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CNN Newsnight Aaron Brown

Republican Leader Says Clarke May Have Lied to Congress; Bush, Kerry Put Forth Economic Plans; Is Tyco Jury Moving Toward Mistrial?

Aired March 26, 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.


DARYN KAGAN, CNN ANCHOR: Good evening. I'm Daryn Kagan in for Aaron Brown and this is NEWSNIGHT.
March may be going out like a lamb here in Atlanta and other places around the country but there is nothing lamb like about the atmosphere in Washington. The sound and fury coming today from Congress centering once again on Richard Clarke. Our Joe Johns with the watch tonight, Joe with our first headline, good evening.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Daryn, top congressional Republicans took their questions about Richard Clarke's credibility to an entirely different level and one thing they're saying is that they need new information about what he said in secret before Congress released to the public. The big surprise is some Democrats are suggesting they just might go along with it -- Daryn.

KAGAN: Looking forward to hearing more about that, Joe.

Next to the back and forth over the economy. Who is going to save it or perhaps who is going to ruin it. Fresh from the campaign trail we find our Kelly Wallace with the headline tonight -- Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Daryn, the focus of the campaign shifted today from terrorism to pocketbook issues with President Bush and John Kerry dueling over who should be trusted with the nation's economy -- Daryn.

KAGAN: Kelly, we'll be back to you in a moment.

And finally the Tyco tycoon on trial. A jury can't seem to make up its mind. CNN Financial Correspondent Chris Huntington following that for us tonight, Chris a headline from you.

CHRIS HUNTINGTON, CNN FINANCIAL CORRESPONDENT: Well, Daryn, the Dennis Kozlowski trial appears to be headed for a mistrial. A single juror has caused so much infighting among the jury that deliberations have ground to a halt. They'll get one more crack at it Monday but if they can't get back on track the judge has made it clear he may have no choice but to call the whole thing off -- Daryn.

KAGAN: We will find out if they can just all get along. Chris Huntington back to you in a moment.

First, though, a few other things to look forward to tonight, including Taiwan's version of a presidential recount. This one comes with violence.

Plus, blurring the line between news and entertainment and NBC's own former president has something to say about that.

And, an unexpected religious find in, of all places, Prattville, Alabama. All of that is to come in our hour ahead.

We're going to begin tonight, though, with the latest turn in the battle royal over Richard Clarke, 9/11 and the White House. Ever since he began making allegations the administration has been hitting back and ever since Mr. Clarke testified before the 9/11 commission the counterattack has focused increasingly on what he said and how it squares with what he said in the past. Today the Republican leadership turned up the heat even more.

Once again CNN's Joe Johns.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): Senate Republican Leader Bill Frist is stepping up attacks against Richard Clarke saying he may have lied to Congress.

SEN. BILL FRIST (R), MAJORITY LEADER: I'm troubled that Mr. Clarke has had a hard time keeping his own story straight.

JOHNS: Frist said Clarke's criticism of the administration's antiterrorism efforts is at odds with supportive comments he gave to reporters two years ago. Frist says Clarke also praised the administration in closed door congressional hearings.

FRIST: It is one thing for Mr. Clarke to dissemble in front of the media, in front of the press but, if he lied under oath to the United States Congress, it's a far, far more serious matter.

JOHNS: Clarke says he did cast the administration in a better light back then but only because he was representing the administration.

RICHARD CLARKE, FORMER COUNTERTERRORISM ADVISER: I was asked to make that case to the press. I was a special assistant to the president and I made the case I was asked to make.

JOHNS: Frist said Clarke's closed door testimony in 2002 should be declassified to get to the bottom of it. The Republican chairman of the House Intelligence Committee says he will ask the administration to make the material public. A Democrat who heard Clarke's testimony agrees but only because he believes the transcript will show Clarke has been consistent all along.

SEN. BOB GRAHAM (D), FLORIDA: Absolutely and I think there should be even more declassification. First the president should declassify all of Mr. Clarke's statement, not as he has done previously cherry-picked just those parts that make the president's case. JOHNS: Democratic candidate John Kerry weighed in from the campaign trail saying he was skeptical Clarke lied and challenged the administration. "If he's not believable and they have reason to show it, then prosecute him for perjury."

(END VIDEOTAPE)

JOHNS: A senior adviser to Kerry accused the administration of scare tactics but what is clear tonight is that for different reasons Democrats and Republicans, even the Speaker of the House himself are now on record supporting disclosure of this information -- Daryn.

KAGAN: Joe, Washington of course is a town where people like to get a lot of attention, like to get the spotlight on them. Are people in general on Capitol Hill surprised just how long the spotlight is staying on Richard Clarke?

JOHNS: Not really. There are a lot of Democrats, of course, who are saying this thing continues to play itself out in part because of the sales of his book. Those sales apparently very high and it does appear we'll be hearing more about Richard Clarke into the weekend -- Daryn.

KAGAN: Joe Johns watching that from Capitol Hill, Joe thank you.

There were sparks flying on the campaign trail as well, the source of much of the heat the economy. In the battleground state of Michigan today, Democratic presidential candidate John Kerry promised to create ten million new jobs in four years if he is elected.

Here's CNN's Kelly Wallace.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): With Republicans portraying him as a tax raising threat to the economy, John Kerry heads to the battleground state of Michigan trying to define himself as a pro business Democrat.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: Some may be surprised to hear a Democrat calling for lower corporate tax rates.

WALLACE: Kerry's goal creating ten million jobs in four years by cutting the corporate tax rate, providing credits for companies making new hires in the U.S. and eliminating tax breaks that encourage American companies to outsource jobs.

In a state that lost 130,000 manufacturing jobs during the Bush administration, according to Michigan's governor, Kerry sought to exploit what Democrats believe is President Bush's greatest vulnerability.

KERRY: America cannot afford four more years of a president who is the first president to lose jobs since Herbert Hoover and the Great Depression.

WALLACE: During a western campaign swing, the president's planned message the economy is improving but this is a case where things did not exactly go according to script.

UNIDENTIFIED MALE: The most important issue for us is jobs and...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Let me tell you something.

UNIDENTIFIED MALE: And, Mr. President and...

BUSH: Yes. The most important issue for me is jobs.

UNIDENTIFIED MALE: That's right.

WALLACE: Still, Mr. Bush tried to focus on the positive like a record 68 percent of Americans owning their own homes. He never mentioned Senator Kerry by name but offered this not so subtle jab at his Democratic rival.

BUSH: It makes sense not to be taking money out of people's pockets just as this economy is beginning to recover.

(END VIDEOTAPE)

WALLACE: And the Bush-Cheney team called Kerry's proposal a "political gimmick" and the Kerry team called President Bush's optimistic message about the economy "out of touch." About the only thing the two sides agree on is what happens with the economy between now and November could play a decisive role in the presidential election -- Daryn.

KAGAN: Kelly, you talked in your piece about the significance of John Kerry picking Michigan but what about George Bush going to New Mexico and what seems like not a very big state in terms of population, the significance that could play in the overall presidential election?

WALLACE: Well, another key battleground state. That is where President Bush won by a little more than 300 votes in the 2000 election. It is a state, though, that is apparently doing somewhat better than states like Michigan when it comes to the economy.

