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CNN Newsnight Aaron Brown

Powell Tours Rubble in Riyadh; Bush: Terrorists Will Know American Justice

Aired May 13, 2003 - 22:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


AARON BROWN, CNN ANCHOR: Good evening again everyone. When you read the ads for the compounds hit in Saudi Arabia last night, the word for oasis comes up a lot. Fortress is probably a better word.
The selling points weren't just the American furniture and the green open spaces, but 24-hour armed guards, infrared detectors, roving foot patrols, delta barriers and drop-arm gates. Now, an illusion of an oasis is long gone. Lives have been shattered and we're left wondering just where we are in the war on terror.

And so, we begin the whip with the latest on the attacks, Andrea Koppel at the State Department tonight, Andrea start us off with a headline.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Good evening, Aaron. The Bush administration is worried that last night's suicide bombings could be the beginning a new wave of attacks throughout the region and so tonight the State Department has ordered the departure of all non-essential U.S. personnel and all dependents at U.S. embassies and consulates throughout Saudi Arabia.

BROWN: Andrea, thank you.

The president responded to the attacks today, the White House Correspondent of the night Suzanne Malveaux on that, Suzanne a headline.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Aaron, President Bush said today he would not be surprised if this was the work of al Qaeda. He has yet to reach that conclusion but tomorrow he'll be briefed by CIA Director George Tenet. In the meantime, White House officials say that they do believe that this could be the work of al Qaeda.

BROWN: Suzanne, thank you.

Assessing the threat that al Qaeda continues to pose, Mike Boettcher's beat, Mike a headline from you.

MIKE BOETTCHER, CNN CORRESPONDENT: Well, Aaron, the al Qaeda we knew on 9/11 no longer exists. It's changed. It's mutated and obviously it's just as dangerous.

BROWN: Mike, thank you. And, quite a turn now to our favorite political story of the day, missing Democrats from the Texas House of Representatives, Ed Lavandera is in Oklahoma where the Democrats have turned up, Ed a headline.

ED LAVANDERA, CNN CORRESPONDENT: Hi, Aaron. Well, when George W. Bush was governor of Texas, now president, Democrats and Republicans used to brag about how well they could get along, but those days are certainly long gone and now about 50 Texas Democrats are holed up in this Holiday Inn here in Ardmore, Oklahoma. We'll tell you why in a little while - Aaron.

BROWN: Ed, thank you very much, back to you and the rest shortly.

Also coming up tonight on NEWSNIGHT, Kelli Arena on how the investigation will go forward in Saudi Arabia. The Saudis were less than fully cooperative after the bombing of the Khobar Towers in '96. We'll look at what the United States can expect this time.

We'll look at the political dimensions of the attack in Riyadh as well with one Democratic candidate for the White House arguing that the war in Iraq was a distraction from the war on terror.

Also coming up tonight, the color of money, a little more color it seems for the new $20 bill. Bruce Morton reports that.

And, Paul O'Neill, the baseball player, here to talk about his life in baseball and the most important figure in his career, his dad, all that and more to come tonight.

We begin with the bombings and all we've learned about them in the last 24 hours. For one, they were especially well organized, the attacks synchronized, the work methodical. If it all seems a familiar picture, it is and so are the questions being asked tonight.

We have a number of reports beginning at the State Department and CNN's Andrea Koppel.

(BEGIN VIDEOTAPE)

KOPPEL (voice-over): At least eight Americans died, 17 others were injured, in the suicide car bombings. The blasts were so powerful they stopped clocks and gutted homes, apartment buildings, and cars in three upscale housing compounds. Only hours after the attack, Secretary of State Powell arrived in Riyadh on a previously scheduled trip ready to assign blame.

COLIN POWELL, SECRETARY OF STATE: This certainly has all the fingerprints of an al Qaeda operation.

KOPPEL: Powell toured the most devastated compound where seven of the eight Americans died, home to about 250 U.S. citizens employed by the Vanel (ph) Corporation, a U.S. defense contractor that trains Saudi Arabia's National Guard. Seventy Vanel employees lived in this bombed-out building but luckily 50 of them were away on a training mission. Powell got a detailed briefing on how the attacks unfolded.

UNIDENTIFIED MALE: They were firing. They charged the gate and assaulted. The silver town car right here had five shooters in it.

KOPPEL: Eyewitnesses say the terrorists shot their way into two of the three compounds overpowering private security guards at two gates before detonating their vehicles packed with powerful explosives.

POWELL: This was a well-planned terrorist attack. Obviously the facility had been cased as had the others, very well executed, and it shows the nature of the enemy we're working against.

KOPPEL: In an unusual move, the kingdom's de facto ruler, Crown Prince Abdullah, also toured the wreckage and took to the airwaves to lash out at the attackers.

CROWN PRINCE ABDULLAH, SAUDI ARABIA (through translator): If they believe that they're criminality, bloody criminal acts, will shake even one hair of the body of our nation and its unity then they are deceiving themselves.

(END VIDEOTAPE)

KOPPEL: But the State Department isn't taking any chances and tonight ordered the departure of the dependents, family members, of all U.S. Embassy employees and also all non-essential U.S. personnel. That's pretty much decided by the ambassador. And they also, State Department officials say, fear that the terrorists who planned those attacks, Aaron, could also be planning additional attacks, a new wave of attacks throughout the region - Aaron.

BROWN: This is a quick one first. How many people are we talking about? How many Americans are we talking about that will be coming out of Saudi Arabia, do we know?

KOPPEL: Yes, that's a question that we always ask when they have these ordered or authorized departures and they tell us that to release that kind of information is not going to be helpful to the people who are left on the ground there. So, the short answer is I don't know. They won't tell us.

BROWN: Do we know how many terrorists were involved?

KOPPEL: The working assumption and there were three teams of attacks, two cars per team, and a few perhaps more terrorists in each team, so there could be anywhere between a dozen and a couple of dozen.

BROWN: And do we know if any of them escaped?

KOPPEL: Again, the working assumption is that some of them did escape. There were the remains of nine of the suspected terrorists that were found on the scene but they don't believe that they have all of them in custody. In fact, they believe that some of them were still on the loose in one of those housing compounds. BROWN: Andrea, thank you, long day's work for you, Andrea Koppel at the State Department.

Just a couple of weeks ago, the prevailing view in Washington seemed to be that al Qaeda if not entirely crippled was no longer capable of mounting a serious operation. It's safe to say a number of people held a different view back then and a lot more are having second thoughts tonight, reporting for us CNN's David Ensor.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): From the president on down, administration officials say they are not sure yet who planned the attacks in Riyadh but al Qaeda is suspect number one.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, there's a lot of suspicion that it is al Qaeda. Al Qaeda is a group of people that they don't care about taking innocent life and obviously these killers didn't care about innocent life.

PETER BERGEN, CNN ANALYST: There's just no other group that carries out these kinds of coordinated attacks, multiple targets, suicidal.

ENSOR: Furthermore, a week earlier Saudi authorities captured 800 pounds of explosives, RDX, and weapons in a house just a quarter of a mile from one of the bomb sites and launched a manhunt for 19 suspects.

A Saudi newspaper said Tuesday it had received an e-mail from a man calling himself Abu Mohammed al-Ablij, AKA Abu Bakr, who says the execution this plan was not hampered by the recent announcement by the Saudi authorities of the seizure of large quantities of arms and explosives in the kingdom and the hunt for 19 people.

The e-mail says al Qaeda's strategy now will be operations "in the heart of the United States, Gulf countries, Egypt, and Jordan." U.S. intelligence officials say the message appears credible.

ALI AL-AHMED, SAUDI DISSIDENT: The bombing in Riyadh is an announcement of the second version of al Qaeda, al Qaeda II.

ENSOR: Saudi dissident Ali al-Ahmed says his information is that the Riyadh suicide bombers were part of a new offshoot of al Qaeda that is homegrown Saudi, not taking orders from Osama bin Laden but adopting his ideology and tactics, and that these killers were young.

AL-AHMED: Our guy who spoke to one of the guards there, he said most of them didn't have beards. They're young, very young, most of them under 25.

BERGEN: We're seeing more local homegrown kinds of things but obviously at a minimum inspired by al Qaeda and in some cases directed by al Qaeda. ENSOR: Al Qaeda or some affiliate of it has now apparently directly attacked the Saudi kingdom by going after the expatriates who keep its infrastructure running.

(on camera): In response, U.S. officials are hoping the Saudis will finally go all out to stop recruiting and fundraising by al Qaeda in their country. This attack was about them as well as us, said one U.S. official, and they know it.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

BROWN: The White House next and the reaction to what must be a terrible reminder. Eighteen months and two wars since the 9/11 attacks, Americans are still at risk. Terrorism has not gone away and our friends the Saudis are uncertain allies at best.

From the White House tonight, CNN's Suzanne Malveaux.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): The White House reaction to the Saudi bombing was swift and strong.

BUSH: These despicable acts were committed by killers whose only faith is hate and the United States will find the killers and they will learn the meaning of American justice.

MALVEAUX: The vice president weighed in as well.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The only way to deal with this threat ultimately is to destroy it.

MALVEAUX: President Bush was in Indianapolis to promote his tax cut plan and later in Pierce City, Missouri, to see the tornado damage there firsthand. But the Saudi bombing prompted him to reassure Americans that fighting terrorism is still a top priority for the White House.

BUSH: The war on terror goes on and this incident in Saudi Arabia shows the country that we still have got a war to fight and we will fight it and we will win it.

MALVEAUX: The Bush administration has been frustrated with the Saudi leadership that it has not gone after terrorists, particularly al Qaeda more aggressively, but some critics question whether the Bush administration's focus on Iraq and toppling Saddam Hussein has limited its own ability to go after al Qaeda. The whereabouts of its leader Osama bin Laden is still unknown. The White House argues it is successfully fighting the war on terror on two fronts.

BUSH: A free Iraq will make the world more peaceful because you see when people are free they're less likely to promote terrorism.

(END VIDEOTAPE) MALVEAUX: Now, White House officials say since the war on terror began that al Qaeda's ability to carry out massive terrorist attacks like we saw on September 11th has been severely disrupted, but the White House also acknowledging that hitting those softer targets abroad very much in al Qaeda's reach - Aaron.

BROWN: Does the White House think of this as a political setback for the president?

MALVEAUX: Well, it could be if it allowed it to be. The White House is arguing that it is successfully fighting the war on terror on two fronts that they're going after al Qaeda and they have successfully gone after Saddam Hussein.

They believe that this is all going forward, that this is the same goal that they're trying to reach, but they do not shirk away from the idea that, yes, there is still a lot of work to be done and, yes, it is still a dangerous place for Americans.

BROWN: Suzanne, thank you very much, Suzanne Malveaux at the White House.

Can't look at pictures tonight without flashing back seven years, then as now an FBI team set off for Saudi Arabia, now as then the hope is for cooperation. A lot has changed in seven years, then again much hasn't.

Here's CNN's Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): The latest explosions are reminiscent of the 1996 truck bombing of the Khobar Towers military barracks in Saudi Arabia. That attack killed 19 Americans. Then, officials say, the Saudi government prevented FBI agents from interrogating some suspects. Officials are hoping for a different outcome this time.

ROBERT MUELLER, FBI DIRECTOR: My expectation is we will get full cooperation from the Saudis. I will tell you that in addition to American citizens killed, my understanding is there were citizens of a number of other nationalities, as well as Saudi citizens.

ARENA: The FBI is sending a team of agents and technicians to Riyadh but because the attacks were against Saudi-owned complexes, the kingdom gets to call the investigative shots. Even though top brass insist the Saudis are cooperating in the war on terror, there is still concern.

SEN. BOB GRAHAM (D), FLORIDA: This will be another test and it comes in a climate of a very mixed Saudi role in the war on terror which we know and they know we know.

ARENA: Some field investigators say even after September 11th, the Saudis made work difficult. Fifteen of the 19 hijackers in the Pentagon and World Trade Center attacks were Saudi, and officials say requests to interview some Saudi citizens or get access to records were denied.

More tension during a money trail investigation involved two of the hijackers and the wife of the Saudi ambassador to the United States. The Saudis refused access for an interview with the princess. Saudi officials say they have cooperated with the United States just not very publicly.

UNIDENTIFIED MALE: Almost every arrest of every major al Qaeda leader could not have happened without active Saudi involvement. We have not spoken about it before and that has created the impression that nothing was being done. We intend to change that.

ARENA (on camera): Agents will get the chance to decide for themselves, firsthand, whether the Saudi government is cooperating as they pursue the individuals who committed this latest act of terrorism.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

BROWN: A bit more perspective now on the terror attacks and the future of U.S.-Saudi relations too. Wyche Fowler, former U.S. Ambassador to Saudi Arabia and he joins us from Washington tonight. Mr. Ambassador, what do you think the Saudi government is thinking right now?

WYCHE FOWLER, FMR. AMBASSADOR TO SAUDI ARABIA: Oh, they're not very happy because they - I think the evidence is and I think your report was very balanced but there has been extraordinary cooperation certainly in recent times and I could make the argument going back to the Khobar Towers that they know they have homegrown terrorists in their country. They know there are cells. They're not sure how deep or how many or where.

Our cooperation, our intelligence agencies, FBI and CIA, have shared information and intelligence and vice versa and yet obviously we're not doing enough despite all of our efforts and even the efforts of the last week when we thought we had a major part of the cell or the gang. They got away. So, we were unable to prevent this and when that happens we don't have success and we can't claim success.

BROWN: What should we all, all of us watching tonight, what should be look for that would suggest to you, someone that knows this government, will be a sign that the Saudis are seriously cooperating, that they take this threat of homegrown terrorism seriously, and that we will not have a replay of Khobar?

