have to get their vehicles working again and get their office and machines working again.

The big next point is by 8th of December. What will Iraq declare that it has by way of weapons of mass destruction? Any? None? Will it be truthful or not? That's the next big step.

BROWN: Well, they've got themselves in a bit of a box here since they've been saying they have none. So I guess all they can do is hand over a blank piece of paper and say if you think otherwise go find it? Is that what has to happen?

BUTLER: That's a terrific question. And you know it always blew me away, fascinated me when I was dealing with them to discover how they're able to look you in the eye, let's say on a Monday, and call something black. And then on the Tuesday they would call the same thing white.

I don't expect that Iraq would have any difficulty submitting a declaration by the seventh or eighth of December which has on it a list of weapons of mass destruction, even though when it accepted the return of the inspectors two days ago in a nine-page letter, it said, of course, we have no such weapons. They will not blink if they change their position. What is more crucial, Aaron, is what will that piece of paper say?

Will it literally be blank, as you so correctly raised, or will it have some detail in it and above all will it be accurate? Will it be truthful? Because the United States has made clear, others have made clear that they're not going to be messed around with this time. If that declaration is not accurate, then they'll be held to pay pretty well immediately, I would have thought.

BROWN: Maybe this is more of a philosophical question than it ought to be or a more political question than it ought to be, how much do you think the U.N. should allow the Iraqis to huff and puff and create some fuss and save face if, in the end, they comply anyway? Ought they have some room to save face?

BUTLER: Again, you know, I compliment you. That is a terrific question, because you are saying let's be a bit philosophical. The cultures differ. People have different ways of doing business with each other and the notion of face or self-respect is not unimportant. It makes sense.

It's only intelligent to take that into account. I actually think we did a lot of that in the past with respect to Iraq and I expect that there will be more of it in the future. But, Aaron, I would draw a distinction between those cultural differences, to which we should be sensitive, and objective fact.

Look, if Iraq present as piece of paper, as you raised a moment ago, a declaration that says we have no chemical weapons whatsoever, I'm here to tell you, Aaron, that that will be a lie. That is simply not true. And that will cause a very serious problem.

What's more likely is that we'll say we had some of those chemical weapons in the past, we have some residual shells and bombs now, but they're old and they're no good and we'll take you to them and show them to you in this place, but that's all of it. And then the inspectors will have to verify whether that really is all of it or not or whether there's stuff hidden, those new gizmos and machines will be necessary to look underground and so on.

So the distinction I would draw is between the notion of objectivity. There are such things as objective numbers, numbers of chemical weapons, for example. And the fact that, of course, all cultures have their own way of dealing with the truth of any given matter and the sensitivity about how it's exposed in public.

BROWN: Ambassador Butler, it's a pleasure to talk to you. We -- I think the whole world is watching what happens in the next days and we'll talk to you again soon. Thank you very much. Looks like we lost him just at the end.

A couple of other quick items from around the world to get to before we go to break. Who is expected to be named the new leader of China? That is an answer, not a question. The reports are that (UNINTELLIGIBLE) has been chosen as the new top man in the Chinese communist party. He and a batch of other younger party members are taking over from an older generation of rulers.

But the bottom line tonight, Who's on first. Thank you Abbott and Costello. We are shameless.

Leaking oil tankers headed out in the open seas tonight away from the northwest coast of Spain. The ship's hull ruptured in a storm yesterday, sending about 3,000 tons of crude oil in the water. This morning the tanker drifted within five miles of the shoreline, but tonight the crew managed to start the engines and turn the ship about.

And in Sicily, Mount Etna seems ready to settle down for a bit. The lava still flows, but slower now, less smoke and ash spewing from the mountain as well. Settled down enough for officials to reopen the airport nearby which had been closed since Sunday.