But, Daryn, really make no mistake about it, President Bush has some concerns when it comes to the economy. He and his aides are trying to get the message out. They think things are moving in the right direction if the numbers continue to improve, especially when it comes to the creation of jobs, well that would take some motivation away or some impetus away from John Kerry's message -- Daryn.

KAGAN: Kelly Wallace thank you.

John Harwood has been following all of this for "The Wall Street Journal." That is where he is a national political editor and he joins us from Washington. Good evening. I'm used to saying good morning at a ten o'clock hour but thank you for being with us, John, appreciate it.

JOHN HARWOOD, NATIONAL POLITICAL EDITOR, "THE WALL STREET JOURNAL": Hi, Daryn.

KAGAN: Apparently John Kerry and George Bush trying to talk economy and yet the nation and, as we heard in Joe Johns' report, still talking 9/11 and still talking about Richard Clarke, kind of difficult for the candidates here to get control of the agenda.

HARWOOD: Well, more difficult for George Bush than it was for John Kerry. John Kerry got a big advantage this week. He saw the headlines being dominated by this attack on George Bush and his administration's credibility by somebody who is not nominally in partisan politics.

John Kerry didn't have to say a thing. He wanted to stay out of it. And then today, when he came back to the campaign trail, he tried to shift the message to the economy and specifically to this issue of outsourcing jobs, which is very hot, a big source of anxiety for a lot of American workers.

KAGAN: What does that say about John Kerry that he had one of his strongest weeks by stepping aside and letting someone else be the star?

HARWOOD: Well, it says that whenever you have somebody like Richard Clarke serve presidents of both parties over 30 years and an expert on your core issue who comes forward and says publicly that you aren't as good on that issue as many Americans currently believe, that's very, very damaging to the administration, which is why you saw this ferocious counterattack.

John Kerry didn't want to get in the middle of that, didn't want to partisanize that dispute. The White House tried to cast it as a partisan dispute and today you saw Kerry go in another direction to talk about jobs and how to stimulate this economy.

KAGAN: And, as you had these dueling conversations, as you have jobs and security, it brings back the question which ultimately do you think is going to be the bigger issue for American voters, being safe or having a job?

HARWOOD: Well, Daryn, it's interesting. If you take a poll and ask Americans what's your top issue, jobs and the economy go right to the top and terrorism and Iraq, issues like that are not at the top of the list.

But I've got to think that, you know, this is a different country since 9/11 and what you see the president's campaign trying to do is in effect take Americans back to how they felt at that time to the fear that Americans felt when they saw an attack on their homeland.

And I think at the end of the day that's going to be a very, very important issue in the campaign. Whether it's going to help President Bush or hurt him we're not entirely sure and that was certainly placed into question this week but that issue is not going to leave voters' minds by November.

KAGAN: Let's talk about some of these economic plans that each candidate came up with today. President Bush has tried to paint John Kerry as a tax and spend liberal. John Kerry today trying to come across as almost a friend of business, somebody who is moderate but still trying to promote business in America.

HARWOOD: It's interesting, Daryn. You saw from John Kerry kind of some echoes of the way that George Bush in 2000 tried to run as sort of a different kind of Republican. He said I'm a conservative but I'm a compassionate conservative.

John Kerry today on the economic front was saying, yes I'm a Democrat, yes I want to take action to spur jobs but I'm not unfriendly to business. He said he was going to take away this incentive in the tax code that encourages businesses to locate jobs overseas, a tax break, raise $12 billion by taking that away and use the money to cut corporate taxes across the board.

This is the way he's saying I'm a pro-growth, pro-jobs Democrat and really take advantage of these headlines about outsourcing, which have become very, very big in this election season.

KAGAN: And let's look at what President Bush was doing. He went to a place that wasn't -- has not been as hard hit as let's say Michigan where John Kerry was, trying to make the argument about his tax cuts, saying look at my tax cuts. They're leading to things like the increased home ownership that you're seeing like in states in New Mexico.

HARWOOD: Daryn, we really have two different economies to talk about in this election. There's the economy that's got problems with jobs that John Kerry wants to talk about.

But for George W. Bush, he can point to things as well. He can say home ownership is up. The stock market is up, above 10,000, the Dow, which is where it was when he took office.

And also you look at the overall growth rate in the economy. In the third quarter of 2003, growth over eight percent, the highest in 20 years followed up in the fourth quarter by four percent growth. That's pretty strong by customary standards.

And if you look at these economic models that people run from past elections that should translate into a comfortable victory for President Bush but the problem is we have high productivity growth in this country. That means businesses can do very well without adding jobs. That's a big asset for John Kerry because he can go hammer at that insecurity many voters feel right now.

KAGAN: And if nothing else it's going to make it interesting for the next seven or -- seven months or so for political reporters like you. John Harwood from "The Wall Street Journal" thank you for your time this evening.

HARWOOD: You bet.

KAGAN: We're going to keep it in the southwest for this next story. To Phoenix, the case that created tremendous outrage months ago. It has ended with even more controversy.

At the center of it, a 68-year-old retired Catholic bishop who resigned as the head of the Phoenix Diocese after he was arrested in a hit-and-run accident last summer. He was found guilty last month. Today he was sentenced.

Our Frank Buckley has more from Phoenix.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT (voice-over): Bishop Thomas O'Brien faced up to 45 months in prison for his conviction in the fatal hit-and-run accident that claimed the life of 43-year-old Jim Reed but Judge Stephen Gerst in an extraordinary hour long PowerPoint presentation said after a review of 99 similar cases prison wasn't warranted.

JUDGE STEPHEN GERST, MARICOPA COUNTY SUPERIOR COURT: To impose an immediate incarceration as a term of probation would be treating this defendant differently and more harshly than anyone else in the same or similar circumstance.

BUCKLEY: And with that he imposed the maximum allowable probation, four years, along with 1,000 hours of community service and a six-month deferred jail sentence, jail likely to be deferred indefinitely. Bishop O'Brien didn't respond to reporters as he left the courthouse. His sister spoke for the family.

JEANNE DEARING, BISHOP'S SISTER: Justice was served to an innocent man.

BUCKLEY: Reed's family did not speak to journalists but the decision to spare O'Brien of jail time angered at least one man who said he'd been abused as a boy by a priest who had been transferred into his parish by Bishop O'Brien.

MARK KENNEDY, ALLEGED PRIEST ABUSE VICTIM: To sentence him to 1,000 hours of what he's been doing for 40 years as a priest is an absolute slap in the face.

BUCKLEY: The sentencing of O'Brien marked the end of an incredible year. It began with the announcement by the county attorney of an agreement that spared O'Brien of obstruction of justice charges for transferring accused priests. That was followed two weeks later by the fatal hit-and-run accident. Then came O'Brien's arrest, his conviction and now his sentencing.

(on camera): Judge Gerst said of all the defendants in the other cases he reviewed none of them felt the public scrutiny that Bishop O'Brien experienced and he considered that in his sentencing. As Judge Gerst put it, wherever he goes Bishop O'Brien will bear the glances and quiet whispers for the rest of his life.

Frank Buckley CNN, Phoenix, Arizona.

(END VIDEOTAPE) KAGAN: Ahead on NEWSNIGHT trouble in the Tyco trial. Will Dennis Kozlowski walk?

And Three Mile Island 25 years later.

From Atlanta, this is NEWSNIGHT.

