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CNN Newsnight Aaron Brown

Fatal Quake Hits California; Terror Alert Raised to Orange; Deadline Looms for 9/11 Victims Fund

Aired December 22, 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, HOST: Good evening again, everyone.
Terror comes in many forms and in many different ways. As we're reminded today, not all of them have to do with color coding from the Department of Homeland Security.

Anyone who's ever lived through an earthquake knows that kind of terror, the quiet before. At least that's how I remember it. The rolling and the shaking and the wondering how long it will last, how bad it will be. Thirty seconds can seem like 30 minutes. And even when it stops, it doesn't really end.

So out West today, it was a terror attack, the old-fashioned kind, and it leads the whip tonight.

The hardest hit down was the town of Paso Robles. Frank Buckley is there for us. Frank, the headline.

FRANK BUCKLEY, CNN CORRESPONDENT: Well, Aaron, rescuers continue to look through the rubble here for any additional victims of this magnitude 6.5 earthquake that struck Central California and left at least two women dead -- Aaron.

BROWN: Frank, thank you.

Next to Washington and the decision to go from yellow to orange. CNN's Jeanne Meserve has the duty tonight. Jeanne, the headline.

JEANNE MESERVE, CNN CORRESPONDENT: Flights originating in other countries used as weapons against targets in the U.S. That is one piece of intelligence which led to the heightened terror level, one of many -- Aaron.

BROWN: Jeanne, thank you.

On to Libya, where earlier today CNN's Andrea Koppel got an exclusive interview with Libya's Colonel Moammar Gadhafi.

So Andrea on the phone, a headline from you tonight.

ANDREA KOPPEL, CNN CORRESPONDENT: Aaron, the Colonel shared his thoughts about the capture of Saddam Hussein, his personal opinion of President George W. Bush and the U.S. war against al Qaeda terrorists.

But the majority of the interview focused on the surprising decision by Colonel Gadhafi to come clean on his weapons of mass destruction program. And as he told us, Aaron, give up that program once and for all.

BROWN: Andrea, thank you. We'll get to you a little bit later.

Finally, to the drug case of Rush Limbaugh and legal maneuvering under way. CNN's Susan Candiotti with the story. Susan, the headline.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Aaron.

So far, Rush Limbaugh has not been charged with anything tonight. He is making some charges of his own against the former housekeeper and her husband. He says they tried to blackmail him.

Back to you.

BROWN: Susan, thank you. And we'll get back to you and the rest shortly.

Also ahead on the program tonight, the rush to buy drugs from Canada. Another state government wants to do it. But is it really a good idea?

In "Segment 7" tonight, we meet Chief Wiggles, an American soldier who takes the spirit of giving all the way to Iraq.

And after a weekend off, resting his voice, the rooster returns, bringing you your morning papers, but no accordion to help him along. And that's a promise.

All that and more in the hour ahead.

We begin with the quake, the large one but not the big one. It was powerful enough to kill, and had it struck San Francisco or Los Angeles, it might have caused a great deal more death and destruction than it did.

So it could have been a lot worse, but just inland not far from San Simeon tonight, it was still plenty bad enough.

Here again, CNN's Frank Buckley.

(BEGIN VIDEOTAPE)

BUCKLEY (voice-over): The earthquake caused the most damage in the small Central California city, Paso Robles. Here, two people died, 19 and 55-year-old women who were caught underneath debris as it fell from buildings constructed in the late 1800s.

Nick Sherwin was inside this building as the quake hit.

NICK SHERWIN, FAH JEWELERS OWNER: After it started crumbling, a roaring type noise. I was able to get my people and tell them to get out of the building. CATHERINE CAZES, BUSINESS OWNER: Everything shakes, everything fell. You hit the ground, you know. You just lay down and wait until it finished.

BUCKLEY: This video from the newsroom camera of a Central California news TV station providing a sense of the shaking.

Forty-seven buildings in a five-square-block area of Paso Robles were damaged. Seismologists says a similar quake in a major metropolis would have resulted in a major catastrophe.

RUSS STEIN, USGS: You put an earthquake like that under Los Angeles, and you have tens of billions of dollars of damage. You put it out here in a relatively remote place, and fortunately, there are not many immediate consequences.

(END VIDEOTAPE)

BUCKLEY: And back here in Paso Robles you can see there is debris. And in fact, right now urban search and rescue dogs and rescuers are going through a building, looking for any additional victims.

Apparently, there were three vehicles found that were in this area that have not been claimed by owners. They are looking right now to see if perhaps there might be one of those people who are attached to one of those vehicles inside this rubble.

We can also tell you this evening that the dead have been identified. They are 19-year-old Jennifer Myrick and Marilyn Zafuto, 55, of Paso Robles -- Aaron.

BROWN: There have been aftershocks?

BUCKLEY: There have been aftershocks, as there always are after earthquakes of this size. In fact, during the first hour after the initial earthquake, there were dozens of aftershocks. And one of them apparently measuring magnitude of 4.7, which is something that you can definitely feel.

BROWN: Frank, thank you. Frank Buckley out west tonight.

Russ Stein is a geophysicist with the U.S. Geological Survey, the USGS. And he joins us now from Menlo Park, California.

It's good to see you. Is there anything extraordinary about this quake, or is it routine?

STEIN: It's routine in the sense that we have earthquakes of this size in California every five or ten years, and we've had earthquakes of this size in this area about every 50 years.

So in that sense it isn't a surprise. And it's occurred on fault system which we know pretty well, a 200-mile long fault that just skirts the coast of California. BROWN: Is it -- Did it take place in an especially vulnerable area, in terms of -- I guess in terms of loss? I mean, the fact that it was a fairly good sized quake and fatalities were not -- well, they were minimal, I guess, under the circumstances, suggests that, if you're going to have a quake, this is where you want one?

STEIN: That's right. This is very close to the Hearst Castle. And if you've ever been there, you know that this is a mountainous rural area. It's far from skyscrapers or military or important facilities. And in that sense we're very fortunate to have this earthquake in such a remote location.

And also, this earthquake illuminates a fault for which we know too little about. Because after all, this fault extends right up the coastline across the San Mateo -- the Monterey Bay and towards San Francisco. So this is a fault we need to get to know better. And in that sense, the earthquake gives us quite a bit to deal with.

BROWN: That was actually my next question. Can we -- and if we can, what do we learn from a quake like this?

STEIN: Well, one thing that's very clear about this earthquake, is that the coast, the mountains went up about a foot or so...

BROWN: Wow.

STEIN: ... and the seafloor went down. So what we're seeing is the process of creating the wonderful Big Sur coastline that we all enjoy driving along. It's a rugged, high coastline, because it gets jacked up in successive earthquakes.

And we're seeing part of that process today, and that tells us something about how California is built and where the lethal earthquakes can lie.

BROWN: Tell me about the second part of that. How does it help us understand where the lethal earthquakes can lie?

STEIN: Well, here we have a fault which is not the most important player of the plate boundary between North America and pacific; that's the San Andreas. But this is nevertheless taking up about 10 percent of that motion.

So sporadically, we get large earthquakes on the fault. But they've occurred rarely, and they haven't been really recorded, because many of them are occurring offshore. So an earthquake like this tells us something about the nature of this fault and where the next earthquake could start or stop.

BROWN: So it helps you predict the next earthquake?

STEIN: Predict is kind of a dangerous word in my business. We don't predict earthquakes; we wish we could. Rather, what we see, before this earthquake, is a lack of any precursory motion of the earth, lack of any precursory seismology. There's nothing that predicts this earthquake that we can measure. But nevertheless, our job is to figure out how likely, over the long term earthquakes are that are damaging.

And this is, as you recall, a 6.5. That's almost the same size as the North Ridge earthquake in 1994.

BROWN: Yes.

STEIN: Which, if you take that earthquake and put it in a populated area, is extremely damaging.

So what we need to do is to make the kind of measurements of how the ground shakes and how the ground moves, so we can path those off to engineers and they can build safer buildings.

BROWN: A final question. What is it like in your office when it becomes clear that an earthquake is underway?

STEIN: Well, crazed would be the verb that I use. We just launched a large number of people down to the site to look for the motion of the ground, to put in more seismometers to measure this beast.

And so I'm essentially an experimental scientist, and I can't plan my own experiments. So when earthquakes occur, we need to get close to them. We need to study them. We need to watch how they cause other faults to turn on and turn off.

Because part of the key of forecasting the long-term occurrence of earthquakes is understanding how earthquakes converse with each other from one fault to another.

BROWN: Good to talk to you. Thank you. I appreciate the honesty of the last answer, too, very much. Thank you. Russ Stein with the USGS in California.

On now to manmade threats and the level orange.

For the first time since May the national terror threat level stands at high. Raising the alert from yellow to orange always creates a gray zone. How worried should we be? Where is the danger the greatest? How do we prepare?

There are grays tonight, but also good reason, officials say, more reasons then ever, for concern.

Again, here's CNN's Jeanne Meserve.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): Heightened security around national monuments, at airports, on the streets. We've seen it before, but many officials say we have never seen it like this.