FOWLER: Well, Aaron, again they have taken it very seriously and they have been cooperating. President Bush is telling the truth. Secretary Powell is telling the truth. We are working very closely together. But to specifically answer your question, if they don't they're committing suicide.

You remember bin Laden started his role as a terrorist, was thrown out of Saudi Arabia, his citizenship taken away because first of all he announced his determination to overthrow the Saudi government as well as what is reported more here to chase all the Americans out of the Arabian Peninsula.

I mean they knew back in '96. It's what sent me to Saudi Arabia when President Clinton sent me to Saudi Arabia when the 19 Americans were killed at Khobar Towers but there were also Saudis killed at that time and that was their 9/11.

They knew, they couldn't believe it, that they had terrorism on their own soil but that's where the determination in their own self interest, one would even say their own self survival, made it necessary to begin extraordinary cooperative efforts. They can't do it alone, I would think, and Lord knows we can't root out the terrorists without the greatest of Saudi cooperation.

BROWN: There seems, just tell me if I'm getting this right. I think that's the fairest way to put it that we tend to see the Saudi government as walking a very - a tightrope as it were.

On the one hand the government knows that within the country there is strong anti-western feeling or strong fundamentalist Muslim feeling, and it doesn't want to give that side too much power. At the same time, it doesn't want to alienate it too much and that that affects how it proceeds in moments like this, is that conventional wisdom wrong?

FOWLER: No, no. I think that's - I think that's fair and the Saudis in many ways are their own worst enemies, at least in looking at it from a western perspective because they do not like to operate in public. If they're too close to the United States it gives them dissident problems at home in a hurry.

They have been criticized not only by bin Laden but many of their neighbors for not being sufficiently Islamic, meaning sufficiently conservative, sufficiently pure, but tainted by the long-time strategic association with the west, America, and our values.

So, it is a very delicate balancing act that the other Gulf, the other Islamic nations in that region understand but it's very difficult in our open society where we are candid about everything on television. It's a very, very difficult balancing act that is the right phrase that they have had to do in their opinion to survive.

BROWN: Mr. Ambassador, it's always nice to talk to you. Thank you for your time tonight.

FOWLER: Thank you very much, Aaron.

BROWN: Thank you, sir.

Ahead on NEWSNIGHT, we'll spend more time looking at al Qaeda, what's left of it, how it's changed since the attacks of 9/11 and maintained its ability to attack despite the arrest of many key leaders.

We'll talk with a former presidential counterterrorism advisor, Daniel Benjamin, about what more can be done to stop them, much more ahead. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: For a year and a half we have watched a steady stream of assaults on al Qaeda, the war in Afghanistan, the arrest, the interrogations in Pakistan, the detentions in Guantanamo, cells broken up in places as disparate as Buffalo, New York, and London.

Billions have been spent and what it may have paid for in part was a false sense of security for if yesterday was the work of the al Qaeda organization, it has regrouped and perhaps reinvented itself, here again CNN's Mike Boettcher.

(BEGIN VIDEOTAPE)

BOETTCHER (voice-over): Since the September 11th attacks, more than 3,000 suspected al Qaeda operatives have been arrested worldwide according to U.S. officials, a crippling but not fatal blow to the terror organization according to counterterrorism officials.

MUELLER: What is to be learned from last night is al Qaeda is still there and it's still capable of striking us and we have to continuously be vigilant and work as hard as we can to identify al Qaeda operatives and to take them out of commission.

BOETTCHER: Earlier this month, the justice ministers of the world's biggest economies known as the G8, concurred. In a statement, the group said: Al Qaeda cells are always ready to act."

So, how has al Qaeda managed to survive such a fierce counterattack? The answers, say counterterror experts, it has adapted to the new, more hostile environment.

Coalition intelligence sources say camps once based in Afghanistan have moved to new locations that up to now are out of the reach of U.S. forces. Chechnya is one example pointed out by renowned French anti-terrorism Judge Jean Louis Brugiere.

JUDGE JEAN LOUIS BRUGIERE, FRENCH ANTI-TERROR MAGISTRATE: All the movements (unintelligible) at war have more and more connections with Chechnya and use this area as a new base to continue as an (unintelligible) you know, to continue the fight against the west.

BOETTCHER: Diversification is another key to al Qaeda's continued survival. Once a tightly-knit group bound by its oath of allegiance to Osama bin Laden, it has established working relationships with groups as disparate as Chechan rebels, Asian Islamic extremists, and South American guerillas, according to coalition counterterrorism officials.

And, because al Qaeda's top leadership is either in hiding, for example in the mountainous border region between Afghanistan and Pakistan, or is in custody, lower level operatives who escaped the coalition dragnet now are more likely to plan and carry out missions without the approval of higher ups.

(END VIDEOTAPE)

BOETTCHER: One terrorism expert I spoke to tonight equated the problem to the war on drugs. For example, when Pablo Escobar was killed and his lieutenants were taken out, there were new people to take his place, people who were harder to find. So, the war on drugs continued. And now, the war on terrorism continues - Aaron.

BROWN: Well, it's a troubling analogy when you consider how singularly unsuccessful the war on drugs has been.

BOETTCHER: It is troubling and it will be a situation that likely, according to many experts, will continue for a long time to come. There is no quick fix. If you look at the problems in Northern Ireland, it took a long time to fix and it's still not fixed.

If you look at other terrorist situations around the world that have persisted for many, many years and these are problems rooted in religion and these are problems that could take centuries to fix - Aaron.

BROWN: Mike, thank you very much, Mike Boettcher in Atlanta.

We're joined tonight by Daniel Benjamin. Mr. Benjamin is a former director of counterterrorism for President Clinton's National Security Council, the co-author of "The Age of Sacred Terror," currently senior fellow at the Center for Strategic and International Studies, lots of titles there. It's good to have you on the program. That's the important part.

In your view is this al Qaeda, is this some freelance operation, is it organized, are there higher ups, what happened?

DANIEL BENJAMIN, AUTHOR "THE AGE OF SACRED TERROR": Most of the arrows point to al Qaeda. The M.O. is typical of al Qaeda. The multiple, simultaneous attacks, certainly the targeting of Americans and westerners is characteristic of al Qaeda. It is possible that this is people who think, act, and talk like al Qaeda without actually having grown up in the network.

At the moment, I would guess it is al Qaeda but in a sense it doesn't matter that much because the true foe here is this jihad, this very radical brand of Islam that as Mike Boettcher suggested is going to be with us for a long time.

BROWN: If it is al Qaeda, at least - at least we have a sense of what the target is. If it's just a lot of groups out there operating, they saw how al Qaeda did business. They figure well we'll do business that way too. Is it a more complicated problem ultimately to solve?

BENJAMIN: Well, it remains a complicated problem either way because al Qaeda should not be mistaken for a tightly circumscribed group that, you know, doesn't bleed out into larger communities.

The key issue here is that al Qaeda has articulated an ideology that is very attractive to large, large groups of people and they continue to be absorbed through recruitment into the organization and the organization is still very effective at fundraising.

So, I don't think we should think of this as, you know, the Abu Nidal (ph) group. We should think of this as a broad ideological movement that is present in one form or another from Southeast Asia to the northwest coast of Africa.

BROWN: Does the ability to carry off this attack, does it say anything at all about the effectiveness to date of the war on terror?

BENJAMIN: The fact that I suppose they did not hit large buildings in Lower Manhattan I guess suggests - will suggest to some that if anything they are going after softer targets abroad, but I wouldn't take too much solace. I mean I do think that al Qaeda's capabilities have been somewhat degraded but it is still able to strike at American interests all around the world.

BROWN: I'm not suggesting here that you have, but do you think the country had developed a false sense of security about the ability of al Qaeda or terrorist groups of another name to attack Americans and American interests?

BENJAMIN: Well, the episodic nature of terrorism plays to the terrorist's advantage. We did have a rather remarkable string of successes and really a better record than I think I or anyone else in the counterterrorism community would have predicted on September 12th, so, it's not really surprising.

I think the fact that we also waged two wars and now find ourselves attacked is bound to cause a lot of people some uncertainty but this is the nature of the problem we face and I do think that it is going to continue to pop up in all kinds of disparate places and surprise us for a long time to come.

BROWN: Mr. Benjamin, unsettling thoughts tonight. We appreciate your time. Thank you very much. Daniel Benjamin with us this evening.

More on the Saudi attacks as NEWSNIGHT continues from New York.

Democratic politicians attack the president...

ANNOUNCER: NEWSNIGHT with Aaron Brown....

BROWN: ...on the war on terror -- not yet. Hold the announcer for a minute.

And we'll talk with New Jersey Senator Frank Lautenberg about his concerns over contracts to build Iraq.

This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: The conventional wisdom for Democrats goes like this: attack the president on the economy, on healthcare, on the environment, on lots of things. But stay away from the war on terror. That's the president's strong suit. That's the conventional wisdom, and tonight it's being challenged.

Here's CNN's Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The attack in Saudi Arabia this week gives Democrats an opening.

SEN. RUSSELL FEINGOLD (D), WISCONSIN: Those forces who would have us live in fear have not better than destroyed.

SCHNEIDER: The latest terrorist attack makes their point, they say -- that the war in Iraq was a dangerous diversion from the war on terrorism.

FEINGOLD: The majority of the American people believe that the Saddam Hussein regime was involved in the September 11 attacks. But I have never, Mr. President, I have never not in hearing, and not in declassified briefing -- I have never once heard our officials to assert that we have intelligence indicating that this is the case.

SCHNEIDER: One of those Democrats is running for president.

SEN. BOB GRAHAM (D-FL), PRESIDENTIAL CANDIDATE: I'm running for president to bring back a focus on America's security.

SCHNEIDER: Back in October, Senator Bob Graham opposed the resolution authorizing the use force in Iraq on the grounds that it was too weak.

GRAHAM: I urge my colleagues to open their eyes to the much larger array of lethal, more violent foes who are prepared today to assault us here at home.

SCHNEIDER: In an impressive feat of political jujitsu, Graham is using the security issue to attack President Bush from the left, where he can make himself sound like George McGovern...

GRAHAM: Friends, it is time to bring America back.

SCHNEIDER: And from the right, where he can make himself sound like Ronald Reagan.

GRAHAM: If you reject that, the American people are not going to be at additional threat, then frankly, my friends, to use a blunt a term, the blood's going to be on your hands.

SCHNEIDER: The bombing in Riyadh and the terrible prospect of more attacks gives Graham a potentially powerful theme to rally Democrats.

GRAHAM: The war in Iraq was a distraction. It took us off the war on terror which we were on a path to win. But we've now let it slip away from us.

(END VIDEOTAPE) SCHNEIDER: The idea of challenging President Bush on his strongest issue -- well, you could call it daring or foolhardy. And, you know, the two often go together -- Aaron.

BROWN: Bill, thank you. Bill Schneider in Washington tonight.

On now to another issue that mixes both politics and policy. The issue cleaning up Iraq. But the president isn't getting much slack from the Democrats either because of a company that's involved and how that company was selected. The contract to fix Iraq's oil infrastructure goes to Halliburton, a company that Vice President Cheney used to run.

The vice president says this, that he severed all corporate ties with Halliburton and that he has nothing to do with awarding any contracts, the bidding process or current work orders. And the company says the amount of money that the company will receive is limited to $24 million.

However, Congressional Democrats are calling for investigation as to how Halliburton got the contract, saying the contract is worth far more than $24 million.

Joining us tonight, Senator Frank Lautenberg of New Jersey, one of those urging the investigation.

Senator, nice to see you again.

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Nice to be here. Thank you.

BROWN: Any evidence at all that the contracts -- and it is hard to put a number on them, isn't it -- how much money is involved here -- that this's actually anything untoward to at all.

LAUTENBERG: Well, the problem is there is no evidence of anything. What we hear is what is being now ferreted out by continuous probing that says that this contract could grow as much as to $7 billion or maybe 10 percent of the cost of helping rebuild Iraq.

It's the lack of transparency. It's the secrecy that surrounded this huge contract award that worries me, and I think will worry the American public, knowing that it goes to the Halliburton company, which was Vice President Cheney's company, company he ran, got a substantial bonus I think, $20 million, as a goodbye present after only five years worth of service.

Why it had to be kept a secret is something that no one -- none of us who are interested in this understand.

BROWN: What was it that was kept secret exactly?

LAUTENBERG: Well...

BROWN: Since we're talking about it here. LAUTENBERG: OK. What was kept secret is the fact that the contract was awarded with no bidding, no competition -- that the contract was first described as a fire extinguishing contract that might cost as little as $20 or $30 million, but could run as high as 600. And the more you inquire, the larger the contract grew until now, it's understood that it includes management of the oil fields, distribution of the oil, that it could be as much as $7 billion.

And that's what's the aggravating factor here is that for a contract this size to be awarded, without competition, without public notice is unusual to say the least.

BROWN: I'm not sure that they teach this in law school or even in journalism school, but every now and then I apply a theory which is the they couldn't be that dumb theory.

Which is, in this case, given the reality, everyone knows the vice president's connections to the company, and everybody must have realized that if they give a contract to Halliburton, all these questions are going to come anyway. They couldn't be so dumb as to do a sweetheart deal, could they?

LAUTENBERG: Well, not having gone to law school, but having run a pretty big company before I came to the Senate, tells me that what you don't know can hurt you and especially in government, where the trend toward more and more sunlight, sunshine on activities is a requirement to induce confidence from the constituency.

Whenever anything is done in secret, obviously, other than military requirements, intelligence, et cetera that it looks like something you ought to find out more about just by virtue of the fact it's cloaked in secrecy. It shouldn't happen especially with the attention that's paid to Iraq -- the loss of lives, the magnitude of the effort to free Iraq from the Hussein regime.