(COMMERCIAL BREAK)

KAGAN: It is not unusual for a jury's perception of a high profile defendant to play a role in the verdict. In the case of Dennis Kozlowski, however, what jurors think of one another may be the real deciding factor in this trial.

Here again is CNN's Chris Huntington.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): Dennis Kozlowski and his wife Karen had to push their way out of New York State Court amid the chaos and uncertainty of a looming mistrial.

DENNIS KOZLOWSKI: Come on guys, let me get to the car huh.

HUNTINGTON: The stunning development brought on by infighting among the jurors who claim they can no longer deliberate in good faith.

STEPHEN KAUFMAN, DENNIS KOZLOWSKI'S ATTORNEY: The mood of my client is the mood you'd expect him to have. He's concerned and he believes in the jury system and if he's not nervous there's something wrong with him and there's nothing wrong with him.

HUNTINGTON: Defense attorneys for Dennis Kozlowski and his co- defendant Mark Swartz, Tyco's former CFO, have repeatedly had their request for a mistrial denied by Judge Michael Obus who let the jury leave early for the weekend to cool off.

CHARLES STILLMAN, MARK SWARTZ' ATTORNEY: The jury has had a long time to work on this and, you know, and you know we think it's time for an end but the judge felt otherwise.

HUNTINGTON: After deliberating for nearly a week, the jury stunned the court Thursday with the first of a series of notes to Judge Obus pointing to a single juror who had "stopped deliberating in good faith." Even after the judge instructed jurors to work out their differences, their final note Friday described deliberations as "irreparably compromised."

While the case is best known for evidence of lavish spending on parties, yachts, real estate and artwork, the charges that Kozlowski and Swartz looted Tyco of more than $600 million could mean a 30-year prison term if the jury can agree on a conviction.

(END VIDEOTAPE) HUNTINGTON: Now the jurors will be back in court 9:30 Monday morning and shortly after that we expect that they will tell the judge whether they can continue deliberating in good faith. If they cannot, the judge has indicated he may have little choice but to declare a mistrial despite the objections of the district attorney -- Daryn.

KAGAN: And you will be standing by to bring us the latest on Monday morning from Manhattan.

HUNTINGTON: Will do.

KAGAN: Chris, thank you for that.

So, the big question tonight will the six-month Tyco trial end in a mistrial? The answer would seem to depend on whether the jury can get beyond its bitterness.

Paul Callan has a lot of experience with juries. He's a criminal defense lawyer specializing in white collar crime, who was formerly a prosecutor in the Brooklyn District Attorney's Office. He knows both sides of a trial like this. Paul, good evening. Thanks for being with us.

PAUL CALLAN, FORMER NYC ASSISTANT D.A.: Nice to be here this evening, Daryn.

KAGAN: It would seem to me this is not going so well, the trial.

CALLAN: No, it's potentially an unmitigated disaster for both sides. You know this case has been tried for about six months. Forty-seven witnesses have been called. Seven hundred documents have been admitted into evidence, so everyone would hope that this jury could come up with a verdict and it's really going to be a disaster if they fail.

KAGAN: Give me a little bit of insight on the dynamics of a single juror holding out.

CALLAN: Well, it's unusual to have one juror hold out against the pressure of the remaining eleven. You know it's interesting. People really don't experience this unless they actually serve on a jury or if they're trial lawyers and try a case but the dynamics of what goes on in that jury room is really interesting.

I mean there are battles. I've tried cases where jurors were throwing chairs at each other. I tried a murder case once where a juror locked himself in the bathroom and had to be broken out of the bathroom by court officers. So, emotions run high and when you have a juror who really wants to resist, sometimes a mistrial or a hung jury, as we call it, is inevitable.

KAGAN: But no matter how Jerry Springer like the jury room becomes, in the end it's the judge that makes that final call.

CALLAN: Well, the judge makes the final call as to whether or not a mistrial is declared but, you know, judges are very, very careful about this because what most people don't realize is if the judge declares a mistrial too soon in the process there's a doctrine called double jeopardy that applies and that doctrine says that you cannot retry the defendants. It's over.

So, you have to really have what's called a manifest necessity to end the trial without a verdict, so you'll see this judge forcing the jury to go forward and try to reach a verdict and it's really only at the very last possible minute will he decide to declare a mistrial.

KAGAN: All right. So take us behind the scenes here about plan B, first for the prosecution. Are they getting kind of nervous thinking they've done six months of work on presentation and they can't get the jury, the entire jury in their camp at this point?

CALLAN: They're getting very nervous but, on the other hand, the preliminary indications are that 11 of the jurors are favoring conviction in the case and only one is favoring acquittal. So, on the one hand the prosecutors know that there's a good chance that that one juror, if he can be persuaded or she in this case can be persuaded, they may have a conviction.

But, you know, a lot of times when juries have been out this long and there's an indication of a hung jury they start to talk plea and they approach the defense and maybe offer a sweeter deal than has been offered earlier in the proceedings.

Now I don't know that that's going to happen in this case. It's a $600 million fraud case, so there will be a public uproar if a deal is offered but it has been done in the past in situations just like this.

KAGAN: Well, and especially, you know, we're fresh on the heels of Martha Stewart's conviction. She, of course, has yet to be sentenced but there's been a lot of comparison. When you look at what she did and how many people impacted compared to big corporate executives like Kozlowski and Swartz, I know it's not the same jury. I know it's not the same case but in public opinion I think people might have a problem with that.

CALLAN: Well there is a supreme irony when you look at it. This is a case involving allegations of a $600 million fraud. Martha Stewart, you know, at best was involved in maybe $40,000 was the amount that she profited from her crime. So, I think a lot of members of the public will look at this case and say, hey how can this be?

But the truth of the matter is that every case is different and no one was in that courtroom for the past six months except the jurors who are evaluating this evidence and it may very well be that, you know, it's a tougher case than the Martha Stewart case.

I don't know. I wasn't in that courtroom and it's probably not fair to make the comparison but you know people will make the comparison and I think if Kozlowski and Swartz walk a lot of people are going to say, you know, two rich, you know, male defendants got off where a woman was convicted. There will be a lot of second guessing I think of the prosecution in both of the cases. KAGAN: In any case it sounds like it's a little too soon for Swartz and Kozlowski to start planning one of those multimillion dollar parties to celebrate. They're not done yet.

CALLAN: No. I think they've had their last multimillion dollar party and, you know, if they get sentenced to prison, there won't be any $6,000 shower curtain, I can assure you, in the prison system in upstate New York.

KAGAN: Yes, plenty of showers to scrub but not with any fancy shower curtains.

CALLAN: That's for sure, Daryn.

KAGAN: Paul Callan. Paul, thank you tonight, appreciate it.

CALLAN: Thank you.

KAGAN: We're not done on NEWSNIGHT. Still a lot more to do.

News of the day or not news at all, why "The Apprentice" finale is making headlines.

(COMMERCIAL BREAK)

KAGAN: It is the time of the evening where we take a look at a few other stories making news around the country.

Tonight, the government today approved the first rapid test to detect the presence of the virus that causes AIDS. It uses material collected by swabbing the inside of the mouth and gives results within 20 minutes. In the past, HIV tests required blood samples.

In California, 19 jurors have been chosen to sit on the grand jury which will hear the case against pop star Michael Jackson. Mr. Jackson has pleaded not guilty to child molestation charges.

