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CNN Newsnight Aaron Brown

President's Top Adviser Accuses Bush of Downplaying al Qaeda's Significance; Israel Kills Hamas' Founder; Interview With Wesley Clark

Aired March 22, 2004 - 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.


JUDY WOODRUFF, CNN ANCHOR: Good evening everybody. Aaron, as Larry said, is away tonight on his way back from the Middle East.
And with fears of new terrorism being felt this day from Jerusalem to Baghdad to Wall Street, the country's worst terrorist attack once again finds itself at center stage.

Starting tomorrow, top members of President Bush's national security team, along with their counterparts from the Clinton administration, will sit down to answer questions from the commission investigating 9/11.

Among those in the hot seat will be one Richard Clarke, the man you just heard Larry mention. He used to be a top adviser to the president and previous presidents on terrorism. He has written a book, which came out today, that accuses the Bush administration of downplaying al Qaeda and fixating instead on Iraq before and after 9/11.

Well, today the White House fired back and they fired back hard and that is getting most of the ink but the subtext is just as important and it's very simple. The climate these charges and countercharges have created may make getting to the bottom of 9/11 harder and many think that ought to be job one.

Well, the whip starts us off and first we go to the White House and CNN's John King, John the headline.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Judy, the White House says it is factually wrong and politically reckless for Richard Clarke to suggest in that new book that perhaps President Bush could have prevented 9/11 had he paid more attention to al Qaeda but the fierceness, Judy, with which the administration is responding shows they're a bit worried that charge might stick.

WOODRUFF: All right and next to Gaza, the assassination of a Palestinian leader and the aftershocks already being felt. CNN's Chris Burns with that and a headline -- Chris.

CHRIS BURNS, CNN CORRESPONDENT: Judy, rocket and mortar attacks here overnight in Gaza are just some of the first acts of revenge by Hamas militants after the Israeli forces kill their founder and spiritual leader. Israel may have cut the head off the organization but they also stirred up the hornets' nest. WOODRUFF: And on to Pakistan and the hunt for important targets. Did al Qaeda's number two man slip away? Was he even there? CNN's Nic Robertson has been following this from the beginning -- Nic, who's on the videophone, a headline from you.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT (via videophone): Judy, the latest from the Pakistani government here they are making progress in their negotiations with tribal members supporting the al Qaeda elements held up in that tribal area making progress to get into that area; however, they have discovered that some of the compounds had a series of tunnels allowing perhaps high value targets to escape the area -- Judy.

WOODRUFF: All right.

And finally, Senator John Kerry back when it was the FBI and not the Secret Service keeping an eye on him, CNN's Kelly Wallace with that story, Kelly the headline.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Judy, as John Kerry seeks to divine himself for America's voters, new revelations about his days protesting the Vietnam War, how he himself was a target of more extensive FBI surveillance than even he knew to be the case -- Judy.

WOODRUFF: All right. Thank you, Kelly, and we're going to get back to you and all the rest shortly.

Also coming up tonight on the program we will talk with retired general and former presidential candidate Wes Clark about the uproar over the accusations that the Bush administration has ignored the threat from al Qaeda.

Should you be able to sue for pain and suffering if your HMO denies you needed medical care? That's a question the Supreme Court takes up tomorrow. We'll have a preview.

And later, want to buy an entire town? Well, Amboy, California could be yours if the price is right, all that to come in the hour ahead.

But we do begin tonight with something Richard Clarke said in his interview with Leslie Stahl, which aired last night on "60 Minutes." "I am sure" he said, "that I'll be criticized for lots of things and I am sure they'll launch their dogs on me."

He is a former high-ranking adviser on terrorism for the Bush and Clinton administrations. They are his former colleagues in the Bush White House. This is a highly charged political season and today the dogs came to call.

Two reports tonight, starting with CNN's John King.

(BEGIN VIDEOTAPE)

KING (voice-over): The administration counteroffensive is nothing short of extraordinary suggesting that before Richard Clarke blames President Bush perhaps he should look in the mirror.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Dick Clarke was the counterterrorism czar in 1998 when the embassies were bombed. He was the counterterrorism czar in 2000 when the Cole was bombed. He was the counterterrorism czar for a period of the '90s when al Qaeda was strengthening and when the plots that ended up in September 11 were being hatched.

KING: The force of the White House rebuttal underscores the enormous political stakes. In this new book, Clarke describes a president and an administration so obsessed with Iraq that from day one they ignored the mounting al Qaeda threat.

SEN. EVAN BAYH (D), INDIANA: I think they had a sort of a visceral reaction. Well, if the Clinton people are saying it's important it must not be that important and we're going to focus on other things.

KING: Clarke says Mr. Bush pressured him the day after the 9/11 attacks to find evidence blaming Iraq and that Defense Secretary Rumsfeld and other senior officials also wanted to blame Saddam Hussein. White House aides say Mr. Bush and others did initially suspect Iraq but that in the end they followed the evidence.

RICE: He told me Iraq is to the side. We're going after Afghanistan and we're going to eliminate the Taliban and the al Qaeda base in Afghanistan.

KING: Clarke also says the administration ignored the al Qaeda threat when it took office and would not take his warning seriously.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: His assertion that there is something we could have done to prevent the September 11 attacks from happening is deeply irresponsible. It's offensive and it's flat out false.

KING: Senior administration officials say President Bush wrote President Musharraf of Pakistan just three weeks after taking office complaining about al Qaeda and Islamabad's support of the Taliban and that Clarke himself was charged on March 7, 2001, just five weeks after Mr. Bush was sworn in, to develop a new, more aggressive strategy to eliminate al Qaeda.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The fact is what the president did not want to do is to have an ineffective response with respect to al Qaeda.

(END VIDEOTAPE)

KING: As you can see, Judy, the vice president, the national security adviser, an array of other senior officials out making this rebuttal today. They insist the main reason is that Mr. Clarke's allegations are reckless and false but, Judy, they also concede at the White House that if those allegations stick they would undermine a central tenet of the Bush reelection campaign that his leadership has made this country safer -- Judy. WOODRUFF: So, John, how worried are they about this and the repercussions?

KING: Well, Judy, the forcefulness just shows the worry here at the White House and they understand it's not just Dick Clarke, not just the interviews today. He is going to go on a book tour. He's going to promote this book.

They also say that the publication of this book was sped up in advance so that he can testify this Wednesday before the 9/11 commission and get maximum exposure. They know they are in for a rough week ahead. Look for more of this. They say they will not back down in this debate.

WOODRUFF: All right, John King at the White House this night, John thank you.

We mentioned at the top there is no denying that the work of the 9/11 commission takes place in a politically supercharged environment and this was before Richard Clarke went public.

With that here's CNN's David Ensor.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): It already looked like a rough week for the Bush administration defending its efforts against al Qaeda before the 9/11 commission but Richard Clarke's broadside has turned up the heat.

RICHARD CLARKE, FORMER Basically, the president botched the response to 9/11. He should have gone right after Afghanistan, right after bin Laden and then he made the whole war on terrorism so much worse by invading Iraq.

RICHARD BEN-VENISTE, 9/11 COMMISSION MEMBER: We had received a tremendous amount of information leading to the conclusion that some dramatic attack would occur by al Qaeda and people, such as Richard Clarke, were literally running through the halls of the White House with their hair on fire with the seriousness of these threats.

ENSOR: Ben-Veniste and the rest of the commission will hear from the present and former secretaries of state and defense Tuesday, from Clarke and CIA Director George Tenet on Wednesday. Bill Clinton and Al Gore will also meet privately with the commission soon to be asked why did they not do more against al Qaeda?

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: Why was there no retaliation at the end of your administration to the bombing of the USS Cole where we lost 17 sailors?

ENSOR: Clarke advocated tough action to both the Bush and Clinton administrations. Even Clinton administration officials argue his ideas were not always realistic.

WILLIAM COHEN, FORMER DEFENSE SECRETARY: There were some of the recommendations he would make in terms of more aggressive action I think that we questioned in terms of the feasibility of carrying them out under certain circumstances.

ENSOR: Still in question how much access the commission will get to President Bush and Vice President Cheney. Just the top two members may see them says the White House and National Security Adviser Condoleezza Rice won't testify publicly citing the confidentiality of the advice she gives to the president.

BEN-VENISTE: They do not make her available and I think that's shameful.

ENSOR (on camera): It may be a rough week and clearly there are lessons to be learned but, for what it's worth, several career officials say they do not believe that either Mr. Bush or Mr. Clinton can really be held responsible for what 19 terrorists were able to do on September 11, 2001.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: In physics we learned that every action brings an equal and opposite reaction. In the Middle East it isn't quite so predictable, except that the reaction is almost always ugly.

Today, Israel took action, appropriate action its government argues, assassinating a man who was a terrorist in the eyes of many but a leader in the eyes of some and tonight to a lot of people with rockets and explosives and rage he has also become a martyr. The question is what comes next?

From Gaza CNN's Chris Burns.

