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CNN Newsnight Aaron Brown

State of Emergency Declared in North Carolina, Virginia; Interview With Wesley Clark; Bush: No Evidence of Hussein Connection to 9/11

Aired September 17, 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.
We'll admit that a hurricane doesn't necessarily lend itself very well to this page. After all what is there really to say. The warnings go up. Many people move out. The rain and the winds begin and then it hits. A few hours later with any luck at all there are no bodies to bury, just an enormous mess to clean up and pay for.

Hurricanes don't suit this page for another reason. Having been through three of them now, including one horrible one on a Coast Guard cutter in the Atlantic, their power and their fury are virtually impossible to describe.

By this time tomorrow, Isabel will have done the worst of what she's planning to do. We can only hope that the days of warnings have everyone prepared for the difficult hours that lie ahead.

So, the storm begins the whip, CNN's Ed Lavandera in Topsail Beach, North Carolina, Ed a headline from you.

ED LAVANDERA, CNN NATIONAL CORRESPONDENT: Aaron, well a state of emergency has been declared in North Carolina and Virginia but hurricane warnings have been put in place. Tens of thousands of people have been urged to evacuate low-lying areas. Now there's a sense of anxiousness along the coastline here and now Hurricane Isabel is just hours away from making landfall -- Aaron.

BROWN: Ed, thank you. We'll get back to you at the top tonight.

The White House next, the president raised some eyebrows or perhaps lowered some with what he said today. Our Senior White House Correspondent John King was there when he said it, John a headline from you.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Aaron, what he said was that the administration has no evidence that Saddam Hussein had anything to do with the September 11 attacks but Mr. Bush went on to say there's no question in his view that Saddam did have ties to al Qaeda, the latest installment in a running battle. This president's critics say he deliberately blurs the line so the Americans do blame Saddam -- Aaron.

BROWN: John, thank you. And, Jonathan Karl next who is covering the newest Democratic presidential candidate, someone you've probably seen here or there these last few days, Jon a headline.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Aaron, General Wesley Clark got into the race with an upbeat speech and a few key endorsements but his campaign still lacks two critical things. He doesn't have many specifics on the issues and almost no money in the bank.

BROWN: Jon, thank you.

And just because there's room in the whip for one more big story we'll turn to Financial Correspondent Allan Chernoff with a pretty fair headline himself -- Allan.

ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: Aaron, the chairman of the New York Stock Exchange Richard Grasso resigns, handing in that resignation to the very board that had granted him a $140 million payday.

BROWN: Allan, thank you, back to you and the rest shortly.

Also coming up on the program tonight we'll talk with retired General Wesley Clark who, as Jon Karl just mentioned, formally declared his intention to run for the White House today.

We'll take a look back at a time when peace in the Middle East may have seemed a whole lot closer than it does tonight the Camp David Accords, 25 years later.

And, even thought the ink-stained drudges everywhere say the bulldog edition comes first a rooster trumps the bulldog and so do tomorrow's headlines tonight or at least that's what we hope, all that and more in the hour ahead.

We begin tonight with the hurricane and something Nicky Wheeler (ph) at Camp Lejeune said to a reporter about her husband who just came home from Iraq. "He hasn't seen rain in seven and a half months" she said.

Welcome home Sergeant Wheeler. You and she and a lot more people besides are about to get very, very wet. In addition to high winds up to a foot of rain is on its way from the Outer Banks to the interior and moving north.

Our coverage begins tonight with CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

LAVANDERA (voice-over): Officials in Topsail Island, North Carolina have issued only voluntary evacuation orders but Mike Price, who owns the local Friendly Mart is already evacuating his groceries and freezers. Flood waters will likely threaten the inside of this market so Price is having everything moved out and driven 75 miles inland. (on camera): So how much, it's a lot of work for you because of this?

MIKE PRICE, BUSINESS OWNER: Yes, a lot of work. We've done it before. Can't take the chance so we'll be back Friday I hope.

LAVANDERA (voice-over): Price has seen vicious storms over the years and keeps a reminder of the worst hurricanes to strike Topsail Island etched on a freezer door inside the store.

What are the markings you have on here?

PRICE: Floyd water level '99 and Fran '96.

LAVANDERA: It's been more than four years since a major hurricane has made a direct hit on this area and as far north as Virginia Beach residents have been heeding the advice to leave their homes.

UNIDENTIFIED MALE: We usually see a few more hurricanes and tropical storms but I think this one's really got everybody's attention.

UNIDENTIFIED MALE: This is probably the first time that I've heard warnings from the people who have been here a long time that say board up.

LAVANDERA: It's not just the coastline emergency crews are worried about. Twelve inches of rain could inundate some areas. Flooding after the storm is a real hazard.

GOV. MIKE EASLEY, NORTH CAROLINA: Keep in mind that most of the injuries occur not during the storm but after the storm so I'm asking people in low-lying areas to please evacuate and get to safer areas until the rain has passed.

LAVANDERA: After Isabel strikes the North Carolina coast it's expected to move north toward Washington, D.C. where even the White House is being prepared to weather the storm. Flags are being lowered and awnings secured.

(END VIDEOTAPE)

LAVANDERA: Now we're starting to see the clouds move in here late this evening. The winds are starting to pick up a little bit but forecasters say it won't be until about midnight Eastern time where we begin to see the tropical storm winds start making its presence felt and probably about sunrise, between sunrise and midday tomorrow is when the brunt of Hurricane Isabel will be coming on shore here along the North Carolina coastline -- Aaron.

BROWN: And we'll get a bit more of that in a moment from Max Mayfield at the National Hurricane Center, a couple of questions first. Do you have a sense for sort of what percentage of people have stayed and what percentage have left? LAVANDERA: Well, along the North Carolina coastline, a little bit further north from where we are is where the brunt of -- the majority of the mandatory evacuations have gone into effect some more than 100,000 in North Carolina alone.

The island we're on here voluntary evacuations have been called for and quite frankly we've been driving up and down this island most of the day and it is a ghost town -- Aaron.

BROWN: And, on shore, not so much on the islands where this would actually be quite complicated, are there shelters set up? They had really a week, almost more than a week to prepare for this so are there shelters set up? Are people in shelters or are they pretty much on their own?

LAVANDERA: In North Carolina there are about 75 shelters that have been set up all the way along the coastline here further inland of course. Exactly how many people are taking advantage of that is hard to say because I think a lot of people are still working up until the last minute trying to take care of their homes so as the night progresses perhaps we'll start seeing more people filling up those shelters and into tomorrow as well.

BROWN: Well, as we often say to reporters have an interesting day tomorrow and I suspect you will. Ed, thank you very much, Ed Lavandera in Topsail, North Carolina.

On to the latest science on the storm, as we mentioned shortly before we went on the air tonight we spoke with Max Mayfield who is the director of the National Hurricane Center in Miami.

(BEGIN VIDEOTAPE)

BROWN: Tell us where we are right now. Is everything on track as it seemed 24 hours ago?

MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: Yes, sir, everything is on track. The center of the hurricane is still about 250 or 260 miles south southeast of the Outer Banks but if you look at the radar loop here you'll see that some of those outer rain bands are already moving over portions of North Carolina around Dare County right now.

So, they're starting to feel some of the impact. The winds will pick up during the night. Hurricane force winds likely to be there very early tomorrow morning and then the eye itself will approach the coast sometime around Noon.

BROWN: And how long does the worst of it last?

MAYFIELD: Well, it depends on where you are. Certainly conditions will deteriorate starting very early tomorrow morning on the North Carolina coast but this is such a large hurricane and, you know, we're saying it's a category two.

The aircraft that's out there now is showing some very strong winds at mid levels of the atmosphere, about 10,000 feet so I think is going to have a very big impact as it moves northward tomorrow through North Carolina and eastern Virginia tomorrow evening and during the day Friday and the Washington, D.C. area on Friday as it moves into Pennsylvania and on Saturday it will be up in Canada.

(END VIDEOTAPE)

BROWN: And that's Max Mayfield, the director of the National Hurricane Center in Miami. We talked to him a short time ago.

Make hay while the sun shines goes the old saying, for some hurricanes are a business opportunity.

Here's CNN's Jeanne Meserve in Virginia.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): It is the sign on the side of the van that caught our eye.

BRIAN HUFFMAN, HUFFMAN HOME IMPROVEMENTS: Hurricane help is available and still try not to rape the people either. That's what's killing me.

MESERVE: What do you mean?

HUFFMAN: Well, people are just price gouging all over the place and I don't live that way.

MESERVE: It depends on your definition. Brian Huffman is charging $50 to board up a single window, a job that takes just a couple of minutes.

HUFFMAN: And then if you get a big slider door like, you know, that most of these homes have facing the ocean that's about double that. So, an average home is probably going to run around $400 to $500 but you got to consider the cost savings in case those windows blow out is amazing. I mean you're talking about thousands upon thousands of dollars saved just by taking a couple, you know, $400, $500, so it is worth it.

MESERVE: There is so much business Brian Huffman has called in his brother-in-law and his construction workers to help, a veritable army.