They are taking new additional steps, they say, because this alert is more intense, security concerns are more serious than during any of the four previous periods at orange.

TOM RIDGE, HOMELAND SECURITY SECRETARY: The strategic indicators suggest that it is the most significant threat reporting since 9/11.

MESERVE: Not only has the volume of threat intelligence increased, according to a homeland security official, new specific and credible threat information has been uncovered, some of it relating to the use of aircraft originating outside the U.S. as weapons for suicide attacks.

The U.S. is pushing airlines and foreign governments to bolster security, including neighboring Mexico and Canada, France and others.

RAFI RON, AVIATION SECURITY ANALYST: The national security standards are still voluntary, and we know that many countries around the world do not exercise those standards.

MESERVE: According to a variety of sources, the intelligence mentions Washington, New York, Los Angeles, Las Vegas, and a handful of other cities, as well as a rural area in the East and another in the Southwest.

A government official says numerous people on terrorist watch- lists have been blocked from entering the country at more than one place since December 1, but would not give specifics.

Another government sources says a handful of foreign flight crewmembers have been stopped in recent days.

Intelligence about possible critical infrastructure targets like chemical and nuclear plants has been melded with risk and threat assessments to provide governors with specific information about where to deploy resources.

GOV. GEORGE PATAKI, NEW YORK: Working with the MTA and the port authority, we have worked to make sure that everything from airports to bridges to tunnels and other mass transit facilities have had heightened security.

(END VIDEOTAPE)

MESERVE: Government sources say tonight that some of the intelligence that led to this heightened threat level came from the United Kingdom.

How long will it last? The threat level orange will stretch past the holiday season and some homeland officials predict it could last into February at a cost, some experts say, of about $1 billion each week -- Aaron.

BROWN: Because people often don't think about this, the cost -- a lot of this is in law enforcement overtime, that sort of thing, right?

MESERVE: That's exactly what people have said. That's probably the biggest budget item. I mean, a lot of the hardware now is in place to do detection. But you need people to run it; you need people to watch it; and you need patrols out. It is largely an overtime question, and it's a big one.

BROWN: And to what extent, if at all, do local governments get reimbursed or at least get some help for these costs?

MESERVE: Well, they would tell you nowhere near enough.

BROWN: I bet they would.

MESERVE: They are spending a lot of money and have since 9/11, particularly when this threat level goes up. There has been a lot of complaint about Washington, that they're not getting the money they need. Washington has pumped some out, but the cities and counties will tell you not enough yet -- Aaron.

BROWN: Jeanne, thank you very much. Jeanne Meserve.

Against this orange backdrop, time is running out for the 9/11 families, who have until midnight tonight to make for what, for some, has been an extraordinary difficult decision.

Should they file a claim with the fund offering unprecedented, tax-free compensation for their losses, a fund created to shield the airlines, whose planes were hijacked, from devastating lawsuit.

More than 3,000 people injured in the 9/11 attacks have filed claims and so have most of the families of those killed. Most but not all.

Why, you may wonder, are they walking away from that sort of money?

Here's CNN's Adaora Udoji.

(BEGIN VIDEOTAPE)

ADAORA UDOJI, CNN CORRESPONDENT (voice-over): For Kathy Trent, whose a three teenagers lost their father Danny that day, it was an agonizing but ultimately simple decision. She turned to the September 11 fund for help.

KATHY TRENT, WIFE OF SEPT. 11 VICTIM: I would rather live in a cardboard box with my kids and have my husband back. This money is blood money. And we don't want the money. But we need it to survive for my kids.

UNIDENTIFIED MALE: And my father, Daniel Matthew Trent.

UDOJI: But for some relatives of the nearly 3,000 who were killed, it has not been so clear.

(on camera) More than 200 families have not applied for the tax- free settlements, which range from $250,000 to $6.8 million from a fund which has no cap.

(voice-over) In return, families give up the right to sue the airlines, among others.

Seventy-three families say that price is too high and have sued. Monica Gabrielle wants answers. Could the death of Richard, her husband of 28 years, have been prevented?

MONICA GABRIELLE, WIFE OF SEPT. 11 VICTIM: No one has lost their job. No one has been held accountable. And the fund, you just sign on the line and walk away from all of that.

UDOJI: Fund administrator Ken Feinberg says litigation is a gamble that's not likely to pay off. And ongoing investigations, he says, will get answers.

KENNETH FEINBERG, ADMINISTRATOR, VICTIMS COMPENSATION FUND: The idea of coming into the fund, getting a check within 60 or 90 days, rather than litigate against the airlines or the World Trade Center for a decade or more, I think is obvious.

UNIDENTIFIED MALE: We're talking about the insurance deductions.

UDOJI: A once skeptical Charles Wolf, whose wife Katherine was killed in the World Trade Center, now has set up a web site encouraging families to sign up.

CHARLES WOLF, HUSBAND OF SEPT. 11 VICTIM: It's worth it, because it feels like it's closure. It's one of the things that's going to help give closure.

UDOJI: Wolf agreed with Feinberg that the fund presents a tremendous opportunity.

FEINBERG: I say to them that you're compounding the tragedy if you do nothing.

UDOJI: Still, the fund can't erase profound grief for those families who simply cannot bear facing a process...

TRENT: Our marriage certificate, the children's birth certificates.

UDOJI: ... which took Kathy Trent two years.

TRENT: Now, I feel I can move on. This is done.

UDOJI: That choice for compensation, no matter, how difficult, ends tonight.

Adoara Udoji, CNN, New York.

(END VIDEOTAPE)

BROWN: And on the program tonight, getting cheaper prescription drugs, Illinois joins a list of state and local governments who wants to buy north of the border.

Can they, and should they? And later, Andrea Koppel's exclusive interview with Libya leader Moammar Gadhafi, who says he's decided to give up his weapons of mass destruction.

From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Many Americans are coping with the high price of prescription drugs by shopping around. Not CVS or Walgreen's, but Mexico or Canada or elsewhere, but mostly Canada. Same drugs, lower prices.

And lately, several localities have also begun taking their business across the boarder.

Now, the state of Illinois is trying to do the same, which some say is greatly problematic for a number of reasons over the long haul, at least, including the eventuality that someone has to pay the price for developing fancy new medicines.

But for right now, a lot of people are asking, why not shop around?

Here's CNN's Jeff Flock.

(BEGIN VIDEOTAPE)

JEFF FLOCK, CNN CORRESPONDENT (voice-over): In one of these bottles is the synthetic hormone, Synthtroid (ph). Carol Glover (ph), who works in the Illinois general counsel's office, takes it every day for her thyroid condition.

A hundred tablets costs $71 in a U.S. pharmacy. In Canada, the same drug is $26.92, because prices are controlled there.

CAROL GLOVER, ILLINOIS STATE EMPLOYEE: I'm ready to tell the governor I think it would be a great idea.

FLOCK: So does Illinois Governor Rod Blagojevich.

GOV. ROD BLAGOJEVICH (D), ILLINOIS: We are not asking for federal funding.

FLOCK: What he is asking in this letter to HHS Secretary Tommy Thompson is federal permission for a pilot program: buy Canadian drugs for Glover and 2e0,000 other Illinois state employees.

(on camera) Bottom line, what would this save you in your budget?

BLAGOJEVICH: $91 million it would save the state of Illinois.

FLOCK: In the first year?

BLAGOJEVICH: In the first year. PETER PITTS, FDA: We think that the plan is not well thought out. It's very risky and it provides for illegal, unsafe foreign drugs to come into this country.

FLOCK (voice-over): In the statement, the pharmaceutical industry agreed the plan "compromises public safety."

But Congressman Rahm Emanuel says it's not about safety but lost profits for the drug companies.

REP. RAHM EMANUEL (D), CHICAGO: When somebody tells you, it ain't about money, it's about money.

FLOCK: The city of Springfield, Massachusetts, said it's already saved $1 million buying prescription drugs in Canada. Boston and the state of New Hampshire ran similar programs, though...

PITTS: Though under current legislation, it is absolutely illegal to bring in unapproved foreign drugs.

FLOCK: But so far, the government hasn't done anything to block those plans.

BLAGOJEVICH: I want action.

FLOCK: Still, Blagojevich would like to have the first approved drug importation program and is convening a governors' summit on the issue in Washington in February.

I'm Jeff Flock, CNN, in Chicago.

(END VIDEOTAPE)

BROWN: Susan Dentzer joins us now. She's health correspondent for "The News Hour with Jim Lehrer" on PBS and someone we turn to from time-to-time when we need to cut through the clutter.

It's good to see you.

SUSAN DENTZER, PBS HEALTH CORRESPONDENT: Nice to see you, Aaron.

BROWN: Set aside the question of whether the FDA will approve this or not. We'll get to that in a second.

Because many people just honestly believe, as you know, that the drug industry has pretty much bought the government off anyway. So tell me if you believe that drugs coming in from Canada are any less safe than drugs coming in from across the street?

DENTZER: Well, Aaron, I think everybody who's looked at this has concluded that, if you could devise a way, where all you let back into the United States were drugs made initially, some for the U.S. market, or identical to drugs made for the U.S. market, where part of the shipment went to Canada, part to the United States.

