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CNN Newsnight Aaron Brown

White House Believes Iraqi Declaration Falls Short; Iraq Might React With a Scorched-Earth Policy if U.S. Attacks

Aired December 18, 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.


CAROL COSTELLO, GUEST HOST: Hello, everybody. I am Carol Costello.
Aaron got an invitation to the White House Christmas party and he is there with his 14-year-old daughter Gabby. And I am sure he will fill you in tomorrow.

In the meantime, we will spend some time on a juicy political scandal uninvolving the highest level of governments complete with a con man and topless dancers and that's just the beginning.

Now, if you're wondering how you missed all of that in the Trent Lott story, you didn't. We're talking about the Cherie Blair, and that scandal has been front-page news over there for the last week.

We'll have an update on the Trent Lott story too.

Now though it's time to new on to the whip and reaction to Iraq declaration on weapons of mass destruction.

CNN's Frank Buckley is at the White House tonight.

Frank the headline please.

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Well, Carol, Bush administration officials made it clear that they believe the Iraqi declaration falls short, but they have no plans to use the term material breach, no plans to trigger immediate military action.

COSTELLO: What would the end of a war look like? A less than pretty picture is emerging.

At the Pentagon for us, Jamie McIntyre is there for us. That is one of two headlines we gather.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: The big military build up may begin next month depending on some decisions made in the next couple of days. And Iraq might react with a scorched-earth policy, according to U.S. intelligence setting its own oil wells on fire and destroying its food supply.

COSTELLO: And Some arrests on the war in terrorism.

CNN Justice Department correspondent has the duty tonight. Kelli, give us a headline.

KELLI ARENA, CNN JUSTICE DEPARTMENT CORRESPONDENT: An alleged radical Islamist link in Texas, they arrested four men who they say helped raise money for the Palestinian group Hamas.

COSTELLO: And in New York, proposals for making lower Manhattan whole again.

CNN's Whitney Casey with that.

Whitney a headline.

WHITNEY CASEY, CNN CORRESPONDENT: Well, Carol, seven architectural teams came up with their plans on what should be on this 16 acre World Trade Center site. It's been dynamic and creative, but now it's time for the public to weigh in -- Carol.

COSTELLO: Back with you and back with all of you in a moment.

Also tonight, we'll look at the World Trade Center proposal through the eyes of Paul Goldberger, the architecture critic of the "NEW YORKER" magazine. We'll check out some of your proposals too.

Trent Lott say he is hanging on but it gets harder every day. We'll bring you the latest on that and revisit the issue of Republicans and race with Shelby Steel. All of that to come in the hour ahead.

We begin with Iraq's declarations. The reception it is getting and something of a twist. Instead of the trigger to war, it may end up being the trigger to a warning. Perhaps the Bush administration's final warning, but something short of the second Gulf War. Here again CNN's Frank Buckley.

(BEGIN VIDEOTAPE)

BUCKLEY (voice-over): On the Iraqi declaration, the White House declared it is not the full and complete accounting required under the U.N. Security Council resolution.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president is concerned about Iraq's failure to list information in this document, the president is concerned with omissions in this document and the president is concerned with problems in this document.

BUCKLEY: A concern echoed by officials in Great Britain, British Foreign Secretary Jack Straw saying there are obvious omissions. A response to the declaration was topic one for principals gathered at the White House for a National Security Council meeting. Previously on numerous occasions, the president emphasized that omissions would not be tolerated.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Zero tolerance is about as plain as I can make it. We will not tolerate any deception, denial or deceit, period. Should he be denied that this arsenal exists, you will have entered his final stage. And deception this time will not be tolerated. Delay in compliance will invite the severest of consequences.

BUCKLEY: But administration officials say the omissions and problems the president sites now will go to the U.N. Security Council. The U.S. will not use them as an immediate trigger for war.

FLEISCHER: Hans Blix of the United Nations will go for the Security Council in New York to discuss the findings and the facts that the United Nations inspectors have found in this declaration. Following that, I think you will see the United States will have been very deliberative about the implications of this are.

BUCKLEY: But it forces a raid in the Gulf are not to be used for now, is that an omission that international support for such action is not yet there. Is the president's previous tough talk a bluff?

FLEISCHER: I assure you, this president does not bluff. What he said that Saddam Hussein must disarm, and he wants Saddam Hussein to disarm so peace can be preserved. Saddam Hussein will be disarmed, it is not a bluff. He hopes Saddam Hussein will do it still.

(END VIDEOTAPE)

BUCKLEY: And as you heard from Ari Fleischer, tomorrow Hans Blix, the chief U.N. weapons inspector, will present his view and his analysis of that 12,000-page declaration from the Iraqis. The U.S. Ambassador to the U.N. will be represented in the security council in that closed session. Afterward U.S. Secretary of State Colin Powell is expected to talk to reporters. We're expecting to get our first sense of detail of exactly what the problems are according to the U.S. with the Iraqi declaration. Carol?

COSTELLO: OK, Frank, tell us the bottom line. The Bush administration is not going to say Iraq is in material breach because of this huge document that it released, right?

BUCKLEY: That is the bottom line. It appears the U.S. Is not going to say, yes, this is a material breach that we have been looking for. To back up just for one second. The position of the Security Council resolution, 1441 is that Iraq is already in material breach for past problems, 16 different resolutions. But we're looking for a new material breach, according to the U.S. and this will not be the thing that triggers war immediately.

The U.S. is always said it will go back to the U.N. Security Council and engage in consultations and engage in diplomacy and that's where we are right now. It isn't clear yet exactly what the next step will be, although officials have been telling us that they do expect the inspection process to continue.

COSTELLO: But, Frank, do you get the sense that those in the White House are in agreement as to exactly what material breach means? BUCKLEY: Well, they have said very consistently that material breach is something that is determined by the facts. That this is not something that the U.N. Security Council should decide, not something that Hans Blix decides, not something the inspectors decide, but something apparent just on the basis of the facts that are presented.

So, there is some disagreement over whether or not they should consider this the material breach that escalates this to the next level. But the term itself material breach, they have always consistently said is something that is just determined by the facts.

COSTELLO: Frank Buckley live at the White House, thanks.

We heard a lot about the timing and the tempo of the war, when it will start, how it will unfold. Nobody knows the ultimate outcome. But tonight there is growing concern within the intelligence community that a victory over Saddam Hussein would come the hard way, that it would be especially ugly. Mostly they believe because that's just how Saddam wants it.

Once again, here's Jamie McIntyre.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): In 1991, retreating Iraqi troops set fire to Kuwait's oil fields, this time, U.s. Intelligence analysts say Iraq is planning to do the same to its own oil fields as part of the scorched-earth policy aimed at winning world sympathy in the event of a U.S.-led invasion.

The Pentagon analysts cite solid evidence that Saddam Hussein has plans to create a humanitarian crisis by destroying food warehouses and power plants, and unleashing bioweapons on his own people. A big unknown, will Saddam's Republican guard carry out the orders or turn on it.

DONALD RUMSFELD, SECRETARY OF DEFENSE: I think that it is very difficult to have good knowledge as to exactly how Iraqi forces will behave.

MCINTYRE: Whether Iraqi forces will drop their weapons and surrender as did 80,000 did during Desert Storm is another unknown. There are indications of morale problems, even among the most loyal troops, the Special Republican Guards. And even suggest some may have plotted coups. But the intelligence also indicates that Saddam Hussein has circled Baghdad with six divisions of his best troops, and preparing for a battle the death.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: There is nobody involved in the military planning to include the secretary or any of the senior leadership in this building, I think that you'll find that will say that this sort of endeavor, if we were asked to do it, would be a cake walk.

MCINTYRE: Intelligence analysis say Saddam Hussein has also drawn a lesson from the February 1991 incident in which the U.S. bombed a Baghdad bunker killing women and children they did not know was inside. The result was a temporary pause in bombing Baghdad. Now, analysts predict Saddam will manufacture civilian casualties to slow any U.S. Advance.

(END VIDEOTAPE)

MCINTYRE: And Pentagon sources indicate that by next month, Saddam Hussein may have more to worry about. The U.S. Could double the number of troops in the Persian Gulf region from 60,000 to well over 100,000. Depending on some decisions that have to be made this week. But Pentagon officials stressed so far no decision for a big build up in January because President Bush still hasn't made the ultimate decision about going to war -- Carol.

COSTELLO: OK, Jamie, lets speculate a little bit. If the United States does attacks Iraq, they want a quick war, if Saddam Hussein does carry out this scorched-earth policy, how would it have a quick war?

MCINTYRE: The key to the U.S. strategy is to deliver a knockout blow that would end the war quickly perhaps in a couple days. And persuade the Saddam Hussein's officers not to carry out orders to do things like blow up oil wells or destroy food supplies or unleash killer germs. So the key to the U.S. strategy is a lightening strike that would take Saddam out, and demoralize his troops before they had chance to carry out all of these dire predictions.

COSTELLO: Jamie McIntyre at the Pentagon.

On to the war on terrorism now, the kind of battle waged with spread sheets and green eye shades. The attorney general today unveiled indictments against seven people, five of them living in Texas, for allegedly financing terrorism.

Details now from CNN's Kelli Arena.

(BEGIN VIDEOTAPE)

ARENA (voice-over): Five brothers, all employees of InfoCom, a Texas computer firm, are charged with violating the U.S. ban on doing business with terrorists.

Namely, this man, Moussa Abu Marzook (ph), a senior leader of Hamas.