HUFFMAN: Hey, Bird, how many have you done since Monday?

UNIDENTIFIED MALE: Thirty-five.

HUFFMAN: Thirty-five since Monday and still rolling.

UNIDENTIFIED MALE: (Unintelligible) and does great work. I don't want anybody to get hurt but there's a positive to everything.

MESERVE: And just think what's ahead roofs to fix, trees to take down, trash to clear up. Huffman estimates he could make $18,000 in this one week.

(on camera): Which just goes to show that for some people, at least even clouds like these do indeed have silver linings.

Jeanne Meserve CNN, Virginia Beach, Virginia.

(END VIDEOTAPE)

BROWN: And obviously we'll provide extensive coverage of the hurricane tomorrow when it hits beginning early in the morning on "AMERICAN MORNING."

Ahead on NEWSNIGHT tonight a new tape that may have come from Saddam Hussein.

And, President Bush says it quite clearly, there is no evidence that Iraq had any connection to the attacks on September 11th.

And later in the hour we'll talk with retired General Wesley Clark who today to no one's surprise formally announced that he will seek the Democratic nomination for president, a break first.

From CNN this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Today was relatively quiet in post-war Iraq. One American soldier reported wounded in this ongoing string of firefights and attacks.

Also today another audio tape is out again attributed to Saddam Hussein. In it the voice on the tape calls for Americans to leave Iraq unconditionally and that a withdrawal of American troops is "inevitable" whether it happens today or tomorrow.

The tape was released to the Arab news network Al Arabiya. In Washington, U.S. officials say the CIA is studying the tape to see if it is, in fact, Saddam Hussein.

Even today two-thirds of Americans, according to polls, believe that Iraq was in some way, shape or form involved in the attacks on 9/11. Why this is, is the subject of considerable debate.

To many of the president's critics the blame lies at the White House with an administration that didn't directly say it but seemed often to somehow suggest it. The president is not suggesting it anymore and the why of that may be as important as the what.

Again we turn to our Senior White House Correspondent John King, John good evening.

KING: Good evening to you, Aaron.

The why specifically in this case is because the president was asked and he was asked because some things the vice president said this past weekend added a whole wave of new intensity to this debate. It was in the Cabinet Room today, both Mr. Bush and Vice President Cheney began shaking their heads at the very mention of the critics who say this administration has deliberately blurred the lines in trying to convince the American people that Saddam Hussein had something, some role in the 9/11 attacks two years ago. They were shaking their heads and then the president added this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've had no evidence that Saddam Hussein was involved with September the 11th. Now, what the vice president said was is that he has been involved with al Qaeda and al-Zarqawi, an al Qaeda operative was in Baghdad. He's the guy that ordered the killing of a U.S. diplomat. He's a man who's still running loose involved with the poisons network, involved with Ansar al-Islam. There's no question that Saddam Hussein had al Qaeda ties.

(END VIDEO CLIP)

KING: Now it was just last night that National Security Adviser Rice was asked about the vice president's weekend remarks and she said there was no evidence that Saddam Hussein had any role in 9/11.

And, just a few hours before that Defense Secretary Rumsfeld shrugged when he was asked about that poll, seven in ten Americans who believe to this day that Saddam did have some role in the 9/11 attacks.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: I've not seen any indication that would lead me to believe that I could say that.

(END VIDEO CLIP)

KING: Yet on Sunday, Vice President Cheney said we don't know, when asked if Saddam Hussein had anything to do with 9/11. He also said he was not surprised more than two-thirds of the American people blame Iraq for the attacks and went on to suggest deep ties between Iraq and al Qaeda.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We will have struck a major blow right at the heart of the base, if you will, the geographic base of the terrorists who've had us under assault now for many years but most especially on 9/11.

(END VIDEO CLIP)

KING: It was that Cheney remark, those Cheney remarks that critics say there's no evidence that al Qaeda had any geographic base inside Iraq and even today after the president spoke critics saying they believe this administration again deliberately trying to blur the lines. They note that Mr. Bush now says Iraq is the central front in the war on terrorism that war, of course, borne from the 9/11 attacks and they note that on the second year anniversary of September 11 just a few years ago, Mr. Bush went to an Army hospital, visited troops wounded in Iraq -- Aaron.

BROWN: Maybe this is a subtext question and the subtext is this that both in the campaign that's forming, the Democratic candidates now ten of them and I think just in the public generally there is among some people, not everyone certainly, some people concerned the administration exaggerates, the administration allows misleading suggestions to go out there. Did the comments by the president, as you heard them at least, suggest a sensitivity to that criticism or simply a direct answer to a direct question?

KING: I think both a direct answer to the question but also a sensitivity. They understand what is going on across the Atlantic. Tony Blair is under fire his administration accused of sexing up, exaggerating the evidence.

They know many on Capitol Hill will make that same argument now as they consider the president's budget request and they know that there is a campaign coming and beyond any questions about did the administration, was the administration forthright and truthful about Iraq the Democrats want to use this to get at the bigger issue.

Remember George Bush ran for president saying he would restore honesty and integrity to the White House. The Democrats want to make the case that this president failed that test.

BROWN: John, thank you very much, Senior White House Correspondent John King tonight.

Quickly here an update on one of the more controversial aspects, I guess you'd say, of the Patriot Act. CNN's Kelli Arena reports that so far the Justice Department says it has made no requests, none, for any records under a provision of the act that would allow investigators to seek that information from libraries, businesses or doctor's offices.

A bit controversial because of Section 215 of the Patriot Act allows the FBI to obtain secret court orders requiring libraries, for example to produce their records.

The Attorney General John Ashcroft decided to declassify the information because of what he says has been misleading attacks against that particular provision of the law. Librarians and others have been pressing for Mr. Ashcroft to declassify the information for about a year now.

Coming up on NEWSNIGHT tonight the newest Democrat, the latest Democrat running for the White House, we'll talk with retired General Wesley Clark, a break first.

From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: We understood a boss' concern the other day about how NEWSNIGHT would cover the expected presidential candidacy of Wesley Clark. General Clark has been both a friend of the program and during the war the cable news equivalent of a foxhole buddy.

So, on those terms the general is tops in our book but when it comes to Wesley Clark, the presidential candidate, we and he and you are just getting acquainted, in a moment our first conversation with candidate Clark, first CNN's Jonathan Karl.

(BEGIN VIDEOTAPE)

KARL (voice-over): General Wesley Clark kicked off his campaign with a whack at the current president.

WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: Why has America lost 2.7 million jobs? Why has America lost the prospect of a $5 trillion surplus and turned it into a $5 trillion deficit that deepens every day? Why has our country lost our sense of security and feels the shadow of fear?

KARL: Clark's first speech as a presidential candidate was short, only 11 minutes long and almost completely without specifics only a promise that he'll figure out a way to deal with the country's problems.

CLARK: We'll work out how to deal with the historic deficits created by this administration, deficits that will kill jobs and burden children. We'll find a way to restore safety and security for America and a sense of security for every American.

KARL: In a sign that many Democrats were not satisfied with the nine others already running for president, Clark is lining up endorsements, including every major Democratic official in Arkansas and his supporters claim he has commitments from between 20 and 30 Congressional endorsements. He also has the enthusiastic support of a lot of former President Bill Clinton's old friends.

SKIP RUTHERFORD, EXECUTIVE DIRECTOR, CLINTON PRESIDENTIAL LIBRARY: Now I've had two friends run for president of the United States in the matter of 12 years so there's a lot of Arkansas pride and excitement here.

KARL: Clark may be the man with the golden resume, West Point, Silver Star in Vietnam, road scholar, but he has no record and no positions on the economic issues most Democrats expect to be central to the campaign against President Bush.

(END VIDEOTAPE)

KARL: General Clark says those specifics will come soon. He says he will give two major policy speeches in the coming weeks, one on national security and the other on the economy.

Meanwhile, on the political front he starts off campaigning tomorrow going down to Florida and South Carolina hitting home the message that this is a candidate, his supporters say, who can compete in the south, a Democrat who can win in the south, something Democrats were not able to do in the last presidential election -- Aaron.

BROWN: I could ask him this question but you're here so I'll ask you. Does that suggest to you that he is -- he will not contest full force in those two first and important states in Iowa and New Hampshire?

KARL: Well, his supporters, his campaign people are already downplaying expectations in New Hampshire, for instance. They're saying that they believe that he can come in ahead of all the other non-New England candidates and, as you know, with three New England candidates, Dean, Kerry, and Lieberman that is saying he'll come in fourth in New Hampshire, hardly raising expectations.

They're still trying to figure out exactly how much to compete there. I'm sure the general will tell you he's going to compete hard in Iowa and New Hampshire. He is going to Iowa on Friday.

BROWN: Jon, thank you very much, Jonathan Karl, you've had a busy week.

General Clark now, the general joins us from Little Rock, Arkansas. It's good to see you, sir.

CLARK: Nice to be here.