If these were drugs that were, in fact, approved for use in the United States, and if they stayed in the normal very well-monitored Canadian distribution system.

If all of those things were true, then it would be a perfectly logical idea to reimport drugs back into the United States.

Leaving aside the questions, as you mentioned earlier, how do you want to fund a pharmaceutical industry for the long-term? Is everybody going to pay? Is every nation going to pay its fair share of the R&D costs?

Leaving that aside, if all of those "ifs" were met, would this be safe? Possibly so.

The problem all along has been, though, that, what the FDA and others believe, is that if you allowed widespread importation of drugs in the U.S., you wouldn't just be getting drugs from Canada. You'd create this giant sucking sound of overwhelming U.S. demand, vastly outstripping the supply of drugs in Canada.

And what would step in to meet that supply, it is believed, would be counterfeit product coming from other countries, using Canada as an entry port into the United States.

BROWN: So this -- I want to get to these other questions. But it's not really about Canadian importation, as such. It's what it leads to?

DENTZLER: That, I think is overwhelmingly the greater fear. And the further fear, if you let one state do it, how could you not let all the states do it?

Then you would have a situation where here you have a country of almost 300 million people. Canada is a country one tenth that size. You would essentially be creating this demand for almost all the available drug product in Canada. What would the Canadians do?

In fact, the Canadian pharmacies are sufficiently worried about it that the provincial pharmacy board wrote to Health Canada and said you ought to put a stop to this, because this could really seriously distort the drug supply in Canada itself.

BROWN: So is there no alternative to the American consumer subsidizing, essentially subsidizing the world's pharmaceutical research?

DENTZLER: There is an alternative, and the FDA commissioner Mark McClellan has pointed this out, which is that the global industry could revisit its overall global pricing structure.

It could essentially demand that countries like Canada and some of the European nations and others that have negotiated their very low drug prices, it could essentially demand that those countries raise the prices and allow higher priced products to be sold in those countries and then possibly reduce the prices that U.S. customers have to pay for the products.

There are other solutions here. And then, of course, it's been pointed out many times over that another solution would be for the U.S. government and others to negotiate better drug prices broadly through Medicare.

But actually, that was taken away from the government's authority, or actually not allow the government, under the recently passed Medicare reform legislation.

BROWN: Right. We see the industry spent somewhere, I read, about $80 million, maybe more than that, lobbying that question. So in the end, not to take a side in this, but it is about money.

DENTZLER: Of course, it's about money. And it's about how you ensure, over time, a vibrant pharmaceutical industry that really is inventing and producing good products and giving customers value for their money, giving them cures and other workable treatments for their money.

Again, there's probably a role to play, a better distribution of global burden of those research and development costs. And certainly U.S. consumers probably have been unwise. Collectively, it's been unwise for all of us to sit by and bear those higher prices while these other countries have not born them.

BROWN: Yes. It's good to see you. Have a good holiday. Thank you.

DENTZLER: You, too, Aaron.

BROWN: Thank you. Susan Dentzler from PBS.

Coming up next on NEWSNIGHT, Rush Limbaugh's case back in court. His lawyers try to keep his medical records out of the hands of the prosecutors, a drug issue of a different sort.

From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: In a Florida courtroom, the medical records of radio show host Rush Limbaugh were supposed to be the focus of a hearing today. The question at hand, should prosecutors who are investigating whether Mr. Limbaugh legally purchased painkillers have access to the records which were seized from his doctors' offices?

That was the issue, but there was much more going on inside and outside the court.

CNN's Susan Candiotti working on the story for us.

(BEGIN VIDEOTAPE)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Is this just standard operating procedure to raise the threat level?

CANDIOTTI (voice-over): While Rush Limbaugh was talking terrorism on his radio show, in a Florida courtroom, Limbaugh's attorney claimed his client had been the victim of extortion, that a former housekeeper and her husband allegedly blackmailed Limbaugh to keep his now admitted drug addiction and other matters a secret.

UNIDENTIFIED MALE: They demanded $4 million in order to keep this quiet and not sell it to the "Enquirer."

CANDIOTTI: His lawyer says Limbaugh refused to pay and wanted to tell the FBI. But when he sought advice from colleagues...

UNIDENTIFIED MALE: He was told that if he made a complaint to law enforcement, that the people in power would ignore the crimes being perpetrated against him, and instead they would target him because of who he was.

He was told that his enemies would use the fact of this addiction as a weapon to discredit him.

CANDIOTTI: Limbaugh says he did end up paying a substantial amount of money to the Clines, what he calls extortion. The Clines' Lawyer denies they blackmailed Limbaugh and says their story, sold to the "National Enquirer," is true, that Limbaugh paid them $100,000 for prescription painkillers.

(END VIDEOTAPE)

CANDIOTTI: However, while all of that is very intriguing, the issue at hand this day, a judge trying decide whether prosecutors have the right to look at Rush Limbaugh's medical records that were seized earlier this month. The defense says they were wrongfully taken and that it is an invasion of Rush Limbaugh's privacy. Meantime, a judge say he will rule on all of that tomorrow -- Aaron.

BROWN: We'll wait for that. There was, floating around today, as you well know, questions about whether his lawyers are engaged in some kind of plea negotiations with prosecutors. What do you know?

CANDIOTTI: Well, a spokeswoman did tell me that there had been discussions going on with the state attorney's office. However, one of Limbaugh's attorneys told me emphatically tonight there are currently no plea negotiations going on and that Rush Limbaugh is not willing to plead guilty to anything.

Meantime, we do know that investigators are moving ahead with their criminal investigation into whether Limbaugh illegally purchased prescription painkillers.

BROWN: Susan, thank you -- Susan Candiotti in Florida.

Tonight, before we go to break, our "MONEYLINE" update with just a day and half of shopping. That's the way I look at it, because you get to shop on Christmas Eve Day. We'll begin with Christmas shopping.

Wal-Mart says it saw better sales over the weekend, but not enough to make up for slow demand at the beginning of the month. The company today warned again the results for December will be at the low end of estimates, but still up compared to last year. You tracking all this?

Reports are, the New York Stock Exchange may want a refund from its former boss. Oh, my. "The Wall Street Journal" is reporting, Dick Grasso could be asked to give back between $50 million to $100 million. There was a public outcry over his $188 million pay package earned over quite a few years that ultimately led to his resignation.

And, outcry or not, the spotlight today was on other things, a rising market. It all rose at the end, the Dow hitting a 19-month high today. The other indexes, or indices, if you prefer, finished in the green as well.

Still ahead on NEWSNIGHT: What was behind a shocking decision by Libyan leader Moammar Gadhafi to give up his weapons of mass destruction? Andrea Koppel's exclusive interview with the Libyan leader after the break.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Fruitcake story.

Other items making news around the world today.

First to Iraq, where another homemade bomb ripped through another military convoy in Baghdad. Two U.S. soldiers died. So did an Iraqi translator, two American soldiers injured as well.

In the Persian Gulf, some 5,300 men and women serving on the USS Enterprise were paid a visit today by the actor Ben Affleck. The carrier's crew has been on active duty since August, needless to say, will not make it home for the holidays.

The head of Iraq's Governing Council told a Russian news agency that Russia has agreed to forgive a chunk of the debt Iraq owes, reducing the total to $3.5 billion from an estimated $8 billion. In return, Russian businesses will be welcome to invest and work in the country.

And the Queen Mary 2, world's largest passenger liner, set sail today from a French shipyard to her home port in Southampton, England. The send-off was toned down some in recognition of the 15 people killed last month when a temporary gangway collapsed. Many of the victims were relatives of workers who had built the ship.

On to Libya. The U.N.'s top nuclear watchdog said today he's ready to travel there, by the weekend, perhaps, to start the process of verifying Libyan disarmament. Skeptics say they will believe it when they see it. For many, the very words Libya and disarmament take a while to sink in.

Today, in an exclusive interview with CNN's Andrea Koppel, Colonel Gadhafi said, Libya does not now have weapons of mass destruction, but does have programs to develop them. She also asked him why he is giving them up now and whether the war in Iraq had anything to do with this decision.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: I'm sure you've heard the statements. President Bush, since your government made the announcement last week, has made it seem as if it is the tough talk from the United States and it is the economic sanctions that have been in place against Libya now for more than a decade, almost 20 years, that are responsible for your government's change of heart.

MOAMMAR GADHAFI, LIBYAN LEADER: It is not important, this analysis.

The important thing is what we have done. It is the correct -- correct action. And to explain why -- now why this, why that, it is not important for all the world, for America, for us, for Britain, for the world.

KOPPEL: There are also some people who have speculated that the reason that Colonel Moammar Gadhafi has made this major decision is because he has seen what has happened in Iraq. He has seen what has happened to the Iraqi leader, Saddam Hussein, and he is concerned that, one day, this could happen to him.

GADHAFI (through translator): Why do we have to set an example, just Iraq? Why do you think Iraq is an example, where we have, on the other side, so many countries have nuclear programs and, actually, some of them have weapons of mass destruction? And such countries actually dismantle these programs in a transparent way, in a legal way.