All of these things we talked about so openly -- you the battlefield in your living room. You saw a combat at its rawest. And now we want to hide things from the American public? I don't get it.

BROWN: Will you get your hearing, senator?

LAUTENBERG: Will I get it?

BROWN: Yes.

LAUTENBERG: Well, I think so because the chairperson is known to be fair. That's Susan Collins. And Joe Lieberman is the Democratic ranking member. And I think that it's curious enough that the public will ultimately and the senators will demand that the public be made knowledgeable about this.

BROWN: Senator, we look forward to them and we thank you for your time tonight. Thank you very much.

LAUTENBERG: Thanks. Good to be with you.

BROWN: A lot still ahead on this Tuesday edition of NEWSNIGHT, including the search for the missing Texas Democrats.

But up next, we'll check on some of the other stories around the country today, including yet another terror drill. Chicago was the city this time. We'll take a break first. Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: A few other stories around country tonight, beginning with the latest on the terror security drill that's going all week.

Today, there was a simulated bioterror attack of pneumonic plague in Chicago. Mock patients pretending to have flu-like symptoms began showing up at Chicago-area hospitals. Others were names on faxes sent to hospitals, to test their ability to cope. The drill began yesterday with a simulated dirty bomb attack in Seattle, and it continues until Friday.

Man charged with killing a student last week during a shooting at Case Western Reserve University in Cleveland was in court today for the first time. The judge ordered the man held without bail, and agreed to a defense request to put him under psychiatric observation.

And in suburban Chicago, one of the students suspended after that hazing incident is fighting the decision in court. The lawyer for 18- year-old Marnee Holz filed a lawsuit seeking a temporary restraining order to keep the school from suspending her. The judge set a hearing on the request for Wednesday.

An intriguing development in a story we talked a lot about last night, fraud and deceit at the hands of the young "New York Times" reporter named Jayson Blair. We should say at the outset, that there is more than we don't know than we do know here, but it has the possibility that Blair committed more than simply journalistic fraud. "New York Times" said today that Blair is now under investigation by the U.S. attorney's office in connection with allegations that his reporting conduct violated the law. Talk about this development with our legal analysts Jeffrey Toobin, who joins us tonight from San Francisco. What do you think is going on here?

JEFFREY TOOBIN, CNN LEGAL ANALYST: Boy, I tell you, Aaron, this is a weird story and it looks like it's getting weirder. You know, there are lots of bad things that people do that just don't happen to be against federal law. Plagiarism isn't against federal law. Lying on the pages of "The New York Times" is not against the federal law. What it seems like the only possible crime here is defrauding "The Times" by filing false expense reports, but those are just a few hundred dollars and it's hard to imagine they could make a federal case like that.

BROWN: Does this like becomes an Al Capone case? They are going to get him on tax evasion because they couldn't get him on the big things?

TOOBIN: Well, you know, federal law, by and large, excepting drugs, excepting crimes of violence is almost all about money in one way or another, and whatever you can say about Jayson Blair, and we've all certainly said a lot, this doesn't appear to be motivated by money. He didn't make anything, really, other than his salary. Ironically, one of the pieces of evidence against him is that he didn't file expense reports because he never went anywhere. He didn't go to the places he said he went to, but it's hard to imagine how that's an act of fraud, not filing expense reports.

BROWN: But even -- I'm not -- we'll see where this question goes, but even if that were it, does it seem a bit much for the U.S. attorney's office to be involved in an expense account case involving the "New York Times," A, and why would that not a be a state crime? Why would it be a federal crime anyway?

TOOBIN: Well, it's almost never even a state crime. The expense account fraud gets you fired. That's what happens when you commit expense account fraud, but I've almost never heard of a case of any kind of criminal prosecution, state or federal.

It does seem like, based on the facts we know, and as you said at the outset, I think it's important to emphasize, that there may be facts out there that we don't know, but based on the "Times" exhaustive recounting of his journalistic offenses, this doesn't seem like something that would be of interest to a federal prosecutor, but journalism students.

BROWN: Yes, it's a little odd conversation going on in the jail cell somewhere. What are you up here for? Phonied up an expense report. So you think maybe there's something we don't know here.

TOOBIN: I think, you know, it's interesting. There is some version of conspiracy to defraud your employer, if you work for the government. If you work for the government and obstruct justice, or do things that violate your trust with the people, that's a crime. But that only applies to the government. It's a crime, conspiracy to defraud the United States. There's no such thing as conspiracy to defraud the "New York Times" of your honest services. That crime simply doesn't exist, and if this is all that's availability to the U.S. attorney, I can't imagine them filing charges here.

BROWN: So we're back at the beginning, we are waiting to see what we can find out. Jeffrey, thank you very much.

TOOBIN: We are indeed.

BROWN: Jeffrey Toobin in San Francisco tonight.

Ahead on NEWSNIGHT, the runaway politicians. Why Democratic legislators from Texas ran off to Oklahoma, and they are not coming back, at least not yet. We will take a break. We are coming back. This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: There's been a daring escape across the border in Texas. Except these aren't Mexican citizens looking to escape poverty, these are Texas Democrats in a bitter fight with rival Republicans in the state House of Representatives. The Democrats have effectively shut down the House by fleeing across the border into the independent republic of Oklahoma out of reach of Texas Rangers who are hunting them down.

This isn't a joke. This is Texas politics down and dirty. Here's CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): In the middle of the night,, a group of about 50 Texas Democratic representatives jumped into two buses and headed north out of Austin and out of state. They found refuse in a Holiday Inn in Ardmore, Oklahoma. It was the only way they say to keep Texas Republicans from passing a new congressional redistricting bill that the Democrats don't like.

BARRY TELFORD (D), TEXAS STATE HOUSE: This Congressional redistricting map destroys rural Texas, utterly and completely destroys it.

LAVANDERA: Under Texas law, two-thirds of all House members must be present to conduct business. So, this temporary defection across state lines has essentially shut down the Texas House. Republicans aren't amused by the political stunt and have even created a most wanted deck of cards with the missing Democrats' faces.

SUE WEDDINGTON, TEXAS GOP CHAIRWOMAN: I have news for these Democrats. They may believe they are clever but the majority of Texans see them as childish. And they may believe they are courageous, but the majority of Texans see them as cowards.

LAVANDERA: Texas Department of Public Safety troopers and Texas rangers were sent out to search for the absent legislators and they could have taken the legislators into custody and driven them back to the House, if they were still inside Texas. But the fleeing politicians are untouchables, as long as they stay beyond state lines. And that's where these Democrats will be until Republicans promise to throw out the redistricting bill.

JIM DUNNAM (D), TEXAS HOUSE CAUCUS CHAIRMAN: And we decided yesterday that we were going to stay as long as it takes. I can't tell you right now how long it will take. It would take about two minutes if leadership in Austin would make the right decision.

(END VIDEOTAPE)

LAVANDERA: Texas Governor Rick Perry said this afternoon that it is time for these Democrats to return to work. But if you ask the Democrats here and they believe they are working and they will stay at this Holiday Inn as long as it takes and until they get assurances from Texas Republican leaders that this bill is dead and not come out of the Texas legislature Aaron.

BROWN: Ed, thank you very much. Ed Lavandera who's in Oklahoma tonight covering Texas. We confess we didn't hear anything out of Republicans out in Texas that indicated they're about to pull their redistricting plan off of the table.

More now from one of the Democrats on the lam and one of his Republican counterparts. At the jam-packed Holiday Inn in Ardmore, Oklahoma, Democratic Representative Steve Wolens. And in Austin, Texas tonight, Republican Representative Dan Branch.

Mr. Wolens...

STEVE WOLENS (D), TEXAS STATE REP., DALLAS: Good evening.

BROWN: ... let's start with you, sir. I suppose if you're not a Texan, if you're just sitting up here in New York, this looks a little childish. So there must be a major principle at play, other than they have the votes, they can do what they want. What's the principle?

WOLENS: You know, this is the principle. The principle is that we don't want to be engaged in a gerrymandered congressional map that was gerry-rigged in Washington, D.C. by a bunch of politicians there. We're not going to be an accomplice to a partisan power grab when there's so many important issues facing us here in Texas.

Issues such as taxes, issues such as health insurance to make it affordable and availability, issues such as homeowners insurance. We have the highest insurance home of any state in the country. We have a $10 billion deficit facing our state that we have got to figure out how to solve that. We've got to pass ethics legislation.

We have a myriad of important issues facing us here and we don't want to be involved with these Washington, D.C. politicians doing a power grab on our watch in the last week of the session that we can take up at these bills.

BROWN: And, Mr. Branch, you did get some help at least based on what I have read, tell me if I am wrong, from Mr. DeLay, Mr. DeLay's office. And it does seem the clear intent of the redistricting plan was to guarantee Republicans more seats in the congressional delegation than they get now. Is that untrue?

DAN BRANCH (R), TEXAS STATE REPRESENTATIVE, DALLAS: Well, that's always the case when you do redistricting and we've done redistricting in this state for every ten years. Our speaker was saying today that he's been in the house for 30 years. He did it in '71, in '81 and '91. He never fled the state, he never walked out. He voted, he lost. He dealt with the consequences. Ultimately, he worked hard and Texas for the first time in 130 years, Aaron, now we have a majority in the state house and a Republican speaker.

And so I sort of see as this at tectonic plates a political structure in the state moving. And the sad thing instead of coming to work and instead of showing up for business, as their constituents expect, these group in a bizarre act have sort of moved across the state into Oklahoma as opposed to coming up, voting, winning or losing, negotiating, using the process they're subverting the process. And I just don't think that's the right approach.

BROWN: Well, obviously you don't think it's the right approach because it's preventing you from doing what it is you want to do. Well, we'll let Mr. Wolens weigh in this in a second. But given the political nature of this process, there's hardly any process that is more political than redistricting. Why not just let a court do it? A court may do it more fairly with a more objective eye than a politician might, don't you think?

BRANCH: Well, you make a point. In fact, a federal court looked into this year and basically drew a status quo map except for the two growth areas in the state.

And so this is a process that goes on every state. It's a federal constitutional process, it's a state process. And Texas didn't get to do that. We had a Democratic speaker, Democratic House last session. And so this is something that was never surprised in the House. We've taken up all of the other issues, the budget, tort reform, all of these issues that supposedly these guys care about and yet didn't walk out on health care or Medicaid, other issues. They stayed and fought. They won some, they lost some.

But here their highest priority apparently, redistricting lines, a power move from Martin Frost and Pelosi, they leave the state in a bizarre stunt. Some of it, people here are calling it, they say it's only tool. I think it's a weapon of massive obstruction that's killing many, many bills, hundreds of bills. And we've got a budget shortfall. We need to get about the people's business here.

BROWN: Mr. Wolens, Representative Wolens, what's the plan here? At some point, I assume you're not going to take up residency in Oklahoma. At some point you've got to go home. You have to deal with all of this. What is the strategy?

WOLENS: The strategy is that we want the Republicans to put this heavy-handed bill behind them. There's a procedure in the House that says that to take up a bill you have to have a quorum. Any third of us can vote against taking up a bill, but we have to be off of the House floor and exactly what we've done. Thursday night's the last time we're going to be taking up this heavy-handed bill that was manipulated there in Washington, D.C.

I disagree totally with Dan. The Republicans have a lot of fault at their hands by dealing with redistricting. The issue comes up every ten years for all the states. Two years ago all the states in the country dealt with redistricting. Texas was no different.

There is a three-person, bipartisan panel of judges that put together a congressional map. It was affirmed and approved by the United States Supreme Court. And it was as recently as about six months ago that all of the congressman ran from this district, and they're all representing that district now.

Now, for Texas to be the only other state plus one to want to go back two years and redraw it is ridiculous when we we've have all of these important issues facing the state of Texas. You're right, the most partisan, divisive issues that we can ever deal with is redistrict.

And notwithstanding fact that every editorial board across Texas admonished the leadership for going down this road of redistricting, even the lieutenant governor of Texas suggested that we not to go down this road. For some reason, it's been imposed on us from Washington, D.C. We've got no business doing this at all.

BROWN: Gentlemen, both...

BRANCH: Aaron...

BROWN: Ten seconds, literally. Ten seconds.

BRANCH: The Senate tonight in Texas has taken up this bill. So we're going to have a redistricting bill. And these guys have known this been coming all along. This is just really the results...

WOLENS: This is a major surprise to all of us here.

(CROSSTALK)

BROWN: Gentlemen, thank you both. Honestly.

(CROSSTALK)

BROWN: ... satellite's going leave us right now. Thank you both for joining us. I hope you all work it out soon.

Still ahead on NEWSNIGHT we'll check the latest news headlines and the color of money. Or should we say the color in money? A more colorful $20 bill coming your way. Take a break, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: A case of extreme makeover. No, not that hokey reality show on some other network. This makeover is more dramatic than anything they're doing, because this makeover involves a guy who was born in 1767, and he's someone you see every day.

The story from CNN's Bruce Morton.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Folks at the Bureau of Engraving and Printing were excited. Money music before the press conference started, big stuff ahead.

THOMAS FERGUSON, BUREAU OF ENGRAVING AND PRINTING: With due respect to my wife and children, it's almost as exciting as the birth of a child.

ROSARIO MARIN, U.S. TREASURER: It just -- it's really like giving birth. Of course, he doesn't know what it is to give birth, but I do.

MORTON: The baby, so to speak, is a new $20 bill. It'll be out later this year, and it's the first American bill since the 1905 series to use colors others than green and black. Big names were there.

ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE: My only chagrin is that in asking for a free sample, I was rebuffed.

MORTON: The new note should make counterfeiting harder. Not a huge problem, of course.

W. RALPH BASHAM, U.S. SECRET SERVICE: Estimates are that one or two of every 10,000 notes may be counterfeiting.

MORTON: Still, counterfeiting is why the currency redesign process never stops.