BROWN: I think we can say without problem congratulations and here we go. As a candidate let's talk issues a little bit first. One that always comes up is abortion. You said you were pro choice. Does that extend to what abortion opponents call partial birth abortion?

CLARK: Well, I've said that I'm pro choice. I think abortion should be legal, safe, and rare.

BROWN: That sounds like -- I think that literally is what Bill Clinton used to say. Are you going to pass on the partial birth abortion question?

CLARK: I think it's a case of abortion being rare but fundamentally it is a woman's choice.

BROWN: OK. As you noted in your talk today, in your speech today, the country is running in dollar terms record deficits. Do you believe given the current state of the economy, the federal budgets and the projections that the country right now can afford prescription coverage under Medicare?

CLARK: We have to do something to address the prescription drug needs of our seniors and we need to produce health insurance for all Americans. We'll take a look at how soon we can do that and how.

BROWN: Do you, are you willing to support, do you support either of the plans, the House version, the Senate version that are currently being kicked around in conference in Washington? CLARK: No, I haven't supported either one of those.

BROWN: Do you expect to or would you rather come up with your own?

CLARK: We'll produce our own ideas on this.

BROWN: What current Supreme Court justice do you most admire?

CLARK: I like people who are in the middle like Stephen Breyer (ph).

BROWN: And I assume the extension of that is that's the kind of justice you would appoint?

CLARK: I'm going to look for people who can look through the issues, who can see both sides of the arguments, who can help advance a moderate mid course direction for the American political system.

BROWN: Is that how you see yourself as a moderate?

CLARK: Well, I don't like labels. I mean I've got, I run the gamut. I believe in a strong defense. I believe in the Second Amendment. I've always had a lot, we've always had a lot of guns in the house. I've been shooting and hunting and fishing since I was a kid.

On the other hand, I'm a strong proponent of affirmative action. I'm very proud of the record we established in the United States armed forces on ending racial discrimination or, at least, greatly reducing it. I'm a believer in open and transparent government.

So, the issues run across the spectrum. I think labeling does a disservice to candidates. I think it's a sort of a political shorthand that does more to obscure the choices and issues in American society than really helping eliminate them.

BROWN: OK. Wes Clark is elected president. Would you expect that there would be American troops in sizable numbers, in the thousands, in Iraq in two years?

CLARK: Partly that's a question of how this administration deals with the issue. As I'm watching the administration's efforts unfold I'm sensing an eagerness to pull down those American force levels.

If that's done successfully and the Iraqis can fill a security void and economic and political development can take root there and move ahead, fine. If it's done prematurely it may worsen the security situation and two years from now we may find ourselves facing a choice we don't want to have to face.

So, I hope this administration will do its duty and face the issues in Iraq squarely, give the commanders on the ground the resources they need to do the job and let's succeed.

I would not have gone into that campaign. But now that we're there, it's not going to help our security or the security of other countries in the region if we were to prematurely pull down or exit and let the situation disintegrate, civil war ensue, and the country become even more of a recruiting ground and training home for al Qaeda.

BROWN: You said -- you just said and you have said before you wouldn't have gone in. Do you think the world and the region, perhaps more particularly, is a better place because Saddam Hussein has been overthrown?

CLARK: Well, all things being equal, yes. But all things are never equal.

And this is a case where there are -- there are pluses and minuses on this. Certainly, the Iraqi people now have an opportunity to grasp for freedom. And we've uncovered some of the horrendous excesses and depredations of the Iraqi regime and brought them to light.

On the other hand, personal security, economic security is down in many places in Iraq. There is terrorism in Iraq that wasn't there before. We have charged up the al Qaeda recruiting machine. I guess we could have done even a better job of reinforcing Osama bin Laden had we invaded Saudi Arabia. But next to Saudi Arabia, going into Iraq was a pretty good thing for al Qaeda. It put a U.S. and British force on the ground in an Arab country and gave them all the ammunition they needed to raise the intensity of hatred against the West.

So these things balance out. And it's really too soon to say. I would say, at best, it's a net wash. It may be negative for U.S. security on the whole.

BROWN: General, I think, literally, I could go on for hours. And actually, you've watched me go on for hours. You know I can do it.

CLARK: I've done it with you.

BROWN: Yes, you have. I hope you will come back and we'll talk some more about issues and about both your history and where you see the country going. It's nice to talk to you, as it always is. Thank you.

CLARK: Thank you, Aaron.

BROWN: General Wesley Clark, now the 10th Democrat to formally enter the race.

Still to come on NEWSNIGHT: The $140 million P.R. mess cost the head of the New York Stock Exchange his job.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Consider for a moment Dick Grasso's dilemma.

You do your job as the head of the New York Stock Exchange well, very well, by most accounts, for eight years. The titans of industry who decide how much you should be paid decide to pay you well, maybe a little too well, if one considers a $140 million lump sum payment, much of that deferred compensation, too well. And now you find yourself in such a firestorm of controversy that you have only one choice left. And taking a pay cut isn't it.

Here is CNN's Allan Chernoff.

(BEGIN VIDEOTAPE)

ALAN CHERNOFF, CNN CORRESPONDENT (voice-over): Virtually everyone agrees Richard Grasso did a great job running the stock exchange. He modernized the trading system, fought off challenges from Nasdaq, and shined during crises, after 9/11 and the recent blackout.

WILLIAM DONALDSON, SEC CHAIRMAN: Mr. Grasso has been, in my view, a superb manager of the New York Stock Exchange.

CHERNOFF: But in this era of corporate scandal, it was Grasso's acceptance of a $140 million pay package that was unacceptable on Wall Street and Main Street.

RICHARD MOORE, TREASURER, NORTH CAROLINA: To make that kind of money when every firm that lists on your exchange is going in the other direction is something that cannot be repaired.

CHERNOFF: Never mind that the money was a retirement package and salary Grasso had deferred for years. Grasso, an expert in marketing, couldn't spin the story his way.

RICHARD GRASSO, FORMER NYSE CHAIRMAN: This institution should not be preoccupied with talking about the compensation of its leader, but rather the policies and programs and initiatives of its leader.

CHERNOFF: Grasso's ouster because of a huge payday is even more ironic, considering that he came from this working-class neighborhood and never graduated college.

He is the only person ever to have risen through the ranks of the stocks exchange to the top. He did so by being smart and savvy. Even last month, minutes of an NYSE compensation committee meeting reveal, Mr. Grasso did not think it was wise to proceed at this time with his pay package. But committee members, including former AOL Time Warner Chief Gerald Levin argued, the agreement should be entered into now.

Grasso said he offered his resignation with the deepest reluctance, adding, "I believe this course is in the best interests of both the exchange and myself."

(END VIDEOTAPE)

CHERNOFF: Yet another irony, Mr. Grasso is resigning exactly two years to the date after one of his greatest triumphs, reopening the stock exchange following the 9/11 terror attacks. The board is asking one of its members, Larry Sonsini, an attorney in Silicon Valley, to step in as interim chairman.

And, Aaron, you can be sure that a shakeup of the board is not far away.

BROWN: Well, let's deal with that. Some of this stuff is -- when you deal with the markets, for most of us, is pretty arcane. But the board is made up of people the exchange has to regulate. Is that fair?

CHERNOFF: That is certainly a major problem. And that is an issue that the Securities and Exchange Commission wants to address. Lots of people have been saying it's a conflict of interests. It was a conflict of interests, they say, for Mr. Grasso to be paid by the very people whom he was supposed to be regulating. So that is one of many issues on the agenda for reforming the exchange.

BROWN: Allan, thank you very much -- Allan Chernoff with us in New York tonight.

Quickly, a few more items from around the country, starting with another story involving the New York Stock Exchange -- OK, indirectly. Come tomorrow, or at least quite soon, the ticker symbol for our company, AOL Time Warner, is expected to change from AOL back to TWX, Time Warner. That's because, if all goes as planned, the board of directors will vote to drop AOL and go back to just plain old old- media Time Warner. I guess it's one of those "seemed like a really good idea at the time" sort of things.

Tough times on Tobacco Road, R.J. Reynolds announcing today it will cut 2,600 jobs, about 40 percent of the work force. Price cutting has taken a toll on profits. So has the public's growing appetite for less profitable generic cigarettes or no cigarettes at all.

And Sheb Wooley has died. He was 82. If the name doesn't ring a bell, perhaps this will: "one-eyed, one-horned, flyin' purple people eater." I know I've never said that before on the air. Sheb Wooley wrote those words, that song, back in 1958. He was also an actor and a founding member of the cast of "Hee Haw."

NEWSNIGHT continues.

The Mideast peace at 25, a look back at what appeared to be the beginning of the end of the violence and why it has not turned out that way.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: Twenty-five years can seem like a lifetime. Where the Middle East is concerned, it feels more like an eternity, so great is the divide between the hopes then and the reality now. On this day a quarter of a century ago at Camp David, Maryland, the leaders of Egypt and Israel and the United States agreed on a document that was called the framework for peace in the Middle East; 25 years later, today, the relationship between Egypt and Israel is chilly at best, and there is nothing resembling peace and barely a framework to hang it on.