And near San Francisco, a horse names DejaVu gave everyone at the racetrack a scare. After throwing his rider during a morning workout, DejaVu panicked, charged through a gate and galloped down a highway before he was caught. He did need a few stitches but he will be racing again in a few months and hopefully will not have a Dejavu incident.

Our "Moneyline Roundup" tonight begins at the supermarket. Albertson's today agreed to buy the Shaw and Star Market chain from the British grocery giant Sainsbury PLC. Albertson's is strong in the west. Shaw and Star have a major presence in New England. The deal is worth nearly $2.5 billion.

In New York, New York, it opened bidding today on a billion dollar contract to outfit the city with, among other things, high tech public potties, pay toilets if you will, self-cleaning, wheelchair accessible, emergency equipped, billboard covered alternatives to finding a friendly restaurant in the cold, cold city. The markets meanwhile ended the day flat. Profit taking did its job leaving major indexes in the red after a red hot session yesterday.

Still to come on NEWSNIGHT, smashing windows, breaking down doors and rioting in the streets, just a little election trouble in Taiwan.

Around the world this is NEWSNIGHT.

(COMMERCIAL BREAK)

KAGAN: The markets ended the day flat. Profit taking did its job leaving indexes in the red after a red hot session yesterday.

Still to come on NEWSNIGHT: smashing windows, breaking down doors and rioting in the streets. Just a little election trouble in Taiwan.

Around the world, this is NEWSNIGHT from Atlanta.

(COMMERCIAL BREAK)

KAGAN: Taiwan is on edge tonight over a close presidential election that reads like Florida 2000 and then some.

Already there's been rioting, an assassination attempt and more than a little international attention. And that's only the beginning.

Here's CNN's Mike Chinoy.

(BEGIN VIDEOTAPE)

MIKE CHINOY, CNN CORRESPONDENT (voice-over): Opposition supporters storming the central election commission in an unsuccessful bid to stop Chen Shui-bian from being declared the official winner of last weekend's election. Smashing doors and windows, occupying the building's grand floor, testing the patience of beleaguered, but restrained riot police.

The opposition contends, without much detailed evidence, that Chen stole the election and they have called variously for a recount, a new election and resistance in the streets.

They camped out all week in front of the presidential palace, accusing Chen of staging his own shooting the day before the election to win sympathy votes that they say tipped the balance in a close race.

(on camera) Is it imaginable that the president would arrange for his own shooting?

UNIDENTIFIED MALE: That's the way of this kind of a party would do it.

UNIDENTIFIED MALE: If he was hit by the bullet, he can walk like that.

CHINOY: So this was a plot? A plot, a conspiracy, you think?

UNIDENTIFIED MALE: Definitely.

CHINOY: Chen has dismissed these allegations. So have the police, who, on Friday, released videotapes of two potential suspects, both recorded by security cameras as they hurredly left the area of the shooting just after it happened.

The clashes coincide with the failure of Taiwan's legislature to pass a bill that would have authorized a recount. The political crisis has now prompted the Chinese government to issue a tough warning, Beijing declaring that if the situation here goes out of control it will not sit back and look on unconcerned.

China claims Taiwan is a break-away province and has never ruled out using force to impose its control.

(END VIDEOTAPE)

CHINOY: The concern now is that things could come to a head here in the next few hours, already, thousands of opposition supporters have gathered in front of the presidential palace behind me.

Opposition leaders have called for hundreds of thousands to take to the streets, and some opposition activists have urged street fighting is the only way to press their case.

The mayor of Taipei and Taiwan's premiere have appealed for calm. And the Bush administration in a statement congratulate Chen, now that his election has been certified, has also called on the people of Taiwan to reject violence means to resolve this political crisis -- Daryn.

KAGAN: Well, comparing to what happened here in the U.S., the course, the recourse was to go through the U.S. Supreme Court. What happens there in Taiwan? Is there any kind of recourse?

CHINOY: Well, the opposition has filed a suit in the court, demanding that the election be overturned and that a recount be ordered. That process could take months.

In the meantime, government and opposition legislatures have been trying to find a way to pass a law that would allow a recount. There is no such law at the moment under Taiwan's legal system.

But they're so far apart. There's so little trust between the two sides that the talks broke down on Friday. And that has now left the way open for hard-line opposition supporters who want to press their case in the streets -- Daryn.

KAGAN: And Mike, the picture behind you tells so much of the story. You can see the hundreds of thousands of people gathering.

Besides the call for calm, any other measures being taken to keep things from getting out of control in Taipei? CHINOY: Well, a large contingent of riot police have been mobilized. They've blocked access to many of the roads leading into this area, although they're letting demonstrators come in.

The government has said, in the interest of democracy, it's not going to suppress the demonstration. But there were calls from some of the more extreme members of the opposition to try and use violent means to break through police cordons and actually go besiege the presidential palace.

Several buses have been lined up in front of the palace to prevent that from happening. And we'll just have to see over the next few hours whether the crowd gets disorderly and whether or not the authorities can maintain control -- Daryn.

KAGAN: Our Mike Chinoy watching the situation from Taipei on what is now Saturday morning.

Mike, thank you.

Now, let's take a quick look at some other stories making news around the world.

We begin in Iraq where two Iraqi nationals working for American U.S. news organizations died today. One was a translator for "TIME" magazine. The man was shot in an ambush two days ago in Baghdad.

The other was a freelance cameraman for ABC News. He was killed while covering a firefight in the Sunni Triangle in the city of Fallujah today.

The 15 nation Caribbean communities said today it does not plan to recognize Haiti's new U.S.-backed interim government. The group has been holding a summit on St. Kits. Yesterday the 15 leaders called for the U.N. general assembly to investigate Jean-Bertrand Aristide's claims that U.S. agents forced him from power.

In Russia, a court has barred Jehovah's Witnesses from operating in Moscow. The court said the group's practices broke up families, encouraged suicide and threatened its members' health by not allowing blood transfusions.

Lawyers for the group said the ruling was a step back for democracy and a punishment reminiscent of Soviet rule.

Ahead on NEWSNIGHT: is it entertainment or is it news? Why Donald Trump's hit reality show is blurring the lines between the two.

We're in Atlanta tonight with NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

KAGAN: Unless you've been living in a cave, you probably have heard of NBC's hit reality television show "The Apprentice."

On the show each week, young executives compete for their dream job working for Donald Trump, the show's star and executive producer.

Well, next month is the season's finale, and in the days leading up to it, NBC's news magazine "Dateline" plans to run roughly two hours of stories about the hit show, which has a lot of people asking the question, is "The Apprentice" really news or is this just another example of the line between news and entertainment being even more blurred.

Lawrence Grossman is former president of NBC News, and he's joining us from Westport, Connecticut.

Larry, good evening, thanks for being with us.

LAWRENCE GROSSMAN, FORMER PRESIDENT, NBC News: Good evening, Daryn, good to be with you.

KAGAN: Two hours of "Dateline" as a news program leading up to the "Apprentice" finale, good or bad idea?

GROSSMAN: Well, it sounds pretty terrible to me. NBC News is a long-standing and proud news organization, and I hardly think that a two-hour promotion for an entertainment show like "The Apprentice" is a major news story that's worth two precious hours of prime-time television.