JOHN SNOW, DEPARTMENT OF TREASURY: As soon as the current $20 note was introduced in 1998, work immediately began on the new design that you're about to see.

MORTON: OK, color. Let's see. Not a lot of color. Maybe the eagle is kind of blue, yes, and the numeral 20 changes color in the light, looks gold here. But not lots of color.

The Europeans, now, they understand about color in money. Look at those euros, bright.

We Americans understand about color in fear. Just look at those bright terror alerts. But money, we know it's green.

Greenbacks, the word is part of our language, long green, big green. So, OK, it's going to have a dab of color. But we'll all know it's still green.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

BROWN: Next on NEWSNIGHT, who's going to run Iraq, and what will the majority group, the Shi'ites, have to say about it? That and much more as we continue from New York.

(COMMERCIAL BREAK)

BROWN: In politics as in nature, a vacuum doesn't last long before something or someone fills it. In Iraq, the power vacuum is palpable, and the force rushing in is Shi'ite Islam, personified for many Iraqis by an ayatollah who last set foot in Iraq in 1980.

Reporting for us tonight, CNN's Jane Arraf.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN CORRESPONDENT (voice-over): Iraq has always been a spiritual center for Shi'a Muslims, but with the fall of Saddam Hussein, they've become a powerful political force. The major player, Ayatollah Mohammed Baqir al-Hakim, has returned to Najaf, the city of his birth, after 23 years in exile in Iran.

His return greeted with joy by tens of thousands of followers who turned out to welcome him, and apprehension by those who fear he wants an Iranian-style Islamic state.

In his first television interview after arriving in Najaf, al- Hakim talked about the role of Islamic law in the new Iraq.

AYATOLLAH MOHAMMED BAQIR AL-HAKIM, IRAQI SHI'ITE MUSLIM LEADER (through translator): The ballot box must be the foundation for the government and the nation. But we believe, because the Iraqi people are a Muslim people, that they will choose to implement Sharia in at least some areas of daily life.

ARRAF: What aspects of life, al-Hakim doesn't say, nor will he be specific about his own political plans, except that his Supreme Council for the Islamic Revolution in Iraq would take part in the interim government.

In our interview, he doesn't call for the immediate expulsion of U.S. and British troops from Iraq, but he does warn that there would be problems if they stay.

AL-HAKIM: I believe that it is in the best interests of the U.S. and the Iraqi people, especially concerning the relationship between the two, for the troops to leave.

ARRAF: In the past, al-Hakim has refused to deal with the United States, and, in fact, has said the U.S. shouldn't have invaded Iraq. But now that he's back, he seems to have toned down his message and is walking a fine line between his followers and his group's political future.

(on camera): Al-Hakim is a respected spiritual leader. And while it's one thing to mobilize tens of thousands of his followers in the south, it would be another challenge to turn that into an effective political power base in Baghdad.

Jane Arraf, CNN, Baghdad.

(END VIDEOTAPE)

BROWN: Bit more tonight on the disorder in Iraq, and who, beyond just the mullahs, may have an interest in making the country difficult to govern for the American forces.

We're joined from Baghdad tonight by Con Coughlin. Mr. Coughlin is the executive editor of "The London Sunday Telegraph" and also the author of the book "Saddam: King of Terror."

It's nice to have you back on the program.

Are there still Saddam followers, perhaps Saddam himself, but Saddam followers who are in Iraq and capable of making trouble for the occupying forces?

CON COUGHLIN, EXECUTIVE EDITOR, "THE LONDON SUNDAY TELEGRAPH": Good evening, Aaron.

Well, the answer to your question is, yes, an emphatic yes. The -- what I'm picking up here is that Saddam and it -- both his sons are still alive, and in Iraq, and lying low, and there is a network of senior Saddam loyalists who are watching the situation, waiting for an opportunity to exploit.

They are also doing their best to maintain the bad security situation here. I was talking to somebody yesterday in the interim authority who's detained a senior Ba'athist security officer who, until Wednesday this week, was still operational in Baghdad, having meetings with other members of the Ba'athists, looking for ways to stir up trouble here in Baghdad, make the job of policing Baghdad more difficult for the American troops.

So they are active, and they're waiting for their opportunity.

BROWN: All right, we'll let you smack the fly off your face while we talk here. Is there evidence that people who the United States would like to do business with are being intimidated by the Ba'athists, or the former Ba'athists?

COUGHLIN: Oh, undoubtedly, Aaron. In the last week or so, there have been several attacks on the headquarters of people who are being groomed for office under the new administration. There was a machine gun attack on the home of Dr. Ayad Alawi (ph), who's the head of the Iraqi National Accord, a grenade was thrown into the compound of Ahmed Chalabi's headquarters at the Iraqi National Congress.

Now, of course, there's a very bad security situation here, and this is the kind of atmosphere that the Ba'athists will exploit for their own political ends. And, of course, the Ba'athists are no friends of the Shi'ites. I mean, Jane Arraf was talking there about the political agenda for Ayatollah al-Hakim.

Well, the Ba'athists suppressed the Shi'ites. The Ba'athists do not want to see the Shi'ites taking over this country. And they will be actively seeking to oppose that. And actually, they will get some support from Iraqi secularists who do not want this to become an Islamic state.

BROWN: Is it your view -- you've been doing some reporting on this, and you're there, you're observing it all -- that even beyond the security situation, that the Americans, the British to an extent, but the Americans mostly, have miscalculated how complicated the occupation is?

COUGHLIN: I'm not sure they've miscalculated how complicated it is. I think they've miscalculated how quickly they had to react after the liberation. Now, when I'm talking to American officials, and British officials, they say, Hey, it's only a month since the statue came down and we liberated Iraq.

But unfortunately, the political reality is that the day after the liberation of Baghdad, they needed to have plans in place to tackle the security situation, to stop the looting, to get a grip of the country. And that is an opportunity missed.

And that is what is fueling the resentment of Iraqis who otherwise are well disposed towards the coalition forces for getting rid of Saddam. That is what's driving their frustration and resentment at the political vacuum that has developed here.

BROWN: Half a minute. Do you sense that there is a clock ticking, that if something doesn't change fairly quickly, this thing could go to hell in a handbasket?

COUGHLIN: Yes. And Jay Garner in his sort of closing statement has basically said they've got 40 days. And he's quite right. They -- first of all, the security situation has to be brought under control. Iraqis have to be able to walk the streets safely. And that will give them the basis to build a political regime that stands some chance of surviving.

BROWN: Con, thank you very much. Be safe there. It's a crazy place. We appreciate your time tonight.

COUGHLIN: (UNINTELLIGIBLE).

BROWN: Still ahead on NEWSNIGHT, we will change gears, change moods, and we'll talk about flies, but in this case fly balls, talk a little baseball with New York Yankee Gray Paul O'Neill, whose new memoir is not so much about the game he played but about his dad and what his dad taught him. Mr. O'Neill joins us in just a moment.

(COMMERCIAL BREAK)

BROWN: Our next guest was the kind of baseball player that even opposing fans liked, not that Paul O'Neill wasn't killing your team with key hits and clutch fielding, but he wasn't hot dogging or rubbing your nose in it either. He could almost make a Midwestern boy love the New York Yankees.

Almost. He wasn't that good.

Mr. O'Neill, who retired in 2001, has now written about his career and the man, his father, to whom he credits much of his success. His book is called "Me and My Dad."

Paul O'Neill joins us tonight.

Nice to meet you.

PAUL O'NEILL, AUTHOR, "ME AND MY DAD": How you doing?

BROWN: (UNINTELLIGIBLE) heck of a ball player.

You talk about your dad, his love of the game, and that he didn't see it as a game, that he saw it essentially as the rules of life.

O'NEILL: Well, that was...

BROWN: Tell me about him. O'NEILL: ... his life. I mean, that was -- I mean, he had four boys that -- you know, five boys, actually, with myself, out in the back yard trying to prove that, you know, we were better on a certain day, and that's how we grew up. And, I mean, his father played before him, so it was kind of -- the blueprints were pretty much set before we even, you know, were -- came around.

BROWN: Is there something about baseball that is -- I mean, no one talks about hockey as teaching the essential rules of life, or football. What is it about baseball that is?

O'NEILL: It's something with our society. I guess the history of baseball makes it the neat thing. But -- and you always the father-son, you know, combo when you think about baseball. I mean, the Saturday afternoons at the major league baseball parks, or, you know, the summer nights, you know, in the dusty old fields of Little League baseball.

And it just -- those are great times in a kid's life, and that's -- when I thought about doing this, I thought, you know, that's the neat story. It's not about a career. You know, there are a lot of people have careers in baseball.

But almost everybody, when you think about it, had this relationship with their father at one time or another, whether it was Little League baseball or basketball or something. And it's such a, you know, a great time of your life.

BROWN: He was a player.

O'NEILL: Yes, yes. And, you know, he lost a lot of his years going to the service, and came back and was not bitter by any means. But, you know, again, that was something that, you know, our generation learned from that one, is it was just a different time of life.

BROWN: Do you think he was living his dream through you?

O'NEILL: Well, I think, you know, all parents kind of -- when you get to a certain point, live through your children. There's no doubt about it. But, you know, not only my dream, but I think obviously his dream was to play major league baseball, and when his shot was gone, obviously you do that through your kids.

BROWN: What do you think about the state of the game these days? I was reading the other day that attendance seems to be down. I have good friends in Seattle, and Seattle for three or four years was selling out everything for everyone. They're not doing that. Yankees' attendance is down, their awesome team.

O'NEILL: Yes, it...

BROWN: What's going on?

O'NEILL: There's just so many other things for kids to do, even in my case, my kids at home. There's -- I mean, there's video games and this and that. There's so many other things where I think it's taken away from some of the simple things of, you know, going to the baseball park and having an ice-cream cone on the way home. It was so easy back then. That was enough.

And now it seems like kids in life, you have to do so much more. And it -- I don't know what's better, but looking back, it was a lot simpler when, you know, I was 10 to 12 years old.

BROWN: Do you think the pace of the game is out of synch with the times in which we live?

O'NEILL: You know, that's a great point. I never thought of that. But yes, I think so. I think that kids want -- You know, when you bring a sport into a game, you want your fan base to be kids, because you want these things to continually go full circle. And when I look at what kids want now, they want something immediate.

And a baseball game, you know, it does take time. But -- and you -- unless you understand the real small intricacies of the game, sometimes, I guess, it can be -- become boring for a kid. But it's a neat experience when, you know, you live these things through your dad, who knows these things and taught you these things.

BROWN: It -- was it '99 that your father passed on?

O'NEILL: Two thousand.

BROWN: Two thousand. It was right at the -- it was in the World Series, wasn't it?

O'NEILL: Right, right. No, I'm sorry, you were right, it was 1999. I got mixed up there, little (UNINTELLIGIBLE)...

BROWN: I wasn't going to argue with you, but I know I was right. Occasionally I prepare these things. (UNINTELLIGIBLE) -- I was here in New York, those of us here in New York remember it as, it was -- obviously it was highly emotional for you. But the whole town, in the way that every now and then happens in New York, seemed like it was drawn into your relationship with your father on that day, that baseball game, that World Series.

O'NEILL: Yes. I mean, if I look back at all the championships we won, and every one of them had a different story. And it was that -- you know, that year that people's lives were kind of exposed, other than just what was going on on the field. Scott Brochas (ph), who was a teammate of mine, had -- his father died, and Louis Soho's (ph) father was in, you know, terrible health, and then I lost my father in the World Series.

So all this stuff was -- being in New York and the media and all the stuff was brought out. But we still managed to win, and that was what the city brought. But all the other stories are, you know, kind of were subtitles to what was happening.

BROWN: Kids who grow up in Minnesota, the first thing they're taught is that they have to learn to hate the Yankees. You made it very difficult, as a player and that club, and that manager and that period for the Yankees was something to watch.

O'NEILL: Yes.

BROWN: It's nice to meet you. Good luck with the book...

O'NEILL: Oh, I appreciate it.

BROWN: ... and all the rest of the stuff you got going on in your life.

O'NEILL: Thank you very much.

BROWN: Thank you, Paul O'Neill.

Check the sports pages and the rest of the morning papers when we come back.

(COMMERCIAL BREAK)

BROWN: All right, it's that time again, time to check morning papers from around the country and around the world. It's bee4n a little busy here tonight. We haven't had as much time to work with this as we would like.

Here we go. "USA Today," if you're traveling, this is what you will find in that fine motel you're staying in tonight. Down here, it's a great "USA Today" sort of story too. "An Overweight America Comes With a Hefty Price Tag." There was a big deal in Washington today about restaurants maybe should tell people not to eat so much. Fat chance, no pun intended.

"The Cincinnati Inquirer," in honor of Paul O'Neill, and a great -- actually this is a terrific story idea on the front page -- "Drunken Driver Lives in Obscurity." Fifteen years ago today, some of you will remember this, I remember this myself, the headline, 27 riders on a church bus died in Kentucky. And it's a profile of the guy all these years later and what his life is like.

"New York Times," all the news that's fit to print -- we won't make no jokes about this -- "New Policy in Iraq," over here, "New Policy in Iraq to Authorize GIs to Shoot Looters, A Much Tougher Stance. Overseer... " well, anyway, that's -- you get the idea. They're cracking down.

Love this very good story in "The Miami Herald," and they chose to put it on the front page, "United Way in Dade," Dade County, "Ends Boy Scout Funding." This is, again, the issue over whether the Boy Scouts should or should not admit gays, and United Way's not going to give them any money.

Have 15 seconds. Why don't we just say good night, then? NO sense going any further.