(BEGIN VIDEOTAPE)

BURNS (voice-over): He was buried in a cemetery called Martyr's Graveyard amid outrage that Israel would dare to fire a rocket at Sheikh Ahmed Yassin, the quadriplegic spiritual leader of Hamas as he left a mosque in his wheelchair.

A Hamas leaflet said to "shake Israel like an earthquake" the Al Aqsa Martyrs Brigade's call for war against the "sons of Zion."

ABDELL AZIZ RANTISI, SENIOR HAMAS LEADER: There will be no revenge, no revenge. It's (unintelligible).

BURNS: The Palestinian Authority condemned the attacks.

AHMED QOREI, PALESTINIAN AUTH. PRIME MINISTER: It's a cowardly, criminal act against a prominent Palestinian leader who devoted all his life to the favor of the independence of his people.

BURNS: But Israeli officials say Yassin has backed suicide attacks that have left hundreds of Israelis dead and he opposed peace talks. ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): The ideology of this person was firstly murder and the killing of Jews because they are Jews and the destruction of the state of Israel.

BURNS: The dual suicide bombings a week earlier in the southern part of Ashdod killing ten Israelis caused the Israeli cabinet to order a stepping up of so-called targeted killings of militant leaders, as well as raids in the territories along with the hardship and the anger, uncertainty of what the killing of Yassin will bring.

(END VIDEOTAPE)

BURNS: Now as dawn breaks here in Gaza there have been overnight rocket and mortar attacks by the militants, a response by Israel as well. They have sent in a pinpoint incursion into one of the villages from which the rockets were fired.

This isn't over yet and usually after these targeted assassinations or killings the Palestinian militants regroup and they launch suicide attacks. That could be coming in the coming days -- back to you.

WOODRUFF: So, Chris, is it accurate to say that Israel literally is bracing for a reaction here?

BURNS: Yes, absolutely Judy. They have closed off the Palestinian territories from Israel. It's very difficult for us to get into here because they're allowing only a trickle of journalists and no Palestinians to get through. Usually there are thousands of them who cross into Israel daily to work and that hardship is now compounded. They cannot go there and work and bring food back on the tables for their people here -- Judy.

WOODRUFF: All right, Chris Burns reporting for us tonight from Gaza, Chris, I should say in the early morning hours from there, thank you.

Well for better or worse, getting Sheikh Yassin took years and for the most part the Israelis knew exactly where to look. Not so for top members of al Qaeda who have thousands of square miles of rural Afghanistan and Pakistan in which to hide.

All last week it was thought that one of them might have been cornered and the fierce battles between guerrillas and the Pakistani Army seemed to confirm it. Now that battle is winding down and no one is really sure.

For the latest we turn once again to Islamabad and to CNN's Nic Robertson who is with us on the videophone. Nic, what is the latest in that search?

ROBERTSON (via videophone): Well, Judy, it appears as if the Pakistani government is about to get access to that area. They've been negotiating for the last two or three days with tribes members that they believe are aiding and abetting and helping the al Qaeda members hide out in that remote tribal region. The negotiations have reached the stage, Pakistani intelligence sources tell us, that the tribesmen say yes the army, the military can come into the area but they want to limit the numbers. They want to limit exactly who can go in.

The negotiations underway now are to dictate the numbers of people allowed access to that area. It tends to indicate at this time that perhaps all the al Qaeda members have escaped the area that the tribesmen have nothing left to hide and that is a feeling that we're getting here that is perhaps solidifying based on the information.

Pakistani military officials say that they discovered tunnels linking some of those compounds that were surrounded, tunnels they say that they believe it's possible. They cannot overlook the fact that al Qaeda members may have used those tunnels to escape the area.

So the conflict seems to be winding down. The negotiations appear to be heading in the direction that the army will be allowed into the area but it appears to be, Judy, very much that anyone in there that the government of Pakistan and the United States might have wanted to catch seems to be long gone -- Judy.

WOODRUFF: Nic, are people coming to the conclusion there that there really is not going to be any progress made unless they do have the cooperation of these tribal leaders?

ROBERTSON: Absolutely. They need the cooperation of the tribal leaders. According to Pakistani military officials here, many of the tribal leaders are quite happy to work with the government, support them. Indeed, it's been tribal leaders loyal to the government that have been in negotiation with these other tribal leaders who are hold outs against the Pakistani government.

So, there is a measure of support but there are areas that have been no-go areas for the Pakistani government. They're trying to penetrate those areas. An indication of how difficult that is, late yesterday a Pakistani military convoy carrying fuel into the area was targeted by rocket fire. At least eight soldiers killed, dozens of others injured. So there is a lot of resistance in some areas still to what the Pakistani military is trying to do in that area -- Judy.

WOODRUFF: All right. Nic Robertson reporting in the morning, Tuesday morning, from that area with a pretty bleak assessment of where the search stands, Nic thank you very much.

Ahead on the program tonight, we'll get former presidential candidate Wesley Clark's take on the uproar over charges that the Bush administration ignored warnings about al Qaeda.

And later, a trip down Route 66 and a visit to a town looking for a buyer.

From Washington this is NEWSNIGHT.

(COMMERCIAL BREAK) WOODRUFF: The White House, as we've been saying, hit back hard today to put it mildly, attacking the credibility of Richard Clarke. He's the former insider who is now lobbing some pretty serious accusations at the administration that he once served.

The White House in effect saying this is a case of the pot calling the kettle black. We suspect a lot of people are wondering tonight what to make of all this.

Joining us now from Little Rock, Arkansas is retired general and former presidential candidate Wesley Clark. General Clark, good to see you. Thank you very much for being with us.

WESLEY CLARK, FORMER PRESIDENTIAL CANDIDATE: Thank you, Judy, good to be with you.

WOODRUFF: The White House is loaded for bear, General Clark. They are basically coming out saying this is politically motivated. It's not true. There's virtually nothing that Mr. Clarke has said that they're not knocking down.

CLARK: You know, well I think that this is a very serious book. It's a very important book and I hope that the American people will take a look at the issues, consider the facts, the opinions on both sides in this and not get lost in personal attacks that are being leveled against Dick Clarke.

Dick Clarke is a responsible, dedicated, career civil servant and there's no point in talking about his motives in this. He wrote a book and it deserves to be seriously considered.

WOODRUFF: When you say we should ignore the personal but today none other than the Vice President of the United States Dick Cheney came out and said Clarke wasn't in the loop and he may have had a grudge to bear because he didn't get some promotion that he wanted. Could that be behind it?

CLARK: Judy, you can't have it both ways. I mean he either was the counterterrorism czar and was responsible and knew what was going on or the administration gave him a title and didn't put any emphasis on terrorism and that's why he wasn't in the loop and the administration is criticizing him from both sides on this. I think that you have to accept each of the incidents and allegations at face value and then listen to the comments and take the facts and sort them through.

WOODRUFF: But what about at a very basic level, General Clark, the administration did go after al Qaeda pretty soon after 9/11. The U.S. went into Afghanistan. We're all very familiar with that. They tried to throw al Qaeda out of there, went after the Taliban. So, you know, the thrust of his argument isn't it really deeply undercut by at least that fact?

CLARK: I don't think so. I think there are really three principal arguments, Judy. First, before 9/11 if you look at the way the administration planned its policies it did not put a lot of high level emphasis on counterterrorism.

The Clinton administration had. It had a lot of meetings on counterterrorism, top level concern, talked about by the president at the cabinet level, not so in the Bush administration.

Before 9/11, the Bush administration, according to Dick Clarke, did not do all it could do, did not even do all that previous administrations had done to try to get a grip on the threat of terrorism and they were warned that this was the greatest threat to American security after 9/11.

WOODRUFF: What about -- I was just going to say what about Dr. Condoleezza Rice's point though that she said Richard Clarke had plenty of opportunities to do something about terrorism, both in the previous administration and to speak up during the Bush administration. She says he didn't do it.

CLARK: Well, he spoke up loud and long during the previous administration because I used to hear colleagues talking about him. When I was in Europe and I wasn't in those White House meetings, they'd say boy that guy Clarke he just, he just won't be quiet on this stuff.

And yet what he asked for in the Bush administration was he asked for a platform and an opportunity to brief the principals and that opportunity wasn't provided and I think that Dr. Rice knows very well that in order to really put together a broad comprehensive counterterrorism policy you must have the leadership of the president of the United States. He simply has to call cabinet officers together and say this is my priority. The president has done those things after 9/11. He should have done them before.

After 9/11, also Judy, according to what Dick Clarke is telling us, even though we did go after the Taliban in Afghanistan the administration was holding back and planning and preparing all along to go after Iraq. That's really what their preoccupation was.

I saw this. I heard this from military colleagues. I saw it in the actions that were underway. I used to talk about it on CNN when I was a military analyst here.

We did not pursue Osama bin Laden in the mountains of Tora Bora and so now we've had this dance with the Pakistani forces over there and now over two years later we didn't get anybody. If we put American troops in there two years ago, we might have bagged our prey.