KAGAN: Now there's some have been accusing, Larry, of kind of being holier than thou. Of sitting up on the perch, because you don't have to be in it, any more.

Isn't the idea of having a hit show that can attract viewers, isn't that a great problem to have?

GROSSMAN: It's a great problem to have, but if you're running NBC News, you're worried about where the world is going and all of the major issues we have.

To take two hours -- I mean, one doesn't have to be a purist. It's understandable that you want to do some promotion for your entertainment shows.

But to take two hours of prime-time to deal with a trivial issue like -- unless you're going to expose "The Apprentice" for some scandal, which I'm sure is not going to happen, seems like a disgrace is the word for it.

It's shameful. And I'm sure that the serious people at NBC News are embarrassed by it, as well.

KAGAN: OK. One more devil's advocate point here.

If you do it on that night, if you take your two hours of "Dateline" and dedicate it to "The Apprentice," which is going to draw millions of viewers.

Brokaw will still have his 22 minutes earlier in the night. You still have MSNBC, another place on the dial where you can be doing 24- hour news. In the environment today, isn't there enough room to do it all?

GROSSMAN: There's enough room to do it all if you're not in the news business. If you're in the news business, what they're doing is not news. What it is is a promotion and a hype. And it's certainly nothing serious.

I can't imagine that you would be doing it on your show, to spend the whole show promoting another CNN program or, indeed, another entertainment show that belongs to Time Warner, which owns CNN.

KAGAN: And I appreciate that vote of confidence in being a quality program. Thank you so much for that.

But let me also use an argument from the playground and say, "Come on, Larry. All the other kids are doing it."

You turn on CBS, they're promoting "Survivor." Any other network that has a hit show and even in the days when you had "The Today Show," I'm sure you were promoting NBC shows.

GROSSMAN: Certainly, as I say, but there are limits. And the idea of taking two hours of prime-time is simply stunning to me.

And the idea that everybody else is doing this so this is all right is just a testimonial to how serious network news has descended, if that's the kind of criteria and those are the kind of standards that they operate by.

I find it really distressing.

KAGAN: And if and when it comes to that day, will you watch?

GROSSMAN: Well, I haven't seen "The Apprentice," I must confess. And I see no reason to watch "Dateline's" two-hour hype of it, even if they're doing it because they themselves will get a very high rating.

It's just irresponsible to ignore what's going on in the rest of the world and in the political campaign and all the other major news items and to spend all that much time. For a serious news organization, it just doesn't -- doesn't parse.

KAGAN: We appreciate your take on it and on that night, a personal invitation to watch CNN. We'll be doing news. How about that?

GROSSMAN: OK, Daryn, I'd be happy to take you up on it.

KAGAN: Excellent. Larry Grossman joining us from Connecticut tonight. Appreciate that.

Still ahead on NEWSNIGHT: broken dryers, rotten mattresses, crumbling wooden signs, all praising Jesus.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK) KAGAN: This week the U.S. Supreme Court heard arguments in a landmark case stemming from the words "under God" and whether they belong in the Pledge of Allegiance.

The case has set off a heated debate in many places. Tonight we thought we'd take a look and take you some place where the question of the public role of religion is somewhat more settled.

Here's CNN's Bruce Burkhardt.

(BEGIN VIDEOTAPE)

BRUCE BURKHARDT, CNN CORRESPONDENT (voice-over): Alabama may be hot come summertime, but not hot, hot, hot. Not that kind of hot.

UNIDENTIFIED FEMALE: A lot of people don't like that, but that's in the Bible.

BURKHARDT (on camera): What, that expression?

UNIDENTIFIED FEMALE: Yes. Hell is hot, hot.

BURKHARDT (voice-over): Mozell Rice (ph) is the widow of the man who built this haunting place, W.C. Rice. It was his passion. He called it the Cross Garden. He died only a couple of months ago.

UNIDENTIFIED FEMALE: I think that's a dryer there.

BURKHARDT (on camera): That's a dryer?

UNIDENTIFIED FEMALE: Yes.

BURKHARDT: Any symbolism there to why a dryer?

UNIDENTIFIED FEMALE: He just used them to put out signs for Jesus.

BURKHARDT (voice-over): He started putting up his signs and crosses and displays back in 1976, displays like the Devil's Hellpit, where old beer cans and toy soldiers warn us to change our ways.

But the Cross Garden is only an extreme example of how Jesus is celebrated in much of the rural South by the side of the road.

JOE YORK, GRADUATE STUDENT/PHOTOGRAPHER: No matter where you go in the South, whether or not you're looking for God, you're going to find him. He's out there in these signs.

BURKHARDT: Signs that Joe York spent several months photographing. A graduate student in Southern Studies at the University of Mississippi, York put his photos in an online exhibit.

In the best tradition of roadside marketing, like the old Burma Shave signs, the message is kept simple. Like this sign where you can vote for Jesus or the devil. YORK: That picture, in particular, encapsulates this battle that goes on on the roadside, in between, you know, this world and the next world.

BURKHARDT: But it takes other forms, too.

Here Jesus presides over the 18th hole of a miniature golf course.

And then there's the clever marquis in front of churches. "The price is right with God, come on down."

But be it a church or an individual shrine like the Cross Garden, it speaks to an evangelical tradition that runs deep in the South.

PROF. WAYNE FLYNT, PASTOR: But the main thing is, it wells up in a heart of deeply emotional, deeply committed people who want others to share their faith.

UNIDENTIFIED FEMALE (singing): There's a garden down in...

BURKHARDT: Sharing the faith, any way you want to, every person, their own pope. That, too, is part of the tradition.

FLYNT: And so the point is, everybody can do it himself. That cross in the garden is a sort of ultimate symbol of the democratization of religion so that that cross can mean whatever you want it to mean.

BURKHARDT: No matter what you think all this means, it does make you stop and wonder.

FLYNT: You react to it. You think about it. In fact, Kate Campbell, one of my former students was so moved by the Cross Garden, that she wrote this poem, folk song, about the Cross Garden and what it meant to her.

UNIDENTIFIED FEMALE (singing): Signs and crosses by the road. One says Jesus is the way home.

BURKHARDT: Bruce Burkhardt, CNN, Plattville, Alabama.

(END VIDEOTAPE)

KAGAN: Our coverage takes a turn, still ahead on NEWSNIGHT: 25 years after Three Mile Island, could it happen again?

(COMMERCIAL BREAK)

KAGAN: It was life imitating the movies, 1979, Jane Fonda was playing a reporter covering a nuclear disaster in "China Syndrome," and suddenly it all became terrifyingly real.

(BEGIN VIDEOTAPE)

KAGAN (voice-over): It was a national nightmare on a small island in Central Pennsylvania.

UNIDENTIFIED MALE: An emergency.

KAGAN: There were new and terrifying phrases, core meltdown, coolant leak, radiation plumes.

Finally, it took a presidential visit to reassure the nation.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: All those who are involved here, who are highly qualified, tell me that the reactor core is indeed, stable.

KAGAN: After Three Mile Island, Americans took a hard look at the nuclear future. Protests spread, dozens of plants were canceled and no new plant licenses have been granted since.

Anti-nuclear activist Paul Gunter says that Three Mile Island turned nuclear energy from a growing to a dying industry. But even he admits it's not dead yet.