Good to have you with us tonight. We're back tomorrow. There you are. Ten o'clock Eastern time, we hope you'll join us then. Until then, good night for all of us at NEWSNIGHT. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





American Justice>


Aired May 13, 2003 - 22:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AARON BROWN, CNN ANCHOR: Good evening again everyone. When you read the ads for the compounds hit in Saudi Arabia last night, the word for oasis comes up a lot. Fortress is probably a better word.
The selling points weren't just the American furniture and the green open spaces, but 24-hour armed guards, infrared detectors, roving foot patrols, delta barriers and drop-arm gates. Now, an illusion of an oasis is long gone. Lives have been shattered and we're left wondering just where we are in the war on terror.

And so, we begin the whip with the latest on the attacks, Andrea Koppel at the State Department tonight, Andrea start us off with a headline.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Good evening, Aaron. The Bush administration is worried that last night's suicide bombings could be the beginning a new wave of attacks throughout the region and so tonight the State Department has ordered the departure of all non-essential U.S. personnel and all dependents at U.S. embassies and consulates throughout Saudi Arabia.

BROWN: Andrea, thank you.

The president responded to the attacks today, the White House Correspondent of the night Suzanne Malveaux on that, Suzanne a headline.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Aaron, President Bush said today he would not be surprised if this was the work of al Qaeda. He has yet to reach that conclusion but tomorrow he'll be briefed by CIA Director George Tenet. In the meantime, White House officials say that they do believe that this could be the work of al Qaeda.

BROWN: Suzanne, thank you.

Assessing the threat that al Qaeda continues to pose, Mike Boettcher's beat, Mike a headline from you.

MIKE BOETTCHER, CNN CORRESPONDENT: Well, Aaron, the al Qaeda we knew on 9/11 no longer exists. It's changed. It's mutated and obviously it's just as dangerous.

BROWN: Mike, thank you. And, quite a turn now to our favorite political story of the day, missing Democrats from the Texas House of Representatives, Ed Lavandera is in Oklahoma where the Democrats have turned up, Ed a headline.

ED LAVANDERA, CNN CORRESPONDENT: Hi, Aaron. Well, when George W. Bush was governor of Texas, now president, Democrats and Republicans used to brag about how well they could get along, but those days are certainly long gone and now about 50 Texas Democrats are holed up in this Holiday Inn here in Ardmore, Oklahoma. We'll tell you why in a little while - Aaron.

BROWN: Ed, thank you very much, back to you and the rest shortly.

Also coming up tonight on NEWSNIGHT, Kelli Arena on how the investigation will go forward in Saudi Arabia. The Saudis were less than fully cooperative after the bombing of the Khobar Towers in '96. We'll look at what the United States can expect this time.

We'll look at the political dimensions of the attack in Riyadh as well with one Democratic candidate for the White House arguing that the war in Iraq was a distraction from the war on terror.

Also coming up tonight, the color of money, a little more color it seems for the new $20 bill. Bruce Morton reports that.

And, Paul O'Neill, the baseball player, here to talk about his life in baseball and the most important figure in his career, his dad, all that and more to come tonight.

We begin with the bombings and all we've learned about them in the last 24 hours. For one, they were especially well organized, the attacks synchronized, the work methodical. If it all seems a familiar picture, it is and so are the questions being asked tonight.

We have a number of reports beginning at the State Department and CNN's Andrea Koppel.

(BEGIN VIDEOTAPE)

KOPPEL (voice-over): At least eight Americans died, 17 others were injured, in the suicide car bombings. The blasts were so powerful they stopped clocks and gutted homes, apartment buildings, and cars in three upscale housing compounds. Only hours after the attack, Secretary of State Powell arrived in Riyadh on a previously scheduled trip ready to assign blame.

COLIN POWELL, SECRETARY OF STATE: This certainly has all the fingerprints of an al Qaeda operation.

KOPPEL: Powell toured the most devastated compound where seven of the eight Americans died, home to about 250 U.S. citizens employed by the Vanel (ph) Corporation, a U.S. defense contractor that trains Saudi Arabia's National Guard. Seventy Vanel employees lived in this bombed-out building but luckily 50 of them were away on a training mission. Powell got a detailed briefing on how the attacks unfolded.

UNIDENTIFIED MALE: They were firing. They charged the gate and assaulted. The silver town car right here had five shooters in it.

KOPPEL: Eyewitnesses say the terrorists shot their way into two of the three compounds overpowering private security guards at two gates before detonating their vehicles packed with powerful explosives.

POWELL: This was a well-planned terrorist attack. Obviously the facility had been cased as had the others, very well executed, and it shows the nature of the enemy we're working against.

KOPPEL: In an unusual move, the kingdom's de facto ruler, Crown Prince Abdullah, also toured the wreckage and took to the airwaves to lash out at the attackers.

CROWN PRINCE ABDULLAH, SAUDI ARABIA (through translator): If they believe that they're criminality, bloody criminal acts, will shake even one hair of the body of our nation and its unity then they are deceiving themselves.

(END VIDEOTAPE)

KOPPEL: But the State Department isn't taking any chances and tonight ordered the departure of the dependents, family members, of all U.S. Embassy employees and also all non-essential U.S. personnel. That's pretty much decided by the ambassador. And they also, State Department officials say, fear that the terrorists who planned those attacks, Aaron, could also be planning additional attacks, a new wave of attacks throughout the region - Aaron.

BROWN: This is a quick one first. How many people are we talking about? How many Americans are we talking about that will be coming out of Saudi Arabia, do we know?

KOPPEL: Yes, that's a question that we always ask when they have these ordered or authorized departures and they tell us that to release that kind of information is not going to be helpful to the people who are left on the ground there. So, the short answer is I don't know. They won't tell us.

BROWN: Do we know how many terrorists were involved?

KOPPEL: The working assumption and there were three teams of attacks, two cars per team, and a few perhaps more terrorists in each team, so there could be anywhere between a dozen and a couple of dozen.

BROWN: And do we know if any of them escaped?

KOPPEL: Again, the working assumption is that some of them did escape. There were the remains of nine of the suspected terrorists that were found on the scene but they don't believe that they have all of them in custody. In fact, they believe that some of them were still on the loose in one of those housing compounds. BROWN: Andrea, thank you, long day's work for you, Andrea Koppel at the State Department.

Just a couple of weeks ago, the prevailing view in Washington seemed to be that al Qaeda if not entirely crippled was no longer capable of mounting a serious operation. It's safe to say a number of people held a different view back then and a lot more are having second thoughts tonight, reporting for us CNN's David Ensor.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): From the president on down, administration officials say they are not sure yet who planned the attacks in Riyadh but al Qaeda is suspect number one.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, there's a lot of suspicion that it is al Qaeda. Al Qaeda is a group of people that they don't care about taking innocent life and obviously these killers didn't care about innocent life.

PETER BERGEN, CNN ANALYST: There's just no other group that carries out these kinds of coordinated attacks, multiple targets, suicidal.

ENSOR: Furthermore, a week earlier Saudi authorities captured 800 pounds of explosives, RDX, and weapons in a house just a quarter of a mile from one of the bomb sites and launched a manhunt for 19 suspects.

A Saudi newspaper said Tuesday it had received an e-mail from a man calling himself Abu Mohammed al-Ablij, AKA Abu Bakr, who says the execution this plan was not hampered by the recent announcement by the Saudi authorities of the seizure of large quantities of arms and explosives in the kingdom and the hunt for 19 people.

The e-mail says al Qaeda's strategy now will be operations "in the heart of the United States, Gulf countries, Egypt, and Jordan." U.S. intelligence officials say the message appears credible.

ALI AL-AHMED, SAUDI DISSIDENT: The bombing in Riyadh is an announcement of the second version of al Qaeda, al Qaeda II.

ENSOR: Saudi dissident Ali al-Ahmed says his information is that the Riyadh suicide bombers were part of a new offshoot of al Qaeda that is homegrown Saudi, not taking orders from Osama bin Laden but adopting his ideology and tactics, and that these killers were young.

AL-AHMED: Our guy who spoke to one of the guards there, he said most of them didn't have beards. They're young, very young, most of them under 25.

BERGEN: We're seeing more local homegrown kinds of things but obviously at a minimum inspired by al Qaeda and in some cases directed by al Qaeda. ENSOR: Al Qaeda or some affiliate of it has now apparently directly attacked the Saudi kingdom by going after the expatriates who keep its infrastructure running.

(on camera): In response, U.S. officials are hoping the Saudis will finally go all out to stop recruiting and fundraising by al Qaeda in their country. This attack was about them as well as us, said one U.S. official, and they know it.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

BROWN: The White House next and the reaction to what must be a terrible reminder. Eighteen months and two wars since the 9/11 attacks, Americans are still at risk. Terrorism has not gone away and our friends the Saudis are uncertain allies at best.

From the White House tonight, CNN's Suzanne Malveaux.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): The White House reaction to the Saudi bombing was swift and strong.

BUSH: These despicable acts were committed by killers whose only faith is hate and the United States will find the killers and they will learn the meaning of American justice.

MALVEAUX: The vice president weighed in as well.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The only way to deal with this threat ultimately is to destroy it.

MALVEAUX: President Bush was in Indianapolis to promote his tax cut plan and later in Pierce City, Missouri, to see the tornado damage there firsthand. But the Saudi bombing prompted him to reassure Americans that fighting terrorism is still a top priority for the White House.

BUSH: The war on terror goes on and this incident in Saudi Arabia shows the country that we still have got a war to fight and we will fight it and we will win it.

MALVEAUX: The Bush administration has been frustrated with the Saudi leadership that it has not gone after terrorists, particularly al Qaeda more aggressively, but some critics question whether the Bush administration's focus on Iraq and toppling Saddam Hussein has limited its own ability to go after al Qaeda. The whereabouts of its leader Osama bin Laden is still unknown. The White House argues it is successfully fighting the war on terror on two fronts.

BUSH: A free Iraq will make the world more peaceful because you see when people are free they're less likely to promote terrorism.

(END VIDEOTAPE) MALVEAUX: Now, White House officials say since the war on terror began that al Qaeda's ability to carry out massive terrorist attacks like we saw on September 11th has been severely disrupted, but the White House also acknowledging that hitting those softer targets abroad very much in al Qaeda's reach - Aaron.

BROWN: Does the White House think of this as a political setback for the president?

MALVEAUX: Well, it could be if it allowed it to be. The White House is arguing that it is successfully fighting the war on terror on two fronts that they're going after al Qaeda and they have successfully gone after Saddam Hussein.

They believe that this is all going forward, that this is the same goal that they're trying to reach, but they do not shirk away from the idea that, yes, there is still a lot of work to be done and, yes, it is still a dangerous place for Americans.

BROWN: Suzanne, thank you very much, Suzanne Malveaux at the White House.

Can't look at pictures tonight without flashing back seven years, then as now an FBI team set off for Saudi Arabia, now as then the hope is for cooperation. A lot has changed in seven years, then again much hasn't.

Here's CNN's Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): The latest explosions are reminiscent of the 1996 truck bombing of the Khobar Towers military barracks in Saudi Arabia. That attack killed 19 Americans. Then, officials say, the Saudi government prevented FBI agents from interrogating some suspects. Officials are hoping for a different outcome this time.

ROBERT MUELLER, FBI DIRECTOR: My expectation is we will get full cooperation from the Saudis. I will tell you that in addition to American citizens killed, my understanding is there were citizens of a number of other nationalities, as well as Saudi citizens.

ARENA: The FBI is sending a team of agents and technicians to Riyadh but because the attacks were against Saudi-owned complexes, the kingdom gets to call the investigative shots. Even though top brass insist the Saudis are cooperating in the war on terror, there is still concern.

SEN. BOB GRAHAM (D), FLORIDA: This will be another test and it comes in a climate of a very mixed Saudi role in the war on terror which we know and they know we know.

ARENA: Some field investigators say even after September 11th, the Saudis made work difficult. Fifteen of the 19 hijackers in the Pentagon and World Trade Center attacks were Saudi, and officials say requests to interview some Saudi citizens or get access to records were denied.

More tension during a money trail investigation involved two of the hijackers and the wife of the Saudi ambassador to the United States. The Saudis refused access for an interview with the princess. Saudi officials say they have cooperated with the United States just not very publicly.

UNIDENTIFIED MALE: Almost every arrest of every major al Qaeda leader could not have happened without active Saudi involvement. We have not spoken about it before and that has created the impression that nothing was being done. We intend to change that.

ARENA (on camera): Agents will get the chance to decide for themselves, firsthand, whether the Saudi government is cooperating as they pursue the individuals who committed this latest act of terrorism.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

BROWN: A bit more perspective now on the terror attacks and the future of U.S.-Saudi relations too. Wyche Fowler, former U.S. Ambassador to Saudi Arabia and he joins us from Washington tonight. Mr. Ambassador, what do you think the Saudi government is thinking right now?

WYCHE FOWLER, FMR. AMBASSADOR TO SAUDI ARABIA: Oh, they're not very happy because they - I think the evidence is and I think your report was very balanced but there has been extraordinary cooperation certainly in recent times and I could make the argument going back to the Khobar Towers that they know they have homegrown terrorists in their country. They know there are cells. They're not sure how deep or how many or where.

Our cooperation, our intelligence agencies, FBI and CIA, have shared information and intelligence and vice versa and yet obviously we're not doing enough despite all of our efforts and even the efforts of the last week when we thought we had a major part of the cell or the gang. They got away. So, we were unable to prevent this and when that happens we don't have success and we can't claim success.

BROWN: What should we all, all of us watching tonight, what should be look for that would suggest to you, someone that knows this government, will be a sign that the Saudis are seriously cooperating, that they take this threat of homegrown terrorism seriously, and that we will not have a replay of Khobar?