Here is CNN's Jeff Greenfield.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SR. ANALYST (voice-over): If you watched this moment as it happened nearly a quarter century ago, you might have thought, this is a moment when history is taking a turn for the better.

Or last June, when the then PLO Prime Minister Mahmoud Abbas and Israel's Sharon and the American president said, yes, this time, peace will happen.

(on camera): Now, the optimist in you might say, yes, those Camp David accords did lead to something better. There has been no war in the region since. The two strongest military powers, Egypt and Israel, deal with each other. And both sides kept faith with the idea of land for peace. But, in the Middle East, in a broader sense, optimism is a very thin reed.

(voice-over): Armies may not clash, but killers blow up the innocent in streets, in schools, on buses. And when retaliation comes, the innocent and guilty often die together.

Just since the new wave of terror was launched less than three years ago, more than 750 Israelis and more than 2,500 Palestinians have died. What has also died, or at least lies mortally wounded, is the whole idea that a well-drafted proposal shaped by honest proposers will somehow lead to peace. Over these many years, we have heard of the Zinni missions, the Mitchell plan, the Tenet work plan, the seven quiet days, the road map, the Reagan plan, the Rogers plan, the Madrid conference, the Oslo accords, the Barak-Clinton-Arafat Camp David, the pan-Arab initiative.

Someday, in a year or five years or 10 or 50, maybe a Palestinian leader will say what Sadat said almost 25 years ago: No more war. We will live in peace with a Jewish state of Israel and no violence will spring from our side.

And maybe then, an Israeli leader will say what Begin said, in effect, back then: We will hold your land no longer and we will remove our people from that land.

Until then, this image that seemed to speak volumes on that day almost 25 years ago now looks a lot more like an illusion.

Jeff Greenfield, CNN, New York.

(END VIDEOTAPE) BROWN: Missing at Camp David 25 years ago was Yasser Arafat, who, at the time, wanted no part of peace talks with Israel and vice versa. What he wants now is less than clear. He told reporters today, he's fully prepared to die a martyr in a hail of gunfire, if the Israeli government tries to deport him, which says little about where things go from here and much about how far there is to go.

Here is CNN's Matthew Chance.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): It may have been a remarkable feat of diplomacy, but 25 years on, for many, its legacy is felt in what it did not achieve.

SARI NUSSEIBEH, PRESIDENT, AL-QUDS UNIVERSITY: The Palestinians remember Camp David as a major disaster, because it's something that happened, by custom, shelved the Palestinian issue, the search for independence, the end of occupation. And until today, people don't look back on either Sadat or that period as being a good period in Palestinian history.

CHANCE: Then, as now, Israeli forces controlled the West Bank and Gaza, which they conquered in 1967. But the Jewish settlements that now scatter the territory, major obstacles to peace for Palestinians, were hardly built back then. For some, the failure of Camp David to resolve the Palestinian question in 1978 was an opportunity lost, one of many.

BOUTROS BOUTROS-GHALI, FORMER U.N. SECRETARY-GENERAL: The situation today is far more difficult than the situation 25 years ago. One, before you have only 4,000 settlers in the West Bank. Today, you have 400,000 settlers, a fair difference; 20 years ago, the fundamentalists were a very marginal and a very weak movement. They killed Sadat, but, still, they were a weak movement. Today, the fundamentalists are more powerful.

CHANCE: Still, the shortcomings of Camp David shouldn't blur its achievements. It broke taboos and was a turning point.

DAN MERIDOR, FORMER ADVISER TO ISRAELI PRIME MINISTER: From that day on, Israel is not isolated in the Middle East. We have other countries who have come to terms with the reality of Israel. Egypt was the first, Jordan officially the second. Then Morocco, Tunisia, some Gulf states came to terms with us. The Palestinians started talking with us. Even the Syrians started talking with us, all because of this major milestone.

CHANCE: But, 25 years on, still immersed in violence, the successes of Middle East diplomacy appear overshadowed by what must still be done.

Matthew Chance, CNN, Jerusalem.

(END VIDEOTAPE) BROWN: Jody Powell rode the highs and lows during the days of Camp David. He was President Carter's press secretary at the time, a close confidante as well.

Mr. Powell joins us tonight from Washington.

Nice to see you, sir.

JODY POWELL, FORMER CARTER PRESS SECRETARY: Good to be with you.

BROWN: You have all gathered together. In moments like this, like today, there must be this odd cocktail of pride in what was accomplished, which was extraordinary -- and that gets lost -- and disappointment.

POWELL: Well, a great sense of pride, absolutely, not only in the things that were mentioned.

But I think the most important thing that was left out is that, for 10 or 15 years during the Cold War, when people thought that, if we managed blow up the world, it would start in the Middle East. For that period after Camp David, there was no Arab-Israeli conflict. There had been one every six to eight years for the past 30 years before then. And the chances of blowing up the world were substantially reduced.

I think that's not a small accomplishment. But you're right. There was a sense of disappointment and almost wonder at how we have gotten from that high point to this sad state in which we find ourselves today, with all the bloodshed and death.

BROWN: Back then -- and it was an arduous negotiation and it was difficult on the parties. It was difficult on the president and the president's staff. Did you imagine that where you were was at an important beginning that certainly would follow through?

POWELL: I don't -- I have very little doubt, Aaron, that, if President Carter had had four more years, that we would not be where we are now.

You would have heard, I am sure, in his second inaugural, a recommitment to that process and to the second part of that progress, which was to deal with a homeland and the rights of the Palestinians and the rights of the Israelis to live in peace in their country. I believe we would have made tremendous progress, if not -- and put that on the same -- the same course. We weren't able to win that election.

And I don't think we have had an administration that has pursued that with that same level of commitment and, I might say, of political courage, which is a significant factor if you're going to try to make peace in the Middle East.

BROWN: Does that include the Clinton administration?

POWELL: I think there's no doubt that what came from those Clinton negotiations at Camp David, at Camp David II, was a very good plan.

I think, by the by -- I heard the comment earlier about the Palestinians. I think the Palestinians and the PLO missed a huge opportunity by refusing to participate in the talks for autonomy in 1979. They missed another huge opportunity at Camp David II. But neither -- but none of the other efforts were proceeded with by the degree of continuity and preparation that had taken place, not just under President Carter, but under two former presidents of a different party, in many cases involving the same career diplomats who were kept on in the Carter administration, an administration that was willing to build on the progress that had been made before.

That, too, is something that has been increasingly lacking over the years that have followed.

BROWN: About 10 seconds.

Does it seem like 25 years? Does it seem more or less or what?

POWELL: Well, it didn't until I looked at all of my former colleagues around the table and I realized how much older they look.

(LAUGHTER)

BROWN: Yes. Well, they do. You look great.

It's good to see you again. Thank you, Jody Powell, who was the press secretary for President Carter 25 years ago.

(CROSSTALK)

BROWN: Morning papers when we come back.

(COMMERCIAL BREAK)

(ROOSTER CROWING)

BROWN: Time to check morning papers from around the country, nice mix of stories, I think. And perhaps you will, too. We'll see how that works out.

"The New York Times," all the news that's fit to print. Big story, major front-page story. They put so many on the front page, though, don't they? We should talk to them about that. "Chairman Quits Stock Exchange in Furor Over Pay. Grasso Resigns Under Pressure. Ally May Become Interim Chief."

Down at the bottom -- and believe me, you can't see it, so let me just mention it to you. Kathy Boudin was released from prison. The '60s radical was involved in a bank robbery. Three police officers died, two police officers and an armored car driver, as I recall. Anyway, 22 years after she went to prison. That was a big local story here.

A couple of big stories up in Oneida, New York, "The Oneida Dispatch." Hot dog. That's pretty cool we got that. "Clinton Highlights Area Agriculture." That would be Senator Hillary Rodham Clinton up there doing what politicians do. But I suspect the big story that has people talking is, "Local Manufacturer Will Shut Down, 300 to Lose Jobs." Kind of the state of play in the economy today, whether you're in big cities or small. And that one came out of Rome, New York.

The big story in Cincinnati, at least according to "The Cincinnati Enquirer" -- and I don't disagree -- "Fifth Accused Priest Identified. He Resigns Before Hearing on Alleged Abuse." Cincinnati has a pretty good-sized Catholic population. That's a pretty good lead for the newspaper.

"The Detroit News." "Chrysler Dangles Buyouts." They continue to negotiate, labor negotiations going on. I haven't had a chance to read this story: "33,371 Young People Bolt Metro Detroit." You can't get more specific than that. They've got it down to the number here.

Forget that paper. We'll do two more.

"The Boston Herald," Dick Grasso on the cover. "Cash Call," the headline. "Wall Street Fat Cat Takes His $140 million and Runs." Man, that is an unkind headline.

In "Chicago Sun-Times": "Mayor Says High School is Too Boring." Got to read that. The weather tomorrow is supremo. The Cubs win again. And the Twins and the Sox play again. We'll see how that goes.