KOPPEL: What kind of assurances have you received from the United States as far as lifting the economic sanctions, as far as improving relations between Tripoli and Washington?

GADHAFI (through translator): Good faith and improving relations between our two respective countries, plus cooperation in defeat of the technology industry, vis-a-vis this equipment and this -- we wish the American companies and the British companies to cooperate with us and to use them together for peaceful purposes.

KOPPEL: What message do you want to send your Arab and Muslim brothers, in particular in Syria and in Iran and over in Asia to the North Koreans, who are all suspected to have secret nuclear programs, weapons of mass destruction? What should they learn from the actions of Libya?

GADHAFI (through translator): In my opinion, I should believe that they should follow the steps of Libya, or take an example from Libya, so that they prevent any tragedy being inflicted upon their own peoples. This would tighten -- tighten the rope or the noose around the Israelis, so that they would dispose -- sorry -- they would expose their programs and their weapons of mass destruction.

KOPPEL: I wanted to ask you, as an African leader, as an Arab leader, as a Muslim leader, what went through your mind when you saw the pictures of another leader, the former leader of Iraq, Saddam Hussein, captured by the Americans, having been hiding in a hole in the ground?

GADHAFI (through translator): With respect of who is with Saddam, who is against Saddam, but what we -- but the way he was shown, the way he appeared meant everybody sympathizing with him.

And I said that to Blair when I spoke to him on the phone. Don't think that treating would like that -- or such a treatment would be beneficial or gain something, not in the country. Irrespective of everything, Saddam should be treated respectfully.

(END VIDEOTAPE)

BROWN: And Andrea Koppel joins us now from Tripoli.

Where was the interview done? Did you just -- you fly to Tripoli and drive over to the palace and sit down with Colonel Gadhafi?

KOPPEL: Oh, far from it, Aaron.

We arrived late last night and were waiting for a phone call to tell us when and where. It came earlier this morning here in Tripoli. We didn't know where it was going to be. We got in a car. We drove. We hit a couple of different stops before we landed at a bedouin tent in a tightly guarded compound, rural compound, about a half-an-hour outside of the capital of Tripoli.

Despite the fact that Moammar Gadhafi is the man who has been at the helm of this oil-rich nation for more than three decades, he still likes to think of himself as a simple bedouin. His father was a nomad. And he prefers to do interviews with foreign journalists in this tent, this circular tent with flies and everything, which is sometimes why you saw him swatting in the middle of the interview. And that where he likes to conduct these interviews, Aaron.

BROWN: What, if anything, surprised you about him? Did he seem younger, older, smarter, less smart, more in control, less in control, none of the above?

KOPPEL: He seemed much calmer than what I expected.

I had, of course, seen some real fiery speeches that the colonel has delivered over the years. I've watched interview that he's done with other television broadcasters. And he can be quite aggressive and quite intimidating. I found a man who was almost subdued. He was very restrained in his answers and wasn't nearly as agitated or perhaps, again, aggressive as I had expected him to be.

But perhaps that's another indication of the changing times between the United States and Libya. The very fact that we got this interview as quickly as we did, it sends a very strong message. The Libyans do see this as the beginning of a rapprochement with the United States. And Colonel Gadhafi is very eager to send the message to the American people that this is a new era, and he is a changed man, and this country is not the terrorist state that the United States has viewed it for so many years -- Aaron.

BROWN: Andrea, nice scoop. Nice scoop.

Thank you very much.

As NEWSNIGHT continues: The spirit of giving is demonstrated by an American soldier in Iraq, the story of Chief Wiggles -- as NEWSNIGHT continues around the world.

(COMMERCIAL BREAK)

BROWN: There are many ways of measuring progress in Iraq: schools open, bad guys captured, dollars spent, lives lost. Each tells a story. None tells the whole story. And we expect this one doesn't either.

But it is worth telling, especially now, because it is a Christmas story and it is one more reminder why "TIME" magazine yesterday said that the American G.I.s were the people of the year.

(BEGIN VIDEOTAPE)

CHIEF WIGGLES, UTAH NATIONAL GUARD: OK. Bye-bye.

BROWN (voice-over): This most unusual Christmas is being arranged by people who have only met on the Internet, and all because of someone known as Chief Wiggles.

If parts of this story are new, the essence is as old as war itself. There are millions of children in Iraq who are cold and hungry, sick, and desperately poor. A toy car or a stuffed doll will not solve these problems, but it can bring a moment of joy and perhaps give parents the feeling that someone somewhere cares.

WIGGLES: Oh, this is wonderful, isn't it? This is the best part of living here.

BROWN: His name has been Wiggles since the third grade, a playground tease that he adopted as a way of life. A 30-year member of the Utah National Guard, he's been in Iraq since the beginning working in intelligence.

WIGGLES: In my job, I'm trying to make contact, make connection with the Iraqi people. And I thought that perhaps the best way to do that was to do it with the children.

BROWN: Bringing heaters and blankets to homeless families living in an unfinished mosque is clearly worthwhile.

WIGGLES: How are you?

BROWN: But sometimes a toy is just as vital as a blanket.

WIGGLES: One day, we saw this little girl crying. And I put this little monkey that had long arms and put it around her head and we gave her a pair of shoes and a toothbrush. And it was just so wonderful.

BROWN: And then he reached out for help.

WIGGLES: Well, I have a Web site. And I put on there one line. That's how it all got started. There was one line that said, "I need more toys." And so there were thousands of people that actually responded.

UNIDENTIFIED MALE: Hi. Welcome. Look at these nice gifts.

BROWN: In a warehouse outside Washington, D.C., volunteers are arriving this early Saturday to sort and pack and ship supplies to Chief Wiggles, mountains of plush, stacks of foosball tables, school supplies, Frisbees and dolls from children and families and businesses across America. If some of the volunteers don't really know a lot about where it's all going...

UNIDENTIFIED FEMALE: Remember what country they're going to?

BROWN: Others know far too much.

UNIDENTIFIED MALE: I actually did Vietnam in '69 and, well, '67, '69. And I saw lot of displaced kids, a lot of hungry kids, a lot of needy people. But the kids seem like they suffered a lot in Vietnam. And I suppose the same thing may be happening in Iraq.

BROWN: In Baghdad, it is not memory. It is reality.

(END VIDEOTAPE)

BROWN: I like that.

We'll check morning papers after the break. I like that.

(COMMERCIAL BREAK)

(ROOSTER CROWING)

BROWN: OK, time to check the morning papers from around the country and around the world. We'll begin with "The San Francisco Chronicle." Remember I told you one day this guy out in California got all upset with me because I said I liked "The San Francisco Chronicle." And he said that showed I was a something. I think he said I was a communist. I'm not sure.

"The San Francisco Chronicle": "6.5 Quake" -- he really did -- "Razes Building, Kills Two in Paso Robles." I know. It looks like it should be Robles, doesn't it? But I'm telling you, that's now how they say they pronounce it. And it's their city. They can say what they want. Anyway, that's "The San Francisco Chronicle."

"The International Herald Tribune." Wait until that guy out in California finds out I like this paper, too. It's printed in France. Well, what does that tell you about me? "The International Herald Tribune." "Egyptian Attacked Inside Al-Aqsa." "Finance" -- "Foreign Minister" -- just read what is on the page -- "Foreign Minister in Visit to Mosque is Target of Abuse by Muslim Radicals." Man, come on. That's such bad P.R.

"The Philadelphia Inquirer" leads with "The Holiday Season on High Alert." Probably the right lead. I think it is probably the right lead. It's the right lead, OK? They won't send the paper ever again. "Home For Christmas." Some local folks in the Philadelphia area coming home from the service for Christmastime. That's nice to see.

I like the story in "The San Antonio Express-News." "Tragedy to Triumph: Cancer Survivor Has Written Book About Her Recovery After a Visit From Four Angels." Cool, huh?

"The Oregonian." "Life Goes on Amid Terror Alert." That's probably not worth either of our time, but I wanted to mention it anyway, because I like "The Oregonian."

Weather tomorrow in Chicago, according to "The Chicago Sun- Times," is "eggnog." No idea what that means, OK, but it's good holiday stuff.

We'll wrap up today's top story and look ahead to tomorrow after these fine commercials.

(COMMERCIAL BREAK)

BROWN: Recapping our top stories, terror of two kinds, the first a magnitude 6.5 earthquake centered midway up the California coast. These two people died, a number of buildings destroyed. The quake was felt as far away as L.A. to the south, San Francisco to the north. Had this quake hit either of those cities, a very different story tonight.

And get ready for an orange Christmas. With the threat level elevated, fighter jets began patrolling major cities. Numerous people on terrorist watch lists have been stopped while trying to enter the country. Officials tell CNN that, in addition to the usual cities, Las Vegas may be a target, according to intelligence they are getting, as well as a pair of rural locations in the East and in the Southwest.

Tomorrow, on this program, John Kerry, the senator, why this seemingly perfect candidate on paper is an underdog on the campaign trail. Jeff Greenfield with that tomorrow on NEWSNIGHT.

"LOU DOBBS TONIGHT" is next.

We'll see you all tomorrow, won't we? Until then, good night for all of us.