FOWLER: Well, Aaron, again they have taken it very seriously and they have been cooperating. President Bush is telling the truth. Secretary Powell is telling the truth. We are working very closely together. But to specifically answer your question, if they don't they're committing suicide.

You remember bin Laden started his role as a terrorist, was thrown out of Saudi Arabia, his citizenship taken away because first of all he announced his determination to overthrow the Saudi government as well as what is reported more here to chase all the Americans out of the Arabian Peninsula.

I mean they knew back in '96. It's what sent me to Saudi Arabia when President Clinton sent me to Saudi Arabia when the 19 Americans were killed at Khobar Towers but there were also Saudis killed at that time and that was their 9/11.

They knew, they couldn't believe it, that they had terrorism on their own soil but that's where the determination in their own self interest, one would even say their own self survival, made it necessary to begin extraordinary cooperative efforts. They can't do it alone, I would think, and Lord knows we can't root out the terrorists without the greatest of Saudi cooperation.

BROWN: There seems, just tell me if I'm getting this right. I think that's the fairest way to put it that we tend to see the Saudi government as walking a very - a tightrope as it were.

On the one hand the government knows that within the country there is strong anti-western feeling or strong fundamentalist Muslim feeling, and it doesn't want to give that side too much power. At the same time, it doesn't want to alienate it too much and that that affects how it proceeds in moments like this, is that conventional wisdom wrong?

FOWLER: No, no. I think that's - I think that's fair and the Saudis in many ways are their own worst enemies, at least in looking at it from a western perspective because they do not like to operate in public. If they're too close to the United States it gives them dissident problems at home in a hurry.

They have been criticized not only by bin Laden but many of their neighbors for not being sufficiently Islamic, meaning sufficiently conservative, sufficiently pure, but tainted by the long-time strategic association with the west, America, and our values.

So, it is a very delicate balancing act that the other Gulf, the other Islamic nations in that region understand but it's very difficult in our open society where we are candid about everything on television. It's a very, very difficult balancing act that is the right phrase that they have had to do in their opinion to survive.

BROWN: Mr. Ambassador, it's always nice to talk to you. Thank you for your time tonight.

FOWLER: Thank you very much, Aaron.

BROWN: Thank you, sir.

Ahead on NEWSNIGHT, we'll spend more time looking at al Qaeda, what's left of it, how it's changed since the attacks of 9/11 and maintained its ability to attack despite the arrest of many key leaders.

We'll talk with a former presidential counterterrorism advisor, Daniel Benjamin, about what more can be done to stop them, much more ahead. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: For a year and a half we have watched a steady stream of assaults on al Qaeda, the war in Afghanistan, the arrest, the interrogations in Pakistan, the detentions in Guantanamo, cells broken up in places as disparate as Buffalo, New York, and London.

Billions have been spent and what it may have paid for in part was a false sense of security for if yesterday was the work of the al Qaeda organization, it has regrouped and perhaps reinvented itself, here again CNN's Mike Boettcher.

(BEGIN VIDEOTAPE)

BOETTCHER (voice-over): Since the September 11th attacks, more than 3,000 suspected al Qaeda operatives have been arrested worldwide according to U.S. officials, a crippling but not fatal blow to the terror organization according to counterterrorism officials.

MUELLER: What is to be learned from last night is al Qaeda is still there and it's still capable of striking us and we have to continuously be vigilant and work as hard as we can to identify al Qaeda operatives and to take them out of commission.

BOETTCHER: Earlier this month, the justice ministers of the world's biggest economies known as the G8, concurred. In a statement, the group said: Al Qaeda cells are always ready to act."

So, how has al Qaeda managed to survive such a fierce counterattack? The answers, say counterterror experts, it has adapted to the new, more hostile environment.

Coalition intelligence sources say camps once based in Afghanistan have moved to new locations that up to now are out of the reach of U.S. forces. Chechnya is one example pointed out by renowned French anti-terrorism Judge Jean Louis Brugiere.

JUDGE JEAN LOUIS BRUGIERE, FRENCH ANTI-TERROR MAGISTRATE: All the movements (unintelligible) at war have more and more connections with Chechnya and use this area as a new base to continue as an (unintelligible) you know, to continue the fight against the west.

BOETTCHER: Diversification is another key to al Qaeda's continued survival. Once a tightly-knit group bound by its oath of allegiance to Osama bin Laden, it has established working relationships with groups as disparate as Chechan rebels, Asian Islamic extremists, and South American guerillas, according to coalition counterterrorism officials.

And, because al Qaeda's top leadership is either in hiding, for example in the mountainous border region between Afghanistan and Pakistan, or is in custody, lower level operatives who escaped the coalition dragnet now are more likely to plan and carry out missions without the approval of higher ups.

(END VIDEOTAPE)

BOETTCHER: One terrorism expert I spoke to tonight equated the problem to the war on drugs. For example, when Pablo Escobar was killed and his lieutenants were taken out, there were new people to take his place, people who were harder to find. So, the war on drugs continued. And now, the war on terrorism continues - Aaron.

BROWN: Well, it's a troubling analogy when you consider how singularly unsuccessful the war on drugs has been.

BOETTCHER: It is troubling and it will be a situation that likely, according to many experts, will continue for a long time to come. There is no quick fix. If you look at the problems in Northern Ireland, it took a long time to fix and it's still not fixed.

If you look at other terrorist situations around the world that have persisted for many, many years and these are problems rooted in religion and these are problems that could take centuries to fix - Aaron.

BROWN: Mike, thank you very much, Mike Boettcher in Atlanta.

We're joined tonight by Daniel Benjamin. Mr. Benjamin is a former director of counterterrorism for President Clinton's National Security Council, the co-author of "The Age of Sacred Terror," currently senior fellow at the Center for Strategic and International Studies, lots of titles there. It's good to have you on the program. That's the important part.

In your view is this al Qaeda, is this some freelance operation, is it organized, are there higher ups, what happened?

DANIEL BENJAMIN, AUTHOR "THE AGE OF SACRED TERROR": Most of the arrows point to al Qaeda. The M.O. is typical of al Qaeda. The multiple, simultaneous attacks, certainly the targeting of Americans and westerners is characteristic of al Qaeda. It is possible that this is people who think, act, and talk like al Qaeda without actually having grown up in the network.

At the moment, I would guess it is al Qaeda but in a sense it doesn't matter that much because the true foe here is this jihad, this very radical brand of Islam that as Mike Boettcher suggested is going to be with us for a long time.

BROWN: If it is al Qaeda, at least - at least we have a sense of what the target is. If it's just a lot of groups out there operating, they saw how al Qaeda did business. They figure well we'll do business that way too. Is it a more complicated problem ultimately to solve?

BENJAMIN: Well, it remains a complicated problem either way because al Qaeda should not be mistaken for a tightly circumscribed group that, you know, doesn't bleed out into larger communities.

The key issue here is that al Qaeda has articulated an ideology that is very attractive to large, large groups of people and they continue to be absorbed through recruitment into the organization and the organization is still very effective at fundraising.

So, I don't think we should think of this as, you know, the Abu Nidal (ph) group. We should think of this as a broad ideological movement that is present in one form or another from Southeast Asia to the northwest coast of Africa.

BROWN: Does the ability to carry off this attack, does it say anything at all about the effectiveness to date of the war on terror?

BENJAMIN: The fact that I suppose they did not hit large buildings in Lower Manhattan I guess suggests - will suggest to some that if anything they are going after softer targets abroad, but I wouldn't take too much solace. I mean I do think that al Qaeda's capabilities have been somewhat degraded but it is still able to strike at American interests all around the world.

BROWN: I'm not suggesting here that you have, but do you think the country had developed a false sense of security about the ability of al Qaeda or terrorist groups of another name to attack Americans and American interests?

BENJAMIN: Well, the episodic nature of terrorism plays to the terrorist's advantage. We did have a rather remarkable string of successes and really a better record than I think I or anyone else in the counterterrorism community would have predicted on September 12th, so, it's not really surprising.

I think the fact that we also waged two wars and now find ourselves attacked is bound to cause a lot of people some uncertainty but this is the nature of the problem we face and I do think that it is going to continue to pop up in all kinds of disparate places and surprise us for a long time to come.

BROWN: Mr. Benjamin, unsettling thoughts tonight. We appreciate your time. Thank you very much. Daniel Benjamin with us this evening.

More on the Saudi attacks as NEWSNIGHT continues from New York.

Democratic politicians attack the president...

ANNOUNCER: NEWSNIGHT with Aaron Brown....

BROWN: ...on the war on terror -- not yet. Hold the announcer for a minute.

And we'll talk with New Jersey Senator Frank Lautenberg about his concerns over contracts to build Iraq.

This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: The conventional wisdom for Democrats goes like this: attack the president on the economy, on healthcare, on the environment, on lots of things. But stay away from the war on terror. That's the president's strong suit. That's the conventional wisdom, and tonight it's being challenged.

Here's CNN's Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The attack in Saudi Arabia this week gives Democrats an opening.

SEN. RUSSELL FEINGOLD (D), WISCONSIN: Those forces who would have us live in fear have not better than destroyed.

SCHNEIDER: The latest terrorist attack makes their point, they say -- that the war in Iraq was a dangerous diversion from the war on terrorism.

FEINGOLD: The majority of the American people believe that the Saddam Hussein regime was involved in the September 11 attacks. But I have never, Mr. President, I have never not in hearing, and not in declassified briefing -- I have never once heard our officials to assert that we have intelligence indicating that this is the case.

SCHNEIDER: One of those Democrats is running for president.

SEN. BOB GRAHAM (D-FL), PRESIDENTIAL CANDIDATE: I'm running for president to bring back a focus on America's security.

SCHNEIDER: Back in October, Senator Bob Graham opposed the resolution authorizing the use force in Iraq on the grounds that it was too weak.

GRAHAM: I urge my colleagues to open their eyes to the much larger array of lethal, more violent foes who are prepared today to assault us here at home.

SCHNEIDER: In an impressive feat of political jujitsu, Graham is using the security issue to attack President Bush from the left, where he can make himself sound like George McGovern...

GRAHAM: Friends, it is time to bring America back.

SCHNEIDER: And from the right, where he can make himself sound like Ronald Reagan.

GRAHAM: If you reject that, the American people are not going to be at additional threat, then frankly, my friends, to use a blunt a term, the blood's going to be on your hands.

SCHNEIDER: The bombing in Riyadh and the terrible prospect of more attacks gives Graham a potentially powerful theme to rally Democrats.

GRAHAM: The war in Iraq was a distraction. It took us off the war on terror which we were on a path to win. But we've now let it slip away from us.

(END VIDEOTAPE) SCHNEIDER: The idea of challenging President Bush on his strongest issue -- well, you could call it daring or foolhardy. And, you know, the two often go together -- Aaron.

BROWN: Bill, thank you. Bill Schneider in Washington tonight.

On now to another issue that mixes both politics and policy. The issue cleaning up Iraq. But the president isn't getting much slack from the Democrats either because of a company that's involved and how that company was selected. The contract to fix Iraq's oil infrastructure goes to Halliburton, a company that Vice President Cheney used to run.

The vice president says this, that he severed all corporate ties with Halliburton and that he has nothing to do with awarding any contracts, the bidding process or current work orders. And the company says the amount of money that the company will receive is limited to $24 million.

However, Congressional Democrats are calling for investigation as to how Halliburton got the contract, saying the contract is worth far more than $24 million.

Joining us tonight, Senator Frank Lautenberg of New Jersey, one of those urging the investigation.

Senator, nice to see you again.

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Nice to be here. Thank you.

BROWN: Any evidence at all that the contracts -- and it is hard to put a number on them, isn't it -- how much money is involved here -- that this's actually anything untoward to at all.

LAUTENBERG: Well, the problem is there is no evidence of anything. What we hear is what is being now ferreted out by continuous probing that says that this contract could grow as much as to $7 billion or maybe 10 percent of the cost of helping rebuild Iraq.

It's the lack of transparency. It's the secrecy that surrounded this huge contract award that worries me, and I think will worry the American public, knowing that it goes to the Halliburton company, which was Vice President Cheney's company, company he ran, got a substantial bonus I think, $20 million, as a goodbye present after only five years worth of service.

Why it had to be kept a secret is something that no one -- none of us who are interested in this understand.

BROWN: What was it that was kept secret exactly?

LAUTENBERG: Well...

BROWN: Since we're talking about it here. LAUTENBERG: OK. What was kept secret is the fact that the contract was awarded with no bidding, no competition -- that the contract was first described as a fire extinguishing contract that might cost as little as $20 or $30 million, but could run as high as 600. And the more you inquire, the larger the contract grew until now, it's understood that it includes management of the oil fields, distribution of the oil, that it could be as much as $7 billion.

And that's what's the aggravating factor here is that for a contract this size to be awarded, without competition, without public notice is unusual to say the least.

BROWN: I'm not sure that they teach this in law school or even in journalism school, but every now and then I apply a theory which is the they couldn't be that dumb theory.

Which is, in this case, given the reality, everyone knows the vice president's connections to the company, and everybody must have realized that if they give a contract to Halliburton, all these questions are going to come anyway. They couldn't be so dumb as to do a sweetheart deal, could they?

LAUTENBERG: Well, not having gone to law school, but having run a pretty big company before I came to the Senate, tells me that what you don't know can hurt you and especially in government, where the trend toward more and more sunlight, sunshine on activities is a requirement to induce confidence from the constituency.

Whenever anything is done in secret, obviously, other than military requirements, intelligence, et cetera that it looks like something you ought to find out more about just by virtue of the fact it's cloaked in secrecy. It shouldn't happen especially with the attention that's paid to Iraq -- the loss of lives, the magnitude of the effort to free Iraq from the Hussein regime.

All of these things we talked about so openly -- you the battlefield in your living room. You saw a combat at its rawest. And now we want to hide things from the American public? I don't get it.