We'll see you tomorrow, won't we, 10:00 Eastern time. 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





Interview With Wesley Clark; Bush: No Evidence of Hussein Connection to 9/11>


Aired September 17, 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.
We'll admit that a hurricane doesn't necessarily lend itself very well to this page. After all what is there really to say. The warnings go up. Many people move out. The rain and the winds begin and then it hits. A few hours later with any luck at all there are no bodies to bury, just an enormous mess to clean up and pay for.

Hurricanes don't suit this page for another reason. Having been through three of them now, including one horrible one on a Coast Guard cutter in the Atlantic, their power and their fury are virtually impossible to describe.

By this time tomorrow, Isabel will have done the worst of what she's planning to do. We can only hope that the days of warnings have everyone prepared for the difficult hours that lie ahead.

So, the storm begins the whip, CNN's Ed Lavandera in Topsail Beach, North Carolina, Ed a headline from you.

ED LAVANDERA, CNN NATIONAL CORRESPONDENT: Aaron, well a state of emergency has been declared in North Carolina and Virginia but hurricane warnings have been put in place. Tens of thousands of people have been urged to evacuate low-lying areas. Now there's a sense of anxiousness along the coastline here and now Hurricane Isabel is just hours away from making landfall -- Aaron.

BROWN: Ed, thank you. We'll get back to you at the top tonight.

The White House next, the president raised some eyebrows or perhaps lowered some with what he said today. Our Senior White House Correspondent John King was there when he said it, John a headline from you.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Aaron, what he said was that the administration has no evidence that Saddam Hussein had anything to do with the September 11 attacks but Mr. Bush went on to say there's no question in his view that Saddam did have ties to al Qaeda, the latest installment in a running battle. This president's critics say he deliberately blurs the line so the Americans do blame Saddam -- Aaron.

BROWN: John, thank you. And, Jonathan Karl next who is covering the newest Democratic presidential candidate, someone you've probably seen here or there these last few days, Jon a headline.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Aaron, General Wesley Clark got into the race with an upbeat speech and a few key endorsements but his campaign still lacks two critical things. He doesn't have many specifics on the issues and almost no money in the bank.

BROWN: Jon, thank you.

And just because there's room in the whip for one more big story we'll turn to Financial Correspondent Allan Chernoff with a pretty fair headline himself -- Allan.

ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: Aaron, the chairman of the New York Stock Exchange Richard Grasso resigns, handing in that resignation to the very board that had granted him a $140 million payday.

BROWN: Allan, thank you, back to you and the rest shortly.

Also coming up on the program tonight we'll talk with retired General Wesley Clark who, as Jon Karl just mentioned, formally declared his intention to run for the White House today.

We'll take a look back at a time when peace in the Middle East may have seemed a whole lot closer than it does tonight the Camp David Accords, 25 years later.

And, even thought the ink-stained drudges everywhere say the bulldog edition comes first a rooster trumps the bulldog and so do tomorrow's headlines tonight or at least that's what we hope, all that and more in the hour ahead.

We begin tonight with the hurricane and something Nicky Wheeler (ph) at Camp Lejeune said to a reporter about her husband who just came home from Iraq. "He hasn't seen rain in seven and a half months" she said.

Welcome home Sergeant Wheeler. You and she and a lot more people besides are about to get very, very wet. In addition to high winds up to a foot of rain is on its way from the Outer Banks to the interior and moving north.

Our coverage begins tonight with CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

LAVANDERA (voice-over): Officials in Topsail Island, North Carolina have issued only voluntary evacuation orders but Mike Price, who owns the local Friendly Mart is already evacuating his groceries and freezers. Flood waters will likely threaten the inside of this market so Price is having everything moved out and driven 75 miles inland. (on camera): So how much, it's a lot of work for you because of this?

MIKE PRICE, BUSINESS OWNER: Yes, a lot of work. We've done it before. Can't take the chance so we'll be back Friday I hope.

LAVANDERA (voice-over): Price has seen vicious storms over the years and keeps a reminder of the worst hurricanes to strike Topsail Island etched on a freezer door inside the store.

What are the markings you have on here?

PRICE: Floyd water level '99 and Fran '96.

LAVANDERA: It's been more than four years since a major hurricane has made a direct hit on this area and as far north as Virginia Beach residents have been heeding the advice to leave their homes.

UNIDENTIFIED MALE: We usually see a few more hurricanes and tropical storms but I think this one's really got everybody's attention.

UNIDENTIFIED MALE: This is probably the first time that I've heard warnings from the people who have been here a long time that say board up.

LAVANDERA: It's not just the coastline emergency crews are worried about. Twelve inches of rain could inundate some areas. Flooding after the storm is a real hazard.

GOV. MIKE EASLEY, NORTH CAROLINA: Keep in mind that most of the injuries occur not during the storm but after the storm so I'm asking people in low-lying areas to please evacuate and get to safer areas until the rain has passed.

LAVANDERA: After Isabel strikes the North Carolina coast it's expected to move north toward Washington, D.C. where even the White House is being prepared to weather the storm. Flags are being lowered and awnings secured.

(END VIDEOTAPE)

LAVANDERA: Now we're starting to see the clouds move in here late this evening. The winds are starting to pick up a little bit but forecasters say it won't be until about midnight Eastern time where we begin to see the tropical storm winds start making its presence felt and probably about sunrise, between sunrise and midday tomorrow is when the brunt of Hurricane Isabel will be coming on shore here along the North Carolina coastline -- Aaron.

BROWN: And we'll get a bit more of that in a moment from Max Mayfield at the National Hurricane Center, a couple of questions first. Do you have a sense for sort of what percentage of people have stayed and what percentage have left? LAVANDERA: Well, along the North Carolina coastline, a little bit further north from where we are is where the brunt of -- the majority of the mandatory evacuations have gone into effect some more than 100,000 in North Carolina alone.

The island we're on here voluntary evacuations have been called for and quite frankly we've been driving up and down this island most of the day and it is a ghost town -- Aaron.

BROWN: And, on shore, not so much on the islands where this would actually be quite complicated, are there shelters set up? They had really a week, almost more than a week to prepare for this so are there shelters set up? Are people in shelters or are they pretty much on their own?

LAVANDERA: In North Carolina there are about 75 shelters that have been set up all the way along the coastline here further inland of course. Exactly how many people are taking advantage of that is hard to say because I think a lot of people are still working up until the last minute trying to take care of their homes so as the night progresses perhaps we'll start seeing more people filling up those shelters and into tomorrow as well.

BROWN: Well, as we often say to reporters have an interesting day tomorrow and I suspect you will. Ed, thank you very much, Ed Lavandera in Topsail, North Carolina.

On to the latest science on the storm, as we mentioned shortly before we went on the air tonight we spoke with Max Mayfield who is the director of the National Hurricane Center in Miami.

(BEGIN VIDEOTAPE)

BROWN: Tell us where we are right now. Is everything on track as it seemed 24 hours ago?

MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: Yes, sir, everything is on track. The center of the hurricane is still about 250 or 260 miles south southeast of the Outer Banks but if you look at the radar loop here you'll see that some of those outer rain bands are already moving over portions of North Carolina around Dare County right now.

So, they're starting to feel some of the impact. The winds will pick up during the night. Hurricane force winds likely to be there very early tomorrow morning and then the eye itself will approach the coast sometime around Noon.

BROWN: And how long does the worst of it last?

MAYFIELD: Well, it depends on where you are. Certainly conditions will deteriorate starting very early tomorrow morning on the North Carolina coast but this is such a large hurricane and, you know, we're saying it's a category two.

The aircraft that's out there now is showing some very strong winds at mid levels of the atmosphere, about 10,000 feet so I think is going to have a very big impact as it moves northward tomorrow through North Carolina and eastern Virginia tomorrow evening and during the day Friday and the Washington, D.C. area on Friday as it moves into Pennsylvania and on Saturday it will be up in Canada.

(END VIDEOTAPE)

BROWN: And that's Max Mayfield, the director of the National Hurricane Center in Miami. We talked to him a short time ago.

Make hay while the sun shines goes the old saying, for some hurricanes are a business opportunity.

Here's CNN's Jeanne Meserve in Virginia.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): It is the sign on the side of the van that caught our eye.

BRIAN HUFFMAN, HUFFMAN HOME IMPROVEMENTS: Hurricane help is available and still try not to rape the people either. That's what's killing me.

MESERVE: What do you mean?

HUFFMAN: Well, people are just price gouging all over the place and I don't live that way.

MESERVE: It depends on your definition. Brian Huffman is charging $50 to board up a single window, a job that takes just a couple of minutes.

HUFFMAN: And then if you get a big slider door like, you know, that most of these homes have facing the ocean that's about double that. So, an average home is probably going to run around $400 to $500 but you got to consider the cost savings in case those windows blow out is amazing. I mean you're talking about thousands upon thousands of dollars saved just by taking a couple, you know, $400, $500, so it is worth it.

MESERVE: There is so much business Brian Huffman has called in his brother-in-law and his construction workers to help, a veritable army.

HUFFMAN: Hey, Bird, how many have you done since Monday?