Later on NEWSNIGHT, the president gives us all a tour of his office. And up next, what information the government thinks might be good to collect on people. This is NEWSNIGHT from New York. (COMMERCIAL BREAK)

BROWN: As expected, Democrats in the House of Representatives have chosen a more liberal and perhaps more confrontational leader than they have had in years. Representative Nancy Pelosi of San Francisco won by a vote of 177-29 over a more conservative Harold Ford Jr. of Tennessee, to be named minority leader.

Congresswoman Pelosi, who currently serves as House Democratic whip, replaces Missouri's Richard Gephardt, who announced last week that he would step down after the election. Miss Pelosi becomes the first woman to lead either party in Congress.

The word "dilemma" doesn't mean what most of think it means. It doesn't mean a tricky problem. What it does mean is a hard choice between equally bad alternatives.

And that is where we seem to find ourselves in the country after 9/11, in a dilemma, or so we are told. Forced to choose between leaving ourselves exposed to our enemies, or just plain leaving ourselves exposed.

Our safety, in other words, versus our privacy. It is an ongoing battle getting more complicated all the time.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Gale Ward is like a lot of Americans. Comfortable with the ease of computers and accustomed, if not altogether comfortable, with the compromises of modern society. GALE WARD, COMPUTER CONSULTANT: We do photographic books, documentaries, things like that, and the Web site is completely geared to that. They can find out a lot about us. Where we go, where we live.

BROWN: But Gale Ward could -- and could is an important word here -- be an unwilling participant in a plan making its way through a little-known Pentagon agency. It is a proposal to see whether mountains of electronic information already stored in computers around the world, information like phone calls made, airline tickets bought, medical treatment sought, all that information, could it be gathered, sorted, stored, and analyzed in an effort to stop terrorists before they strike? It's called Total Information Awareness system, no search warrants required.

WARD: Yes, hi, this is Gale Ward...

BROWN: This is what it's like in the post-9/11 period. Security and privacy in collision. Remember the TIPS program announced by the attorney general? He wanted people like mail carriers and meter readers, people who come into your home to report suspicious activity. Under a wave of public outcry, the idea died.

For the Pentagon's information gathering system, the political problem is down the road. First, the technology issues.

JIM GOODNIGHT, CEO, SAS INSTITUTE: I'm sure it's technically possible. It will take quite a few years. The state of the art of being able to collect and pull all that data together is still -- we're still a ways away from that.

BROWN: Its proponents say if it happens at all, it will only be used overseas.

REP. CURT WELDON (R), PENNSYLVANIA: That capability needs to be in place from an intelligence standpoint, especially with those that we're monitoring on foreign individuals, on bad guys around the world.

BROWN: But critics say that's nonsense, that information on bad guys and good guys both here and around the world would end up in the database, and those who worry about government abusing its power worry what government will do with all that data.

REP. BOB BARR (R), GEORGIA: There are absolutely no checks or balances on what the government is doing here. They're not playing by the rules under which law enforcement has been operating for 30 years now.

BROWN: "New York times" columnist William Sapphire blasted the plan today, calling it an assault on individual privacy, and he railed against the agency's director, former vice admiral William (sic) Poindexter, the National Security Adviser for Ronald Reagan.

Poindexter has told reporters that his office is simply trying to develop the capability to mine all that information. Politicians will have to decide how it's used. WARD: I try to keep as little personal information as possible on the computer that could be easily accessed.

BROWN: Back at her home in Northern California, Gale Ward says she is concerned.

WARD: I'm not crazy about them knowing my every move, what I do or even finding it interesting. I don't like any of the changes, really, that we've had since, you know, the terrorist attack.

(END VIDEOTAPE)

BROWN: And therein lies the dilemma.

Still to come on NEWSNIGHT, the Wall Street analyst and the nursery school. A little bit later, new campaign targeting that SUV in your driveway and mine. Is what you drive supporting terrorism? And also, you probably can't get a real tour of the Oval Office, so why not the next best thing? A tour led by the guy who works there. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: In yesterday's chapter of Jack Grubman's follies, an e- mail from the once star telcom analyst surfaced where he said he had raised the ratings on AT&T stock to please his boss, who in turn was trying to make with the chairman of AT&T.