Hamas, which has claimed responsibility for attacks in Israel, the West Bank and Gaza has been designated a terrorist organization by the United States.

JOHN ASHCROFT, ATTORNEY GENERAL: Just as we will prosecute the terrorist who plants a bomb, we will prosecute the terrorist supporter who writes a check.

ARENA: The indictment alleges that Marzook conspired with InfoCom and the five brothers, whose last name is Elashi ,to hide how money was illegal transferred. In addition, the brothers, two of them seen here, are charged with illegally selling computers parts to Libya and Syria. Both have been designated by the United States as state sponsors of terrorism.

A defense attorney for the men suggested there could be an innocent explanation.

MIKE GIBSON, DEFENSE ATTORNEY: I think we may have a situation where things were sent to the Middle East to a proper country and somehow ended up in a terrorist country and now they're trying to connect the dots.

ARENA: Marzook was deported by the United States in 1997. He and his wife are now fugitives.

The Elashi brothers are in custody in Texas.

But it doesn't end there. One of the five, Ghassan Elashi, is also chairman of the Holy Land Foundation, the largest Muslim charity in the United States.

The government has said the foundation funds terrorists and has frozen its assets. It's a charge Elashi has repeatedly denied.

GHASSAN ELASHI, HOLY LAND FOUNDATION CHAIRMAN: We are a strictly charitable organization and we have no relation with any terrorist organizations.

ARENA: Justice officials say they have been aware of a relationship between Holy Land and InfoCom since before the September 11 attacks.

ASHCROFT: Both InfoCom and Holy Land Foundation received their seed money from one of the defendants in the cases announced today, Moussa Abu Marzook.

(END VIDEOTAPE)

ARENA: Four of the brothers made an initial appearance in court today and said they understood the charges against them. They are due back in court on Friday for a detention hearing.

Meanwhile, officials say that the investigation into InfoCom is wrapping up but that the investigation into the Holy Land Foundation remains very active -- Carol.

COSTELLO: Kelli, Marzook and his wife, you say they're fugitives.

ARENA: That's right.

COSTELLO: Are investigators actively looking for them?

ARENA: Well they are believed to be in the Middle East and so they were indicted, as part of today's indictment. They have alerted their allies in the war on terror that they are looking for them. It is up to our partners to alert U.S. officials as to whether or not they're in any of those countries.

COSTELLO: Good enough. Kelli Arena, thanks.

As NEWSNIGHT continues, we'll spend some time looking at the new proposals for Ground Zero and we'll show some of your ideas as well.

And up next, are we a step closer to war with Iraq? We'll talk with General Wesley Clark.

(COMMERCIAL BREAK)

COSTELLO: A few moments ago, Jamie McIntyre sketched out a worse-case scenario: winning in Iraq, but winning ugly. It's a concern for the generals who have their troops to look out for, and a source of tension with their civilian bosses who call it foot dragging and defeatism. Disagreement blossomed today on the pages of "The Washington Post," but it's been going on for months behind the seas -- behind the scenes, rather, which is why we're glad retired General Wesley Clark is with us tonight to help sort things out.

OK, let's start with Saddam Hussein's Scorched Earth policy. I mean, we all think that Saddam Hussein is not quite right, but to destroy your own country, kill your own people and then kill yourself.

GEN. WESLEY CLARK (RET.), FORMER NATO SUPREME COMMANDER: Well, in his own mind, it's probably a rational thing to say because he wants to portray the United States as having caused the destruction of this country. And so he's got the plans to start the destruction under way. He'll be able to blame it on the United States and it's probably a story that will spread and find some traction in the Arab world, even though he is causing it himself.

Now, the question, of course is...

COSTELLO: Well, before we go on, let's explain what this Scorched Earth thing is. That means his own troops will set the oil fields on fire in Iraq and would he stage civilians being killed or would he go ahead actually go ahead kill his own people once again?

CLARK: Well, if he uses biological weapons he might well seed the large area with anthrax spores or some other bioweapon. And it might be nominally directed against us, but he has never had any love for the Shiite (ph) population in the south, anyway, he might be able to cause hundreds of thousands of civilian casualties down there.

COSTELLO: And he really thinks that by doing this, that this might cause sympathy for him and Iraq in the Middle East.

CLARK: That's exactly right, and it would be directed as a weapon against the United States.

COSTELLO: So what's the United States going to do? How will this affect its knockout punch strategy?

CLARK: Well, I think two things. First, diplomatically, we're going to be sure that we've got as much of the world with us as possible before we go in. And so, that's why we're taking this step by step right now diplomatically.

And as far as the military is concerned, obviously we want to do the job as rapidly as possible.

COSTELLO: You say as rapidly as possible. There are so many troops over there right now, how many more can we send? And because the United States keeps sending so many troops over there, I mean, isn't war a foregone conclusion?

CLARK: I think we are moving to war. None of us see any way that this is going to end unless there's a coup or unless Saddam somehow miraculously has a conversion and decides to fess up and that's unlikely.

This is most likely going to end in war some time in the first, at the end of January, early February of next year.

COSTELLO: And how will it begin? What will the United States do?

CLARK: Well, the inspections will be more intrusive and eventually either Saddam will obstruct them or will find something or will simply declare that the pattern itself constitutes another material breach and then it'll be the air campaign for five days and the ground force moving as rapidly as possible into contact with the enemy.

COSTELLO: How many troops do you think that the United States will have to send in on the ground?

CLARK: Maybe four divisions worth, depends on how you count the logistic troops behind them. But we're probably talking about a fairly big package. They might not all go in simultaneously, but within a week or so we'll probably see 100 to 150,000 troops.

COSTELLO: OK.

CLARK: Not counting what's in Kuwait.

COSTELLO: OK. I was just going to ask you, say divisions -- how many people would that entail? How many soldiers?

CLARK: Well, each of the divisions, Army and Marine, maybe 15,000 to 20,000, plus they'll be backed by the headquarters and support troops beyond them. So, the total package could be 200,000, maybe more.

COSTELLO: So how far will those troops go? Will they go all the way to Saddam Hussein?

CLARK: Absolutely. All the way to Baghdad. All the way to Tikrit. Everywhere in Iraq.

COSTELLO: You know, I don't know, you just think about ground troops going in and your heart beats faster because you know more American casualties because of this. And I'm sure Saddam Hussein has some kind of plan up his sleeve to inflict as much damage on American troops as possible.

CLARK: Sure, he'd love to. But we're very good. I mean, no one in the armed forces is going to underestimate the risks, but we've worked this plan in some detail for a year or so, it's come up, the troops are trained. They're going to better trained before we go. We're going to be as careful as we can. We're going to use as much support as we can and we just got to trust the fact that we've got a very, very fine military.

COSTELLO: Well, we'll see what happens tomorrow, when the president comments on the big Iraqi document, supposedly declaring all of its weapons. We'll see.

Thank you very much, General Clark.

CLARK: Thank you, Carol.

COSTELLO: Before we take a break, a few more items from around the country though, starting in Southern California at the federal building at Westwood. Thousands of people, many from L.A.'s Iranian- American community turning out to protest a new homeland security policy. It calls for men visiting from certain Muslim countries to be photographed and fingerprinted. The deadline came and went to days ago and already hundreds of men who have showed up have been detained for a variety of reasons. The protesters called the detentions inhumane and the policy itself counterproductive.

In New Orleans today, a guilty plea from David Duke. Remember him? He's the former Klan leader. Mr. Duke admits to bilking supporters out of thousands of dollars, money prosecutors say he used for gambling. He also pleaded guilty to filing a false tax return. The charges carry a prison term, a fine and disqualify Mr. Duke from holding public office.

And a judge in San Francisco got to play umpire on who gets Barry Bonds 73rd home run ball. Alex Popov (ph) caught it, as you can see, and then he lost it. Patrick Hiyashi (ph) wound up with it. So who gets it? Well, the judge said both and neither. He ordered the ball put up for auction and the two to share in the proceeds, which could amount to a million bucks apiece. So there you go.

Later on NEWSNIGHT, new design ideas for Ground Zero. We'll show them to you and have an expert give his opinion.

And up next, the outlook for embattled Senate Majority Leader Trent Lott. How did he do today?

(COMMERCIAL BREAK)

COSTELLO: Did we mention the Lott-o-meter? It shows Trent Lott is in a lot of trouble.

Former President Clinton today actually called Trent Lott's remarks par for the Republican course. Outside of a business lunch in New York, Mr. Clinton accused Mr. Lott of saying publicly what the GOP really believes. (BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Right now, their policy is, in my view, inimical to everything this country stands for. They tried to suppress black voting, they ran on the Confederate flag in Georgia and South Carolina. And from top to bottom the Republicans supported it. So I don't see what they're jumping on Trent Lott about.

(END VIDEO CLIP)

COSTELLO: (UNINTELLIGIBLE), from a spokesman for the Republican national committee, Mr. Clinton, he said, should check his facts.

A bit more now on our Lott-o-meter. It's a finally tuned instrument sensitive to the slightest variation in the political sign waves caused by the curfupple (ph) surrounding the senator.

CNN's Jonathan Karl has following the waxing and waning, or waning and further waning of Senator Lott. Here's what affected the meter today.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Speaking out in Biloxi, Mississippi, Trent Lott told reporters he has the support of his fellow Republicans.

SEN. TRENT LOTT (R-MS), SENATE MINORITY LEADER: I am hanging in there. We are going to work through this in a positive way.