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





Orange; Deadline Looms for 9/11 Victims Fund>


Aired December 22, 2003 - 22:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AARON BROWN, HOST: Good evening again, everyone.
Terror comes in many forms and in many different ways. As we're reminded today, not all of them have to do with color coding from the Department of Homeland Security.

Anyone who's ever lived through an earthquake knows that kind of terror, the quiet before. At least that's how I remember it. The rolling and the shaking and the wondering how long it will last, how bad it will be. Thirty seconds can seem like 30 minutes. And even when it stops, it doesn't really end.

So out West today, it was a terror attack, the old-fashioned kind, and it leads the whip tonight.

The hardest hit down was the town of Paso Robles. Frank Buckley is there for us. Frank, the headline.

FRANK BUCKLEY, CNN CORRESPONDENT: Well, Aaron, rescuers continue to look through the rubble here for any additional victims of this magnitude 6.5 earthquake that struck Central California and left at least two women dead -- Aaron.

BROWN: Frank, thank you.

Next to Washington and the decision to go from yellow to orange. CNN's Jeanne Meserve has the duty tonight. Jeanne, the headline.

JEANNE MESERVE, CNN CORRESPONDENT: Flights originating in other countries used as weapons against targets in the U.S. That is one piece of intelligence which led to the heightened terror level, one of many -- Aaron.

BROWN: Jeanne, thank you.

On to Libya, where earlier today CNN's Andrea Koppel got an exclusive interview with Libya's Colonel Moammar Gadhafi.

So Andrea on the phone, a headline from you tonight.

ANDREA KOPPEL, CNN CORRESPONDENT: Aaron, the Colonel shared his thoughts about the capture of Saddam Hussein, his personal opinion of President George W. Bush and the U.S. war against al Qaeda terrorists.

But the majority of the interview focused on the surprising decision by Colonel Gadhafi to come clean on his weapons of mass destruction program. And as he told us, Aaron, give up that program once and for all.

BROWN: Andrea, thank you. We'll get to you a little bit later.

Finally, to the drug case of Rush Limbaugh and legal maneuvering under way. CNN's Susan Candiotti with the story. Susan, the headline.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Aaron.

So far, Rush Limbaugh has not been charged with anything tonight. He is making some charges of his own against the former housekeeper and her husband. He says they tried to blackmail him.

Back to you.

BROWN: Susan, thank you. And we'll get back to you and the rest shortly.

Also ahead on the program tonight, the rush to buy drugs from Canada. Another state government wants to do it. But is it really a good idea?

In "Segment 7" tonight, we meet Chief Wiggles, an American soldier who takes the spirit of giving all the way to Iraq.

And after a weekend off, resting his voice, the rooster returns, bringing you your morning papers, but no accordion to help him along. And that's a promise.

All that and more in the hour ahead.

We begin with the quake, the large one but not the big one. It was powerful enough to kill, and had it struck San Francisco or Los Angeles, it might have caused a great deal more death and destruction than it did.

So it could have been a lot worse, but just inland not far from San Simeon tonight, it was still plenty bad enough.

Here again, CNN's Frank Buckley.

(BEGIN VIDEOTAPE)

BUCKLEY (voice-over): The earthquake caused the most damage in the small Central California city, Paso Robles. Here, two people died, 19 and 55-year-old women who were caught underneath debris as it fell from buildings constructed in the late 1800s.

Nick Sherwin was inside this building as the quake hit.

NICK SHERWIN, FAH JEWELERS OWNER: After it started crumbling, a roaring type noise. I was able to get my people and tell them to get out of the building. CATHERINE CAZES, BUSINESS OWNER: Everything shakes, everything fell. You hit the ground, you know. You just lay down and wait until it finished.

BUCKLEY: This video from the newsroom camera of a Central California news TV station providing a sense of the shaking.

Forty-seven buildings in a five-square-block area of Paso Robles were damaged. Seismologists says a similar quake in a major metropolis would have resulted in a major catastrophe.

RUSS STEIN, USGS: You put an earthquake like that under Los Angeles, and you have tens of billions of dollars of damage. You put it out here in a relatively remote place, and fortunately, there are not many immediate consequences.

(END VIDEOTAPE)

BUCKLEY: And back here in Paso Robles you can see there is debris. And in fact, right now urban search and rescue dogs and rescuers are going through a building, looking for any additional victims.

Apparently, there were three vehicles found that were in this area that have not been claimed by owners. They are looking right now to see if perhaps there might be one of those people who are attached to one of those vehicles inside this rubble.

We can also tell you this evening that the dead have been identified. They are 19-year-old Jennifer Myrick and Marilyn Zafuto, 55, of Paso Robles -- Aaron.

BROWN: There have been aftershocks?

BUCKLEY: There have been aftershocks, as there always are after earthquakes of this size. In fact, during the first hour after the initial earthquake, there were dozens of aftershocks. And one of them apparently measuring magnitude of 4.7, which is something that you can definitely feel.

BROWN: Frank, thank you. Frank Buckley out west tonight.

Russ Stein is a geophysicist with the U.S. Geological Survey, the USGS. And he joins us now from Menlo Park, California.

It's good to see you. Is there anything extraordinary about this quake, or is it routine?

STEIN: It's routine in the sense that we have earthquakes of this size in California every five or ten years, and we've had earthquakes of this size in this area about every 50 years.

So in that sense it isn't a surprise. And it's occurred on fault system which we know pretty well, a 200-mile long fault that just skirts the coast of California. BROWN: Is it -- Did it take place in an especially vulnerable area, in terms of -- I guess in terms of loss? I mean, the fact that it was a fairly good sized quake and fatalities were not -- well, they were minimal, I guess, under the circumstances, suggests that, if you're going to have a quake, this is where you want one?

STEIN: That's right. This is very close to the Hearst Castle. And if you've ever been there, you know that this is a mountainous rural area. It's far from skyscrapers or military or important facilities. And in that sense we're very fortunate to have this earthquake in such a remote location.

And also, this earthquake illuminates a fault for which we know too little about. Because after all, this fault extends right up the coastline across the San Mateo -- the Monterey Bay and towards San Francisco. So this is a fault we need to get to know better. And in that sense, the earthquake gives us quite a bit to deal with.

BROWN: That was actually my next question. Can we -- and if we can, what do we learn from a quake like this?

STEIN: Well, one thing that's very clear about this earthquake, is that the coast, the mountains went up about a foot or so...

BROWN: Wow.

STEIN: ... and the seafloor went down. So what we're seeing is the process of creating the wonderful Big Sur coastline that we all enjoy driving along. It's a rugged, high coastline, because it gets jacked up in successive earthquakes.

And we're seeing part of that process today, and that tells us something about how California is built and where the lethal earthquakes can lie.

BROWN: Tell me about the second part of that. How does it help us understand where the lethal earthquakes can lie?

STEIN: Well, here we have a fault which is not the most important player of the plate boundary between North America and pacific; that's the San Andreas. But this is nevertheless taking up about 10 percent of that motion.

So sporadically, we get large earthquakes on the fault. But they've occurred rarely, and they haven't been really recorded, because many of them are occurring offshore. So an earthquake like this tells us something about the nature of this fault and where the next earthquake could start or stop.

BROWN: So it helps you predict the next earthquake?

STEIN: Predict is kind of a dangerous word in my business. We don't predict earthquakes; we wish we could. Rather, what we see, before this earthquake, is a lack of any precursory motion of the earth, lack of any precursory seismology. There's nothing that predicts this earthquake that we can measure. But nevertheless, our job is to figure out how likely, over the long term earthquakes are that are damaging.

And this is, as you recall, a 6.5. That's almost the same size as the North Ridge earthquake in 1994.

BROWN: Yes.

STEIN: Which, if you take that earthquake and put it in a populated area, is extremely damaging.

So what we need to do is to make the kind of measurements of how the ground shakes and how the ground moves, so we can path those off to engineers and they can build safer buildings.

BROWN: A final question. What is it like in your office when it becomes clear that an earthquake is underway?

STEIN: Well, crazed would be the verb that I use. We just launched a large number of people down to the site to look for the motion of the ground, to put in more seismometers to measure this beast.

And so I'm essentially an experimental scientist, and I can't plan my own experiments. So when earthquakes occur, we need to get close to them. We need to study them. We need to watch how they cause other faults to turn on and turn off.

Because part of the key of forecasting the long-term occurrence of earthquakes is understanding how earthquakes converse with each other from one fault to another.

BROWN: Good to talk to you. Thank you. I appreciate the honesty of the last answer, too, very much. Thank you. Russ Stein with the USGS in California.

On now to manmade threats and the level orange.

For the first time since May the national terror threat level stands at high. Raising the alert from yellow to orange always creates a gray zone. How worried should we be? Where is the danger the greatest? How do we prepare?

There are grays tonight, but also good reason, officials say, more reasons then ever, for concern.

Again, here's CNN's Jeanne Meserve.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): Heightened security around national monuments, at airports, on the streets. We've seen it before, but many officials say we have never seen it like this.

They are taking new additional steps, they say, because this alert is more intense, security concerns are more serious than during any of the four previous periods at orange.