Today, we learned it was not quite that simple. Mr. Grubman also wrote that by raising the rating of AT&T, his boss promised to help get his kids into a really cool nursery school.

Don't laugh, he took this guy's advice.

"Wall Street Journal" reporter Charles Gasparino has been writing the story, and joins us now to fill in some of the blanks.

Well, actually, we sort of laid it out. We talked a little bit about there was some infighting going on.

CHARLES GASPARINO, "WALL STREET JOURNAL": Sandy was trying to...

BROWN: Sandy Weill.

GASPARINO: ... basically get rid of John Reed, who was his co- chairman.

BROWN: This is at CitiCorp.

GASPARINO: Citigroup was created by the combination of Travelers Corp, which Mr. Weill ran, and CitiCorp, the big bank which John Reid ran. Very -- a guy who has been around for years.

And at some point, Sandy wanted to run the show by himself, and we actually chronicled this in the "Journal" at the time. We never knew this little intrigue involving Grubman and the rating. BROWN: And the hope was, because Michael Armstrong of AT&T was on the board at Citigroup that if -- if they raised rating that Mr. Armstrong would be so pleased and so beholden, he'd toss Reid?

GASPARINO: Right -- well, he would at least vote for Sandy to run the show. You have to put this in the context at the time. Mike Armstrong, from what I understand, was obsessed with that rating. At the time, Jack Grubman was not the disgraced figure he is now. He was the top telecom analyst -- maybe the top analyst on Wall Street, and he had a negative view on AT&T. And Mike Armstrong wanted to change that. Now, as you know, they all deny that there was any plan here, although they don't deny the e-mails.

Jack Grubman says he wrote what he wrote.

BROWN: Right. And then he -- what he said yesterday was, essentially, I was just showing off.

GASPARINO: Right. Right.

BROWN: And so, how do we -- by the way, what has the company officially said in response to these e-mails?

GASPARINO: CitiCorp?

BROWN: Yes.

GASPARINO: Citigroup has essentially said the same thing, he said what he said, but he's blowing smoke. Absolutely.

I mean -- here is the thing. I can't get into Jack Grubman's mind, but I can tell you that I've seen the e-mails. It doesn't hook like he was showing off. It basically looks like he was...

BROWN: Who were the e-mails written to?

GASPARINO: They were written to a money manager -- excuse me, an analyst at a money management firm. See, what a lot of people that work at companies like Salomon Smith Barney, which is the unit of Citigroup in question here, what they do is they put out research. The research goes to individual investors like you and I. They also go to institutional investors. This woman worked at a firm that was an institutional investor.

BROWN: And,(UNINTELLIGIBLE) talk about Armstrong, not that he's in some sense complicit in this, except that it's important to understand, it seems to me, the kinds of pressures on these brokerage companies to give these guys good ratings. AT&T Wireless, was it, that was coming out with a big offering?

GASPARINO: Nine times out of ten these companies just roll over. And that's the scandal here that...

BROWN: The brokerage companies?

GASPARINO: Yes, the brokerage can roll. They show all these positive ratings. For years we've been writing about it. No one really cared until the market blew up and now people care about this conflict of interest.

In this case Jack Grubman for years didn't roll over. Now, he at some point changed his rating and people are wondering why. But for years Jack Grubman had a very negative outlook on AT&T.

BROWN: Just before -- tell me again how much time. Just before this stock offering, he did raise the rating.

GASPARINO: Absolutely.

BROWN: A couple months later he lowered it.

GASPARINO: Yes, absolutely. That's what makes this so strange. The whole thing is very bizarre.

BROWN: What's next? You got anything tomorrow?

GASPARINO: We got stuff but we can't talk about it.

BROWN: Come on, sell a few newspapers.

GASPARINO: If I tell you, I got to kill you.

BROWN: No, no, I'm the anchor, OK. It works the other way.