And finally, by going after Iraq what Dick Clarke says is we were distracted from the focus on al Qaeda and that is a concern.

WOODRUFF: All right. Well we're going to have to leave it there. General Clark, Wesley Clark, former NATO commander, former presidential candidate for the Democrats we appreciate you joining us.

CLARK: Thank you, Judy.

WOODRUFF: This is something we know we're going to continue to hear about and talk about for days to come. General Clark thank you very much.

CLARK: Thank you.

WOODRUFF: And coming up tonight on NEWSNIGHT, another presidential candidate, another war and what the FBI was doing. We'll be back.

(COMMERCIAL BREAK)

WOODRUFF: Tonight there is a new window into the operations of the FBI, one that has nothing to do with the 9/11 attacks or the commission investigating alleged intelligence failures.

A review of thousands of documents more than 30 years old reveals for the first time how far the FBI went to investigate anti-war groups and their leaders, including the presumptive Democratic presidential candidate John Kerry.

Here now CNN's Kelly Wallace.

(BEGIN VIDEOTAPE)

JOHN KERRY, ANTI-WAR ACTIVIST: We're going to keep coming back until this war ends.

WALLACE (voice-over): As John Kerry stepped into the national spotlight in 1971, the Nixon administration's FBI stepped up its monitoring of Kerry and the group he helped direct, Vietnam Veterans Against the War, also known as VVAW.

GERALD NICOSIA, AUTHOR "HOME TO WAR": Nixon and the FBI saw VVAW as a major, major threat to the United States.

WALLACE: Gerald Nicosia is author of the book "Home to War," a history of the Vietnam Veterans movement.

NICOSIA: They really believed that these veterans were going to come to Washington with, you know, rifles and armaments and storm, and create a coup, you know, storm the White House, kill the president, take over the government.

WALLACE: But it wasn't until Nicosia recently reviewed 20,000 pages of FBI documents he obtained five years ago that the extent Kerry himself was followed by FBI agents became public. The documents note the mundane, like how many people Kerry talked to and what he said like here, calling for a political process to bring an end to the war.

Through a spokesman, the vacationing Senator told CNN: "It is almost surreal to learn the extent to which I was followed by the FBI." White House tapes show President Nixon keeping tabs on Kerry. Here he talks with his special counsel Charles Colson.

COLSON: He was in Vietnam a total of four months. He's politically ambitious and just looking for an issue. He came back a hawk and became a dove when he was the political opportunities. NIXON: Sure, well anyway keep the faith.

COLSON: Don't worry. We'll keep hitting him Mr. President.

WALLACE: The documents also do something else. They place John Kerry at a November, 1971 convention in Kansas City, Missouri, where three Vietnam Veterans tell CNN there was discussion at some point of an idea to kill U.S. leaders who supported the war.

Nicosia says veterans told him the idea was deemed as ludicrous.

NICOSIA: People were screaming, throwing chairs in the air. This is mad. This is crazy. What do you think we're going to be assassinating people?

WALLACE: There's no confirmation that Kerry heard any of that. He says he has no memory of attending the Kansas City gathering.

(END VIDEOTAPE)

WALLACE: The FBI never linked Kerry to any violent activity and ended its surveillance of him in May of 1972, but the question is now, could the era past that Kerry is touting on the campaign trail end up causing him a bit of harm -- Judy.

WOODRUFF: Kelly, a lot of documents there, pages and pages. Is there more there that could be either damaging or, you know, could raise questions for Senator Kerry?

WALLACE: One question that's being raised by the documents, Judy, includes just when John Kerry broke ties with this group Vietnam Veterans Against the War, which was turning or sounding more and more violent?

He has said repeatedly he believes he resigned and ended his ties with that group earlier in the year in 1971, but these documents definitely show he was at that November 1971 meeting. He now just says he just doesn't remember being there. But that's one issue that could be raised. Again, his campaign says this shows the extent the FBI was targeting and the real kind of questions go to the Nixon administration and the FBI during that time -- Judy.

WOODRUFF: But, Kelly, just to clarify, this is literally the first time it's been known that the FBI was trailing him.

WALLACE: Well, it is interesting. John Kerry says he knew to some extent broadly that the FBI was monitoring him and other veterans protesting the war, but he did not learn, he says, the extent of this surveillance until a few days ago, three days ago, in fact, when his campaign aides looked at some of these same document that Mr. Nicasea (ph) provided to CNN -- Judy.

WOODRUFF: All right, fascinating story on so many counts.

Kelly Wallace, thank you very much. Appreciate it. Still to come on the program, what rights do you have if your HMO denies you coverage? A question before the Supreme Court tomorrow. We'll have a preview when NEWSNIGHT continues from Washington.

(COMMERCIAL BREAK)

WOODRUFF: Tomorrow, the U.S. Supreme Court will hear oral arguments in two cases which could settle a long-running dispute at the intersection of medicine and law. Do patients have the right to sue health insurers in state court?

A federal law known as ERISA prevents most Americans from suing their health plans outside of federal court. And that restriction is being challenged.

Here's CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

RUBY CALAD, PLAINTIFF: To take some medicine.

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Ruby Calad says her hysterectomy operation five years ago was a nightmare.

CALAD: I couldn't walk. They had to lift me from the bed to a wheelchair.

LAVANDERA: Two days after the surgery, her doctor said she needed more time in the hospital to recover. But a CIGNA health care employee told Calad to go home.

CALAD: That person, without the knowledge, without the experience, overrode my doctor's decision for me to stay in the hospital.

LAVANDERA: A day later, Calad was rushed to the emergency room because of complications from the operation.

CALAD: This is wrong. This is unethical. This is not right. They are treating you like a piece of meat.

LAVANDERA: CIGNA HealthCare refused on-camera interviews for this report. But in a statement, CIGNA said: "Calad chose not to use the existing avenues to appeal the coverage."

Calad's story is one of two cases before the U.S. Supreme Court which could determine if health insurance providers can be sued in state court or if those cases must remain in federal court.

(on camera): A majority of Americans get health insurance from their employers. But, as it stands now, those people, like Ruby Calad, aren't allowed to sue their HMOs in state court. Recently, 10 states passed laws allowing that to happen, but those laws apply only to people who bought their own insurance or work in state government.

(voice-over): Insurance providers want medical malpractice lawsuits kept in federal court because you can only sue for the amount of the coverage. In Ruby Calad's case, that would have been for an extra night's stay in the hospital, about $1,500.

In state court, however, juries could award damages for pain and suffering and lost wages, a much more expensive reality for insurance companies.

SUSAN PISANO, AMERICAN ASSOCIATION OF HEALTH PLANS: If what happens is, there's a threat of going to state court every time there's a question about the scope of coverage for an individual, then health care could very well become unaffordable for many more employers and many more consumers.

LAVANDERA: George Parker Young is Ruby Calad's attorney. He says it's an issue of accountability.

GEORGE PARKER YOUNG, ATTORNEY FOR CALAD: Really, what they're saying is, we should be immune. We should be able to make these medical decisions, second-guess the doctors and have absolutely no accountability if things turn out bad.

LAVANDERA: The Supreme Court could finally decide how much legal protection HMOs to get from patients. Ruby Calad says sometimes a lawsuit is the only way a powerless person can get the attention of a giant insurance company.

Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

WOODRUFF: Well, some other bits of business now.

Our "Moneyline Roundup" starts with the former Treasury Secretary Paul O'Neill. Today, an investigation cleared him of wrongdoing where sensitive documents were concerned, documents he took when he left office that later became the basis of a book critical of the president. No laws were broken, says the report from the treasury's inspector general.

But a number of documents marked sensitive should have been marked classified instead. Had they been, Mr. O'Neill wouldn't have been able to take them with him.

The Food and Drug Administration is warning doctors to keep an eye out for suicidal tendencies in patients taking certain antidepressants. The drugs include Prozac, Paxil, Zoloft and seven other similar compounds. The FDA also ordered tougher suicide warnings on the label. What is unclear, though, is whether the drugs themselves add to the risk of suicide or if underlying mental illness is to blame.

"Fortune" magazine's list of the country's largest companies is out again and once again Wal-Mart is king, No. 1 on the Fortune 500 for the third year, running with ExxonMobil and GM in second and third place.

Markets, meantime, took a Monday swan dive. Fears of terrorism shook Wall Street, sending all the major indexes deep into the red.

And ahead on NEWSNIGHT, we'll go back to the Mideast story and questions of whether the Israeli assassination of a Hamas leader has stirred up a hornet's nest there.

Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: Sad information you see almost every night on NEWSNIGHT.

Well, rage and retaliation are not new developments in the drama of the Middle East. Many would argue they're defining themes in that conflict. And the assassination of a Hamas founder Sheik Ahmed Yassin has left many people bracing for retaliation of the worst sort.

Aaron David Miller joins us now. He's here in Washington with me. He is the president of Seeds of Peace. He is a former Middle East negotiator in the Clinton administration.