PAUL GUNTER, ANTI-NUCLEAR ACTIVIST: Here's the deal. I've been fighting this for, you know, over 30 years now, and it's certainly a struggle that is similar to trying to drive a stake through a vampire's heart.

KAGAN: In fact, nuclear power output has risen steadily, going from 11 to 20 percent of our national electrical power supply, as plants already under construction came online and existing plants grew more efficient.

ANGIE HOWARD, EVP, NUCLEAR ENERGY INSTITUTE: That's one of every five homes and businesses receiving power from nuclear energy, and it does so safely. It does so cleanly. It does so economically and reliably.

KAGAN: There is no better example of this than at Three Mile Island, where right next to the infamous Reactor 2, mothballed at a cost of a billion dollars, TMI-1 is setting records for electrical production.

There are still incidents. The Davis Vessey (ph) nuclear power plant came close to failure in 2002.

But the chairman of the Nuclear Regulatory Commission says today's improved safety record reflects the lessons learned back in 1979.

DR. NILS J. DIAZ, CHAIRMAN, NUCLER REGULATORY COMMISSION: They are safer than TMI. They're safer because of TMI, because we know a lot more about them now than we did then.

We know the systems better; we know the human responses better. We have actually established better regulatory systems and better operating systems.

KAGAN: Critics admit that the industry has learned from experience, but warn against complacency.

DAVID LOCHBAUM, NUCLEAR ENGINEER, UNION OF CONCERNED SCIENTISTS: We're having plants getting older, equipment getting older, safety margins being challenged at a time when we're cutting back on the safety inspections.

KAGAN: Others point to the failure to solve the problem of how to store nuclear waste. A planned depository at Yucca Mountain won't open until 2010 at the earliest.

GUNTER: The legacy of nuclear waste is a timeless legacy that will outlive the last watt of electricity coming from these facilities.

KAGAN: And despite increased security, Gunter warns nuclear plants remain an ideal terrorist target.

But in a world where blackouts are unacceptable, increased nuclear power is a key part of the U.S. energy plan.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Congress should promote research into the next generation of nuclear plants and encourage investment in existing nuclear plants to expand a clean and unlimited source of energy.

KAGAN: Despite government encouragement, there are no new plants on the drawing board yet.

HOWARD: Right now we have an excess capacity -- generating capacity in this country. But by the next four or five years, that capacity, if we see economic recovery, is going to be used and we're going to have a need to build new plants.

And so we will expect nuclear to be one of the choices that utilities companies will need.

(END VIDEOTAPE)

KAGAN: And that's it for tonight. I'm Daryn Kagan. Thanks for watching. I'll see you Monday morning.

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


Aired March 26, 2004 - 22:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Good evening. I'm Daryn Kagan in for Aaron Brown and this is NEWSNIGHT.
March may be going out like a lamb here in Atlanta and other places around the country but there is nothing lamb like about the atmosphere in Washington. The sound and fury coming today from Congress centering once again on Richard Clarke. Our Joe Johns with the watch tonight, Joe with our first headline, good evening.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Daryn, top congressional Republicans took their questions about Richard Clarke's credibility to an entirely different level and one thing they're saying is that they need new information about what he said in secret before Congress released to the public. The big surprise is some Democrats are suggesting they just might go along with it -- Daryn.

KAGAN: Looking forward to hearing more about that, Joe.

Next to the back and forth over the economy. Who is going to save it or perhaps who is going to ruin it. Fresh from the campaign trail we find our Kelly Wallace with the headline tonight -- Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Daryn, the focus of the campaign shifted today from terrorism to pocketbook issues with President Bush and John Kerry dueling over who should be trusted with the nation's economy -- Daryn.

KAGAN: Kelly, we'll be back to you in a moment.

And finally the Tyco tycoon on trial. A jury can't seem to make up its mind. CNN Financial Correspondent Chris Huntington following that for us tonight, Chris a headline from you.

CHRIS HUNTINGTON, CNN FINANCIAL CORRESPONDENT: Well, Daryn, the Dennis Kozlowski trial appears to be headed for a mistrial. A single juror has caused so much infighting among the jury that deliberations have ground to a halt. They'll get one more crack at it Monday but if they can't get back on track the judge has made it clear he may have no choice but to call the whole thing off -- Daryn.

KAGAN: We will find out if they can just all get along. Chris Huntington back to you in a moment.

First, though, a few other things to look forward to tonight, including Taiwan's version of a presidential recount. This one comes with violence.

Plus, blurring the line between news and entertainment and NBC's own former president has something to say about that.

And, an unexpected religious find in, of all places, Prattville, Alabama. All of that is to come in our hour ahead.

We're going to begin tonight, though, with the latest turn in the battle royal over Richard Clarke, 9/11 and the White House. Ever since he began making allegations the administration has been hitting back and ever since Mr. Clarke testified before the 9/11 commission the counterattack has focused increasingly on what he said and how it squares with what he said in the past. Today the Republican leadership turned up the heat even more.

Once again CNN's Joe Johns.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): Senate Republican Leader Bill Frist is stepping up attacks against Richard Clarke saying he may have lied to Congress.

SEN. BILL FRIST (R), MAJORITY LEADER: I'm troubled that Mr. Clarke has had a hard time keeping his own story straight.

JOHNS: Frist said Clarke's criticism of the administration's antiterrorism efforts is at odds with supportive comments he gave to reporters two years ago. Frist says Clarke also praised the administration in closed door congressional hearings.

FRIST: It is one thing for Mr. Clarke to dissemble in front of the media, in front of the press but, if he lied under oath to the United States Congress, it's a far, far more serious matter.

JOHNS: Clarke says he did cast the administration in a better light back then but only because he was representing the administration.

RICHARD CLARKE, FORMER COUNTERTERRORISM ADVISER: I was asked to make that case to the press. I was a special assistant to the president and I made the case I was asked to make.

JOHNS: Frist said Clarke's closed door testimony in 2002 should be declassified to get to the bottom of it. The Republican chairman of the House Intelligence Committee says he will ask the administration to make the material public. A Democrat who heard Clarke's testimony agrees but only because he believes the transcript will show Clarke has been consistent all along.

SEN. BOB GRAHAM (D), FLORIDA: Absolutely and I think there should be even more declassification. First the president should declassify all of Mr. Clarke's statement, not as he has done previously cherry-picked just those parts that make the president's case. JOHNS: Democratic candidate John Kerry weighed in from the campaign trail saying he was skeptical Clarke lied and challenged the administration. "If he's not believable and they have reason to show it, then prosecute him for perjury."

(END VIDEOTAPE)

JOHNS: A senior adviser to Kerry accused the administration of scare tactics but what is clear tonight is that for different reasons Democrats and Republicans, even the Speaker of the House himself are now on record supporting disclosure of this information -- Daryn.

KAGAN: Joe, Washington of course is a town where people like to get a lot of attention, like to get the spotlight on them. Are people in general on Capitol Hill surprised just how long the spotlight is staying on Richard Clarke?

JOHNS: Not really. There are a lot of Democrats, of course, who are saying this thing continues to play itself out in part because of the sales of his book. Those sales apparently very high and it does appear we'll be hearing more about Richard Clarke into the weekend -- Daryn.

KAGAN: Joe Johns watching that from Capitol Hill, Joe thank you.