So you got something for the paper tomorrow.

GASPARINO: It's interesting. This is a story that's going to keep going.

BROWN: Is all of this being driven by -- to some degree by the attorney general of New York, Eliot Spitzer?

GASPARINO: Basically, Eliot Spitzer did something no one else did, he actually investigated this and he was one of the first people to do it. Now other people are jumping aboard. The NASD is doing a aggressive investigation, the SEC. But they...

BROWN: The SEC is finally in the game?

GASPARINO: They're in the game with everybody else. But I'm telling you that no one ever thought to do this until Spitzer thought to do it. It's very fascinating. When was the last time the New York state attorney general essentially was the enforcer for Wall Street?

BROWN: It's been a great story for him and obviously it goes on. It's good to see you again. Nice piece of reporting on this. Will you tell me later what tomorrow is?

GASPARINO: Maybe. After the show.

BROWN: For what we pay guests here, that's amazing -- thank you very much -- which is absolutely nothing. A few quick items from around the country. We begin with the sniper case. John Lee Malvo, the young suspect whose court appointed guardian says he plans to ask that Malvo be moved from a Fairfax, Virginia county jail where he's being held in isolation to a juvenile facility. The transfer would mean, according to the guardian, that Malvo could continue his schooling. Whether that happens or not young Malvo will nevertheless be tried as an adult when that begins.

In Miami at the airport, a lot of travelers forced to cool their heels today. (UNINTELLIGIBLE) bad at Miami, I suppose, but at the airport it's kind of a pain. But a couple of passengers somehow got by the screeners causing the shutdown of five concourses, 41 outgoing flights delayed, some inbound flights held up as well. The slippery passengers never located.

And finally the corporate backers of the well-known television psychic Miss Cleo today settled a federal lawsuit against them in part by tearing up a few bills from unhappy customers. The bills added up to -- you ready -- $500 million, money the companies basically extorted from people who were lead to believe they were making free phone calls to Miss Cleo's psychic hotline.

Later on NEWSNIGHT, the inside scoop on the Oval Office from a real insider. Up next, the trouble with SUVs, do they finance terrorism? We'll be right back.

(COMMERCIAL BREAK)

BROWN: We're about to be joined from Los Angeles by the always interesting syndicated columnist Arianna Huffington, who along with some friends and colleagues is about to make a pair of TV commercials, more like public service spots, denouncing what she and her partners believe is one of the great menaces currently facing the country.

You've all heard the three initials Miss Huffington believes should strike fear in our hearts. That's right, three initials: SUV. Really? We're always glad when she joins us. Nice to you have with us tonight.

OK. Make your argument. Actually, you did this in a column the other day that's basically they use so much gas that it finances the people who finance the people who do the terrorism, right?

ARIANNA HUFFINGTON, SYNDICATED COLUMNIST: Well, actually, the idea came to me after I've been watching all the ads the Bush administration has on the air, the drug war ads that actually link taking drugs to financing terrorism.

So I thought if this is legitimate logic when it comes to drug war, what about turning the tables on the administration and ask them to answer the question, then why isn't it putting the kind of money that we put into our cars and the gas that they consume supporting terrorism since clearly there is a link between the amount of money we give to countries like Saudi Arabia and indeed Iraq and the kind of terrorism that they support? BROWN: I was thinking that the script from one of the ads today. In fact, it is a parity, pretty much of the drug ads, which I'm not sure people believe or not.

HUFFINGTON: Well, I don't believe the drug ad myself. Because consuming drugs is an addiction. It takes tremendous determination to get rid of the habit.

But driving SUVs is a lifestyle choice. If we are at war, if indeed we are being called to be patriotic, isn't this one of the most patriotic things we can do immediately at our disposal? You know, it's quite amazing, but when I gave up my SUV, which I was driving up until a year ago and started driving a hybrid car, a little Prius, a Toyota Prius, my life didn't change.