KARL: Ending speculation about whether he would leave the Senate if forced out as leader, Lott said he would fill out his term.

LOTT: Quite simply, I was elected by the people in Mississippi to a six-year term. I've served two years of that contract. I have a contract and I am going to finish it.

KARL: But several senior Republicans on Capitol Hill continued to say privately, Lott is finished as majority leader and Senator Lincoln Chaffee became the first Senate Republican to say he wants Lott replaced.

SEN. LINCOLN CHAFFEE (R), RHODE ISLAND: I believe it's time for a change. I think the process is happening.

KARL: Chaffee, however, is the only Senate Republican to say publicly he wants Lott to go. At least nine Republicans, ranging from conservative to Orrin Hatch to moderate Arlen Specter, say they will support him.

SEN. MIKE DEWINE (R), OHIO: My prediction is that Trent Lott will retain his position as majority leader because the reason I said that the majority of my colleagues, I believe, will come to the conclusion that this is a good man. KARL: But one of Lott's strongest supporters, outgoing Congressman J.C. Watts, said if he was in Lott's shoes he would step down.

REP. J.C. WATTS (R), OKLAHOMA: I can tell you if it was me, I would not put my family nor my grandchildren nor my party through that.

KARL: Speaking out for the first time on the issue, Secretary Of State Colin Powell sharply criticized Lott and, like the president, refused to say whether he should remain leader.

COLIN POWELL, SECRETARY OF STATE: I was disappointed in the senator's statement. I deplored the sentiments behind the statement. There was nothing about the 1948 election or the Dixiecrat agenda that should have been acceptable in any way to any American at that time or any American now.

KARL: Lott said he still believes he has the president's support, despite persistent press reports that say the president wants him out and White House Chief of Staff Andy Card told Lott on Wednesday that those reports are unfair and inaccurate.

Jonathan Karl, CNN, Capitol Hill.

(END VIDEOTAPE)

COSTELLO: The issue, though, we shouldn't forget, really isn't Trent Lott. The issue really is race and how it continues to bedevil a nation founded on principles that should have banished race as a consideration long ago, but hasn't.

We're joined now in Monterey, California by commentator, essayist and Hoover Institution research fellow and Shelby Steele, who is always interesting and provocative on this subject.

Welcome to you, Shelby.

SHELBY STEELE, RESEARCH FELLOW, HOOVER INSTITUTION: Good to be here.

COSTELLO: You had an opinion piece in "The Wall Street Journal." I found it fascinating.

I want to read an excerpt from that for you -- to -- for you to expound on it. You said, "Senator Lott's many apologies have revealed him to be a man who has troubled himself very little with self examination."

That's a cold statement.

STEELE: Well, but I think that's true. I mean, I think that the we -- the world can now -- now sees evidence of that. I mean, his remark suggests that, at the very least, he was insensitive. That Senator Lott is not the kind of man who in the past, at any rate, went deeply and looked within himself and came to terms with his feelings about race and I think they've -- all of that has now caught up with him.

COSTELLO: Do you think that e's looking within himself now?

STEELE: I think that he -- well, I think he should and I think he soon -- he probably will. I mean, I think that's going to be inevitable. It's too bad it took this to make it happen.

But yes, I think in the long run he will look now within himself.

COSTELLO: So does he deserve to be majority leader still?

STEELE: I think, for me, there are two conditions, because he is -- I think he is very, very gravely wounded as a leader at this point and stands to do his party considerable damage.

Saying that, I think that if somehow Trent Lott can in fact become a transformed man and can do that within a framework of compassionate conservatism. That is to say not sell out the values of his party and the social agenda of his party which i think is very progressive and addresses racial issues and poverty and so forth very well.

If he can stay within that framework and at the same time be transitioning and convince the other senators that is the case, I think he has a chance.

COSTELLO: You mentioned that this is hurting the Republican party. I want to read, folks, another except from your opinion piece. You say the Lott crisis is "terrible for conservatives because the best thinking on social problems and race in recent years has come from their ranks." Many people would disagree with that.

STEELE: Well, that's sad because I think, first of all, what conservatives have brought to the social debate that was left out of it for the last three or four decades is simply the idea of individual responsibility.

The greatest social program, most effective social program in the last, well, probably forever in the United States was welfare reform, which simply added this element of individual responsibility to welfare.

That's the kind of thing that compassionate conservatism wants to do. It has been extremely effective. And, again, it is conservatives, it's people in think tanks and elsewhere who have done all sorts of new and original thinking about these problems.

COSTELLO: Shelby, I would have to ask you this. If they're so forward thinking on these issues, why didn't they realize that Trent Lott had a problem?

STEELE: That's a good question. I think they're culpable for that. Trent Lott hadn't done this every day, but he clearly had a pattern and this should have been something that was addressed before. There is no dot about it.

COSTELLO: Should the Republicans kick him out of his post? Do they have to do that to maintain credibility?

STEELE: I think that, again, I think that it may come to that. It very likely will come to that. Again, unless Trent Lott is somehow able to meet the conditions that I was just talking about, if he can stay within the framework of compassionate conservatives...

COSTELLO: Yes, but how can he do that? He apologized five times. He comes out and says that he is for affirmative action and he wants to meet with members of the black community to come up with some sort of plan. What more can he do?

STEELE: You're absolutely right. He is a figure now who stands to be rolled. He has been taken over. You can put a collar and a leash on him. If you look at the interview he did the other night on BET, he's in favor of affirmative action, he's going to rethink Judge Pickering, he's taken over the liberal agenda. That's disastrous, he has to go if that continues.

COSTELLO: OK, we'll see January 6. Shelby Steele, thanks for joining us tonight.

Still to come on NEWSNIGHT a really good political scandal. The British kind.

Up next, a new set of proposals for Ground Zero are unveiled. You're looking live at a picture of Ground Zero now. We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: Next on NEWSNIGHT, new ideas for what to do with Ground Zero.

(COMMERCIAL BREAK)

COSTELLO: The weather was warm when the first six plans for the World Trade Center site were unveiled over the summer, but the reception for those plans was not. The designs were not so much criticized as they were ridiculed.

All the same, all dull, none rose to the unprecedented occasion. Stung, the agencies involved literally went back to the drawing board, inviting some of the most daring architects to have a crack at it. That they have. Their visions were presented to the public today. CNN's Whitney Casey is at Ground Zero.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: And the buildings rise up in a spiral to the very tip.

UNIDENTIFIED MALE: The World Trade Center could be transformed into the World Cultural Center.

UNIDENTIFIED MALE: On the horizon our idea is to express the sublimed. CASEY (voice-over): This day belonged to the visionaries.

UNIDENTIFIED MALE: It's a sacred, cathedral-like space, by forming uniting five towers together.

UNIDENTIFIED MALE: These towers make an urban connection.

UNIDENTIFIED MALE: The greatest transportation hub ever.

CASEY: Seven teams of architects from all over the world, each with 20 minutes to present their vision for the 16 acres where the World Trade Center once soared.

Four of those teams propose making the New York home once again to the tallest building in the world. The first plan presents the dramatic spiral rising 1,776 feet for recalling the year of America's independence.

The second plan includes a glass-encased underground mall with twin towers more than 1,700 feet connected by aerial walkways.

The centerpiece of the third presentation a memorial square with fingers extending into lower Manhattan. Three quarters of the site would be open space with memorial parks and then five, 1,000-foot towers.

The tallest structures would be in this, the fourth presentation. Two 2,100 foot metal towers housing a cultural center.

And the fifth team proposes five towers connected at the 60th floor with a sky memorial.

From the sixth team, twin towers with a massive garden, a pool in the footprint of the original north tower and an amphitheater in the south tower footprint with 2,792 seats, one for each of the Trade Center victims.

The final plan offers nine commercial buildings, each 80 floors totaling more commercial space than the original towers, creating a vertical city with a smaller three-acre memorial.

How to assess these plans?

ALEXANDER GARVIN, LOWER MANHATTAN DEVELOPMENT CORP.: They're also very strong ideas and the notion that you can take half of one and mix it with a quarter of B and a quarter of C is unlikely.

CASEY: Monica Iken, whose husband's remains still have not been identified, said she needs more time.

MONICA IKEN, WIDOW OF WTC VICTIM: We just need a space to go that will honor our loved ones and preserve that sanctity.

(END VIDEOTAPE)

CASEY: And we really have an unusual vantage point up here. This is actually where someone like Monica Iken or a family member would come if they came down to Ground Zero. They would be away from the general public.

But when it comes to the general public and the family members, both are asked to weigh in on this. But ultimately it is up to the Lower Manhattan Development Corporation and the Port Authority who own this 16-acre site. They will decide now. Governor George Pataki and Mayor Michael Bloomberg both oversee those tow organizations and all the parties involved hope to come up with one plan by February -- Carol.

COSTELLO: Tough job. Whitney, thanks.

Next on NEWSNIGHT, we'll get an expert's opinion on today's new world Trade Center proposals. Stay right there.

(COMMERCIAL BREAK)

COSTELLO: Next on NEWSNIGHT an expert's view on the new proposals for Ground Zero.

(COMMERCIAL BREAK)

Ideas for what to do with there World Trade Center site are not limited to pro professional architects. From last summer we received thousands of ideas, from all 50 states and 76 countries, some of which we posted on our websites. We gotten actual drawings and models that fill an entire room at our world headquarters in Atlanta. Some of those designs are pretty darn good.