UNIDENTIFIED MALE: Thirty-five.

HUFFMAN: Thirty-five since Monday and still rolling.

UNIDENTIFIED MALE: (Unintelligible) and does great work. I don't want anybody to get hurt but there's a positive to everything.

MESERVE: And just think what's ahead roofs to fix, trees to take down, trash to clear up. Huffman estimates he could make $18,000 in this one week.

(on camera): Which just goes to show that for some people, at least even clouds like these do indeed have silver linings.

Jeanne Meserve CNN, Virginia Beach, Virginia.

(END VIDEOTAPE)

BROWN: And obviously we'll provide extensive coverage of the hurricane tomorrow when it hits beginning early in the morning on "AMERICAN MORNING."

Ahead on NEWSNIGHT tonight a new tape that may have come from Saddam Hussein.

And, President Bush says it quite clearly, there is no evidence that Iraq had any connection to the attacks on September 11th.

And later in the hour we'll talk with retired General Wesley Clark who today to no one's surprise formally announced that he will seek the Democratic nomination for president, a break first.

From CNN this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Today was relatively quiet in post-war Iraq. One American soldier reported wounded in this ongoing string of firefights and attacks.

Also today another audio tape is out again attributed to Saddam Hussein. In it the voice on the tape calls for Americans to leave Iraq unconditionally and that a withdrawal of American troops is "inevitable" whether it happens today or tomorrow.

The tape was released to the Arab news network Al Arabiya. In Washington, U.S. officials say the CIA is studying the tape to see if it is, in fact, Saddam Hussein.

Even today two-thirds of Americans, according to polls, believe that Iraq was in some way, shape or form involved in the attacks on 9/11. Why this is, is the subject of considerable debate.

To many of the president's critics the blame lies at the White House with an administration that didn't directly say it but seemed often to somehow suggest it. The president is not suggesting it anymore and the why of that may be as important as the what.

Again we turn to our Senior White House Correspondent John King, John good evening.

KING: Good evening to you, Aaron.

The why specifically in this case is because the president was asked and he was asked because some things the vice president said this past weekend added a whole wave of new intensity to this debate. It was in the Cabinet Room today, both Mr. Bush and Vice President Cheney began shaking their heads at the very mention of the critics who say this administration has deliberately blurred the lines in trying to convince the American people that Saddam Hussein had something, some role in the 9/11 attacks two years ago. They were shaking their heads and then the president added this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've had no evidence that Saddam Hussein was involved with September the 11th. Now, what the vice president said was is that he has been involved with al Qaeda and al-Zarqawi, an al Qaeda operative was in Baghdad. He's the guy that ordered the killing of a U.S. diplomat. He's a man who's still running loose involved with the poisons network, involved with Ansar al-Islam. There's no question that Saddam Hussein had al Qaeda ties.

(END VIDEO CLIP)

KING: Now it was just last night that National Security Adviser Rice was asked about the vice president's weekend remarks and she said there was no evidence that Saddam Hussein had any role in 9/11.

And, just a few hours before that Defense Secretary Rumsfeld shrugged when he was asked about that poll, seven in ten Americans who believe to this day that Saddam did have some role in the 9/11 attacks.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: I've not seen any indication that would lead me to believe that I could say that.

(END VIDEO CLIP)

KING: Yet on Sunday, Vice President Cheney said we don't know, when asked if Saddam Hussein had anything to do with 9/11. He also said he was not surprised more than two-thirds of the American people blame Iraq for the attacks and went on to suggest deep ties between Iraq and al Qaeda.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We will have struck a major blow right at the heart of the base, if you will, the geographic base of the terrorists who've had us under assault now for many years but most especially on 9/11.

(END VIDEO CLIP)

KING: It was that Cheney remark, those Cheney remarks that critics say there's no evidence that al Qaeda had any geographic base inside Iraq and even today after the president spoke critics saying they believe this administration again deliberately trying to blur the lines. They note that Mr. Bush now says Iraq is the central front in the war on terrorism that war, of course, borne from the 9/11 attacks and they note that on the second year anniversary of September 11 just a few years ago, Mr. Bush went to an Army hospital, visited troops wounded in Iraq -- Aaron.

BROWN: Maybe this is a subtext question and the subtext is this that both in the campaign that's forming, the Democratic candidates now ten of them and I think just in the public generally there is among some people, not everyone certainly, some people concerned the administration exaggerates, the administration allows misleading suggestions to go out there. Did the comments by the president, as you heard them at least, suggest a sensitivity to that criticism or simply a direct answer to a direct question?

KING: I think both a direct answer to the question but also a sensitivity. They understand what is going on across the Atlantic. Tony Blair is under fire his administration accused of sexing up, exaggerating the evidence.

They know many on Capitol Hill will make that same argument now as they consider the president's budget request and they know that there is a campaign coming and beyond any questions about did the administration, was the administration forthright and truthful about Iraq the Democrats want to use this to get at the bigger issue.

Remember George Bush ran for president saying he would restore honesty and integrity to the White House. The Democrats want to make the case that this president failed that test.

BROWN: John, thank you very much, Senior White House Correspondent John King tonight.

Quickly here an update on one of the more controversial aspects, I guess you'd say, of the Patriot Act. CNN's Kelli Arena reports that so far the Justice Department says it has made no requests, none, for any records under a provision of the act that would allow investigators to seek that information from libraries, businesses or doctor's offices.

A bit controversial because of Section 215 of the Patriot Act allows the FBI to obtain secret court orders requiring libraries, for example to produce their records.

The Attorney General John Ashcroft decided to declassify the information because of what he says has been misleading attacks against that particular provision of the law. Librarians and others have been pressing for Mr. Ashcroft to declassify the information for about a year now.

Coming up on NEWSNIGHT tonight the newest Democrat, the latest Democrat running for the White House, we'll talk with retired General Wesley Clark, a break first.

From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: We understood a boss' concern the other day about how NEWSNIGHT would cover the expected presidential candidacy of Wesley Clark. General Clark has been both a friend of the program and during the war the cable news equivalent of a foxhole buddy.

So, on those terms the general is tops in our book but when it comes to Wesley Clark, the presidential candidate, we and he and you are just getting acquainted, in a moment our first conversation with candidate Clark, first CNN's Jonathan Karl.

(BEGIN VIDEOTAPE)

KARL (voice-over): General Wesley Clark kicked off his campaign with a whack at the current president.

WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: Why has America lost 2.7 million jobs? Why has America lost the prospect of a $5 trillion surplus and turned it into a $5 trillion deficit that deepens every day? Why has our country lost our sense of security and feels the shadow of fear?

KARL: Clark's first speech as a presidential candidate was short, only 11 minutes long and almost completely without specifics only a promise that he'll figure out a way to deal with the country's problems.

CLARK: We'll work out how to deal with the historic deficits created by this administration, deficits that will kill jobs and burden children. We'll find a way to restore safety and security for America and a sense of security for every American.

KARL: In a sign that many Democrats were not satisfied with the nine others already running for president, Clark is lining up endorsements, including every major Democratic official in Arkansas and his supporters claim he has commitments from between 20 and 30 Congressional endorsements. He also has the enthusiastic support of a lot of former President Bill Clinton's old friends.

SKIP RUTHERFORD, EXECUTIVE DIRECTOR, CLINTON PRESIDENTIAL LIBRARY: Now I've had two friends run for president of the United States in the matter of 12 years so there's a lot of Arkansas pride and excitement here.

KARL: Clark may be the man with the golden resume, West Point, Silver Star in Vietnam, road scholar, but he has no record and no positions on the economic issues most Democrats expect to be central to the campaign against President Bush.

(END VIDEOTAPE)

KARL: General Clark says those specifics will come soon. He says he will give two major policy speeches in the coming weeks, one on national security and the other on the economy.

Meanwhile, on the political front he starts off campaigning tomorrow going down to Florida and South Carolina hitting home the message that this is a candidate, his supporters say, who can compete in the south, a Democrat who can win in the south, something Democrats were not able to do in the last presidential election -- Aaron.

BROWN: I could ask him this question but you're here so I'll ask you. Does that suggest to you that he is -- he will not contest full force in those two first and important states in Iowa and New Hampshire?

KARL: Well, his supporters, his campaign people are already downplaying expectations in New Hampshire, for instance. They're saying that they believe that he can come in ahead of all the other non-New England candidates and, as you know, with three New England candidates, Dean, Kerry, and Lieberman that is saying he'll come in fourth in New Hampshire, hardly raising expectations.

They're still trying to figure out exactly how much to compete there. I'm sure the general will tell you he's going to compete hard in Iowa and New Hampshire. He is going to Iowa on Friday.

BROWN: Jon, thank you very much, Jonathan Karl, you've had a busy week.

General Clark now, the general joins us from Little Rock, Arkansas. It's good to see you, sir.

CLARK: Nice to be here.

BROWN: I think we can say without problem congratulations and here we go. As a candidate let's talk issues a little bit first. One that always comes up is abortion. You said you were pro choice. Does that extend to what abortion opponents call partial birth abortion?