And, you were just reminding me as well, in the first Bush administration.

AARON DAVID MILLER, PRESIDENT, SEEDS OF PEACE: That's right. Thanks you for inviting me, Judy.

WOODRUFF: First of all, why did the Israelis do this? Did they think that this would somehow lessen the threat that they feel?

MILLER: I think democracies coping with suicide terror are in a predicament. I mean, the highest order of magnitude of any government is to defend its citizens.

The Israelis have been exposed over the last several years to unremitting, nonstop terror and violence. It's understandable that they need to develop a policy to protect themselves. The problem is the targeted assassinations particularly of leaders have consequences and everything that the Israelis do, even if it's in defense of legitimate security interests, are bound to have a consequence. And this one is going to as well.

WOODRUFF: What do you think the consequence will be?

MILLER: Well, I think, quite bluntly, the situation on the ground is going to get worse before it gets worse. And I don't mean to be flip about that. I believe we're entering a qualitatively new level of escalation, which is going to be driven by some very nasty factors.

Hamas and its supporters, including al-Aqsa Islamic, Tanzim, Islamic Jihad, will rally to the cause and in an effort to redeem the memory of the late Sheik Yassin, will pull out all the stops in an effort to pull off megaterror, assassinate leaders, to do everything possible they can to demonstrate their viability. And the Palestinians, the public, you noticed out of the last comments, his comments tonight you would have thought made Sheik Yassin out to be George Washington. No Palestinian under these circumstances is going to be able to depart from the party line. Israelis on the other hand, in an effort to demonstrate their deterrence, will respond with their formidable military power. So I think we really are in for a new level of escalation.

WOODRUFF: Is there anything anybody can do to stop this, anything the U.S. can do? The U.S. has not been engaged directly recently.

MILLER: I mean, there have been moments over the last several of years where the administration could have been engaged.

And I believe, in the grimmest and blackest of circumstances, which this act today may push to the fore, there will come a moment, because this process is incredibly resilient. Israeli and Palestinians suffer from a proximity problem. Their lives are inextricably linked together.

So there will come a moment, another moment, despite all of the grimness of the current situation. And, at that point, this administration or successor is going to have to make a decision how much of a priority is the pursuit of Arab-Israeli peace to American national interests? I would argue that it is a fundamental priority.

WOODRUFF: Aaron David Miller, how do you explain today what were almost two different reactions by the Bush administration?

In the morning, you had Condoleezza Rice, the president national security adviser, saying on television, yes, she agreed Sheik Yassin was a terrorist, the founder of Hamas. But then, a few hours later, at the State Department and at the White House, they were saying this is not something they condoned. It was not helpful to the process. What do you expect is going on?

MILLER: Well, having spent 25 years drafting I don't know how many countless press releases and talking points for press releases, I think there is an understandable and natural ambivalence.

On one hand, the administration has made its position against targeted assassinations clear. You know that there is in the inner councils tonight a real dismay, I suspect, over this turn of developments, that the situation is only going to be made worse by this. On the other hand, the administration is prosecuting its own war against global terror. And they very well are not going to come out and condemn the Israelis for acting in what the Israelis and maybe even some American officials believe to be the legitimate pursuit of Israeli interest. So herein lies the ambivalence.

WOODRUFF: So, for right now, it is hands off, though,?

MILLER: For right now, I suspect it is hands off.

WOODRUFF: Aaron David Miller, president of Seeds of Peace, a grim night all around.

MILLER: Thank you, Judy.

WOODRUFF: Thank you for being here. We appreciate it.

And a couple of more items from around the world before we take a break.

A judge in Spain has charged four more people with terrorism in connection with the railroad bombings in Madrid. This brings to nine the number of people facing trial, a mix of Spaniards and Moroccans so far. Authorities say they expect more charges to come.

Expect to see Britain's Prime Minister Tony Blair in Libya later this week, this according to the son of Libyan leader Moammar Gadhafi. British officials keeping mum, but it would not be unusual considering the role Prime Minister Blair played in negotiating the agreement under which Libya renounced efforts to develop weapons of mass destruction.

Next up on NEWSNIGHT, a little town just looking for someone to buy it. We'll be back.

(COMMERCIAL BREAK)

WOODRUFF: We began tonight with big controversies and big questions about terrorism and the dangers we face in the new normal.

Well, now to Amboy, California, just a speck of a town on the map and about as far from the new normal as you can get in this country. It is for sale.

Here's CNN's Bruce Burkhardt.

(BEGIN VIDEOTAPE)

BRUCE BURKHARDT, CNN CORRESPONDENT (voice-over): Maybe it was the appealing paint. Maybe it was the old cafe frozen in another time or the roadside motel and cabins, a rest stop on Legendary Route 66. Whatever it was, Walt Wilson fell in love with this place. He and a friend bought the town.

WALT WILSON, TOWN CO-OWNER: It looked like they were going to close it, is what they were going to do. And it's too nice of a place, man, you know, just let it go.

BURKHARDT: That was in 1995. Now Amboy, population seven, is up for sale once again.

WILSON: Oh, it's time to let somebody else take over. I've been here almost 10 years now. It is a lot of work. And it's time for somebody to come in and finish up what we started.

BURKHARDT: It was a railroad that gave Amboy its name, back when they named all these little mining towns in the desert alphabetically, Amboy, Amboy, Bolo, Cadiz, and so on. Amboy is one of the few that has survived, barely.

WILSON: It's piece of history, you know? And, really, this is the last place between Barstow and Needles still open.

BURKHARDT: When Route 66 came through here in 1927, it was the beginning of Amboy's golden age, which peaked in the early '70s with a population of nearly 800, before the interstate slowly choked off life. But then, it was a booming oasis along Route 66, what John Steinbeck called in "The Grapes of Wrath" the mother road.

MAC MCGUIRE: This was the lifeline. This was the umbilical cord to Southern California during the dust bowl area. They had hopes. They had dreams. And they went right down this road right here.

Couldn't believe that for years.

BURKHARDT: Mac McGuire and Richard Fundon (ph), a couple of Walt's buddies, drive over here about once a month. Ever so often, they just need a dose of Amboy.

(on camera): So what do you do for fun now?

UNIDENTIFIED MALE: Come out here.

MCGUIRE: We're doing it.

UNIDENTIFIED MALE: We're doing it.

You know what? Most people bypass this looking for something better and they miss this. They totally miss this.

BURKHARDT (voice-over): At 60, 70 miles per hour, it is easy to miss. If you happen to slow down, you can breathe in a different time in America. The musty cabins of Roy's Motel still open for the occasional guest. And that distinctive Roy's sign, it was a big deal when it went up in 1959. Roy's son Buster ran the place and the town until the early '90s. That's when Walt and his partner took over.

The next owner of Amboy will need more than just the asking price of almost $1.4 million. It has to be the right person.

WILSON: The right person who wants to keep the history going, doesn't want to change it, doesn't want to put a Wal-Mart in.

(LAUGHTER)

BURKHARDT: Bruce Burkhardt, CNN, Amboy, California.

(END VIDEOTAPE)

WOODRUFF: Didn't want to put a Wal-Mart in, that company that was at the top of the Fortune 500 list this year again.

Well, next on the program, we'll update our top story and we will preview tomorrow.

(COMMERCIAL BREAK)

WOODRUFF: Before we go, a quick recap of our top story.

The White House today took aim at Richard Clarke. He's the former counterterrorism czar and adviser to President Clinton and Bush, all this after Mr. Clarke's memoirs came out today accusing White House officials, the president included, of being so obsessed with Iraq, that they overlooked the threat from al Qaeda. Administration officials from the vice president on down today called the allegations false and Mr. Clarke irresponsible, marginal and worse.

Tomorrow on the program, the chairman of Smith & Wesson, it turns out he did time for armed robbery. He resigned. End of the story? Well, not quite. Jim Minder turned his life around years ago. And there are 600,000 soon-to-be-ex-cons who will be facing the same challenges this year alone. His story and theirs tomorrow night with Aaron here in Washington.

And before we go, here's Bill Hemmer with a look at what is coming up tomorrow on "AMERICAN MORNING."

(BEGIN VIDEO CLIP)

BILL HEMMER, CNN ANCHOR: Judy, thank you.

Tomorrow morning on "AMERICAN MORNING," the man at the center of the storm in Washington, former counterterrorism chief Richard Clarke, is our guest. Why is he coming out now with this book, accusations the president ignored the fight against terrorism before 9/11 and that he insisted on an Iraqi connection after that? The man on the inside, what he saw and heard tomorrow morning, 7:00 a.m. Eastern time, right here on "AMERICAN MORNING" -- Judy.

(END VIDEO CLIP)

WOODRUFF: All right, Bill, thanks -- Richard Clarke still in the news.

That's NEWSNIGHT for tonight. Thank you for watching. Aaron is back tomorrow.

I'm Judy Woodruff and I hope you'll join me tomorrow on "INSIDE POLITICS" at 3:30 Eastern.

"LOU DOBBS TONIGHT" is next. Good night.