From Oliver Rodums in Bethlehem, Pennsylvania, an open pyramid- ship memorial with the names of the victims etched on it. From Lebanon, Shugrallah George Assaf, writes he would like to see three towers in the shape of the letters, USA. Daniel Dorman, of Fairfax, Virginia sees a twin tower design with a stairway of buildings in the middle, with a memorial in the center core of the building. From Carol Hayden in Fairfield Glade, Tennessee a 110-story tall tower with a resolving restaurant at the top, and globe representing the nations of all those killed. Joseph Calamuse of Port Jefferson Station, New York has a religious theme with a statue of Jesus atop on a single tower. The exterior which is designed to appear as a draped flag. And Finally what he admits might be a challenge to make, Oscar Rub of Toronto proposes buildings like the initial N.Y. with the names of the victims engraved on the steps.

There are almost too many ideas to process, but Paul Goldberger, the distinguished architecture critic for the "New Yorker" is here to help us sort it all out.

Those were pretty good weren't they.

PAUL GOLDBERGER, ARCHITECTURAL CRITIC: Well, they were very earnest. Lets put it that way.

COSTELLO: Very earnest.

GOLDBERGER: I admire the passion behind them.

COSTELLO: Exactly. Let's talk about the professional proposals. Did any of them rock your world?

GOLDBERGER: Actually, they all did to some extent. We have an amazing thing going on right here now, the first time a public agency has actually commissioned some of the most daring and adventuresome architects in the world to do the most important building it could possibly ever do.

COSTELLO: They came up with such massive ideas. Everything is so big and complicated and very modern.

GOLDBERGER: All but one. One is very conservative actually. But in fact, there is now this enormous passion to really reinvent the skyscraper and do something that Ground Zero that is new and different. The one that is more conservative. The one of these nine that looked safe. In some ways the least safe because it doesn't have that craving for newness that everyone want right now.

COSTELLO: I have noticed that many of the proposals, there's a spear that goes high into the sky, sort of like the architect in reclaiming the skyline.

GOLDBERGER: Reclaiming the skyline and repairing the skyline is a big part of the mission for everybody. Those who were lucky enough not to have lost people on September 11 felt that they have lost the skyline. And they cared deeply about it and fixing that by going high is also a way of saying we're repairing New York because that is what New York is about.

COSTELLO: Show us your favorite. Which one is your favorite?

GOLDBERGER: I haven't yet fully figured it out. I think (UNINTELLIGIBLE) is very beautiful and very moving. And he has done one two really important things. He has said to us going down into the earth and seeing that foundation wall that held during the catastrophe during September 11 and keeping it as a memorial is a very important statement and an important gesture. He has gone up into the sky, not with an office building, but with a beautiful slender tower, that would just be a symbol.

COSTELLO: I was going to ask you about that. Whether the people would have offices in the highest part of the building.

GOLDBERGER: Not in his, not in his, in some of the others, yes. He proposes just a very slender tower. He does have some big office buildings but the don't go that big.

COSTELLO: Got you. United, we both like that one.

GOLDBERGER: United is very exciting. That's a whole group of out on guard architects, young, very savvy on the computer and they have really tried to reinvent the skyscraper. I think in some ways, what better place, the skyscraper after all was a great American invention, they're not Ground Zero to bring the next generation of skyscrapers forward.

COSTELLO: You can see how they curve and twist and don't even look like buildings.

GOLDBERGER: Well, they're definitely not boxes. People called the last generation of skyscrapers glass boxes, no one would make that mistake now.

COSTELLO: At looking at these proposals they all seem so complicated and they would cost so much money to actually achieve, is there that much money to build this sort of thing?

GOLDBERGER: We don't know how much money there will be. There is a caring to build something important and meaningful there and when the proposals to build something ordinary were out there last summer everybody said the one thing we can't do at Ground Zero is something ordinary. They're supposed to be built over time. So, there it is not a question of whether we have the money today or whether we have the market to fill the office space today, these are five, ten, 15, even 20-year projects.

COSTELLO: I must say in looking at each design, none of them made me feel warm. And it really brings you to the consideration that maybe an architect, if not the right person, to be building a memorial, maybe it should be separate.

GOLDBERGER: Well, in fact, the official process does call for separate things. These are overall master plans with the big buildings set out there. But each of them needs space for a separate memorial, and the Lower Manhattan Development Corporation plans in the spring to have an international competition for just for that memorial.

COSTELLO: Got you. Well, OK, that's better. But these proposals really aren't set in stone either. These are just ideas.

GOLDBERGER: They're not set in stone. They're not set in glass. They're not set concrete. They're not set in anything yet. They're just ideas.

COSTELLO: It's possible not one of these might be chosen.

GOLDBERGER: It is possible.

COSTELLO: Why go through all this?

GOLDBERGER: Because people care and they want something important and when the Lower Manhattan Development Corporation did it last time around and they were ordinary, they came back and said, all right, you want architecture, we'll give you architecture, we'll search the world, we will invite any architecture to participate. Four-hundred and seven sent in a request to participate. Of them the Lower Manhattan Development Corporation choose 7 teams to participate and they came up with these designs.

COSTELLO: And a decision will be made on January 31. Do you think it will it be? Will a decision be made then.

GOLDBERGER: I think a tentative decision will be made, but it is possible as you say. They could say these are all interesting but they don't work. And we're going to go back to the drawing board yet again. I hope they don't say that. I hope they feel in they do feel that in the spirit of Ground Zero and in the spirit of all that happened there, that in fact moving cutting-edge architecture is actually an interesting way to respond.

Whether these things can be humanized and made inviting and worked into the rest of the city. All of this has to be looked at in the context that Mayor Bloomberg gave an important speech last week in which he laid out his vision for the rest of Lower Manhattan and all that stuff has to connect too.

COSTELLO: It's become very politicalicized which always complicates things. Thank you for your insight.

GOLDBERGER: Thank you.

COSTELLO: Sure appreciate it.

Next on NEWSNIGHT, the political scandals where they really know how to do a political scandal. You won't believe it.

(COMMERCIAL BREAK)

COSTELLO: Finally from us tonight, a scandal as only the British can do it. At the center of it all Cherie Blair, the Prime Minister's wife.

She is something of a Hillary Clinton figure in the U.K. Very smart, a bit outspoken and definitely a women Britons either love or hate. As for the scandal itself, maybe there is a crime involved, maybe not. Nobody knows where this is going yet, but in true British tradition, it all sounds so deliciously dirty.

The story from CNN's Gaven Morris.

(BEGIN VIDEOTAPE)

GAVEN MORRIS, CNN CORRESPONDENT (VOICE-OVER): A con man, topless models and the prime minister's wife. As salacious stories go, this one had it all. And didn't the British tabloids just love it? For two weeks nothing else mattered.

MAX CLIFFORD, CELEBRITY PUBLICIST: The pantomime became a farce, the drama became a disaster and it had all the usual ingredients of a great British tabloid scandal. In other words, they kind of made it up as they went along.

MORRIS: Well, not quite all of it. Here is how the Blair affair unfolded. This is Cherie, Prime Minister's Tony Blair's wife. Here she bought two apartments at a discount because this man helped her bargain them down. He is Peter Foster, an Australian convicted of fraud known to all of Britain because of his former relationship with this famous topless model. Now he's the partner of this former topless model. Famous too, because she's her friend and confidant.

He was facing deportation because of his criminal record and she, a lawyer and a part-time judge, called government officials seeking information over the case to put her mind at rest. Got it?

(on camera): It all smelled just a little bit fishy and that was before the Prime Minister's office here at 10 Downing Street got involved. It officially denied the whole affair, which was fine until Mrs. Blair admitted it was all actually rather true.

(voice-over): So Cherie Blair faced the nation and confessed and apologized with the defense that she never knew of Peter Foster's past.

CHERIE BLAIR, BRITISH PRIME MINISTER'S WIFE: I am not Superwoman. The reality of my daily life is that I am juggling a lot of balls in the air and sometimes some of the balls get dropped.

MORRIS: Mrs. Blair came close to tears and the papers had a field day.

CLIFFORD: This was the day after she was on television.

MORRIS: Max Clifford is Britain's busiest broker of celebrity scuttlebutt. He knows scandal and he knew this would be big.

CLIFFORD: The British public were naturally very interested in this because it was someone who's rich, successful, married to the most powerful man in the country, being seen to make a total fool of themselves and being conned.

MORRIS: Where was the prime minister during all of this? Trying to get on with the affairs of state, and getting increasingly frustrated. Like he when he tried to announce the historic expansion of the European Union only to be confronted by his wife's scandal.

TONY BLAIR, BRITISH PRIME MINISTER: Honestly, I don't want to be difficult about it, but all those questions can be dealt with back home. I really want to concentrate on these issues, which, as you know, are very, very important.

MORRIS: The public's mind is lingering. The polls and the people suggesting the embarrassing imbroglio has caused at least some lasting pain for the government.

UNIDENTIFIED FEMALE: I don't know if I completely believe her to be completely honest because a lot of scandal has come out of it.

UNIDENTIFIED FEMALE: For a part-time judge she is showing remarkable lack of judgment.

MORRIS: In the end, no crimes were ever committed, it is simply a tabloid tale of a con man, topless models and the prime minister's wife, just a lure of the lurid that won't go away.

Gaven Morris, CNN, London.

(END VIDEOTAPE)

COSTELLO: Takes a long time for the lurid to go away.

That's NEWSNIGHT for tonight. I'm Carol Costello, thanks for watching. Aaron will be back tomorrow.