TOM RIDGE, HOMELAND SECURITY SECRETARY: The strategic indicators suggest that it is the most significant threat reporting since 9/11.

MESERVE: Not only has the volume of threat intelligence increased, according to a homeland security official, new specific and credible threat information has been uncovered, some of it relating to the use of aircraft originating outside the U.S. as weapons for suicide attacks.

The U.S. is pushing airlines and foreign governments to bolster security, including neighboring Mexico and Canada, France and others.

RAFI RON, AVIATION SECURITY ANALYST: The national security standards are still voluntary, and we know that many countries around the world do not exercise those standards.

MESERVE: According to a variety of sources, the intelligence mentions Washington, New York, Los Angeles, Las Vegas, and a handful of other cities, as well as a rural area in the East and another in the Southwest.

A government official says numerous people on terrorist watch- lists have been blocked from entering the country at more than one place since December 1, but would not give specifics.

Another government sources says a handful of foreign flight crewmembers have been stopped in recent days.

Intelligence about possible critical infrastructure targets like chemical and nuclear plants has been melded with risk and threat assessments to provide governors with specific information about where to deploy resources.

GOV. GEORGE PATAKI, NEW YORK: Working with the MTA and the port authority, we have worked to make sure that everything from airports to bridges to tunnels and other mass transit facilities have had heightened security.

(END VIDEOTAPE)

MESERVE: Government sources say tonight that some of the intelligence that led to this heightened threat level came from the United Kingdom.

How long will it last? The threat level orange will stretch past the holiday season and some homeland officials predict it could last into February at a cost, some experts say, of about $1 billion each week -- Aaron.

BROWN: Because people often don't think about this, the cost -- a lot of this is in law enforcement overtime, that sort of thing, right?

MESERVE: That's exactly what people have said. That's probably the biggest budget item. I mean, a lot of the hardware now is in place to do detection. But you need people to run it; you need people to watch it; and you need patrols out. It is largely an overtime question, and it's a big one.

BROWN: And to what extent, if at all, do local governments get reimbursed or at least get some help for these costs?

MESERVE: Well, they would tell you nowhere near enough.

BROWN: I bet they would.

MESERVE: They are spending a lot of money and have since 9/11, particularly when this threat level goes up. There has been a lot of complaint about Washington, that they're not getting the money they need. Washington has pumped some out, but the cities and counties will tell you not enough yet -- Aaron.

BROWN: Jeanne, thank you very much. Jeanne Meserve.

Against this orange backdrop, time is running out for the 9/11 families, who have until midnight tonight to make for what, for some, has been an extraordinary difficult decision.

Should they file a claim with the fund offering unprecedented, tax-free compensation for their losses, a fund created to shield the airlines, whose planes were hijacked, from devastating lawsuit.

More than 3,000 people injured in the 9/11 attacks have filed claims and so have most of the families of those killed. Most but not all.

Why, you may wonder, are they walking away from that sort of money?

Here's CNN's Adaora Udoji.

(BEGIN VIDEOTAPE)

ADAORA UDOJI, CNN CORRESPONDENT (voice-over): For Kathy Trent, whose a three teenagers lost their father Danny that day, it was an agonizing but ultimately simple decision. She turned to the September 11 fund for help.

KATHY TRENT, WIFE OF SEPT. 11 VICTIM: I would rather live in a cardboard box with my kids and have my husband back. This money is blood money. And we don't want the money. But we need it to survive for my kids.

UNIDENTIFIED MALE: And my father, Daniel Matthew Trent.

UDOJI: But for some relatives of the nearly 3,000 who were killed, it has not been so clear.

(on camera) More than 200 families have not applied for the tax- free settlements, which range from $250,000 to $6.8 million from a fund which has no cap.

(voice-over) In return, families give up the right to sue the airlines, among others.

Seventy-three families say that price is too high and have sued. Monica Gabrielle wants answers. Could the death of Richard, her husband of 28 years, have been prevented?

MONICA GABRIELLE, WIFE OF SEPT. 11 VICTIM: No one has lost their job. No one has been held accountable. And the fund, you just sign on the line and walk away from all of that.

UDOJI: Fund administrator Ken Feinberg says litigation is a gamble that's not likely to pay off. And ongoing investigations, he says, will get answers.

KENNETH FEINBERG, ADMINISTRATOR, VICTIMS COMPENSATION FUND: The idea of coming into the fund, getting a check within 60 or 90 days, rather than litigate against the airlines or the World Trade Center for a decade or more, I think is obvious.

UNIDENTIFIED MALE: We're talking about the insurance deductions.

UDOJI: A once skeptical Charles Wolf, whose wife Katherine was killed in the World Trade Center, now has set up a web site encouraging families to sign up.

CHARLES WOLF, HUSBAND OF SEPT. 11 VICTIM: It's worth it, because it feels like it's closure. It's one of the things that's going to help give closure.

UDOJI: Wolf agreed with Feinberg that the fund presents a tremendous opportunity.

FEINBERG: I say to them that you're compounding the tragedy if you do nothing.

UDOJI: Still, the fund can't erase profound grief for those families who simply cannot bear facing a process...

TRENT: Our marriage certificate, the children's birth certificates.

UDOJI: ... which took Kathy Trent two years.

TRENT: Now, I feel I can move on. This is done.

UDOJI: That choice for compensation, no matter, how difficult, ends tonight.

Adoara Udoji, CNN, New York.

(END VIDEOTAPE)

BROWN: And on the program tonight, getting cheaper prescription drugs, Illinois joins a list of state and local governments who wants to buy north of the border.

Can they, and should they? And later, Andrea Koppel's exclusive interview with Libya leader Moammar Gadhafi, who says he's decided to give up his weapons of mass destruction.

From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Many Americans are coping with the high price of prescription drugs by shopping around. Not CVS or Walgreen's, but Mexico or Canada or elsewhere, but mostly Canada. Same drugs, lower prices.

And lately, several localities have also begun taking their business across the boarder.

Now, the state of Illinois is trying to do the same, which some say is greatly problematic for a number of reasons over the long haul, at least, including the eventuality that someone has to pay the price for developing fancy new medicines.

But for right now, a lot of people are asking, why not shop around?

Here's CNN's Jeff Flock.

(BEGIN VIDEOTAPE)

JEFF FLOCK, CNN CORRESPONDENT (voice-over): In one of these bottles is the synthetic hormone, Synthtroid (ph). Carol Glover (ph), who works in the Illinois general counsel's office, takes it every day for her thyroid condition.

A hundred tablets costs $71 in a U.S. pharmacy. In Canada, the same drug is $26.92, because prices are controlled there.

CAROL GLOVER, ILLINOIS STATE EMPLOYEE: I'm ready to tell the governor I think it would be a great idea.

FLOCK: So does Illinois Governor Rod Blagojevich.

GOV. ROD BLAGOJEVICH (D), ILLINOIS: We are not asking for federal funding.

FLOCK: What he is asking in this letter to HHS Secretary Tommy Thompson is federal permission for a pilot program: buy Canadian drugs for Glover and 2e0,000 other Illinois state employees.

(on camera) Bottom line, what would this save you in your budget?

BLAGOJEVICH: $91 million it would save the state of Illinois.

FLOCK: In the first year?

BLAGOJEVICH: In the first year. PETER PITTS, FDA: We think that the plan is not well thought out. It's very risky and it provides for illegal, unsafe foreign drugs to come into this country.

FLOCK (voice-over): In the statement, the pharmaceutical industry agreed the plan "compromises public safety."

But Congressman Rahm Emanuel says it's not about safety but lost profits for the drug companies.

REP. RAHM EMANUEL (D), CHICAGO: When somebody tells you, it ain't about money, it's about money.

FLOCK: The city of Springfield, Massachusetts, said it's already saved $1 million buying prescription drugs in Canada. Boston and the state of New Hampshire ran similar programs, though...

PITTS: Though under current legislation, it is absolutely illegal to bring in unapproved foreign drugs.

FLOCK: But so far, the government hasn't done anything to block those plans.

BLAGOJEVICH: I want action.

FLOCK: Still, Blagojevich would like to have the first approved drug importation program and is convening a governors' summit on the issue in Washington in February.

I'm Jeff Flock, CNN, in Chicago.

(END VIDEOTAPE)

BROWN: Susan Dentzer joins us now. She's health correspondent for "The News Hour with Jim Lehrer" on PBS and someone we turn to from time-to-time when we need to cut through the clutter.

It's good to see you.

SUSAN DENTZER, PBS HEALTH CORRESPONDENT: Nice to see you, Aaron.

BROWN: Set aside the question of whether the FDA will approve this or not. We'll get to that in a second.

Because many people just honestly believe, as you know, that the drug industry has pretty much bought the government off anyway. So tell me if you believe that drugs coming in from Canada are any less safe than drugs coming in from across the street?

DENTZER: Well, Aaron, I think everybody who's looked at this has concluded that, if you could devise a way, where all you let back into the United States were drugs made initially, some for the U.S. market, or identical to drugs made for the U.S. market, where part of the shipment went to Canada, part to the United States.