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





Qaeda's Significance; Israel Kills Hamas' Founder; Interview With Wesley Clark>


Aired March 22, 2004 - 22:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: Good evening everybody. Aaron, as Larry said, is away tonight on his way back from the Middle East.
And with fears of new terrorism being felt this day from Jerusalem to Baghdad to Wall Street, the country's worst terrorist attack once again finds itself at center stage.

Starting tomorrow, top members of President Bush's national security team, along with their counterparts from the Clinton administration, will sit down to answer questions from the commission investigating 9/11.

Among those in the hot seat will be one Richard Clarke, the man you just heard Larry mention. He used to be a top adviser to the president and previous presidents on terrorism. He has written a book, which came out today, that accuses the Bush administration of downplaying al Qaeda and fixating instead on Iraq before and after 9/11.

Well, today the White House fired back and they fired back hard and that is getting most of the ink but the subtext is just as important and it's very simple. The climate these charges and countercharges have created may make getting to the bottom of 9/11 harder and many think that ought to be job one.

Well, the whip starts us off and first we go to the White House and CNN's John King, John the headline.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Judy, the White House says it is factually wrong and politically reckless for Richard Clarke to suggest in that new book that perhaps President Bush could have prevented 9/11 had he paid more attention to al Qaeda but the fierceness, Judy, with which the administration is responding shows they're a bit worried that charge might stick.

WOODRUFF: All right and next to Gaza, the assassination of a Palestinian leader and the aftershocks already being felt. CNN's Chris Burns with that and a headline -- Chris.

CHRIS BURNS, CNN CORRESPONDENT: Judy, rocket and mortar attacks here overnight in Gaza are just some of the first acts of revenge by Hamas militants after the Israeli forces kill their founder and spiritual leader. Israel may have cut the head off the organization but they also stirred up the hornets' nest. WOODRUFF: And on to Pakistan and the hunt for important targets. Did al Qaeda's number two man slip away? Was he even there? CNN's Nic Robertson has been following this from the beginning -- Nic, who's on the videophone, a headline from you.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT (via videophone): Judy, the latest from the Pakistani government here they are making progress in their negotiations with tribal members supporting the al Qaeda elements held up in that tribal area making progress to get into that area; however, they have discovered that some of the compounds had a series of tunnels allowing perhaps high value targets to escape the area -- Judy.

WOODRUFF: All right.

And finally, Senator John Kerry back when it was the FBI and not the Secret Service keeping an eye on him, CNN's Kelly Wallace with that story, Kelly the headline.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Judy, as John Kerry seeks to divine himself for America's voters, new revelations about his days protesting the Vietnam War, how he himself was a target of more extensive FBI surveillance than even he knew to be the case -- Judy.

WOODRUFF: All right. Thank you, Kelly, and we're going to get back to you and all the rest shortly.

Also coming up tonight on the program we will talk with retired general and former presidential candidate Wes Clark about the uproar over the accusations that the Bush administration has ignored the threat from al Qaeda.

Should you be able to sue for pain and suffering if your HMO denies you needed medical care? That's a question the Supreme Court takes up tomorrow. We'll have a preview.

And later, want to buy an entire town? Well, Amboy, California could be yours if the price is right, all that to come in the hour ahead.

But we do begin tonight with something Richard Clarke said in his interview with Leslie Stahl, which aired last night on "60 Minutes." "I am sure" he said, "that I'll be criticized for lots of things and I am sure they'll launch their dogs on me."

He is a former high-ranking adviser on terrorism for the Bush and Clinton administrations. They are his former colleagues in the Bush White House. This is a highly charged political season and today the dogs came to call.

Two reports tonight, starting with CNN's John King.

(BEGIN VIDEOTAPE)

KING (voice-over): The administration counteroffensive is nothing short of extraordinary suggesting that before Richard Clarke blames President Bush perhaps he should look in the mirror.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Dick Clarke was the counterterrorism czar in 1998 when the embassies were bombed. He was the counterterrorism czar in 2000 when the Cole was bombed. He was the counterterrorism czar for a period of the '90s when al Qaeda was strengthening and when the plots that ended up in September 11 were being hatched.

KING: The force of the White House rebuttal underscores the enormous political stakes. In this new book, Clarke describes a president and an administration so obsessed with Iraq that from day one they ignored the mounting al Qaeda threat.

SEN. EVAN BAYH (D), INDIANA: I think they had a sort of a visceral reaction. Well, if the Clinton people are saying it's important it must not be that important and we're going to focus on other things.

KING: Clarke says Mr. Bush pressured him the day after the 9/11 attacks to find evidence blaming Iraq and that Defense Secretary Rumsfeld and other senior officials also wanted to blame Saddam Hussein. White House aides say Mr. Bush and others did initially suspect Iraq but that in the end they followed the evidence.

RICE: He told me Iraq is to the side. We're going after Afghanistan and we're going to eliminate the Taliban and the al Qaeda base in Afghanistan.

KING: Clarke also says the administration ignored the al Qaeda threat when it took office and would not take his warning seriously.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: His assertion that there is something we could have done to prevent the September 11 attacks from happening is deeply irresponsible. It's offensive and it's flat out false.

KING: Senior administration officials say President Bush wrote President Musharraf of Pakistan just three weeks after taking office complaining about al Qaeda and Islamabad's support of the Taliban and that Clarke himself was charged on March 7, 2001, just five weeks after Mr. Bush was sworn in, to develop a new, more aggressive strategy to eliminate al Qaeda.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The fact is what the president did not want to do is to have an ineffective response with respect to al Qaeda.

(END VIDEOTAPE)

KING: As you can see, Judy, the vice president, the national security adviser, an array of other senior officials out making this rebuttal today. They insist the main reason is that Mr. Clarke's allegations are reckless and false but, Judy, they also concede at the White House that if those allegations stick they would undermine a central tenet of the Bush reelection campaign that his leadership has made this country safer -- Judy. WOODRUFF: So, John, how worried are they about this and the repercussions?

KING: Well, Judy, the forcefulness just shows the worry here at the White House and they understand it's not just Dick Clarke, not just the interviews today. He is going to go on a book tour. He's going to promote this book.

They also say that the publication of this book was sped up in advance so that he can testify this Wednesday before the 9/11 commission and get maximum exposure. They know they are in for a rough week ahead. Look for more of this. They say they will not back down in this debate.

WOODRUFF: All right, John King at the White House this night, John thank you.

We mentioned at the top there is no denying that the work of the 9/11 commission takes place in a politically supercharged environment and this was before Richard Clarke went public.

With that here's CNN's David Ensor.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): It already looked like a rough week for the Bush administration defending its efforts against al Qaeda before the 9/11 commission but Richard Clarke's broadside has turned up the heat.

RICHARD CLARKE, FORMER Basically, the president botched the response to 9/11. He should have gone right after Afghanistan, right after bin Laden and then he made the whole war on terrorism so much worse by invading Iraq.

RICHARD BEN-VENISTE, 9/11 COMMISSION MEMBER: We had received a tremendous amount of information leading to the conclusion that some dramatic attack would occur by al Qaeda and people, such as Richard Clarke, were literally running through the halls of the White House with their hair on fire with the seriousness of these threats.

ENSOR: Ben-Veniste and the rest of the commission will hear from the present and former secretaries of state and defense Tuesday, from Clarke and CIA Director George Tenet on Wednesday. Bill Clinton and Al Gore will also meet privately with the commission soon to be asked why did they not do more against al Qaeda?

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: Why was there no retaliation at the end of your administration to the bombing of the USS Cole where we lost 17 sailors?

ENSOR: Clarke advocated tough action to both the Bush and Clinton administrations. Even Clinton administration officials argue his ideas were not always realistic.

WILLIAM COHEN, FORMER DEFENSE SECRETARY: There were some of the recommendations he would make in terms of more aggressive action I think that we questioned in terms of the feasibility of carrying them out under certain circumstances.

ENSOR: Still in question how much access the commission will get to President Bush and Vice President Cheney. Just the top two members may see them says the White House and National Security Adviser Condoleezza Rice won't testify publicly citing the confidentiality of the advice she gives to the president.

BEN-VENISTE: They do not make her available and I think that's shameful.

ENSOR (on camera): It may be a rough week and clearly there are lessons to be learned but, for what it's worth, several career officials say they do not believe that either Mr. Bush or Mr. Clinton can really be held responsible for what 19 terrorists were able to do on September 11, 2001.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: In physics we learned that every action brings an equal and opposite reaction. In the Middle East it isn't quite so predictable, except that the reaction is almost always ugly.

Today, Israel took action, appropriate action its government argues, assassinating a man who was a terrorist in the eyes of many but a leader in the eyes of some and tonight to a lot of people with rockets and explosives and rage he has also become a martyr. The question is what comes next?

From Gaza CNN's Chris Burns.