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





Might React With a Scorched-Earth Policy if U.S. Attacks>


Aired December 18, 2002 - 22:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, GUEST HOST: Hello, everybody. I am Carol Costello.
Aaron got an invitation to the White House Christmas party and he is there with his 14-year-old daughter Gabby. And I am sure he will fill you in tomorrow.

In the meantime, we will spend some time on a juicy political scandal uninvolving the highest level of governments complete with a con man and topless dancers and that's just the beginning.

Now, if you're wondering how you missed all of that in the Trent Lott story, you didn't. We're talking about the Cherie Blair, and that scandal has been front-page news over there for the last week.

We'll have an update on the Trent Lott story too.

Now though it's time to new on to the whip and reaction to Iraq declaration on weapons of mass destruction.

CNN's Frank Buckley is at the White House tonight.

Frank the headline please.

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Well, Carol, Bush administration officials made it clear that they believe the Iraqi declaration falls short, but they have no plans to use the term material breach, no plans to trigger immediate military action.

COSTELLO: What would the end of a war look like? A less than pretty picture is emerging.

At the Pentagon for us, Jamie McIntyre is there for us. That is one of two headlines we gather.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: The big military build up may begin next month depending on some decisions made in the next couple of days. And Iraq might react with a scorched-earth policy, according to U.S. intelligence setting its own oil wells on fire and destroying its food supply.

COSTELLO: And Some arrests on the war in terrorism.

CNN Justice Department correspondent has the duty tonight. Kelli, give us a headline.

KELLI ARENA, CNN JUSTICE DEPARTMENT CORRESPONDENT: An alleged radical Islamist link in Texas, they arrested four men who they say helped raise money for the Palestinian group Hamas.

COSTELLO: And in New York, proposals for making lower Manhattan whole again.

CNN's Whitney Casey with that.

Whitney a headline.

WHITNEY CASEY, CNN CORRESPONDENT: Well, Carol, seven architectural teams came up with their plans on what should be on this 16 acre World Trade Center site. It's been dynamic and creative, but now it's time for the public to weigh in -- Carol.

COSTELLO: Back with you and back with all of you in a moment.

Also tonight, we'll look at the World Trade Center proposal through the eyes of Paul Goldberger, the architecture critic of the "NEW YORKER" magazine. We'll check out some of your proposals too.

Trent Lott say he is hanging on but it gets harder every day. We'll bring you the latest on that and revisit the issue of Republicans and race with Shelby Steel. All of that to come in the hour ahead.

We begin with Iraq's declarations. The reception it is getting and something of a twist. Instead of the trigger to war, it may end up being the trigger to a warning. Perhaps the Bush administration's final warning, but something short of the second Gulf War. Here again CNN's Frank Buckley.

(BEGIN VIDEOTAPE)

BUCKLEY (voice-over): On the Iraqi declaration, the White House declared it is not the full and complete accounting required under the U.N. Security Council resolution.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president is concerned about Iraq's failure to list information in this document, the president is concerned with omissions in this document and the president is concerned with problems in this document.

BUCKLEY: A concern echoed by officials in Great Britain, British Foreign Secretary Jack Straw saying there are obvious omissions. A response to the declaration was topic one for principals gathered at the White House for a National Security Council meeting. Previously on numerous occasions, the president emphasized that omissions would not be tolerated.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Zero tolerance is about as plain as I can make it. We will not tolerate any deception, denial or deceit, period. Should he be denied that this arsenal exists, you will have entered his final stage. And deception this time will not be tolerated. Delay in compliance will invite the severest of consequences.

BUCKLEY: But administration officials say the omissions and problems the president sites now will go to the U.N. Security Council. The U.S. will not use them as an immediate trigger for war.

FLEISCHER: Hans Blix of the United Nations will go for the Security Council in New York to discuss the findings and the facts that the United Nations inspectors have found in this declaration. Following that, I think you will see the United States will have been very deliberative about the implications of this are.

BUCKLEY: But it forces a raid in the Gulf are not to be used for now, is that an omission that international support for such action is not yet there. Is the president's previous tough talk a bluff?

FLEISCHER: I assure you, this president does not bluff. What he said that Saddam Hussein must disarm, and he wants Saddam Hussein to disarm so peace can be preserved. Saddam Hussein will be disarmed, it is not a bluff. He hopes Saddam Hussein will do it still.

(END VIDEOTAPE)

BUCKLEY: And as you heard from Ari Fleischer, tomorrow Hans Blix, the chief U.N. weapons inspector, will present his view and his analysis of that 12,000-page declaration from the Iraqis. The U.S. Ambassador to the U.N. will be represented in the security council in that closed session. Afterward U.S. Secretary of State Colin Powell is expected to talk to reporters. We're expecting to get our first sense of detail of exactly what the problems are according to the U.S. with the Iraqi declaration. Carol?

COSTELLO: OK, Frank, tell us the bottom line. The Bush administration is not going to say Iraq is in material breach because of this huge document that it released, right?

BUCKLEY: That is the bottom line. It appears the U.S. Is not going to say, yes, this is a material breach that we have been looking for. To back up just for one second. The position of the Security Council resolution, 1441 is that Iraq is already in material breach for past problems, 16 different resolutions. But we're looking for a new material breach, according to the U.S. and this will not be the thing that triggers war immediately.

The U.S. is always said it will go back to the U.N. Security Council and engage in consultations and engage in diplomacy and that's where we are right now. It isn't clear yet exactly what the next step will be, although officials have been telling us that they do expect the inspection process to continue.

COSTELLO: But, Frank, do you get the sense that those in the White House are in agreement as to exactly what material breach means? BUCKLEY: Well, they have said very consistently that material breach is something that is determined by the facts. That this is not something that the U.N. Security Council should decide, not something that Hans Blix decides, not something the inspectors decide, but something apparent just on the basis of the facts that are presented.

So, there is some disagreement over whether or not they should consider this the material breach that escalates this to the next level. But the term itself material breach, they have always consistently said is something that is just determined by the facts.

COSTELLO: Frank Buckley live at the White House, thanks.

We heard a lot about the timing and the tempo of the war, when it will start, how it will unfold. Nobody knows the ultimate outcome. But tonight there is growing concern within the intelligence community that a victory over Saddam Hussein would come the hard way, that it would be especially ugly. Mostly they believe because that's just how Saddam wants it.

Once again, here's Jamie McIntyre.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): In 1991, retreating Iraqi troops set fire to Kuwait's oil fields, this time, U.s. Intelligence analysts say Iraq is planning to do the same to its own oil fields as part of the scorched-earth policy aimed at winning world sympathy in the event of a U.S.-led invasion.

The Pentagon analysts cite solid evidence that Saddam Hussein has plans to create a humanitarian crisis by destroying food warehouses and power plants, and unleashing bioweapons on his own people. A big unknown, will Saddam's Republican guard carry out the orders or turn on it.

DONALD RUMSFELD, SECRETARY OF DEFENSE: I think that it is very difficult to have good knowledge as to exactly how Iraqi forces will behave.

MCINTYRE: Whether Iraqi forces will drop their weapons and surrender as did 80,000 did during Desert Storm is another unknown. There are indications of morale problems, even among the most loyal troops, the Special Republican Guards. And even suggest some may have plotted coups. But the intelligence also indicates that Saddam Hussein has circled Baghdad with six divisions of his best troops, and preparing for a battle the death.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: There is nobody involved in the military planning to include the secretary or any of the senior leadership in this building, I think that you'll find that will say that this sort of endeavor, if we were asked to do it, would be a cake walk.

MCINTYRE: Intelligence analysis say Saddam Hussein has also drawn a lesson from the February 1991 incident in which the U.S. bombed a Baghdad bunker killing women and children they did not know was inside. The result was a temporary pause in bombing Baghdad. Now, analysts predict Saddam will manufacture civilian casualties to slow any U.S. Advance.

(END VIDEOTAPE)

MCINTYRE: And Pentagon sources indicate that by next month, Saddam Hussein may have more to worry about. The U.S. Could double the number of troops in the Persian Gulf region from 60,000 to well over 100,000. Depending on some decisions that have to be made this week. But Pentagon officials stressed so far no decision for a big build up in January because President Bush still hasn't made the ultimate decision about going to war -- Carol.

COSTELLO: OK, Jamie, lets speculate a little bit. If the United States does attacks Iraq, they want a quick war, if Saddam Hussein does carry out this scorched-earth policy, how would it have a quick war?

MCINTYRE: The key to the U.S. strategy is to deliver a knockout blow that would end the war quickly perhaps in a couple days. And persuade the Saddam Hussein's officers not to carry out orders to do things like blow up oil wells or destroy food supplies or unleash killer germs. So the key to the U.S. strategy is a lightening strike that would take Saddam out, and demoralize his troops before they had chance to carry out all of these dire predictions.

COSTELLO: Jamie McIntyre at the Pentagon.

On to the war on terrorism now, the kind of battle waged with spread sheets and green eye shades. The attorney general today unveiled indictments against seven people, five of them living in Texas, for allegedly financing terrorism.

Details now from CNN's Kelli Arena.

(BEGIN VIDEOTAPE)

ARENA (voice-over): Five brothers, all employees of InfoCom, a Texas computer firm, are charged with violating the U.S. ban on doing business with terrorists.

Namely, this man, Moussa Abu Marzook (ph), a senior leader of Hamas.