If these were drugs that were, in fact, approved for use in the United States, and if they stayed in the normal very well-monitored Canadian distribution system.

If all of those things were true, then it would be a perfectly logical idea to reimport drugs back into the United States.

Leaving aside the questions, as you mentioned earlier, how do you want to fund a pharmaceutical industry for the long-term? Is everybody going to pay? Is every nation going to pay its fair share of the R&D costs?

Leaving that aside, if all of those "ifs" were met, would this be safe? Possibly so.

The problem all along has been, though, that, what the FDA and others believe, is that if you allowed widespread importation of drugs in the U.S., you wouldn't just be getting drugs from Canada. You'd create this giant sucking sound of overwhelming U.S. demand, vastly outstripping the supply of drugs in Canada.

And what would step in to meet that supply, it is believed, would be counterfeit product coming from other countries, using Canada as an entry port into the United States.

BROWN: So this -- I want to get to these other questions. But it's not really about Canadian importation, as such. It's what it leads to?

DENTZLER: That, I think is overwhelmingly the greater fear. And the further fear, if you let one state do it, how could you not let all the states do it?

Then you would have a situation where here you have a country of almost 300 million people. Canada is a country one tenth that size. You would essentially be creating this demand for almost all the available drug product in Canada. What would the Canadians do?

In fact, the Canadian pharmacies are sufficiently worried about it that the provincial pharmacy board wrote to Health Canada and said you ought to put a stop to this, because this could really seriously distort the drug supply in Canada itself.

BROWN: So is there no alternative to the American consumer subsidizing, essentially subsidizing the world's pharmaceutical research?

DENTZLER: There is an alternative, and the FDA commissioner Mark McClellan has pointed this out, which is that the global industry could revisit its overall global pricing structure.

It could essentially demand that countries like Canada and some of the European nations and others that have negotiated their very low drug prices, it could essentially demand that those countries raise the prices and allow higher priced products to be sold in those countries and then possibly reduce the prices that U.S. customers have to pay for the products.

There are other solutions here. And then, of course, it's been pointed out many times over that another solution would be for the U.S. government and others to negotiate better drug prices broadly through Medicare.

But actually, that was taken away from the government's authority, or actually not allow the government, under the recently passed Medicare reform legislation.

BROWN: Right. We see the industry spent somewhere, I read, about $80 million, maybe more than that, lobbying that question. So in the end, not to take a side in this, but it is about money.

DENTZLER: Of course, it's about money. And it's about how you ensure, over time, a vibrant pharmaceutical industry that really is inventing and producing good products and giving customers value for their money, giving them cures and other workable treatments for their money.

Again, there's probably a role to play, a better distribution of global burden of those research and development costs. And certainly U.S. consumers probably have been unwise. Collectively, it's been unwise for all of us to sit by and bear those higher prices while these other countries have not born them.

BROWN: Yes. It's good to see you. Have a good holiday. Thank you.

DENTZLER: You, too, Aaron.

BROWN: Thank you. Susan Dentzler from PBS.

Coming up next on NEWSNIGHT, Rush Limbaugh's case back in court. His lawyers try to keep his medical records out of the hands of the prosecutors, a drug issue of a different sort.

From New York, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: In a Florida courtroom, the medical records of radio show host Rush Limbaugh were supposed to be the focus of a hearing today. The question at hand, should prosecutors who are investigating whether Mr. Limbaugh legally purchased painkillers have access to the records which were seized from his doctors' offices?

That was the issue, but there was much more going on inside and outside the court.

CNN's Susan Candiotti working on the story for us.

(BEGIN VIDEOTAPE)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Is this just standard operating procedure to raise the threat level?

CANDIOTTI (voice-over): While Rush Limbaugh was talking terrorism on his radio show, in a Florida courtroom, Limbaugh's attorney claimed his client had been the victim of extortion, that a former housekeeper and her husband allegedly blackmailed Limbaugh to keep his now admitted drug addiction and other matters a secret.

UNIDENTIFIED MALE: They demanded $4 million in order to keep this quiet and not sell it to the "Enquirer."

CANDIOTTI: His lawyer says Limbaugh refused to pay and wanted to tell the FBI. But when he sought advice from colleagues...

UNIDENTIFIED MALE: He was told that if he made a complaint to law enforcement, that the people in power would ignore the crimes being perpetrated against him, and instead they would target him because of who he was.

He was told that his enemies would use the fact of this addiction as a weapon to discredit him.

CANDIOTTI: Limbaugh says he did end up paying a substantial amount of money to the Clines, what he calls extortion. The Clines' Lawyer denies they blackmailed Limbaugh and says their story, sold to the "National Enquirer," is true, that Limbaugh paid them $100,000 for prescription painkillers.

(END VIDEOTAPE)

CANDIOTTI: However, while all of that is very intriguing, the issue at hand this day, a judge trying decide whether prosecutors have the right to look at Rush Limbaugh's medical records that were seized earlier this month. The defense says they were wrongfully taken and that it is an invasion of Rush Limbaugh's privacy. Meantime, a judge say he will rule on all of that tomorrow -- Aaron.

BROWN: We'll wait for that. There was, floating around today, as you well know, questions about whether his lawyers are engaged in some kind of plea negotiations with prosecutors. What do you know?

CANDIOTTI: Well, a spokeswoman did tell me that there had been discussions going on with the state attorney's office. However, one of Limbaugh's attorneys told me emphatically tonight there are currently no plea negotiations going on and that Rush Limbaugh is not willing to plead guilty to anything.

Meantime, we do know that investigators are moving ahead with their criminal investigation into whether Limbaugh illegally purchased prescription painkillers.

BROWN: Susan, thank you -- Susan Candiotti in Florida.

Tonight, before we go to break, our "MONEYLINE" update with just a day and half of shopping. That's the way I look at it, because you get to shop on Christmas Eve Day. We'll begin with Christmas shopping.

Wal-Mart says it saw better sales over the weekend, but not enough to make up for slow demand at the beginning of the month. The company today warned again the results for December will be at the low end of estimates, but still up compared to last year. You tracking all this?

Reports are, the New York Stock Exchange may want a refund from its former boss. Oh, my. "The Wall Street Journal" is reporting, Dick Grasso could be asked to give back between $50 million to $100 million. There was a public outcry over his $188 million pay package earned over quite a few years that ultimately led to his resignation.

And, outcry or not, the spotlight today was on other things, a rising market. It all rose at the end, the Dow hitting a 19-month high today. The other indexes, or indices, if you prefer, finished in the green as well.

Still ahead on NEWSNIGHT: What was behind a shocking decision by Libyan leader Moammar Gadhafi to give up his weapons of mass destruction? Andrea Koppel's exclusive interview with the Libyan leader after the break.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Fruitcake story.

Other items making news around the world today.

First to Iraq, where another homemade bomb ripped through another military convoy in Baghdad. Two U.S. soldiers died. So did an Iraqi translator, two American soldiers injured as well.

In the Persian Gulf, some 5,300 men and women serving on the USS Enterprise were paid a visit today by the actor Ben Affleck. The carrier's crew has been on active duty since August, needless to say, will not make it home for the holidays.

The head of Iraq's Governing Council told a Russian news agency that Russia has agreed to forgive a chunk of the debt Iraq owes, reducing the total to $3.5 billion from an estimated $8 billion. In return, Russian businesses will be welcome to invest and work in the country.

And the Queen Mary 2, world's largest passenger liner, set sail today from a French shipyard to her home port in Southampton, England. The send-off was toned down some in recognition of the 15 people killed last month when a temporary gangway collapsed. Many of the victims were relatives of workers who had built the ship.

On to Libya. The U.N.'s top nuclear watchdog said today he's ready to travel there, by the weekend, perhaps, to start the process of verifying Libyan disarmament. Skeptics say they will believe it when they see it. For many, the very words Libya and disarmament take a while to sink in.

Today, in an exclusive interview with CNN's Andrea Koppel, Colonel Gadhafi said, Libya does not now have weapons of mass destruction, but does have programs to develop them. She also asked him why he is giving them up now and whether the war in Iraq had anything to do with this decision.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: I'm sure you've heard the statements. President Bush, since your government made the announcement last week, has made it seem as if it is the tough talk from the United States and it is the economic sanctions that have been in place against Libya now for more than a decade, almost 20 years, that are responsible for your government's change of heart.

MOAMMAR GADHAFI, LIBYAN LEADER: It is not important, this analysis.

The important thing is what we have done. It is the correct -- correct action. And to explain why -- now why this, why that, it is not important for all the world, for America, for us, for Britain, for the world.

KOPPEL: There are also some people who have speculated that the reason that Colonel Moammar Gadhafi has made this major decision is because he has seen what has happened in Iraq. He has seen what has happened to the Iraqi leader, Saddam Hussein, and he is concerned that, one day, this could happen to him.

GADHAFI (through translator): Why do we have to set an example, just Iraq? Why do you think Iraq is an example, where we have, on the other side, so many countries have nuclear programs and, actually, some of them have weapons of mass destruction? And such countries actually dismantle these programs in a transparent way, in a legal way.

KOPPEL: What kind of assurances have you received from the United States as far as lifting the economic sanctions, as far as improving relations between Tripoli and Washington?