CLARK: Well, I've said that I'm pro choice. I think abortion should be legal, safe, and rare.

BROWN: That sounds like -- I think that literally is what Bill Clinton used to say. Are you going to pass on the partial birth abortion question?

CLARK: I think it's a case of abortion being rare but fundamentally it is a woman's choice.

BROWN: OK. As you noted in your talk today, in your speech today, the country is running in dollar terms record deficits. Do you believe given the current state of the economy, the federal budgets and the projections that the country right now can afford prescription coverage under Medicare?

CLARK: We have to do something to address the prescription drug needs of our seniors and we need to produce health insurance for all Americans. We'll take a look at how soon we can do that and how.

BROWN: Do you, are you willing to support, do you support either of the plans, the House version, the Senate version that are currently being kicked around in conference in Washington? CLARK: No, I haven't supported either one of those.

BROWN: Do you expect to or would you rather come up with your own?

CLARK: We'll produce our own ideas on this.

BROWN: What current Supreme Court justice do you most admire?

CLARK: I like people who are in the middle like Stephen Breyer (ph).

BROWN: And I assume the extension of that is that's the kind of justice you would appoint?

CLARK: I'm going to look for people who can look through the issues, who can see both sides of the arguments, who can help advance a moderate mid course direction for the American political system.

BROWN: Is that how you see yourself as a moderate?

CLARK: Well, I don't like labels. I mean I've got, I run the gamut. I believe in a strong defense. I believe in the Second Amendment. I've always had a lot, we've always had a lot of guns in the house. I've been shooting and hunting and fishing since I was a kid.

On the other hand, I'm a strong proponent of affirmative action. I'm very proud of the record we established in the United States armed forces on ending racial discrimination or, at least, greatly reducing it. I'm a believer in open and transparent government.

So, the issues run across the spectrum. I think labeling does a disservice to candidates. I think it's a sort of a political shorthand that does more to obscure the choices and issues in American society than really helping eliminate them.

BROWN: OK. Wes Clark is elected president. Would you expect that there would be American troops in sizable numbers, in the thousands, in Iraq in two years?

CLARK: Partly that's a question of how this administration deals with the issue. As I'm watching the administration's efforts unfold I'm sensing an eagerness to pull down those American force levels.

If that's done successfully and the Iraqis can fill a security void and economic and political development can take root there and move ahead, fine. If it's done prematurely it may worsen the security situation and two years from now we may find ourselves facing a choice we don't want to have to face.

So, I hope this administration will do its duty and face the issues in Iraq squarely, give the commanders on the ground the resources they need to do the job and let's succeed.

I would not have gone into that campaign. But now that we're there, it's not going to help our security or the security of other countries in the region if we were to prematurely pull down or exit and let the situation disintegrate, civil war ensue, and the country become even more of a recruiting ground and training home for al Qaeda.

BROWN: You said -- you just said and you have said before you wouldn't have gone in. Do you think the world and the region, perhaps more particularly, is a better place because Saddam Hussein has been overthrown?

CLARK: Well, all things being equal, yes. But all things are never equal.

And this is a case where there are -- there are pluses and minuses on this. Certainly, the Iraqi people now have an opportunity to grasp for freedom. And we've uncovered some of the horrendous excesses and depredations of the Iraqi regime and brought them to light.

On the other hand, personal security, economic security is down in many places in Iraq. There is terrorism in Iraq that wasn't there before. We have charged up the al Qaeda recruiting machine. I guess we could have done even a better job of reinforcing Osama bin Laden had we invaded Saudi Arabia. But next to Saudi Arabia, going into Iraq was a pretty good thing for al Qaeda. It put a U.S. and British force on the ground in an Arab country and gave them all the ammunition they needed to raise the intensity of hatred against the West.

So these things balance out. And it's really too soon to say. I would say, at best, it's a net wash. It may be negative for U.S. security on the whole.

BROWN: General, I think, literally, I could go on for hours. And actually, you've watched me go on for hours. You know I can do it.

CLARK: I've done it with you.

BROWN: Yes, you have. I hope you will come back and we'll talk some more about issues and about both your history and where you see the country going. It's nice to talk to you, as it always is. Thank you.

CLARK: Thank you, Aaron.

BROWN: General Wesley Clark, now the 10th Democrat to formally enter the race.

Still to come on NEWSNIGHT: The $140 million P.R. mess cost the head of the New York Stock Exchange his job.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Consider for a moment Dick Grasso's dilemma.

You do your job as the head of the New York Stock Exchange well, very well, by most accounts, for eight years. The titans of industry who decide how much you should be paid decide to pay you well, maybe a little too well, if one considers a $140 million lump sum payment, much of that deferred compensation, too well. And now you find yourself in such a firestorm of controversy that you have only one choice left. And taking a pay cut isn't it.

Here is CNN's Allan Chernoff.

(BEGIN VIDEOTAPE)

ALAN CHERNOFF, CNN CORRESPONDENT (voice-over): Virtually everyone agrees Richard Grasso did a great job running the stock exchange. He modernized the trading system, fought off challenges from Nasdaq, and shined during crises, after 9/11 and the recent blackout.

WILLIAM DONALDSON, SEC CHAIRMAN: Mr. Grasso has been, in my view, a superb manager of the New York Stock Exchange.

CHERNOFF: But in this era of corporate scandal, it was Grasso's acceptance of a $140 million pay package that was unacceptable on Wall Street and Main Street.

RICHARD MOORE, TREASURER, NORTH CAROLINA: To make that kind of money when every firm that lists on your exchange is going in the other direction is something that cannot be repaired.

CHERNOFF: Never mind that the money was a retirement package and salary Grasso had deferred for years. Grasso, an expert in marketing, couldn't spin the story his way.

RICHARD GRASSO, FORMER NYSE CHAIRMAN: This institution should not be preoccupied with talking about the compensation of its leader, but rather the policies and programs and initiatives of its leader.

CHERNOFF: Grasso's ouster because of a huge payday is even more ironic, considering that he came from this working-class neighborhood and never graduated college.

He is the only person ever to have risen through the ranks of the stocks exchange to the top. He did so by being smart and savvy. Even last month, minutes of an NYSE compensation committee meeting reveal, Mr. Grasso did not think it was wise to proceed at this time with his pay package. But committee members, including former AOL Time Warner Chief Gerald Levin argued, the agreement should be entered into now.

Grasso said he offered his resignation with the deepest reluctance, adding, "I believe this course is in the best interests of both the exchange and myself."

(END VIDEOTAPE)

CHERNOFF: Yet another irony, Mr. Grasso is resigning exactly two years to the date after one of his greatest triumphs, reopening the stock exchange following the 9/11 terror attacks. The board is asking one of its members, Larry Sonsini, an attorney in Silicon Valley, to step in as interim chairman.

And, Aaron, you can be sure that a shakeup of the board is not far away.

BROWN: Well, let's deal with that. Some of this stuff is -- when you deal with the markets, for most of us, is pretty arcane. But the board is made up of people the exchange has to regulate. Is that fair?

CHERNOFF: That is certainly a major problem. And that is an issue that the Securities and Exchange Commission wants to address. Lots of people have been saying it's a conflict of interests. It was a conflict of interests, they say, for Mr. Grasso to be paid by the very people whom he was supposed to be regulating. So that is one of many issues on the agenda for reforming the exchange.

BROWN: Allan, thank you very much -- Allan Chernoff with us in New York tonight.

Quickly, a few more items from around the country, starting with another story involving the New York Stock Exchange -- OK, indirectly. Come tomorrow, or at least quite soon, the ticker symbol for our company, AOL Time Warner, is expected to change from AOL back to TWX, Time Warner. That's because, if all goes as planned, the board of directors will vote to drop AOL and go back to just plain old old- media Time Warner. I guess it's one of those "seemed like a really good idea at the time" sort of things.

Tough times on Tobacco Road, R.J. Reynolds announcing today it will cut 2,600 jobs, about 40 percent of the work force. Price cutting has taken a toll on profits. So has the public's growing appetite for less profitable generic cigarettes or no cigarettes at all.

And Sheb Wooley has died. He was 82. If the name doesn't ring a bell, perhaps this will: "one-eyed, one-horned, flyin' purple people eater." I know I've never said that before on the air. Sheb Wooley wrote those words, that song, back in 1958. He was also an actor and a founding member of the cast of "Hee Haw."

NEWSNIGHT continues.

The Mideast peace at 25, a look back at what appeared to be the beginning of the end of the violence and why it has not turned out that way.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: Twenty-five years can seem like a lifetime. Where the Middle East is concerned, it feels more like an eternity, so great is the divide between the hopes then and the reality now. On this day a quarter of a century ago at Camp David, Maryland, the leaders of Egypt and Israel and the United States agreed on a document that was called the framework for peace in the Middle East; 25 years later, today, the relationship between Egypt and Israel is chilly at best, and there is nothing resembling peace and barely a framework to hang it on.

Here is CNN's Jeff Greenfield.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SR. ANALYST (voice-over): If you watched this moment as it happened nearly a quarter century ago, you might have thought, this is a moment when history is taking a turn for the better.