(BEGIN VIDEOTAPE)

BURNS (voice-over): He was buried in a cemetery called Martyr's Graveyard amid outrage that Israel would dare to fire a rocket at Sheikh Ahmed Yassin, the quadriplegic spiritual leader of Hamas as he left a mosque in his wheelchair.

A Hamas leaflet said to "shake Israel like an earthquake" the Al Aqsa Martyrs Brigade's call for war against the "sons of Zion."

ABDELL AZIZ RANTISI, SENIOR HAMAS LEADER: There will be no revenge, no revenge. It's (unintelligible).

BURNS: The Palestinian Authority condemned the attacks.

AHMED QOREI, PALESTINIAN AUTH. PRIME MINISTER: It's a cowardly, criminal act against a prominent Palestinian leader who devoted all his life to the favor of the independence of his people.

BURNS: But Israeli officials say Yassin has backed suicide attacks that have left hundreds of Israelis dead and he opposed peace talks. ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): The ideology of this person was firstly murder and the killing of Jews because they are Jews and the destruction of the state of Israel.

BURNS: The dual suicide bombings a week earlier in the southern part of Ashdod killing ten Israelis caused the Israeli cabinet to order a stepping up of so-called targeted killings of militant leaders, as well as raids in the territories along with the hardship and the anger, uncertainty of what the killing of Yassin will bring.

(END VIDEOTAPE)

BURNS: Now as dawn breaks here in Gaza there have been overnight rocket and mortar attacks by the militants, a response by Israel as well. They have sent in a pinpoint incursion into one of the villages from which the rockets were fired.

This isn't over yet and usually after these targeted assassinations or killings the Palestinian militants regroup and they launch suicide attacks. That could be coming in the coming days -- back to you.

WOODRUFF: So, Chris, is it accurate to say that Israel literally is bracing for a reaction here?

BURNS: Yes, absolutely Judy. They have closed off the Palestinian territories from Israel. It's very difficult for us to get into here because they're allowing only a trickle of journalists and no Palestinians to get through. Usually there are thousands of them who cross into Israel daily to work and that hardship is now compounded. They cannot go there and work and bring food back on the tables for their people here -- Judy.

WOODRUFF: All right, Chris Burns reporting for us tonight from Gaza, Chris, I should say in the early morning hours from there, thank you.

Well for better or worse, getting Sheikh Yassin took years and for the most part the Israelis knew exactly where to look. Not so for top members of al Qaeda who have thousands of square miles of rural Afghanistan and Pakistan in which to hide.

All last week it was thought that one of them might have been cornered and the fierce battles between guerrillas and the Pakistani Army seemed to confirm it. Now that battle is winding down and no one is really sure.

For the latest we turn once again to Islamabad and to CNN's Nic Robertson who is with us on the videophone. Nic, what is the latest in that search?

ROBERTSON (via videophone): Well, Judy, it appears as if the Pakistani government is about to get access to that area. They've been negotiating for the last two or three days with tribes members that they believe are aiding and abetting and helping the al Qaeda members hide out in that remote tribal region. The negotiations have reached the stage, Pakistani intelligence sources tell us, that the tribesmen say yes the army, the military can come into the area but they want to limit the numbers. They want to limit exactly who can go in.

The negotiations underway now are to dictate the numbers of people allowed access to that area. It tends to indicate at this time that perhaps all the al Qaeda members have escaped the area that the tribesmen have nothing left to hide and that is a feeling that we're getting here that is perhaps solidifying based on the information.

Pakistani military officials say that they discovered tunnels linking some of those compounds that were surrounded, tunnels they say that they believe it's possible. They cannot overlook the fact that al Qaeda members may have used those tunnels to escape the area.

So the conflict seems to be winding down. The negotiations appear to be heading in the direction that the army will be allowed into the area but it appears to be, Judy, very much that anyone in there that the government of Pakistan and the United States might have wanted to catch seems to be long gone -- Judy.

WOODRUFF: Nic, are people coming to the conclusion there that there really is not going to be any progress made unless they do have the cooperation of these tribal leaders?

ROBERTSON: Absolutely. They need the cooperation of the tribal leaders. According to Pakistani military officials here, many of the tribal leaders are quite happy to work with the government, support them. Indeed, it's been tribal leaders loyal to the government that have been in negotiation with these other tribal leaders who are hold outs against the Pakistani government.

So, there is a measure of support but there are areas that have been no-go areas for the Pakistani government. They're trying to penetrate those areas. An indication of how difficult that is, late yesterday a Pakistani military convoy carrying fuel into the area was targeted by rocket fire. At least eight soldiers killed, dozens of others injured. So there is a lot of resistance in some areas still to what the Pakistani military is trying to do in that area -- Judy.

WOODRUFF: All right. Nic Robertson reporting in the morning, Tuesday morning, from that area with a pretty bleak assessment of where the search stands, Nic thank you very much.

Ahead on the program tonight, we'll get former presidential candidate Wesley Clark's take on the uproar over charges that the Bush administration ignored warnings about al Qaeda.

And later, a trip down Route 66 and a visit to a town looking for a buyer.

From Washington this is NEWSNIGHT.

(COMMERCIAL BREAK) WOODRUFF: The White House, as we've been saying, hit back hard today to put it mildly, attacking the credibility of Richard Clarke. He's the former insider who is now lobbing some pretty serious accusations at the administration that he once served.

The White House in effect saying this is a case of the pot calling the kettle black. We suspect a lot of people are wondering tonight what to make of all this.

Joining us now from Little Rock, Arkansas is retired general and former presidential candidate Wesley Clark. General Clark, good to see you. Thank you very much for being with us.

WESLEY CLARK, FORMER PRESIDENTIAL CANDIDATE: Thank you, Judy, good to be with you.

WOODRUFF: The White House is loaded for bear, General Clark. They are basically coming out saying this is politically motivated. It's not true. There's virtually nothing that Mr. Clarke has said that they're not knocking down.

CLARK: You know, well I think that this is a very serious book. It's a very important book and I hope that the American people will take a look at the issues, consider the facts, the opinions on both sides in this and not get lost in personal attacks that are being leveled against Dick Clarke.

Dick Clarke is a responsible, dedicated, career civil servant and there's no point in talking about his motives in this. He wrote a book and it deserves to be seriously considered.

WOODRUFF: When you say we should ignore the personal but today none other than the Vice President of the United States Dick Cheney came out and said Clarke wasn't in the loop and he may have had a grudge to bear because he didn't get some promotion that he wanted. Could that be behind it?

CLARK: Judy, you can't have it both ways. I mean he either was the counterterrorism czar and was responsible and knew what was going on or the administration gave him a title and didn't put any emphasis on terrorism and that's why he wasn't in the loop and the administration is criticizing him from both sides on this. I think that you have to accept each of the incidents and allegations at face value and then listen to the comments and take the facts and sort them through.

WOODRUFF: But what about at a very basic level, General Clark, the administration did go after al Qaeda pretty soon after 9/11. The U.S. went into Afghanistan. We're all very familiar with that. They tried to throw al Qaeda out of there, went after the Taliban. So, you know, the thrust of his argument isn't it really deeply undercut by at least that fact?

CLARK: I don't think so. I think there are really three principal arguments, Judy. First, before 9/11 if you look at the way the administration planned its policies it did not put a lot of high level emphasis on counterterrorism.

The Clinton administration had. It had a lot of meetings on counterterrorism, top level concern, talked about by the president at the cabinet level, not so in the Bush administration.

Before 9/11, the Bush administration, according to Dick Clarke, did not do all it could do, did not even do all that previous administrations had done to try to get a grip on the threat of terrorism and they were warned that this was the greatest threat to American security after 9/11.

WOODRUFF: What about -- I was just going to say what about Dr. Condoleezza Rice's point though that she said Richard Clarke had plenty of opportunities to do something about terrorism, both in the previous administration and to speak up during the Bush administration. She says he didn't do it.

CLARK: Well, he spoke up loud and long during the previous administration because I used to hear colleagues talking about him. When I was in Europe and I wasn't in those White House meetings, they'd say boy that guy Clarke he just, he just won't be quiet on this stuff.

And yet what he asked for in the Bush administration was he asked for a platform and an opportunity to brief the principals and that opportunity wasn't provided and I think that Dr. Rice knows very well that in order to really put together a broad comprehensive counterterrorism policy you must have the leadership of the president of the United States. He simply has to call cabinet officers together and say this is my priority. The president has done those things after 9/11. He should have done them before.

After 9/11, also Judy, according to what Dick Clarke is telling us, even though we did go after the Taliban in Afghanistan the administration was holding back and planning and preparing all along to go after Iraq. That's really what their preoccupation was.

I saw this. I heard this from military colleagues. I saw it in the actions that were underway. I used to talk about it on CNN when I was a military analyst here.

We did not pursue Osama bin Laden in the mountains of Tora Bora and so now we've had this dance with the Pakistani forces over there and now over two years later we didn't get anybody. If we put American troops in there two years ago, we might have bagged our prey.

And finally, by going after Iraq what Dick Clarke says is we were distracted from the focus on al Qaeda and that is a concern.