BROWN: Will you get your hearing, senator?

LAUTENBERG: Will I get it?

BROWN: Yes.

LAUTENBERG: Well, I think so because the chairperson is known to be fair. That's Susan Collins. And Joe Lieberman is the Democratic ranking member. And I think that it's curious enough that the public will ultimately and the senators will demand that the public be made knowledgeable about this.

BROWN: Senator, we look forward to them and we thank you for your time tonight. Thank you very much.

LAUTENBERG: Thanks. Good to be with you.

BROWN: A lot still ahead on this Tuesday edition of NEWSNIGHT, including the search for the missing Texas Democrats.

But up next, we'll check on some of the other stories around the country today, including yet another terror drill. Chicago was the city this time. We'll take a break first. Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: A few other stories around country tonight, beginning with the latest on the terror security drill that's going all week.

Today, there was a simulated bioterror attack of pneumonic plague in Chicago. Mock patients pretending to have flu-like symptoms began showing up at Chicago-area hospitals. Others were names on faxes sent to hospitals, to test their ability to cope. The drill began yesterday with a simulated dirty bomb attack in Seattle, and it continues until Friday.

Man charged with killing a student last week during a shooting at Case Western Reserve University in Cleveland was in court today for the first time. The judge ordered the man held without bail, and agreed to a defense request to put him under psychiatric observation.

And in suburban Chicago, one of the students suspended after that hazing incident is fighting the decision in court. The lawyer for 18- year-old Marnee Holz filed a lawsuit seeking a temporary restraining order to keep the school from suspending her. The judge set a hearing on the request for Wednesday.

An intriguing development in a story we talked a lot about last night, fraud and deceit at the hands of the young "New York Times" reporter named Jayson Blair. We should say at the outset, that there is more than we don't know than we do know here, but it has the possibility that Blair committed more than simply journalistic fraud. "New York Times" said today that Blair is now under investigation by the U.S. attorney's office in connection with allegations that his reporting conduct violated the law. Talk about this development with our legal analysts Jeffrey Toobin, who joins us tonight from San Francisco. What do you think is going on here?

JEFFREY TOOBIN, CNN LEGAL ANALYST: Boy, I tell you, Aaron, this is a weird story and it looks like it's getting weirder. You know, there are lots of bad things that people do that just don't happen to be against federal law. Plagiarism isn't against federal law. Lying on the pages of "The New York Times" is not against the federal law. What it seems like the only possible crime here is defrauding "The Times" by filing false expense reports, but those are just a few hundred dollars and it's hard to imagine they could make a federal case like that.

BROWN: Does this like becomes an Al Capone case? They are going to get him on tax evasion because they couldn't get him on the big things?

TOOBIN: Well, you know, federal law, by and large, excepting drugs, excepting crimes of violence is almost all about money in one way or another, and whatever you can say about Jayson Blair, and we've all certainly said a lot, this doesn't appear to be motivated by money. He didn't make anything, really, other than his salary. Ironically, one of the pieces of evidence against him is that he didn't file expense reports because he never went anywhere. He didn't go to the places he said he went to, but it's hard to imagine how that's an act of fraud, not filing expense reports.

BROWN: But even -- I'm not -- we'll see where this question goes, but even if that were it, does it seem a bit much for the U.S. attorney's office to be involved in an expense account case involving the "New York Times," A, and why would that not a be a state crime? Why would it be a federal crime anyway?

TOOBIN: Well, it's almost never even a state crime. The expense account fraud gets you fired. That's what happens when you commit expense account fraud, but I've almost never heard of a case of any kind of criminal prosecution, state or federal.

It does seem like, based on the facts we know, and as you said at the outset, I think it's important to emphasize, that there may be facts out there that we don't know, but based on the "Times" exhaustive recounting of his journalistic offenses, this doesn't seem like something that would be of interest to a federal prosecutor, but journalism students.

BROWN: Yes, it's a little odd conversation going on in the jail cell somewhere. What are you up here for? Phonied up an expense report. So you think maybe there's something we don't know here.

TOOBIN: I think, you know, it's interesting. There is some version of conspiracy to defraud your employer, if you work for the government. If you work for the government and obstruct justice, or do things that violate your trust with the people, that's a crime. But that only applies to the government. It's a crime, conspiracy to defraud the United States. There's no such thing as conspiracy to defraud the "New York Times" of your honest services. That crime simply doesn't exist, and if this is all that's availability to the U.S. attorney, I can't imagine them filing charges here.

BROWN: So we're back at the beginning, we are waiting to see what we can find out. Jeffrey, thank you very much.

TOOBIN: We are indeed.

BROWN: Jeffrey Toobin in San Francisco tonight.

Ahead on NEWSNIGHT, the runaway politicians. Why Democratic legislators from Texas ran off to Oklahoma, and they are not coming back, at least not yet. We will take a break. We are coming back. This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: There's been a daring escape across the border in Texas. Except these aren't Mexican citizens looking to escape poverty, these are Texas Democrats in a bitter fight with rival Republicans in the state House of Representatives. The Democrats have effectively shut down the House by fleeing across the border into the independent republic of Oklahoma out of reach of Texas Rangers who are hunting them down.

This isn't a joke. This is Texas politics down and dirty. Here's CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): In the middle of the night,, a group of about 50 Texas Democratic representatives jumped into two buses and headed north out of Austin and out of state. They found refuse in a Holiday Inn in Ardmore, Oklahoma. It was the only way they say to keep Texas Republicans from passing a new congressional redistricting bill that the Democrats don't like.

BARRY TELFORD (D), TEXAS STATE HOUSE: This Congressional redistricting map destroys rural Texas, utterly and completely destroys it.

LAVANDERA: Under Texas law, two-thirds of all House members must be present to conduct business. So, this temporary defection across state lines has essentially shut down the Texas House. Republicans aren't amused by the political stunt and have even created a most wanted deck of cards with the missing Democrats' faces.

SUE WEDDINGTON, TEXAS GOP CHAIRWOMAN: I have news for these Democrats. They may believe they are clever but the majority of Texans see them as childish. And they may believe they are courageous, but the majority of Texans see them as cowards.

LAVANDERA: Texas Department of Public Safety troopers and Texas rangers were sent out to search for the absent legislators and they could have taken the legislators into custody and driven them back to the House, if they were still inside Texas. But the fleeing politicians are untouchables, as long as they stay beyond state lines. And that's where these Democrats will be until Republicans promise to throw out the redistricting bill.

JIM DUNNAM (D), TEXAS HOUSE CAUCUS CHAIRMAN: And we decided yesterday that we were going to stay as long as it takes. I can't tell you right now how long it will take. It would take about two minutes if leadership in Austin would make the right decision.

(END VIDEOTAPE)

LAVANDERA: Texas Governor Rick Perry said this afternoon that it is time for these Democrats to return to work. But if you ask the Democrats here and they believe they are working and they will stay at this Holiday Inn as long as it takes and until they get assurances from Texas Republican leaders that this bill is dead and not come out of the Texas legislature Aaron.

BROWN: Ed, thank you very much. Ed Lavandera who's in Oklahoma tonight covering Texas. We confess we didn't hear anything out of Republicans out in Texas that indicated they're about to pull their redistricting plan off of the table.

More now from one of the Democrats on the lam and one of his Republican counterparts. At the jam-packed Holiday Inn in Ardmore, Oklahoma, Democratic Representative Steve Wolens. And in Austin, Texas tonight, Republican Representative Dan Branch.

Mr. Wolens...

STEVE WOLENS (D), TEXAS STATE REP., DALLAS: Good evening.

BROWN: ... let's start with you, sir. I suppose if you're not a Texan, if you're just sitting up here in New York, this looks a little childish. So there must be a major principle at play, other than they have the votes, they can do what they want. What's the principle?

WOLENS: You know, this is the principle. The principle is that we don't want to be engaged in a gerrymandered congressional map that was gerry-rigged in Washington, D.C. by a bunch of politicians there. We're not going to be an accomplice to a partisan power grab when there's so many important issues facing us here in Texas.

Issues such as taxes, issues such as health insurance to make it affordable and availability, issues such as homeowners insurance. We have the highest insurance home of any state in the country. We have a $10 billion deficit facing our state that we have got to figure out how to solve that. We've got to pass ethics legislation.

We have a myriad of important issues facing us here and we don't want to be involved with these Washington, D.C. politicians doing a power grab on our watch in the last week of the session that we can take up at these bills.

BROWN: And, Mr. Branch, you did get some help at least based on what I have read, tell me if I am wrong, from Mr. DeLay, Mr. DeLay's office. And it does seem the clear intent of the redistricting plan was to guarantee Republicans more seats in the congressional delegation than they get now. Is that untrue?

DAN BRANCH (R), TEXAS STATE REPRESENTATIVE, DALLAS: Well, that's always the case when you do redistricting and we've done redistricting in this state for every ten years. Our speaker was saying today that he's been in the house for 30 years. He did it in '71, in '81 and '91. He never fled the state, he never walked out. He voted, he lost. He dealt with the consequences. Ultimately, he worked hard and Texas for the first time in 130 years, Aaron, now we have a majority in the state house and a Republican speaker.

And so I sort of see as this at tectonic plates a political structure in the state moving. And the sad thing instead of coming to work and instead of showing up for business, as their constituents expect, these group in a bizarre act have sort of moved across the state into Oklahoma as opposed to coming up, voting, winning or losing, negotiating, using the process they're subverting the process. And I just don't think that's the right approach.

BROWN: Well, obviously you don't think it's the right approach because it's preventing you from doing what it is you want to do. Well, we'll let Mr. Wolens weigh in this in a second. But given the political nature of this process, there's hardly any process that is more political than redistricting. Why not just let a court do it? A court may do it more fairly with a more objective eye than a politician might, don't you think?

BRANCH: Well, you make a point. In fact, a federal court looked into this year and basically drew a status quo map except for the two growth areas in the state.

And so this is a process that goes on every state. It's a federal constitutional process, it's a state process. And Texas didn't get to do that. We had a Democratic speaker, Democratic House last session. And so this is something that was never surprised in the House. We've taken up all of the other issues, the budget, tort reform, all of these issues that supposedly these guys care about and yet didn't walk out on health care or Medicaid, other issues. They stayed and fought. They won some, they lost some.

But here their highest priority apparently, redistricting lines, a power move from Martin Frost and Pelosi, they leave the state in a bizarre stunt. Some of it, people here are calling it, they say it's only tool. I think it's a weapon of massive obstruction that's killing many, many bills, hundreds of bills. And we've got a budget shortfall. We need to get about the people's business here.

BROWN: Mr. Wolens, Representative Wolens, what's the plan here? At some point, I assume you're not going to take up residency in Oklahoma. At some point you've got to go home. You have to deal with all of this. What is the strategy?

WOLENS: The strategy is that we want the Republicans to put this heavy-handed bill behind them. There's a procedure in the House that says that to take up a bill you have to have a quorum. Any third of us can vote against taking up a bill, but we have to be off of the House floor and exactly what we've done. Thursday night's the last time we're going to be taking up this heavy-handed bill that was manipulated there in Washington, D.C.

I disagree totally with Dan. The Republicans have a lot of fault at their hands by dealing with redistricting. The issue comes up every ten years for all the states. Two years ago all the states in the country dealt with redistricting. Texas was no different.

There is a three-person, bipartisan panel of judges that put together a congressional map. It was affirmed and approved by the United States Supreme Court. And it was as recently as about six months ago that all of the congressman ran from this district, and they're all representing that district now.

Now, for Texas to be the only other state plus one to want to go back two years and redraw it is ridiculous when we we've have all of these important issues facing the state of Texas. You're right, the most partisan, divisive issues that we can ever deal with is redistrict.

And notwithstanding fact that every editorial board across Texas admonished the leadership for going down this road of redistricting, even the lieutenant governor of Texas suggested that we not to go down this road. For some reason, it's been imposed on us from Washington, D.C. We've got no business doing this at all.

BROWN: Gentlemen, both...

BRANCH: Aaron...

BROWN: Ten seconds, literally. Ten seconds.

BRANCH: The Senate tonight in Texas has taken up this bill. So we're going to have a redistricting bill. And these guys have known this been coming all along. This is just really the results...

WOLENS: This is a major surprise to all of us here.

(CROSSTALK)

BROWN: Gentlemen, thank you both. Honestly.

(CROSSTALK)

BROWN: ... satellite's going leave us right now. Thank you both for joining us. I hope you all work it out soon.

Still ahead on NEWSNIGHT we'll check the latest news headlines and the color of money. Or should we say the color in money? A more colorful $20 bill coming your way. Take a break, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: A case of extreme makeover. No, not that hokey reality show on some other network. This makeover is more dramatic than anything they're doing, because this makeover involves a guy who was born in 1767, and he's someone you see every day.

The story from CNN's Bruce Morton.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Folks at the Bureau of Engraving and Printing were excited. Money music before the press conference started, big stuff ahead.

THOMAS FERGUSON, BUREAU OF ENGRAVING AND PRINTING: With due respect to my wife and children, it's almost as exciting as the birth of a child.

ROSARIO MARIN, U.S. TREASURER: It just -- it's really like giving birth. Of course, he doesn't know what it is to give birth, but I do.

MORTON: The baby, so to speak, is a new $20 bill. It'll be out later this year, and it's the first American bill since the 1905 series to use colors others than green and black. Big names were there.

ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE: My only chagrin is that in asking for a free sample, I was rebuffed.

MORTON: The new note should make counterfeiting harder. Not a huge problem, of course.

W. RALPH BASHAM, U.S. SECRET SERVICE: Estimates are that one or two of every 10,000 notes may be counterfeiting.

MORTON: Still, counterfeiting is why the currency redesign process never stops.