Hamas, which has claimed responsibility for attacks in Israel, the West Bank and Gaza has been designated a terrorist organization by the United States.

JOHN ASHCROFT, ATTORNEY GENERAL: Just as we will prosecute the terrorist who plants a bomb, we will prosecute the terrorist supporter who writes a check.

ARENA: The indictment alleges that Marzook conspired with InfoCom and the five brothers, whose last name is Elashi ,to hide how money was illegal transferred. In addition, the brothers, two of them seen here, are charged with illegally selling computers parts to Libya and Syria. Both have been designated by the United States as state sponsors of terrorism.

A defense attorney for the men suggested there could be an innocent explanation.

MIKE GIBSON, DEFENSE ATTORNEY: I think we may have a situation where things were sent to the Middle East to a proper country and somehow ended up in a terrorist country and now they're trying to connect the dots.

ARENA: Marzook was deported by the United States in 1997. He and his wife are now fugitives.

The Elashi brothers are in custody in Texas.

But it doesn't end there. One of the five, Ghassan Elashi, is also chairman of the Holy Land Foundation, the largest Muslim charity in the United States.

The government has said the foundation funds terrorists and has frozen its assets. It's a charge Elashi has repeatedly denied.

GHASSAN ELASHI, HOLY LAND FOUNDATION CHAIRMAN: We are a strictly charitable organization and we have no relation with any terrorist organizations.

ARENA: Justice officials say they have been aware of a relationship between Holy Land and InfoCom since before the September 11 attacks.

ASHCROFT: Both InfoCom and Holy Land Foundation received their seed money from one of the defendants in the cases announced today, Moussa Abu Marzook.

(END VIDEOTAPE)

ARENA: Four of the brothers made an initial appearance in court today and said they understood the charges against them. They are due back in court on Friday for a detention hearing.

Meanwhile, officials say that the investigation into InfoCom is wrapping up but that the investigation into the Holy Land Foundation remains very active -- Carol.

COSTELLO: Kelli, Marzook and his wife, you say they're fugitives.

ARENA: That's right.

COSTELLO: Are investigators actively looking for them?

ARENA: Well they are believed to be in the Middle East and so they were indicted, as part of today's indictment. They have alerted their allies in the war on terror that they are looking for them. It is up to our partners to alert U.S. officials as to whether or not they're in any of those countries.

COSTELLO: Good enough. Kelli Arena, thanks.

As NEWSNIGHT continues, we'll spend some time looking at the new proposals for Ground Zero and we'll show some of your ideas as well.

And up next, are we a step closer to war with Iraq? We'll talk with General Wesley Clark.

(COMMERCIAL BREAK)

COSTELLO: A few moments ago, Jamie McIntyre sketched out a worse-case scenario: winning in Iraq, but winning ugly. It's a concern for the generals who have their troops to look out for, and a source of tension with their civilian bosses who call it foot dragging and defeatism. Disagreement blossomed today on the pages of "The Washington Post," but it's been going on for months behind the seas -- behind the scenes, rather, which is why we're glad retired General Wesley Clark is with us tonight to help sort things out.

OK, let's start with Saddam Hussein's Scorched Earth policy. I mean, we all think that Saddam Hussein is not quite right, but to destroy your own country, kill your own people and then kill yourself.

GEN. WESLEY CLARK (RET.), FORMER NATO SUPREME COMMANDER: Well, in his own mind, it's probably a rational thing to say because he wants to portray the United States as having caused the destruction of this country. And so he's got the plans to start the destruction under way. He'll be able to blame it on the United States and it's probably a story that will spread and find some traction in the Arab world, even though he is causing it himself.

Now, the question, of course is...

COSTELLO: Well, before we go on, let's explain what this Scorched Earth thing is. That means his own troops will set the oil fields on fire in Iraq and would he stage civilians being killed or would he go ahead actually go ahead kill his own people once again?

CLARK: Well, if he uses biological weapons he might well seed the large area with anthrax spores or some other bioweapon. And it might be nominally directed against us, but he has never had any love for the Shiite (ph) population in the south, anyway, he might be able to cause hundreds of thousands of civilian casualties down there.

COSTELLO: And he really thinks that by doing this, that this might cause sympathy for him and Iraq in the Middle East.

CLARK: That's exactly right, and it would be directed as a weapon against the United States.

COSTELLO: So what's the United States going to do? How will this affect its knockout punch strategy?

CLARK: Well, I think two things. First, diplomatically, we're going to be sure that we've got as much of the world with us as possible before we go in. And so, that's why we're taking this step by step right now diplomatically.

And as far as the military is concerned, obviously we want to do the job as rapidly as possible.

COSTELLO: You say as rapidly as possible. There are so many troops over there right now, how many more can we send? And because the United States keeps sending so many troops over there, I mean, isn't war a foregone conclusion?

CLARK: I think we are moving to war. None of us see any way that this is going to end unless there's a coup or unless Saddam somehow miraculously has a conversion and decides to fess up and that's unlikely.

This is most likely going to end in war some time in the first, at the end of January, early February of next year.

COSTELLO: And how will it begin? What will the United States do?

CLARK: Well, the inspections will be more intrusive and eventually either Saddam will obstruct them or will find something or will simply declare that the pattern itself constitutes another material breach and then it'll be the air campaign for five days and the ground force moving as rapidly as possible into contact with the enemy.

COSTELLO: How many troops do you think that the United States will have to send in on the ground?

CLARK: Maybe four divisions worth, depends on how you count the logistic troops behind them. But we're probably talking about a fairly big package. They might not all go in simultaneously, but within a week or so we'll probably see 100 to 150,000 troops.

COSTELLO: OK.

CLARK: Not counting what's in Kuwait.

COSTELLO: OK. I was just going to ask you, say divisions -- how many people would that entail? How many soldiers?

CLARK: Well, each of the divisions, Army and Marine, maybe 15,000 to 20,000, plus they'll be backed by the headquarters and support troops beyond them. So, the total package could be 200,000, maybe more.

COSTELLO: So how far will those troops go? Will they go all the way to Saddam Hussein?

CLARK: Absolutely. All the way to Baghdad. All the way to Tikrit. Everywhere in Iraq.

COSTELLO: You know, I don't know, you just think about ground troops going in and your heart beats faster because you know more American casualties because of this. And I'm sure Saddam Hussein has some kind of plan up his sleeve to inflict as much damage on American troops as possible.

CLARK: Sure, he'd love to. But we're very good. I mean, no one in the armed forces is going to underestimate the risks, but we've worked this plan in some detail for a year or so, it's come up, the troops are trained. They're going to better trained before we go. We're going to be as careful as we can. We're going to use as much support as we can and we just got to trust the fact that we've got a very, very fine military.

COSTELLO: Well, we'll see what happens tomorrow, when the president comments on the big Iraqi document, supposedly declaring all of its weapons. We'll see.

Thank you very much, General Clark.

CLARK: Thank you, Carol.

COSTELLO: Before we take a break, a few more items from around the country though, starting in Southern California at the federal building at Westwood. Thousands of people, many from L.A.'s Iranian- American community turning out to protest a new homeland security policy. It calls for men visiting from certain Muslim countries to be photographed and fingerprinted. The deadline came and went to days ago and already hundreds of men who have showed up have been detained for a variety of reasons. The protesters called the detentions inhumane and the policy itself counterproductive.

In New Orleans today, a guilty plea from David Duke. Remember him? He's the former Klan leader. Mr. Duke admits to bilking supporters out of thousands of dollars, money prosecutors say he used for gambling. He also pleaded guilty to filing a false tax return. The charges carry a prison term, a fine and disqualify Mr. Duke from holding public office.

And a judge in San Francisco got to play umpire on who gets Barry Bonds 73rd home run ball. Alex Popov (ph) caught it, as you can see, and then he lost it. Patrick Hiyashi (ph) wound up with it. So who gets it? Well, the judge said both and neither. He ordered the ball put up for auction and the two to share in the proceeds, which could amount to a million bucks apiece. So there you go.

Later on NEWSNIGHT, new design ideas for Ground Zero. We'll show them to you and have an expert give his opinion.

And up next, the outlook for embattled Senate Majority Leader Trent Lott. How did he do today?

(COMMERCIAL BREAK)

COSTELLO: Did we mention the Lott-o-meter? It shows Trent Lott is in a lot of trouble.

Former President Clinton today actually called Trent Lott's remarks par for the Republican course. Outside of a business lunch in New York, Mr. Clinton accused Mr. Lott of saying publicly what the GOP really believes. (BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Right now, their policy is, in my view, inimical to everything this country stands for. They tried to suppress black voting, they ran on the Confederate flag in Georgia and South Carolina. And from top to bottom the Republicans supported it. So I don't see what they're jumping on Trent Lott about.

(END VIDEO CLIP)

COSTELLO: (UNINTELLIGIBLE), from a spokesman for the Republican national committee, Mr. Clinton, he said, should check his facts.

A bit more now on our Lott-o-meter. It's a finally tuned instrument sensitive to the slightest variation in the political sign waves caused by the curfupple (ph) surrounding the senator.

CNN's Jonathan Karl has following the waxing and waning, or waning and further waning of Senator Lott. Here's what affected the meter today.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Speaking out in Biloxi, Mississippi, Trent Lott told reporters he has the support of his fellow Republicans.

SEN. TRENT LOTT (R-MS), SENATE MINORITY LEADER: I am hanging in there. We are going to work through this in a positive way.

KARL: Ending speculation about whether he would leave the Senate if forced out as leader, Lott said he would fill out his term.