WOODRUFF: All right. Well we're going to have to leave it there. General Clark, Wesley Clark, former NATO commander, former presidential candidate for the Democrats we appreciate you joining us.

CLARK: Thank you, Judy.

WOODRUFF: This is something we know we're going to continue to hear about and talk about for days to come. General Clark thank you very much.

CLARK: Thank you.

WOODRUFF: And coming up tonight on NEWSNIGHT, another presidential candidate, another war and what the FBI was doing. We'll be back.

(COMMERCIAL BREAK)

WOODRUFF: Tonight there is a new window into the operations of the FBI, one that has nothing to do with the 9/11 attacks or the commission investigating alleged intelligence failures.

A review of thousands of documents more than 30 years old reveals for the first time how far the FBI went to investigate anti-war groups and their leaders, including the presumptive Democratic presidential candidate John Kerry.

Here now CNN's Kelly Wallace.

(BEGIN VIDEOTAPE)

JOHN KERRY, ANTI-WAR ACTIVIST: We're going to keep coming back until this war ends.

WALLACE (voice-over): As John Kerry stepped into the national spotlight in 1971, the Nixon administration's FBI stepped up its monitoring of Kerry and the group he helped direct, Vietnam Veterans Against the War, also known as VVAW.

GERALD NICOSIA, AUTHOR "HOME TO WAR": Nixon and the FBI saw VVAW as a major, major threat to the United States.

WALLACE: Gerald Nicosia is author of the book "Home to War," a history of the Vietnam Veterans movement.

NICOSIA: They really believed that these veterans were going to come to Washington with, you know, rifles and armaments and storm, and create a coup, you know, storm the White House, kill the president, take over the government.

WALLACE: But it wasn't until Nicosia recently reviewed 20,000 pages of FBI documents he obtained five years ago that the extent Kerry himself was followed by FBI agents became public. The documents note the mundane, like how many people Kerry talked to and what he said like here, calling for a political process to bring an end to the war.

Through a spokesman, the vacationing Senator told CNN: "It is almost surreal to learn the extent to which I was followed by the FBI." White House tapes show President Nixon keeping tabs on Kerry. Here he talks with his special counsel Charles Colson.

COLSON: He was in Vietnam a total of four months. He's politically ambitious and just looking for an issue. He came back a hawk and became a dove when he was the political opportunities. NIXON: Sure, well anyway keep the faith.

COLSON: Don't worry. We'll keep hitting him Mr. President.

WALLACE: The documents also do something else. They place John Kerry at a November, 1971 convention in Kansas City, Missouri, where three Vietnam Veterans tell CNN there was discussion at some point of an idea to kill U.S. leaders who supported the war.

Nicosia says veterans told him the idea was deemed as ludicrous.

NICOSIA: People were screaming, throwing chairs in the air. This is mad. This is crazy. What do you think we're going to be assassinating people?

WALLACE: There's no confirmation that Kerry heard any of that. He says he has no memory of attending the Kansas City gathering.

(END VIDEOTAPE)

WALLACE: The FBI never linked Kerry to any violent activity and ended its surveillance of him in May of 1972, but the question is now, could the era past that Kerry is touting on the campaign trail end up causing him a bit of harm -- Judy.

WOODRUFF: Kelly, a lot of documents there, pages and pages. Is there more there that could be either damaging or, you know, could raise questions for Senator Kerry?

WALLACE: One question that's being raised by the documents, Judy, includes just when John Kerry broke ties with this group Vietnam Veterans Against the War, which was turning or sounding more and more violent?

He has said repeatedly he believes he resigned and ended his ties with that group earlier in the year in 1971, but these documents definitely show he was at that November 1971 meeting. He now just says he just doesn't remember being there. But that's one issue that could be raised. Again, his campaign says this shows the extent the FBI was targeting and the real kind of questions go to the Nixon administration and the FBI during that time -- Judy.

WOODRUFF: But, Kelly, just to clarify, this is literally the first time it's been known that the FBI was trailing him.

WALLACE: Well, it is interesting. John Kerry says he knew to some extent broadly that the FBI was monitoring him and other veterans protesting the war, but he did not learn, he says, the extent of this surveillance until a few days ago, three days ago, in fact, when his campaign aides looked at some of these same document that Mr. Nicasea (ph) provided to CNN -- Judy.

WOODRUFF: All right, fascinating story on so many counts.

Kelly Wallace, thank you very much. Appreciate it. Still to come on the program, what rights do you have if your HMO denies you coverage? A question before the Supreme Court tomorrow. We'll have a preview when NEWSNIGHT continues from Washington.

(COMMERCIAL BREAK)

WOODRUFF: Tomorrow, the U.S. Supreme Court will hear oral arguments in two cases which could settle a long-running dispute at the intersection of medicine and law. Do patients have the right to sue health insurers in state court?

A federal law known as ERISA prevents most Americans from suing their health plans outside of federal court. And that restriction is being challenged.

Here's CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

RUBY CALAD, PLAINTIFF: To take some medicine.

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Ruby Calad says her hysterectomy operation five years ago was a nightmare.

CALAD: I couldn't walk. They had to lift me from the bed to a wheelchair.

LAVANDERA: Two days after the surgery, her doctor said she needed more time in the hospital to recover. But a CIGNA health care employee told Calad to go home.

CALAD: That person, without the knowledge, without the experience, overrode my doctor's decision for me to stay in the hospital.

LAVANDERA: A day later, Calad was rushed to the emergency room because of complications from the operation.

CALAD: This is wrong. This is unethical. This is not right. They are treating you like a piece of meat.

LAVANDERA: CIGNA HealthCare refused on-camera interviews for this report. But in a statement, CIGNA said: "Calad chose not to use the existing avenues to appeal the coverage."

Calad's story is one of two cases before the U.S. Supreme Court which could determine if health insurance providers can be sued in state court or if those cases must remain in federal court.

(on camera): A majority of Americans get health insurance from their employers. But, as it stands now, those people, like Ruby Calad, aren't allowed to sue their HMOs in state court. Recently, 10 states passed laws allowing that to happen, but those laws apply only to people who bought their own insurance or work in state government.

(voice-over): Insurance providers want medical malpractice lawsuits kept in federal court because you can only sue for the amount of the coverage. In Ruby Calad's case, that would have been for an extra night's stay in the hospital, about $1,500.

In state court, however, juries could award damages for pain and suffering and lost wages, a much more expensive reality for insurance companies.

SUSAN PISANO, AMERICAN ASSOCIATION OF HEALTH PLANS: If what happens is, there's a threat of going to state court every time there's a question about the scope of coverage for an individual, then health care could very well become unaffordable for many more employers and many more consumers.

LAVANDERA: George Parker Young is Ruby Calad's attorney. He says it's an issue of accountability.

GEORGE PARKER YOUNG, ATTORNEY FOR CALAD: Really, what they're saying is, we should be immune. We should be able to make these medical decisions, second-guess the doctors and have absolutely no accountability if things turn out bad.

LAVANDERA: The Supreme Court could finally decide how much legal protection HMOs to get from patients. Ruby Calad says sometimes a lawsuit is the only way a powerless person can get the attention of a giant insurance company.

Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

WOODRUFF: Well, some other bits of business now.

Our "Moneyline Roundup" starts with the former Treasury Secretary Paul O'Neill. Today, an investigation cleared him of wrongdoing where sensitive documents were concerned, documents he took when he left office that later became the basis of a book critical of the president. No laws were broken, says the report from the treasury's inspector general.

But a number of documents marked sensitive should have been marked classified instead. Had they been, Mr. O'Neill wouldn't have been able to take them with him.

The Food and Drug Administration is warning doctors to keep an eye out for suicidal tendencies in patients taking certain antidepressants. The drugs include Prozac, Paxil, Zoloft and seven other similar compounds. The FDA also ordered tougher suicide warnings on the label. What is unclear, though, is whether the drugs themselves add to the risk of suicide or if underlying mental illness is to blame.

"Fortune" magazine's list of the country's largest companies is out again and once again Wal-Mart is king, No. 1 on the Fortune 500 for the third year, running with ExxonMobil and GM in second and third place.

Markets, meantime, took a Monday swan dive. Fears of terrorism shook Wall Street, sending all the major indexes deep into the red.

And ahead on NEWSNIGHT, we'll go back to the Mideast story and questions of whether the Israeli assassination of a Hamas leader has stirred up a hornet's nest there.

Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: Sad information you see almost every night on NEWSNIGHT.

Well, rage and retaliation are not new developments in the drama of the Middle East. Many would argue they're defining themes in that conflict. And the assassination of a Hamas founder Sheik Ahmed Yassin has left many people bracing for retaliation of the worst sort.

Aaron David Miller joins us now. He's here in Washington with me. He is the president of Seeds of Peace. He is a former Middle East negotiator in the Clinton administration.

And, you were just reminding me as well, in the first Bush administration.

AARON DAVID MILLER, PRESIDENT, SEEDS OF PEACE: That's right. Thanks you for inviting me, Judy.