Or last June, when the then PLO Prime Minister Mahmoud Abbas and Israel's Sharon and the American president said, yes, this time, peace will happen.

(on camera): Now, the optimist in you might say, yes, those Camp David accords did lead to something better. There has been no war in the region since. The two strongest military powers, Egypt and Israel, deal with each other. And both sides kept faith with the idea of land for peace. But, in the Middle East, in a broader sense, optimism is a very thin reed.

(voice-over): Armies may not clash, but killers blow up the innocent in streets, in schools, on buses. And when retaliation comes, the innocent and guilty often die together.

Just since the new wave of terror was launched less than three years ago, more than 750 Israelis and more than 2,500 Palestinians have died. What has also died, or at least lies mortally wounded, is the whole idea that a well-drafted proposal shaped by honest proposers will somehow lead to peace. Over these many years, we have heard of the Zinni missions, the Mitchell plan, the Tenet work plan, the seven quiet days, the road map, the Reagan plan, the Rogers plan, the Madrid conference, the Oslo accords, the Barak-Clinton-Arafat Camp David, the pan-Arab initiative.

Someday, in a year or five years or 10 or 50, maybe a Palestinian leader will say what Sadat said almost 25 years ago: No more war. We will live in peace with a Jewish state of Israel and no violence will spring from our side.

And maybe then, an Israeli leader will say what Begin said, in effect, back then: We will hold your land no longer and we will remove our people from that land.

Until then, this image that seemed to speak volumes on that day almost 25 years ago now looks a lot more like an illusion.

Jeff Greenfield, CNN, New York.

(END VIDEOTAPE) BROWN: Missing at Camp David 25 years ago was Yasser Arafat, who, at the time, wanted no part of peace talks with Israel and vice versa. What he wants now is less than clear. He told reporters today, he's fully prepared to die a martyr in a hail of gunfire, if the Israeli government tries to deport him, which says little about where things go from here and much about how far there is to go.

Here is CNN's Matthew Chance.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): It may have been a remarkable feat of diplomacy, but 25 years on, for many, its legacy is felt in what it did not achieve.

SARI NUSSEIBEH, PRESIDENT, AL-QUDS UNIVERSITY: The Palestinians remember Camp David as a major disaster, because it's something that happened, by custom, shelved the Palestinian issue, the search for independence, the end of occupation. And until today, people don't look back on either Sadat or that period as being a good period in Palestinian history.

CHANCE: Then, as now, Israeli forces controlled the West Bank and Gaza, which they conquered in 1967. But the Jewish settlements that now scatter the territory, major obstacles to peace for Palestinians, were hardly built back then. For some, the failure of Camp David to resolve the Palestinian question in 1978 was an opportunity lost, one of many.

BOUTROS BOUTROS-GHALI, FORMER U.N. SECRETARY-GENERAL: The situation today is far more difficult than the situation 25 years ago. One, before you have only 4,000 settlers in the West Bank. Today, you have 400,000 settlers, a fair difference; 20 years ago, the fundamentalists were a very marginal and a very weak movement. They killed Sadat, but, still, they were a weak movement. Today, the fundamentalists are more powerful.

CHANCE: Still, the shortcomings of Camp David shouldn't blur its achievements. It broke taboos and was a turning point.

DAN MERIDOR, FORMER ADVISER TO ISRAELI PRIME MINISTER: From that day on, Israel is not isolated in the Middle East. We have other countries who have come to terms with the reality of Israel. Egypt was the first, Jordan officially the second. Then Morocco, Tunisia, some Gulf states came to terms with us. The Palestinians started talking with us. Even the Syrians started talking with us, all because of this major milestone.

CHANCE: But, 25 years on, still immersed in violence, the successes of Middle East diplomacy appear overshadowed by what must still be done.

Matthew Chance, CNN, Jerusalem.

(END VIDEOTAPE) BROWN: Jody Powell rode the highs and lows during the days of Camp David. He was President Carter's press secretary at the time, a close confidante as well.

Mr. Powell joins us tonight from Washington.

Nice to see you, sir.

JODY POWELL, FORMER CARTER PRESS SECRETARY: Good to be with you.

BROWN: You have all gathered together. In moments like this, like today, there must be this odd cocktail of pride in what was accomplished, which was extraordinary -- and that gets lost -- and disappointment.

POWELL: Well, a great sense of pride, absolutely, not only in the things that were mentioned.

But I think the most important thing that was left out is that, for 10 or 15 years during the Cold War, when people thought that, if we managed blow up the world, it would start in the Middle East. For that period after Camp David, there was no Arab-Israeli conflict. There had been one every six to eight years for the past 30 years before then. And the chances of blowing up the world were substantially reduced.

I think that's not a small accomplishment. But you're right. There was a sense of disappointment and almost wonder at how we have gotten from that high point to this sad state in which we find ourselves today, with all the bloodshed and death.

BROWN: Back then -- and it was an arduous negotiation and it was difficult on the parties. It was difficult on the president and the president's staff. Did you imagine that where you were was at an important beginning that certainly would follow through?

POWELL: I don't -- I have very little doubt, Aaron, that, if President Carter had had four more years, that we would not be where we are now.

You would have heard, I am sure, in his second inaugural, a recommitment to that process and to the second part of that progress, which was to deal with a homeland and the rights of the Palestinians and the rights of the Israelis to live in peace in their country. I believe we would have made tremendous progress, if not -- and put that on the same -- the same course. We weren't able to win that election.

And I don't think we have had an administration that has pursued that with that same level of commitment and, I might say, of political courage, which is a significant factor if you're going to try to make peace in the Middle East.

BROWN: Does that include the Clinton administration?

POWELL: I think there's no doubt that what came from those Clinton negotiations at Camp David, at Camp David II, was a very good plan.

I think, by the by -- I heard the comment earlier about the Palestinians. I think the Palestinians and the PLO missed a huge opportunity by refusing to participate in the talks for autonomy in 1979. They missed another huge opportunity at Camp David II. But neither -- but none of the other efforts were proceeded with by the degree of continuity and preparation that had taken place, not just under President Carter, but under two former presidents of a different party, in many cases involving the same career diplomats who were kept on in the Carter administration, an administration that was willing to build on the progress that had been made before.

That, too, is something that has been increasingly lacking over the years that have followed.

BROWN: About 10 seconds.

Does it seem like 25 years? Does it seem more or less or what?

POWELL: Well, it didn't until I looked at all of my former colleagues around the table and I realized how much older they look.

(LAUGHTER)

BROWN: Yes. Well, they do. You look great.

It's good to see you again. Thank you, Jody Powell, who was the press secretary for President Carter 25 years ago.

(CROSSTALK)

BROWN: Morning papers when we come back.

(COMMERCIAL BREAK)

(ROOSTER CROWING)

BROWN: Time to check morning papers from around the country, nice mix of stories, I think. And perhaps you will, too. We'll see how that works out.

"The New York Times," all the news that's fit to print. Big story, major front-page story. They put so many on the front page, though, don't they? We should talk to them about that. "Chairman Quits Stock Exchange in Furor Over Pay. Grasso Resigns Under Pressure. Ally May Become Interim Chief."

Down at the bottom -- and believe me, you can't see it, so let me just mention it to you. Kathy Boudin was released from prison. The '60s radical was involved in a bank robbery. Three police officers died, two police officers and an armored car driver, as I recall. Anyway, 22 years after she went to prison. That was a big local story here.

A couple of big stories up in Oneida, New York, "The Oneida Dispatch." Hot dog. That's pretty cool we got that. "Clinton Highlights Area Agriculture." That would be Senator Hillary Rodham Clinton up there doing what politicians do. But I suspect the big story that has people talking is, "Local Manufacturer Will Shut Down, 300 to Lose Jobs." Kind of the state of play in the economy today, whether you're in big cities or small. And that one came out of Rome, New York.

The big story in Cincinnati, at least according to "The Cincinnati Enquirer" -- and I don't disagree -- "Fifth Accused Priest Identified. He Resigns Before Hearing on Alleged Abuse." Cincinnati has a pretty good-sized Catholic population. That's a pretty good lead for the newspaper.

"The Detroit News." "Chrysler Dangles Buyouts." They continue to negotiate, labor negotiations going on. I haven't had a chance to read this story: "33,371 Young People Bolt Metro Detroit." You can't get more specific than that. They've got it down to the number here.

Forget that paper. We'll do two more.

"The Boston Herald," Dick Grasso on the cover. "Cash Call," the headline. "Wall Street Fat Cat Takes His $140 million and Runs." Man, that is an unkind headline.

In "Chicago Sun-Times": "Mayor Says High School is Too Boring." Got to read that. The weather tomorrow is supremo. The Cubs win again. And the Twins and the Sox play again. We'll see how that goes.

We'll see you tomorrow, won't we, 10:00 Eastern time. Until then, good night for all of us at NEWSNIGHT.

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Interview With Wesley Clark; Bush: No Evidence of Hussein Connection to 9/11>