LOTT: Quite simply, I was elected by the people in Mississippi to a six-year term. I've served two years of that contract. I have a contract and I am going to finish it.

KARL: But several senior Republicans on Capitol Hill continued to say privately, Lott is finished as majority leader and Senator Lincoln Chaffee became the first Senate Republican to say he wants Lott replaced.

SEN. LINCOLN CHAFFEE (R), RHODE ISLAND: I believe it's time for a change. I think the process is happening.

KARL: Chaffee, however, is the only Senate Republican to say publicly he wants Lott to go. At least nine Republicans, ranging from conservative to Orrin Hatch to moderate Arlen Specter, say they will support him.

SEN. MIKE DEWINE (R), OHIO: My prediction is that Trent Lott will retain his position as majority leader because the reason I said that the majority of my colleagues, I believe, will come to the conclusion that this is a good man. KARL: But one of Lott's strongest supporters, outgoing Congressman J.C. Watts, said if he was in Lott's shoes he would step down.

REP. J.C. WATTS (R), OKLAHOMA: I can tell you if it was me, I would not put my family nor my grandchildren nor my party through that.

KARL: Speaking out for the first time on the issue, Secretary Of State Colin Powell sharply criticized Lott and, like the president, refused to say whether he should remain leader.

COLIN POWELL, SECRETARY OF STATE: I was disappointed in the senator's statement. I deplored the sentiments behind the statement. There was nothing about the 1948 election or the Dixiecrat agenda that should have been acceptable in any way to any American at that time or any American now.

KARL: Lott said he still believes he has the president's support, despite persistent press reports that say the president wants him out and White House Chief of Staff Andy Card told Lott on Wednesday that those reports are unfair and inaccurate.

Jonathan Karl, CNN, Capitol Hill.

(END VIDEOTAPE)

COSTELLO: The issue, though, we shouldn't forget, really isn't Trent Lott. The issue really is race and how it continues to bedevil a nation founded on principles that should have banished race as a consideration long ago, but hasn't.

We're joined now in Monterey, California by commentator, essayist and Hoover Institution research fellow and Shelby Steele, who is always interesting and provocative on this subject.

Welcome to you, Shelby.

SHELBY STEELE, RESEARCH FELLOW, HOOVER INSTITUTION: Good to be here.

COSTELLO: You had an opinion piece in "The Wall Street Journal." I found it fascinating.

I want to read an excerpt from that for you -- to -- for you to expound on it. You said, "Senator Lott's many apologies have revealed him to be a man who has troubled himself very little with self examination."

That's a cold statement.

STEELE: Well, but I think that's true. I mean, I think that the we -- the world can now -- now sees evidence of that. I mean, his remark suggests that, at the very least, he was insensitive. That Senator Lott is not the kind of man who in the past, at any rate, went deeply and looked within himself and came to terms with his feelings about race and I think they've -- all of that has now caught up with him.

COSTELLO: Do you think that e's looking within himself now?

STEELE: I think that he -- well, I think he should and I think he soon -- he probably will. I mean, I think that's going to be inevitable. It's too bad it took this to make it happen.

But yes, I think in the long run he will look now within himself.

COSTELLO: So does he deserve to be majority leader still?

STEELE: I think, for me, there are two conditions, because he is -- I think he is very, very gravely wounded as a leader at this point and stands to do his party considerable damage.

Saying that, I think that if somehow Trent Lott can in fact become a transformed man and can do that within a framework of compassionate conservatism. That is to say not sell out the values of his party and the social agenda of his party which i think is very progressive and addresses racial issues and poverty and so forth very well.

If he can stay within that framework and at the same time be transitioning and convince the other senators that is the case, I think he has a chance.

COSTELLO: You mentioned that this is hurting the Republican party. I want to read, folks, another except from your opinion piece. You say the Lott crisis is "terrible for conservatives because the best thinking on social problems and race in recent years has come from their ranks." Many people would disagree with that.

STEELE: Well, that's sad because I think, first of all, what conservatives have brought to the social debate that was left out of it for the last three or four decades is simply the idea of individual responsibility.

The greatest social program, most effective social program in the last, well, probably forever in the United States was welfare reform, which simply added this element of individual responsibility to welfare.

That's the kind of thing that compassionate conservatism wants to do. It has been extremely effective. And, again, it is conservatives, it's people in think tanks and elsewhere who have done all sorts of new and original thinking about these problems.

COSTELLO: Shelby, I would have to ask you this. If they're so forward thinking on these issues, why didn't they realize that Trent Lott had a problem?

STEELE: That's a good question. I think they're culpable for that. Trent Lott hadn't done this every day, but he clearly had a pattern and this should have been something that was addressed before. There is no dot about it.

COSTELLO: Should the Republicans kick him out of his post? Do they have to do that to maintain credibility?

STEELE: I think that, again, I think that it may come to that. It very likely will come to that. Again, unless Trent Lott is somehow able to meet the conditions that I was just talking about, if he can stay within the framework of compassionate conservatives...

COSTELLO: Yes, but how can he do that? He apologized five times. He comes out and says that he is for affirmative action and he wants to meet with members of the black community to come up with some sort of plan. What more can he do?

STEELE: You're absolutely right. He is a figure now who stands to be rolled. He has been taken over. You can put a collar and a leash on him. If you look at the interview he did the other night on BET, he's in favor of affirmative action, he's going to rethink Judge Pickering, he's taken over the liberal agenda. That's disastrous, he has to go if that continues.

COSTELLO: OK, we'll see January 6. Shelby Steele, thanks for joining us tonight.

Still to come on NEWSNIGHT a really good political scandal. The British kind.

Up next, a new set of proposals for Ground Zero are unveiled. You're looking live at a picture of Ground Zero now. We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: Next on NEWSNIGHT, new ideas for what to do with Ground Zero.

(COMMERCIAL BREAK)

COSTELLO: The weather was warm when the first six plans for the World Trade Center site were unveiled over the summer, but the reception for those plans was not. The designs were not so much criticized as they were ridiculed.

All the same, all dull, none rose to the unprecedented occasion. Stung, the agencies involved literally went back to the drawing board, inviting some of the most daring architects to have a crack at it. That they have. Their visions were presented to the public today. CNN's Whitney Casey is at Ground Zero.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: And the buildings rise up in a spiral to the very tip.

UNIDENTIFIED MALE: The World Trade Center could be transformed into the World Cultural Center.

UNIDENTIFIED MALE: On the horizon our idea is to express the sublimed. CASEY (voice-over): This day belonged to the visionaries.

UNIDENTIFIED MALE: It's a sacred, cathedral-like space, by forming uniting five towers together.

UNIDENTIFIED MALE: These towers make an urban connection.

UNIDENTIFIED MALE: The greatest transportation hub ever.

CASEY: Seven teams of architects from all over the world, each with 20 minutes to present their vision for the 16 acres where the World Trade Center once soared.

Four of those teams propose making the New York home once again to the tallest building in the world. The first plan presents the dramatic spiral rising 1,776 feet for recalling the year of America's independence.

The second plan includes a glass-encased underground mall with twin towers more than 1,700 feet connected by aerial walkways.

The centerpiece of the third presentation a memorial square with fingers extending into lower Manhattan. Three quarters of the site would be open space with memorial parks and then five, 1,000-foot towers.

The tallest structures would be in this, the fourth presentation. Two 2,100 foot metal towers housing a cultural center.

And the fifth team proposes five towers connected at the 60th floor with a sky memorial.

From the sixth team, twin towers with a massive garden, a pool in the footprint of the original north tower and an amphitheater in the south tower footprint with 2,792 seats, one for each of the Trade Center victims.

The final plan offers nine commercial buildings, each 80 floors totaling more commercial space than the original towers, creating a vertical city with a smaller three-acre memorial.

How to assess these plans?

ALEXANDER GARVIN, LOWER MANHATTAN DEVELOPMENT CORP.: They're also very strong ideas and the notion that you can take half of one and mix it with a quarter of B and a quarter of C is unlikely.

CASEY: Monica Iken, whose husband's remains still have not been identified, said she needs more time.

MONICA IKEN, WIDOW OF WTC VICTIM: We just need a space to go that will honor our loved ones and preserve that sanctity.

(END VIDEOTAPE)

CASEY: And we really have an unusual vantage point up here. This is actually where someone like Monica Iken or a family member would come if they came down to Ground Zero. They would be away from the general public.

But when it comes to the general public and the family members, both are asked to weigh in on this. But ultimately it is up to the Lower Manhattan Development Corporation and the Port Authority who own this 16-acre site. They will decide now. Governor George Pataki and Mayor Michael Bloomberg both oversee those tow organizations and all the parties involved hope to come up with one plan by February -- Carol.

COSTELLO: Tough job. Whitney, thanks.

Next on NEWSNIGHT, we'll get an expert's opinion on today's new world Trade Center proposals. Stay right there.

(COMMERCIAL BREAK)

COSTELLO: Next on NEWSNIGHT an expert's view on the new proposals for Ground Zero.

(COMMERCIAL BREAK)

Ideas for what to do with there World Trade Center site are not limited to pro professional architects. From last summer we received thousands of ideas, from all 50 states and 76 countries, some of which we posted on our websites. We gotten actual drawings and models that fill an entire room at our world headquarters in Atlanta. Some of those designs are pretty darn good.