WOODRUFF: First of all, why did the Israelis do this? Did they think that this would somehow lessen the threat that they feel?

MILLER: I think democracies coping with suicide terror are in a predicament. I mean, the highest order of magnitude of any government is to defend its citizens.

The Israelis have been exposed over the last several years to unremitting, nonstop terror and violence. It's understandable that they need to develop a policy to protect themselves. The problem is the targeted assassinations particularly of leaders have consequences and everything that the Israelis do, even if it's in defense of legitimate security interests, are bound to have a consequence. And this one is going to as well.

WOODRUFF: What do you think the consequence will be?

MILLER: Well, I think, quite bluntly, the situation on the ground is going to get worse before it gets worse. And I don't mean to be flip about that. I believe we're entering a qualitatively new level of escalation, which is going to be driven by some very nasty factors.

Hamas and its supporters, including al-Aqsa Islamic, Tanzim, Islamic Jihad, will rally to the cause and in an effort to redeem the memory of the late Sheik Yassin, will pull out all the stops in an effort to pull off megaterror, assassinate leaders, to do everything possible they can to demonstrate their viability. And the Palestinians, the public, you noticed out of the last comments, his comments tonight you would have thought made Sheik Yassin out to be George Washington. No Palestinian under these circumstances is going to be able to depart from the party line. Israelis on the other hand, in an effort to demonstrate their deterrence, will respond with their formidable military power. So I think we really are in for a new level of escalation.

WOODRUFF: Is there anything anybody can do to stop this, anything the U.S. can do? The U.S. has not been engaged directly recently.

MILLER: I mean, there have been moments over the last several of years where the administration could have been engaged.

And I believe, in the grimmest and blackest of circumstances, which this act today may push to the fore, there will come a moment, because this process is incredibly resilient. Israeli and Palestinians suffer from a proximity problem. Their lives are inextricably linked together.

So there will come a moment, another moment, despite all of the grimness of the current situation. And, at that point, this administration or successor is going to have to make a decision how much of a priority is the pursuit of Arab-Israeli peace to American national interests? I would argue that it is a fundamental priority.

WOODRUFF: Aaron David Miller, how do you explain today what were almost two different reactions by the Bush administration?

In the morning, you had Condoleezza Rice, the president national security adviser, saying on television, yes, she agreed Sheik Yassin was a terrorist, the founder of Hamas. But then, a few hours later, at the State Department and at the White House, they were saying this is not something they condoned. It was not helpful to the process. What do you expect is going on?

MILLER: Well, having spent 25 years drafting I don't know how many countless press releases and talking points for press releases, I think there is an understandable and natural ambivalence.

On one hand, the administration has made its position against targeted assassinations clear. You know that there is in the inner councils tonight a real dismay, I suspect, over this turn of developments, that the situation is only going to be made worse by this. On the other hand, the administration is prosecuting its own war against global terror. And they very well are not going to come out and condemn the Israelis for acting in what the Israelis and maybe even some American officials believe to be the legitimate pursuit of Israeli interest. So herein lies the ambivalence.

WOODRUFF: So, for right now, it is hands off, though,?

MILLER: For right now, I suspect it is hands off.

WOODRUFF: Aaron David Miller, president of Seeds of Peace, a grim night all around.

MILLER: Thank you, Judy.

WOODRUFF: Thank you for being here. We appreciate it.

And a couple of more items from around the world before we take a break.

A judge in Spain has charged four more people with terrorism in connection with the railroad bombings in Madrid. This brings to nine the number of people facing trial, a mix of Spaniards and Moroccans so far. Authorities say they expect more charges to come.

Expect to see Britain's Prime Minister Tony Blair in Libya later this week, this according to the son of Libyan leader Moammar Gadhafi. British officials keeping mum, but it would not be unusual considering the role Prime Minister Blair played in negotiating the agreement under which Libya renounced efforts to develop weapons of mass destruction.

Next up on NEWSNIGHT, a little town just looking for someone to buy it. We'll be back.

(COMMERCIAL BREAK)

WOODRUFF: We began tonight with big controversies and big questions about terrorism and the dangers we face in the new normal.

Well, now to Amboy, California, just a speck of a town on the map and about as far from the new normal as you can get in this country. It is for sale.

Here's CNN's Bruce Burkhardt.

(BEGIN VIDEOTAPE)

BRUCE BURKHARDT, CNN CORRESPONDENT (voice-over): Maybe it was the appealing paint. Maybe it was the old cafe frozen in another time or the roadside motel and cabins, a rest stop on Legendary Route 66. Whatever it was, Walt Wilson fell in love with this place. He and a friend bought the town.

WALT WILSON, TOWN CO-OWNER: It looked like they were going to close it, is what they were going to do. And it's too nice of a place, man, you know, just let it go.

BURKHARDT: That was in 1995. Now Amboy, population seven, is up for sale once again.

WILSON: Oh, it's time to let somebody else take over. I've been here almost 10 years now. It is a lot of work. And it's time for somebody to come in and finish up what we started.

BURKHARDT: It was a railroad that gave Amboy its name, back when they named all these little mining towns in the desert alphabetically, Amboy, Amboy, Bolo, Cadiz, and so on. Amboy is one of the few that has survived, barely.

WILSON: It's piece of history, you know? And, really, this is the last place between Barstow and Needles still open.

BURKHARDT: When Route 66 came through here in 1927, it was the beginning of Amboy's golden age, which peaked in the early '70s with a population of nearly 800, before the interstate slowly choked off life. But then, it was a booming oasis along Route 66, what John Steinbeck called in "The Grapes of Wrath" the mother road.

MAC MCGUIRE: This was the lifeline. This was the umbilical cord to Southern California during the dust bowl area. They had hopes. They had dreams. And they went right down this road right here.

Couldn't believe that for years.

BURKHARDT: Mac McGuire and Richard Fundon (ph), a couple of Walt's buddies, drive over here about once a month. Ever so often, they just need a dose of Amboy.

(on camera): So what do you do for fun now?

UNIDENTIFIED MALE: Come out here.

MCGUIRE: We're doing it.

UNIDENTIFIED MALE: We're doing it.

You know what? Most people bypass this looking for something better and they miss this. They totally miss this.

BURKHARDT (voice-over): At 60, 70 miles per hour, it is easy to miss. If you happen to slow down, you can breathe in a different time in America. The musty cabins of Roy's Motel still open for the occasional guest. And that distinctive Roy's sign, it was a big deal when it went up in 1959. Roy's son Buster ran the place and the town until the early '90s. That's when Walt and his partner took over.

The next owner of Amboy will need more than just the asking price of almost $1.4 million. It has to be the right person.

WILSON: The right person who wants to keep the history going, doesn't want to change it, doesn't want to put a Wal-Mart in.

(LAUGHTER)

BURKHARDT: Bruce Burkhardt, CNN, Amboy, California.

(END VIDEOTAPE)

WOODRUFF: Didn't want to put a Wal-Mart in, that company that was at the top of the Fortune 500 list this year again.

Well, next on the program, we'll update our top story and we will preview tomorrow.

(COMMERCIAL BREAK)

WOODRUFF: Before we go, a quick recap of our top story.

The White House today took aim at Richard Clarke. He's the former counterterrorism czar and adviser to President Clinton and Bush, all this after Mr. Clarke's memoirs came out today accusing White House officials, the president included, of being so obsessed with Iraq, that they overlooked the threat from al Qaeda. Administration officials from the vice president on down today called the allegations false and Mr. Clarke irresponsible, marginal and worse.

Tomorrow on the program, the chairman of Smith & Wesson, it turns out he did time for armed robbery. He resigned. End of the story? Well, not quite. Jim Minder turned his life around years ago. And there are 600,000 soon-to-be-ex-cons who will be facing the same challenges this year alone. His story and theirs tomorrow night with Aaron here in Washington.

And before we go, here's Bill Hemmer with a look at what is coming up tomorrow on "AMERICAN MORNING."

(BEGIN VIDEO CLIP)

BILL HEMMER, CNN ANCHOR: Judy, thank you.

Tomorrow morning on "AMERICAN MORNING," the man at the center of the storm in Washington, former counterterrorism chief Richard Clarke, is our guest. Why is he coming out now with this book, accusations the president ignored the fight against terrorism before 9/11 and that he insisted on an Iraqi connection after that? The man on the inside, what he saw and heard tomorrow morning, 7:00 a.m. Eastern time, right here on "AMERICAN MORNING" -- Judy.

(END VIDEO CLIP)

WOODRUFF: All right, Bill, thanks -- Richard Clarke still in the news.

That's NEWSNIGHT for tonight. Thank you for watching. Aaron is back tomorrow.

I'm Judy Woodruff and I hope you'll join me tomorrow on "INSIDE POLITICS" at 3:30 Eastern.

"LOU DOBBS TONIGHT" is next. Good night.

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





Qaeda's Significance; Israel Kills Hamas' Founder; Interview With Wesley Clark>