GADHAFI (through translator): Good faith and improving relations between our two respective countries, plus cooperation in defeat of the technology industry, vis-a-vis this equipment and this -- we wish the American companies and the British companies to cooperate with us and to use them together for peaceful purposes.

KOPPEL: What message do you want to send your Arab and Muslim brothers, in particular in Syria and in Iran and over in Asia to the North Koreans, who are all suspected to have secret nuclear programs, weapons of mass destruction? What should they learn from the actions of Libya?

GADHAFI (through translator): In my opinion, I should believe that they should follow the steps of Libya, or take an example from Libya, so that they prevent any tragedy being inflicted upon their own peoples. This would tighten -- tighten the rope or the noose around the Israelis, so that they would dispose -- sorry -- they would expose their programs and their weapons of mass destruction.

KOPPEL: I wanted to ask you, as an African leader, as an Arab leader, as a Muslim leader, what went through your mind when you saw the pictures of another leader, the former leader of Iraq, Saddam Hussein, captured by the Americans, having been hiding in a hole in the ground?

GADHAFI (through translator): With respect of who is with Saddam, who is against Saddam, but what we -- but the way he was shown, the way he appeared meant everybody sympathizing with him.

And I said that to Blair when I spoke to him on the phone. Don't think that treating would like that -- or such a treatment would be beneficial or gain something, not in the country. Irrespective of everything, Saddam should be treated respectfully.

(END VIDEOTAPE)

BROWN: And Andrea Koppel joins us now from Tripoli.

Where was the interview done? Did you just -- you fly to Tripoli and drive over to the palace and sit down with Colonel Gadhafi?

KOPPEL: Oh, far from it, Aaron.

We arrived late last night and were waiting for a phone call to tell us when and where. It came earlier this morning here in Tripoli. We didn't know where it was going to be. We got in a car. We drove. We hit a couple of different stops before we landed at a bedouin tent in a tightly guarded compound, rural compound, about a half-an-hour outside of the capital of Tripoli.

Despite the fact that Moammar Gadhafi is the man who has been at the helm of this oil-rich nation for more than three decades, he still likes to think of himself as a simple bedouin. His father was a nomad. And he prefers to do interviews with foreign journalists in this tent, this circular tent with flies and everything, which is sometimes why you saw him swatting in the middle of the interview. And that where he likes to conduct these interviews, Aaron.

BROWN: What, if anything, surprised you about him? Did he seem younger, older, smarter, less smart, more in control, less in control, none of the above?

KOPPEL: He seemed much calmer than what I expected.

I had, of course, seen some real fiery speeches that the colonel has delivered over the years. I've watched interview that he's done with other television broadcasters. And he can be quite aggressive and quite intimidating. I found a man who was almost subdued. He was very restrained in his answers and wasn't nearly as agitated or perhaps, again, aggressive as I had expected him to be.

But perhaps that's another indication of the changing times between the United States and Libya. The very fact that we got this interview as quickly as we did, it sends a very strong message. The Libyans do see this as the beginning of a rapprochement with the United States. And Colonel Gadhafi is very eager to send the message to the American people that this is a new era, and he is a changed man, and this country is not the terrorist state that the United States has viewed it for so many years -- Aaron.

BROWN: Andrea, nice scoop. Nice scoop.

Thank you very much.

As NEWSNIGHT continues: The spirit of giving is demonstrated by an American soldier in Iraq, the story of Chief Wiggles -- as NEWSNIGHT continues around the world.

(COMMERCIAL BREAK)

BROWN: There are many ways of measuring progress in Iraq: schools open, bad guys captured, dollars spent, lives lost. Each tells a story. None tells the whole story. And we expect this one doesn't either.

But it is worth telling, especially now, because it is a Christmas story and it is one more reminder why "TIME" magazine yesterday said that the American G.I.s were the people of the year.

(BEGIN VIDEOTAPE)

CHIEF WIGGLES, UTAH NATIONAL GUARD: OK. Bye-bye.

BROWN (voice-over): This most unusual Christmas is being arranged by people who have only met on the Internet, and all because of someone known as Chief Wiggles.

If parts of this story are new, the essence is as old as war itself. There are millions of children in Iraq who are cold and hungry, sick, and desperately poor. A toy car or a stuffed doll will not solve these problems, but it can bring a moment of joy and perhaps give parents the feeling that someone somewhere cares.

WIGGLES: Oh, this is wonderful, isn't it? This is the best part of living here.

BROWN: His name has been Wiggles since the third grade, a playground tease that he adopted as a way of life. A 30-year member of the Utah National Guard, he's been in Iraq since the beginning working in intelligence.

WIGGLES: In my job, I'm trying to make contact, make connection with the Iraqi people. And I thought that perhaps the best way to do that was to do it with the children.

BROWN: Bringing heaters and blankets to homeless families living in an unfinished mosque is clearly worthwhile.

WIGGLES: How are you?

BROWN: But sometimes a toy is just as vital as a blanket.

WIGGLES: One day, we saw this little girl crying. And I put this little monkey that had long arms and put it around her head and we gave her a pair of shoes and a toothbrush. And it was just so wonderful.

BROWN: And then he reached out for help.

WIGGLES: Well, I have a Web site. And I put on there one line. That's how it all got started. There was one line that said, "I need more toys." And so there were thousands of people that actually responded.

UNIDENTIFIED MALE: Hi. Welcome. Look at these nice gifts.

BROWN: In a warehouse outside Washington, D.C., volunteers are arriving this early Saturday to sort and pack and ship supplies to Chief Wiggles, mountains of plush, stacks of foosball tables, school supplies, Frisbees and dolls from children and families and businesses across America. If some of the volunteers don't really know a lot about where it's all going...

UNIDENTIFIED FEMALE: Remember what country they're going to?

BROWN: Others know far too much.

UNIDENTIFIED MALE: I actually did Vietnam in '69 and, well, '67, '69. And I saw lot of displaced kids, a lot of hungry kids, a lot of needy people. But the kids seem like they suffered a lot in Vietnam. And I suppose the same thing may be happening in Iraq.

BROWN: In Baghdad, it is not memory. It is reality.

(END VIDEOTAPE)

BROWN: I like that.

We'll check morning papers after the break. I like that.

(COMMERCIAL BREAK)

(ROOSTER CROWING)

BROWN: OK, time to check the morning papers from around the country and around the world. We'll begin with "The San Francisco Chronicle." Remember I told you one day this guy out in California got all upset with me because I said I liked "The San Francisco Chronicle." And he said that showed I was a something. I think he said I was a communist. I'm not sure.

"The San Francisco Chronicle": "6.5 Quake" -- he really did -- "Razes Building, Kills Two in Paso Robles." I know. It looks like it should be Robles, doesn't it? But I'm telling you, that's now how they say they pronounce it. And it's their city. They can say what they want. Anyway, that's "The San Francisco Chronicle."

"The International Herald Tribune." Wait until that guy out in California finds out I like this paper, too. It's printed in France. Well, what does that tell you about me? "The International Herald Tribune." "Egyptian Attacked Inside Al-Aqsa." "Finance" -- "Foreign Minister" -- just read what is on the page -- "Foreign Minister in Visit to Mosque is Target of Abuse by Muslim Radicals." Man, come on. That's such bad P.R.

"The Philadelphia Inquirer" leads with "The Holiday Season on High Alert." Probably the right lead. I think it is probably the right lead. It's the right lead, OK? They won't send the paper ever again. "Home For Christmas." Some local folks in the Philadelphia area coming home from the service for Christmastime. That's nice to see.

I like the story in "The San Antonio Express-News." "Tragedy to Triumph: Cancer Survivor Has Written Book About Her Recovery After a Visit From Four Angels." Cool, huh?

"The Oregonian." "Life Goes on Amid Terror Alert." That's probably not worth either of our time, but I wanted to mention it anyway, because I like "The Oregonian."

Weather tomorrow in Chicago, according to "The Chicago Sun- Times," is "eggnog." No idea what that means, OK, but it's good holiday stuff.

We'll wrap up today's top story and look ahead to tomorrow after these fine commercials.

(COMMERCIAL BREAK)

BROWN: Recapping our top stories, terror of two kinds, the first a magnitude 6.5 earthquake centered midway up the California coast. These two people died, a number of buildings destroyed. The quake was felt as far away as L.A. to the south, San Francisco to the north. Had this quake hit either of those cities, a very different story tonight.

And get ready for an orange Christmas. With the threat level elevated, fighter jets began patrolling major cities. Numerous people on terrorist watch lists have been stopped while trying to enter the country. Officials tell CNN that, in addition to the usual cities, Las Vegas may be a target, according to intelligence they are getting, as well as a pair of rural locations in the East and in the Southwest.

Tomorrow, on this program, John Kerry, the senator, why this seemingly perfect candidate on paper is an underdog on the campaign trail. Jeff Greenfield with that tomorrow on NEWSNIGHT.

"LOU DOBBS TONIGHT" is next.

We'll see you all tomorrow, won't we? Until then, good night for all of us.

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





Orange; Deadline Looms for 9/11 Victims Fund>