But I went from driving car consuming 13 miles per gallon to driving a car consuming 52 miles per gallon. My kids, 11 and 13 are perfectly content to be driven in a Prius rather than an SUV.

BROWN: The -- and you raise this in the column too -- the underlying issue here is a pretty complicated one. We are in perhaps the most important war of our lifetime. The stakes are high, thousands of Americans have died, thousands of others are overseas defending freedom and that the country itself has not been asked to sacrifice anything.

HUFFINGTON: Exactly. That is really at the heart of what we are trying to say. In the second world war, we are constantly being asked to sacrifice. In fact, we could not consume more than three gallons per week, which is about what it takes to go to Starbucks as few times in an SUV.

Now we're being asked to shop, we're being asked to lead normal life but we're not being asked to do anything for the war effort yet we're being constantly told that we are at at war.

And you know what is amazing Aaron? People are ready to sacrifice. I mean, this response to this column, and it starts as a rhetorical question saying, Are we willing to pay for an ad campaign to jolt our leaders into reality? And the response was overwhelming. We got thousands of e-mails. We got thousands of little checks from $10, $20, enough to finance those ads at cost. And if anybody wants to contribute, they can go to my Web site, arrianaonline.com and contribute $5, $10. It's a people's ad campaign and it proves once again that the people are ready to be involved in this war effort in a more real way than simply shopping.

BROWN: Just -- we got literally about 20 seconds left.

Do you really expect that people will give up their SUVs or would you at least be happy if they thought about both the specific issue of how much their car uses and the broad issue of sacrifice?

HUFFINGTON: We want both people to give up their SUVs and we want car makers to put on hybrid SUVs on the road and we want our leaders to think seriously about energy conservation and raising fuel efficiency standards.

BROWN: Arriana, yet again, provocative ideas. Thank you and thanks for joining us.

HUFFINGTON: Thank you.

BROWN: Very much.

Still ahead on NEWSNIGHT, the Oval Office and a heck of a tour guide. We're right back.

(COMMERCIAL BREAK)

BROWN: Finally from us tonight, you may not know the expression house proud, but you certainly know people who are. They're the ones that rush you right into the new kitchen and say, See, we bought the granite. Or, Look, over there at the stainless steal. How about that Viking? Don't even ask what it costs. And by the way, those are custom-made cabinets.

This kind of pride, as it turns out, affect even presidents. Really. Go to the appropriate Web site, whitehouse.gov, be careful here, and take the tour of what we'll called "This Ole White House." Your tour guide will be familiar.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: First thing I see every morning when I come in is the sun shining through these big windows and the windows are magnificent. They let in the sunlight, they're -- it's a great place for me to view the wonderful South Lawn. And the rug we've designed, each president designs a rug and the rug that Laura designed for the Oval Office captures the sun and it helps make this room an open and optimistic place.

The job of a president is to set big goals for the country, big objectives. And in order to achieve those objectives, the country must be united. Abe Lincoln had the toughest job of all as president of the United States in achieving big goals and big objectives because the country was divided. It was fighting itself. And yet when you read his writings, he constantly thought about how best to keep the Union together.

I've also got George Washington on the wall here. And the answer is I don't think you could have the Oval Office without George Washington, the first president of our country. He's just a perfect fit.

This is on loan from the British government. My friend, the prime minister of Great Britain heard me say that I admired -- greatly admired Winston Churchill, and so he saw to it that the government loaned me this. And I'm most honored to have this Jacob Epstein bust of Winston Churchill. I like Churchill because he was a great war leader, he was resolute, he was tough, he knew what he believed and he had a fabulous sense of humor. And in this job, believe me, you've got to have a sense of humor. Otherwise it makes the days awfully long and the nights awfully short.

(END VIDEOTAPE)

BROWN: Whitehouse.gov to see the whole thing.

You have the whole thing from us. We're back tomorrow at 10:00. Among other things tomorrow, the future of professional wrestling. No kidding.

10:00 Eastern time. Until then, goodnight for all of us.

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