There were sparks flying on the campaign trail as well, the source of much of the heat the economy. In the battleground state of Michigan today, Democratic presidential candidate John Kerry promised to create ten million new jobs in four years if he is elected.

Here's CNN's Kelly Wallace.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): With Republicans portraying him as a tax raising threat to the economy, John Kerry heads to the battleground state of Michigan trying to define himself as a pro business Democrat.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: Some may be surprised to hear a Democrat calling for lower corporate tax rates.

WALLACE: Kerry's goal creating ten million jobs in four years by cutting the corporate tax rate, providing credits for companies making new hires in the U.S. and eliminating tax breaks that encourage American companies to outsource jobs.

In a state that lost 130,000 manufacturing jobs during the Bush administration, according to Michigan's governor, Kerry sought to exploit what Democrats believe is President Bush's greatest vulnerability.

KERRY: America cannot afford four more years of a president who is the first president to lose jobs since Herbert Hoover and the Great Depression.

WALLACE: During a western campaign swing, the president's planned message the economy is improving but this is a case where things did not exactly go according to script.

UNIDENTIFIED MALE: The most important issue for us is jobs and...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Let me tell you something.

UNIDENTIFIED MALE: And, Mr. President and...

BUSH: Yes. The most important issue for me is jobs.

UNIDENTIFIED MALE: That's right.

WALLACE: Still, Mr. Bush tried to focus on the positive like a record 68 percent of Americans owning their own homes. He never mentioned Senator Kerry by name but offered this not so subtle jab at his Democratic rival.

BUSH: It makes sense not to be taking money out of people's pockets just as this economy is beginning to recover.

(END VIDEOTAPE)

WALLACE: And the Bush-Cheney team called Kerry's proposal a "political gimmick" and the Kerry team called President Bush's optimistic message about the economy "out of touch." About the only thing the two sides agree on is what happens with the economy between now and November could play a decisive role in the presidential election -- Daryn.

KAGAN: Kelly, you talked in your piece about the significance of John Kerry picking Michigan but what about George Bush going to New Mexico and what seems like not a very big state in terms of population, the significance that could play in the overall presidential election?

WALLACE: Well, another key battleground state. That is where President Bush won by a little more than 300 votes in the 2000 election. It is a state, though, that is apparently doing somewhat better than states like Michigan when it comes to the economy.

But, Daryn, really make no mistake about it, President Bush has some concerns when it comes to the economy. He and his aides are trying to get the message out. They think things are moving in the right direction if the numbers continue to improve, especially when it comes to the creation of jobs, well that would take some motivation away or some impetus away from John Kerry's message -- Daryn.

KAGAN: Kelly Wallace thank you.

John Harwood has been following all of this for "The Wall Street Journal." That is where he is a national political editor and he joins us from Washington. Good evening. I'm used to saying good morning at a ten o'clock hour but thank you for being with us, John, appreciate it.

JOHN HARWOOD, NATIONAL POLITICAL EDITOR, "THE WALL STREET JOURNAL": Hi, Daryn.

KAGAN: Apparently John Kerry and George Bush trying to talk economy and yet the nation and, as we heard in Joe Johns' report, still talking 9/11 and still talking about Richard Clarke, kind of difficult for the candidates here to get control of the agenda.

HARWOOD: Well, more difficult for George Bush than it was for John Kerry. John Kerry got a big advantage this week. He saw the headlines being dominated by this attack on George Bush and his administration's credibility by somebody who is not nominally in partisan politics.

John Kerry didn't have to say a thing. He wanted to stay out of it. And then today, when he came back to the campaign trail, he tried to shift the message to the economy and specifically to this issue of outsourcing jobs, which is very hot, a big source of anxiety for a lot of American workers.

KAGAN: What does that say about John Kerry that he had one of his strongest weeks by stepping aside and letting someone else be the star?

HARWOOD: Well, it says that whenever you have somebody like Richard Clarke serve presidents of both parties over 30 years and an expert on your core issue who comes forward and says publicly that you aren't as good on that issue as many Americans currently believe, that's very, very damaging to the administration, which is why you saw this ferocious counterattack.

John Kerry didn't want to get in the middle of that, didn't want to partisanize that dispute. The White House tried to cast it as a partisan dispute and today you saw Kerry go in another direction to talk about jobs and how to stimulate this economy.

KAGAN: And, as you had these dueling conversations, as you have jobs and security, it brings back the question which ultimately do you think is going to be the bigger issue for American voters, being safe or having a job?

HARWOOD: Well, Daryn, it's interesting. If you take a poll and ask Americans what's your top issue, jobs and the economy go right to the top and terrorism and Iraq, issues like that are not at the top of the list.

But I've got to think that, you know, this is a different country since 9/11 and what you see the president's campaign trying to do is in effect take Americans back to how they felt at that time to the fear that Americans felt when they saw an attack on their homeland.

And I think at the end of the day that's going to be a very, very important issue in the campaign. Whether it's going to help President Bush or hurt him we're not entirely sure and that was certainly placed into question this week but that issue is not going to leave voters' minds by November.

KAGAN: Let's talk about some of these economic plans that each candidate came up with today. President Bush has tried to paint John Kerry as a tax and spend liberal. John Kerry today trying to come across as almost a friend of business, somebody who is moderate but still trying to promote business in America.

HARWOOD: It's interesting, Daryn. You saw from John Kerry kind of some echoes of the way that George Bush in 2000 tried to run as sort of a different kind of Republican. He said I'm a conservative but I'm a compassionate conservative.

John Kerry today on the economic front was saying, yes I'm a Democrat, yes I want to take action to spur jobs but I'm not unfriendly to business. He said he was going to take away this incentive in the tax code that encourages businesses to locate jobs overseas, a tax break, raise $12 billion by taking that away and use the money to cut corporate taxes across the board.

This is the way he's saying I'm a pro-growth, pro-jobs Democrat and really take advantage of these headlines about outsourcing, which have become very, very big in this election season.

KAGAN: And let's look at what President Bush was doing. He went to a place that wasn't -- has not been as hard hit as let's say Michigan where John Kerry was, trying to make the argument about his tax cuts, saying look at my tax cuts. They're leading to things like the increased home ownership that you're seeing like in states in New Mexico.

HARWOOD: Daryn, we really have two different economies to talk about in this election. There's the economy that's got problems with jobs that John Kerry wants to talk about.

But for George W. Bush, he can point to things as well. He can say home ownership is up. The stock market is up, above 10,000, the Dow, which is where it was when he took office.

And also you look at the overall growth rate in the economy. In the third quarter of 2003, growth over eight percent, the highest in 20 years followed up in the fourth quarter by four percent growth. That's pretty strong by customary standards.

And if you look at these economic models that people run from past elections that should translate into a comfortable victory for President Bush but the problem is we have high productivity growth in this country. That means businesses can do very well without adding jobs. That's a big asset for John Kerry because he can go hammer at that insecurity many voters feel right now.

KAGAN: And if nothing else it's going to make it interesting for the next seven or -- seven months or so for political reporters like you. John Harwood from "The Wall Street Journal" thank you for your time this evening.

HARWOOD: You bet.

KAGAN: We're going to keep it in the southwest for this next story. To Phoenix, the case that created tremendous outrage months ago. It has ended with even more controversy.