From Oliver Rodums in Bethlehem, Pennsylvania, an open pyramid- ship memorial with the names of the victims etched on it. From Lebanon, Shugrallah George Assaf, writes he would like to see three towers in the shape of the letters, USA. Daniel Dorman, of Fairfax, Virginia sees a twin tower design with a stairway of buildings in the middle, with a memorial in the center core of the building. From Carol Hayden in Fairfield Glade, Tennessee a 110-story tall tower with a resolving restaurant at the top, and globe representing the nations of all those killed. Joseph Calamuse of Port Jefferson Station, New York has a religious theme with a statue of Jesus atop on a single tower. The exterior which is designed to appear as a draped flag. And Finally what he admits might be a challenge to make, Oscar Rub of Toronto proposes buildings like the initial N.Y. with the names of the victims engraved on the steps.

There are almost too many ideas to process, but Paul Goldberger, the distinguished architecture critic for the "New Yorker" is here to help us sort it all out.

Those were pretty good weren't they.

PAUL GOLDBERGER, ARCHITECTURAL CRITIC: Well, they were very earnest. Lets put it that way.

COSTELLO: Very earnest.

GOLDBERGER: I admire the passion behind them.

COSTELLO: Exactly. Let's talk about the professional proposals. Did any of them rock your world?

GOLDBERGER: Actually, they all did to some extent. We have an amazing thing going on right here now, the first time a public agency has actually commissioned some of the most daring and adventuresome architects in the world to do the most important building it could possibly ever do.

COSTELLO: They came up with such massive ideas. Everything is so big and complicated and very modern.

GOLDBERGER: All but one. One is very conservative actually. But in fact, there is now this enormous passion to really reinvent the skyscraper and do something that Ground Zero that is new and different. The one that is more conservative. The one of these nine that looked safe. In some ways the least safe because it doesn't have that craving for newness that everyone want right now.

COSTELLO: I have noticed that many of the proposals, there's a spear that goes high into the sky, sort of like the architect in reclaiming the skyline.

GOLDBERGER: Reclaiming the skyline and repairing the skyline is a big part of the mission for everybody. Those who were lucky enough not to have lost people on September 11 felt that they have lost the skyline. And they cared deeply about it and fixing that by going high is also a way of saying we're repairing New York because that is what New York is about.

COSTELLO: Show us your favorite. Which one is your favorite?

GOLDBERGER: I haven't yet fully figured it out. I think (UNINTELLIGIBLE) is very beautiful and very moving. And he has done one two really important things. He has said to us going down into the earth and seeing that foundation wall that held during the catastrophe during September 11 and keeping it as a memorial is a very important statement and an important gesture. He has gone up into the sky, not with an office building, but with a beautiful slender tower, that would just be a symbol.

COSTELLO: I was going to ask you about that. Whether the people would have offices in the highest part of the building.

GOLDBERGER: Not in his, not in his, in some of the others, yes. He proposes just a very slender tower. He does have some big office buildings but the don't go that big.

COSTELLO: Got you. United, we both like that one.

GOLDBERGER: United is very exciting. That's a whole group of out on guard architects, young, very savvy on the computer and they have really tried to reinvent the skyscraper. I think in some ways, what better place, the skyscraper after all was a great American invention, they're not Ground Zero to bring the next generation of skyscrapers forward.

COSTELLO: You can see how they curve and twist and don't even look like buildings.

GOLDBERGER: Well, they're definitely not boxes. People called the last generation of skyscrapers glass boxes, no one would make that mistake now.

COSTELLO: At looking at these proposals they all seem so complicated and they would cost so much money to actually achieve, is there that much money to build this sort of thing?

GOLDBERGER: We don't know how much money there will be. There is a caring to build something important and meaningful there and when the proposals to build something ordinary were out there last summer everybody said the one thing we can't do at Ground Zero is something ordinary. They're supposed to be built over time. So, there it is not a question of whether we have the money today or whether we have the market to fill the office space today, these are five, ten, 15, even 20-year projects.

COSTELLO: I must say in looking at each design, none of them made me feel warm. And it really brings you to the consideration that maybe an architect, if not the right person, to be building a memorial, maybe it should be separate.

GOLDBERGER: Well, in fact, the official process does call for separate things. These are overall master plans with the big buildings set out there. But each of them needs space for a separate memorial, and the Lower Manhattan Development Corporation plans in the spring to have an international competition for just for that memorial.

COSTELLO: Got you. Well, OK, that's better. But these proposals really aren't set in stone either. These are just ideas.

GOLDBERGER: They're not set in stone. They're not set in glass. They're not set concrete. They're not set in anything yet. They're just ideas.

COSTELLO: It's possible not one of these might be chosen.

GOLDBERGER: It is possible.

COSTELLO: Why go through all this?

GOLDBERGER: Because people care and they want something important and when the Lower Manhattan Development Corporation did it last time around and they were ordinary, they came back and said, all right, you want architecture, we'll give you architecture, we'll search the world, we will invite any architecture to participate. Four-hundred and seven sent in a request to participate. Of them the Lower Manhattan Development Corporation choose 7 teams to participate and they came up with these designs.

COSTELLO: And a decision will be made on January 31. Do you think it will it be? Will a decision be made then.

GOLDBERGER: I think a tentative decision will be made, but it is possible as you say. They could say these are all interesting but they don't work. And we're going to go back to the drawing board yet again. I hope they don't say that. I hope they feel in they do feel that in the spirit of Ground Zero and in the spirit of all that happened there, that in fact moving cutting-edge architecture is actually an interesting way to respond.

Whether these things can be humanized and made inviting and worked into the rest of the city. All of this has to be looked at in the context that Mayor Bloomberg gave an important speech last week in which he laid out his vision for the rest of Lower Manhattan and all that stuff has to connect too.

COSTELLO: It's become very politicalicized which always complicates things. Thank you for your insight.

GOLDBERGER: Thank you.

COSTELLO: Sure appreciate it.

Next on NEWSNIGHT, the political scandals where they really know how to do a political scandal. You won't believe it.

(COMMERCIAL BREAK)

COSTELLO: Finally from us tonight, a scandal as only the British can do it. At the center of it all Cherie Blair, the Prime Minister's wife.

She is something of a Hillary Clinton figure in the U.K. Very smart, a bit outspoken and definitely a women Britons either love or hate. As for the scandal itself, maybe there is a crime involved, maybe not. Nobody knows where this is going yet, but in true British tradition, it all sounds so deliciously dirty.

The story from CNN's Gaven Morris.

(BEGIN VIDEOTAPE)

GAVEN MORRIS, CNN CORRESPONDENT (VOICE-OVER): A con man, topless models and the prime minister's wife. As salacious stories go, this one had it all. And didn't the British tabloids just love it? For two weeks nothing else mattered.

MAX CLIFFORD, CELEBRITY PUBLICIST: The pantomime became a farce, the drama became a disaster and it had all the usual ingredients of a great British tabloid scandal. In other words, they kind of made it up as they went along.

MORRIS: Well, not quite all of it. Here is how the Blair affair unfolded. This is Cherie, Prime Minister's Tony Blair's wife. Here she bought two apartments at a discount because this man helped her bargain them down. He is Peter Foster, an Australian convicted of fraud known to all of Britain because of his former relationship with this famous topless model. Now he's the partner of this former topless model. Famous too, because she's her friend and confidant.

He was facing deportation because of his criminal record and she, a lawyer and a part-time judge, called government officials seeking information over the case to put her mind at rest. Got it?

(on camera): It all smelled just a little bit fishy and that was before the Prime Minister's office here at 10 Downing Street got involved. It officially denied the whole affair, which was fine until Mrs. Blair admitted it was all actually rather true.

(voice-over): So Cherie Blair faced the nation and confessed and apologized with the defense that she never knew of Peter Foster's past.

CHERIE BLAIR, BRITISH PRIME MINISTER'S WIFE: I am not Superwoman. The reality of my daily life is that I am juggling a lot of balls in the air and sometimes some of the balls get dropped.

MORRIS: Mrs. Blair came close to tears and the papers had a field day.

CLIFFORD: This was the day after she was on television.

MORRIS: Max Clifford is Britain's busiest broker of celebrity scuttlebutt. He knows scandal and he knew this would be big.

CLIFFORD: The British public were naturally very interested in this because it was someone who's rich, successful, married to the most powerful man in the country, being seen to make a total fool of themselves and being conned.

MORRIS: Where was the prime minister during all of this? Trying to get on with the affairs of state, and getting increasingly frustrated. Like he when he tried to announce the historic expansion of the European Union only to be confronted by his wife's scandal.

TONY BLAIR, BRITISH PRIME MINISTER: Honestly, I don't want to be difficult about it, but all those questions can be dealt with back home. I really want to concentrate on these issues, which, as you know, are very, very important.

MORRIS: The public's mind is lingering. The polls and the people suggesting the embarrassing imbroglio has caused at least some lasting pain for the government.

UNIDENTIFIED FEMALE: I don't know if I completely believe her to be completely honest because a lot of scandal has come out of it.

UNIDENTIFIED FEMALE: For a part-time judge she is showing remarkable lack of judgment.

MORRIS: In the end, no crimes were ever committed, it is simply a tabloid tale of a con man, topless models and the prime minister's wife, just a lure of the lurid that won't go away.

Gaven Morris, CNN, London.

(END VIDEOTAPE)

COSTELLO: Takes a long time for the lurid to go away.

That's NEWSNIGHT for tonight. I'm Carol Costello, thanks for watching. Aaron will be back tomorrow.

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