JOHN SNOW, DEPARTMENT OF TREASURY: As soon as the current $20 note was introduced in 1998, work immediately began on the new design that you're about to see.

MORTON: OK, color. Let's see. Not a lot of color. Maybe the eagle is kind of blue, yes, and the numeral 20 changes color in the light, looks gold here. But not lots of color.

The Europeans, now, they understand about color in money. Look at those euros, bright.

We Americans understand about color in fear. Just look at those bright terror alerts. But money, we know it's green.

Greenbacks, the word is part of our language, long green, big green. So, OK, it's going to have a dab of color. But we'll all know it's still green.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

BROWN: Next on NEWSNIGHT, who's going to run Iraq, and what will the majority group, the Shi'ites, have to say about it? That and much more as we continue from New York.

(COMMERCIAL BREAK)

BROWN: In politics as in nature, a vacuum doesn't last long before something or someone fills it. In Iraq, the power vacuum is palpable, and the force rushing in is Shi'ite Islam, personified for many Iraqis by an ayatollah who last set foot in Iraq in 1980.

Reporting for us tonight, CNN's Jane Arraf.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN CORRESPONDENT (voice-over): Iraq has always been a spiritual center for Shi'a Muslims, but with the fall of Saddam Hussein, they've become a powerful political force. The major player, Ayatollah Mohammed Baqir al-Hakim, has returned to Najaf, the city of his birth, after 23 years in exile in Iran.

His return greeted with joy by tens of thousands of followers who turned out to welcome him, and apprehension by those who fear he wants an Iranian-style Islamic state.

In his first television interview after arriving in Najaf, al- Hakim talked about the role of Islamic law in the new Iraq.

AYATOLLAH MOHAMMED BAQIR AL-HAKIM, IRAQI SHI'ITE MUSLIM LEADER (through translator): The ballot box must be the foundation for the government and the nation. But we believe, because the Iraqi people are a Muslim people, that they will choose to implement Sharia in at least some areas of daily life.

ARRAF: What aspects of life, al-Hakim doesn't say, nor will he be specific about his own political plans, except that his Supreme Council for the Islamic Revolution in Iraq would take part in the interim government.

In our interview, he doesn't call for the immediate expulsion of U.S. and British troops from Iraq, but he does warn that there would be problems if they stay.

AL-HAKIM: I believe that it is in the best interests of the U.S. and the Iraqi people, especially concerning the relationship between the two, for the troops to leave.

ARRAF: In the past, al-Hakim has refused to deal with the United States, and, in fact, has said the U.S. shouldn't have invaded Iraq. But now that he's back, he seems to have toned down his message and is walking a fine line between his followers and his group's political future.

(on camera): Al-Hakim is a respected spiritual leader. And while it's one thing to mobilize tens of thousands of his followers in the south, it would be another challenge to turn that into an effective political power base in Baghdad.

Jane Arraf, CNN, Baghdad.

(END VIDEOTAPE)

BROWN: Bit more tonight on the disorder in Iraq, and who, beyond just the mullahs, may have an interest in making the country difficult to govern for the American forces.

We're joined from Baghdad tonight by Con Coughlin. Mr. Coughlin is the executive editor of "The London Sunday Telegraph" and also the author of the book "Saddam: King of Terror."

It's nice to have you back on the program.

Are there still Saddam followers, perhaps Saddam himself, but Saddam followers who are in Iraq and capable of making trouble for the occupying forces?

CON COUGHLIN, EXECUTIVE EDITOR, "THE LONDON SUNDAY TELEGRAPH": Good evening, Aaron.

Well, the answer to your question is, yes, an emphatic yes. The -- what I'm picking up here is that Saddam and it -- both his sons are still alive, and in Iraq, and lying low, and there is a network of senior Saddam loyalists who are watching the situation, waiting for an opportunity to exploit.

They are also doing their best to maintain the bad security situation here. I was talking to somebody yesterday in the interim authority who's detained a senior Ba'athist security officer who, until Wednesday this week, was still operational in Baghdad, having meetings with other members of the Ba'athists, looking for ways to stir up trouble here in Baghdad, make the job of policing Baghdad more difficult for the American troops.

So they are active, and they're waiting for their opportunity.

BROWN: All right, we'll let you smack the fly off your face while we talk here. Is there evidence that people who the United States would like to do business with are being intimidated by the Ba'athists, or the former Ba'athists?

COUGHLIN: Oh, undoubtedly, Aaron. In the last week or so, there have been several attacks on the headquarters of people who are being groomed for office under the new administration. There was a machine gun attack on the home of Dr. Ayad Alawi (ph), who's the head of the Iraqi National Accord, a grenade was thrown into the compound of Ahmed Chalabi's headquarters at the Iraqi National Congress.

Now, of course, there's a very bad security situation here, and this is the kind of atmosphere that the Ba'athists will exploit for their own political ends. And, of course, the Ba'athists are no friends of the Shi'ites. I mean, Jane Arraf was talking there about the political agenda for Ayatollah al-Hakim.

Well, the Ba'athists suppressed the Shi'ites. The Ba'athists do not want to see the Shi'ites taking over this country. And they will be actively seeking to oppose that. And actually, they will get some support from Iraqi secularists who do not want this to become an Islamic state.

BROWN: Is it your view -- you've been doing some reporting on this, and you're there, you're observing it all -- that even beyond the security situation, that the Americans, the British to an extent, but the Americans mostly, have miscalculated how complicated the occupation is?

COUGHLIN: I'm not sure they've miscalculated how complicated it is. I think they've miscalculated how quickly they had to react after the liberation. Now, when I'm talking to American officials, and British officials, they say, Hey, it's only a month since the statue came down and we liberated Iraq.

But unfortunately, the political reality is that the day after the liberation of Baghdad, they needed to have plans in place to tackle the security situation, to stop the looting, to get a grip of the country. And that is an opportunity missed.

And that is what is fueling the resentment of Iraqis who otherwise are well disposed towards the coalition forces for getting rid of Saddam. That is what's driving their frustration and resentment at the political vacuum that has developed here.

BROWN: Half a minute. Do you sense that there is a clock ticking, that if something doesn't change fairly quickly, this thing could go to hell in a handbasket?

COUGHLIN: Yes. And Jay Garner in his sort of closing statement has basically said they've got 40 days. And he's quite right. They -- first of all, the security situation has to be brought under control. Iraqis have to be able to walk the streets safely. And that will give them the basis to build a political regime that stands some chance of surviving.

BROWN: Con, thank you very much. Be safe there. It's a crazy place. We appreciate your time tonight.

COUGHLIN: (UNINTELLIGIBLE).

BROWN: Still ahead on NEWSNIGHT, we will change gears, change moods, and we'll talk about flies, but in this case fly balls, talk a little baseball with New York Yankee Gray Paul O'Neill, whose new memoir is not so much about the game he played but about his dad and what his dad taught him. Mr. O'Neill joins us in just a moment.

(COMMERCIAL BREAK)

BROWN: Our next guest was the kind of baseball player that even opposing fans liked, not that Paul O'Neill wasn't killing your team with key hits and clutch fielding, but he wasn't hot dogging or rubbing your nose in it either. He could almost make a Midwestern boy love the New York Yankees.

Almost. He wasn't that good.

Mr. O'Neill, who retired in 2001, has now written about his career and the man, his father, to whom he credits much of his success. His book is called "Me and My Dad."

Paul O'Neill joins us tonight.

Nice to meet you.

PAUL O'NEILL, AUTHOR, "ME AND MY DAD": How you doing?

BROWN: (UNINTELLIGIBLE) heck of a ball player.

You talk about your dad, his love of the game, and that he didn't see it as a game, that he saw it essentially as the rules of life.

O'NEILL: Well, that was...

BROWN: Tell me about him. O'NEILL: ... his life. I mean, that was -- I mean, he had four boys that -- you know, five boys, actually, with myself, out in the back yard trying to prove that, you know, we were better on a certain day, and that's how we grew up. And, I mean, his father played before him, so it was kind of -- the blueprints were pretty much set before we even, you know, were -- came around.

BROWN: Is there something about baseball that is -- I mean, no one talks about hockey as teaching the essential rules of life, or football. What is it about baseball that is?

O'NEILL: It's something with our society. I guess the history of baseball makes it the neat thing. But -- and you always the father-son, you know, combo when you think about baseball. I mean, the Saturday afternoons at the major league baseball parks, or, you know, the summer nights, you know, in the dusty old fields of Little League baseball.

And it just -- those are great times in a kid's life, and that's -- when I thought about doing this, I thought, you know, that's the neat story. It's not about a career. You know, there are a lot of people have careers in baseball.

But almost everybody, when you think about it, had this relationship with their father at one time or another, whether it was Little League baseball or basketball or something. And it's such a, you know, a great time of your life.

BROWN: He was a player.

O'NEILL: Yes, yes. And, you know, he lost a lot of his years going to the service, and came back and was not bitter by any means. But, you know, again, that was something that, you know, our generation learned from that one, is it was just a different time of life.

BROWN: Do you think he was living his dream through you?

O'NEILL: Well, I think, you know, all parents kind of -- when you get to a certain point, live through your children. There's no doubt about it. But, you know, not only my dream, but I think obviously his dream was to play major league baseball, and when his shot was gone, obviously you do that through your kids.

BROWN: What do you think about the state of the game these days? I was reading the other day that attendance seems to be down. I have good friends in Seattle, and Seattle for three or four years was selling out everything for everyone. They're not doing that. Yankees' attendance is down, their awesome team.

O'NEILL: Yes, it...

BROWN: What's going on?

O'NEILL: There's just so many other things for kids to do, even in my case, my kids at home. There's -- I mean, there's video games and this and that. There's so many other things where I think it's taken away from some of the simple things of, you know, going to the baseball park and having an ice-cream cone on the way home. It was so easy back then. That was enough.

And now it seems like kids in life, you have to do so much more. And it -- I don't know what's better, but looking back, it was a lot simpler when, you know, I was 10 to 12 years old.

BROWN: Do you think the pace of the game is out of synch with the times in which we live?

O'NEILL: You know, that's a great point. I never thought of that. But yes, I think so. I think that kids want -- You know, when you bring a sport into a game, you want your fan base to be kids, because you want these things to continually go full circle. And when I look at what kids want now, they want something immediate.

And a baseball game, you know, it does take time. But -- and you -- unless you understand the real small intricacies of the game, sometimes, I guess, it can be -- become boring for a kid. But it's a neat experience when, you know, you live these things through your dad, who knows these things and taught you these things.

BROWN: It -- was it '99 that your father passed on?

O'NEILL: Two thousand.

BROWN: Two thousand. It was right at the -- it was in the World Series, wasn't it?

O'NEILL: Right, right. No, I'm sorry, you were right, it was 1999. I got mixed up there, little (UNINTELLIGIBLE)...

BROWN: I wasn't going to argue with you, but I know I was right. Occasionally I prepare these things. (UNINTELLIGIBLE) -- I was here in New York, those of us here in New York remember it as, it was -- obviously it was highly emotional for you. But the whole town, in the way that every now and then happens in New York, seemed like it was drawn into your relationship with your father on that day, that baseball game, that World Series.

O'NEILL: Yes. I mean, if I look back at all the championships we won, and every one of them had a different story. And it was that -- you know, that year that people's lives were kind of exposed, other than just what was going on on the field. Scott Brochas (ph), who was a teammate of mine, had -- his father died, and Louis Soho's (ph) father was in, you know, terrible health, and then I lost my father in the World Series.

So all this stuff was -- being in New York and the media and all the stuff was brought out. But we still managed to win, and that was what the city brought. But all the other stories are, you know, kind of were subtitles to what was happening.

BROWN: Kids who grow up in Minnesota, the first thing they're taught is that they have to learn to hate the Yankees. You made it very difficult, as a player and that club, and that manager and that period for the Yankees was something to watch.

O'NEILL: Yes.

BROWN: It's nice to meet you. Good luck with the book...

O'NEILL: Oh, I appreciate it.

BROWN: ... and all the rest of the stuff you got going on in your life.

O'NEILL: Thank you very much.

BROWN: Thank you, Paul O'Neill.

Check the sports pages and the rest of the morning papers when we come back.

(COMMERCIAL BREAK)

BROWN: All right, it's that time again, time to check morning papers from around the country and around the world. It's bee4n a little busy here tonight. We haven't had as much time to work with this as we would like.

Here we go. "USA Today," if you're traveling, this is what you will find in that fine motel you're staying in tonight. Down here, it's a great "USA Today" sort of story too. "An Overweight America Comes With a Hefty Price Tag." There was a big deal in Washington today about restaurants maybe should tell people not to eat so much. Fat chance, no pun intended.

"The Cincinnati Inquirer," in honor of Paul O'Neill, and a great -- actually this is a terrific story idea on the front page -- "Drunken Driver Lives in Obscurity." Fifteen years ago today, some of you will remember this, I remember this myself, the headline, 27 riders on a church bus died in Kentucky. And it's a profile of the guy all these years later and what his life is like.

"New York Times," all the news that's fit to print -- we won't make no jokes about this -- "New Policy in Iraq," over here, "New Policy in Iraq to Authorize GIs to Shoot Looters, A Much Tougher Stance. Overseer... " well, anyway, that's -- you get the idea. They're cracking down.

Love this very good story in "The Miami Herald," and they chose to put it on the front page, "United Way in Dade," Dade County, "Ends Boy Scout Funding." This is, again, the issue over whether the Boy Scouts should or should not admit gays, and United Way's not going to give them any money.

Have 15 seconds. Why don't we just say good night, then? NO sense going any further.

Good to have you with us tonight. We're back tomorrow. There you are. Ten o'clock Eastern time, we hope you'll join us then. Until then, good night for all of us at NEWSNIGHT. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





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