At the center of it, a 68-year-old retired Catholic bishop who resigned as the head of the Phoenix Diocese after he was arrested in a hit-and-run accident last summer. He was found guilty last month. Today he was sentenced.

Our Frank Buckley has more from Phoenix.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT (voice-over): Bishop Thomas O'Brien faced up to 45 months in prison for his conviction in the fatal hit-and-run accident that claimed the life of 43-year-old Jim Reed but Judge Stephen Gerst in an extraordinary hour long PowerPoint presentation said after a review of 99 similar cases prison wasn't warranted.

JUDGE STEPHEN GERST, MARICOPA COUNTY SUPERIOR COURT: To impose an immediate incarceration as a term of probation would be treating this defendant differently and more harshly than anyone else in the same or similar circumstance.

BUCKLEY: And with that he imposed the maximum allowable probation, four years, along with 1,000 hours of community service and a six-month deferred jail sentence, jail likely to be deferred indefinitely. Bishop O'Brien didn't respond to reporters as he left the courthouse. His sister spoke for the family.

JEANNE DEARING, BISHOP'S SISTER: Justice was served to an innocent man.

BUCKLEY: Reed's family did not speak to journalists but the decision to spare O'Brien of jail time angered at least one man who said he'd been abused as a boy by a priest who had been transferred into his parish by Bishop O'Brien.

MARK KENNEDY, ALLEGED PRIEST ABUSE VICTIM: To sentence him to 1,000 hours of what he's been doing for 40 years as a priest is an absolute slap in the face.

BUCKLEY: The sentencing of O'Brien marked the end of an incredible year. It began with the announcement by the county attorney of an agreement that spared O'Brien of obstruction of justice charges for transferring accused priests. That was followed two weeks later by the fatal hit-and-run accident. Then came O'Brien's arrest, his conviction and now his sentencing.

(on camera): Judge Gerst said of all the defendants in the other cases he reviewed none of them felt the public scrutiny that Bishop O'Brien experienced and he considered that in his sentencing. As Judge Gerst put it, wherever he goes Bishop O'Brien will bear the glances and quiet whispers for the rest of his life.

Frank Buckley CNN, Phoenix, Arizona.

(END VIDEOTAPE) KAGAN: Ahead on NEWSNIGHT trouble in the Tyco trial. Will Dennis Kozlowski walk?

And Three Mile Island 25 years later.

From Atlanta, this is NEWSNIGHT.

(COMMERCIAL BREAK)

KAGAN: It is not unusual for a jury's perception of a high profile defendant to play a role in the verdict. In the case of Dennis Kozlowski, however, what jurors think of one another may be the real deciding factor in this trial.

Here again is CNN's Chris Huntington.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): Dennis Kozlowski and his wife Karen had to push their way out of New York State Court amid the chaos and uncertainty of a looming mistrial.

DENNIS KOZLOWSKI: Come on guys, let me get to the car huh.

HUNTINGTON: The stunning development brought on by infighting among the jurors who claim they can no longer deliberate in good faith.

STEPHEN KAUFMAN, DENNIS KOZLOWSKI'S ATTORNEY: The mood of my client is the mood you'd expect him to have. He's concerned and he believes in the jury system and if he's not nervous there's something wrong with him and there's nothing wrong with him.

HUNTINGTON: Defense attorneys for Dennis Kozlowski and his co- defendant Mark Swartz, Tyco's former CFO, have repeatedly had their request for a mistrial denied by Judge Michael Obus who let the jury leave early for the weekend to cool off.

CHARLES STILLMAN, MARK SWARTZ' ATTORNEY: The jury has had a long time to work on this and, you know, and you know we think it's time for an end but the judge felt otherwise.

HUNTINGTON: After deliberating for nearly a week, the jury stunned the court Thursday with the first of a series of notes to Judge Obus pointing to a single juror who had "stopped deliberating in good faith." Even after the judge instructed jurors to work out their differences, their final note Friday described deliberations as "irreparably compromised."

While the case is best known for evidence of lavish spending on parties, yachts, real estate and artwork, the charges that Kozlowski and Swartz looted Tyco of more than $600 million could mean a 30-year prison term if the jury can agree on a conviction.

(END VIDEOTAPE) HUNTINGTON: Now the jurors will be back in court 9:30 Monday morning and shortly after that we expect that they will tell the judge whether they can continue deliberating in good faith. If they cannot, the judge has indicated he may have little choice but to declare a mistrial despite the objections of the district attorney -- Daryn.

KAGAN: And you will be standing by to bring us the latest on Monday morning from Manhattan.

HUNTINGTON: Will do.

KAGAN: Chris, thank you for that.

So, the big question tonight will the six-month Tyco trial end in a mistrial? The answer would seem to depend on whether the jury can get beyond its bitterness.

Paul Callan has a lot of experience with juries. He's a criminal defense lawyer specializing in white collar crime, who was formerly a prosecutor in the Brooklyn District Attorney's Office. He knows both sides of a trial like this. Paul, good evening. Thanks for being with us.

PAUL CALLAN, FORMER NYC ASSISTANT D.A.: Nice to be here this evening, Daryn.

KAGAN: It would seem to me this is not going so well, the trial.

CALLAN: No, it's potentially an unmitigated disaster for both sides. You know this case has been tried for about six months. Forty-seven witnesses have been called. Seven hundred documents have been admitted into evidence, so everyone would hope that this jury could come up with a verdict and it's really going to be a disaster if they fail.

KAGAN: Give me a little bit of insight on the dynamics of a single juror holding out.

CALLAN: Well, it's unusual to have one juror hold out against the pressure of the remaining eleven. You know it's interesting. People really don't experience this unless they actually serve on a jury or if they're trial lawyers and try a case but the dynamics of what goes on in that jury room is really interesting.

I mean there are battles. I've tried cases where jurors were throwing chairs at each other. I tried a murder case once where a juror locked himself in the bathroom and had to be broken out of the bathroom by court officers. So, emotions run high and when you have a juror who really wants to resist, sometimes a mistrial or a hung jury, as we call it, is inevitable.

KAGAN: But no matter how Jerry Springer like the jury room becomes, in the end it's the judge that makes that final call.

CALLAN: Well, the judge makes the final call as to whether or not a mistrial is declared but, you know, judges are very, very careful about this because what most people don't realize is if the judge declares a mistrial too soon in the process there's a doctrine called double jeopardy that applies and that doctrine says that you cannot retry the defendants. It's over.

So, you have to really have what's called a manifest necessity to end the trial without a verdict, so you'll see this judge forcing the jury to go forward and try to reach a verdict and it's really only at the very last possible minute will he decide to declare a mistrial.

KAGAN: All right. So take us behind the scenes here about plan B, first for the prosecution. Are they getting kind of nervous thinking they've done six months of work on presentation and they can't get the jury, the entire jury in their camp at this point?

CALLAN: They're getting very nervous but, on the other hand, the preliminary indications are that 11 of the jurors are favoring conviction in the case and only one is favoring acquittal. So, on the one hand the prosecutors know that there's a good chance that that one juror, if he can be persuaded or she in this case can be persuaded, they may have a conviction.

But, you know, a lot of times when juries have been out this long and there's an indication of a hung jury they start to talk plea and they approach the defense and maybe offer a sweeter deal than has been offered earlier in the proceedings.

Now I don't know that that's going to happen in this case. It's a $600 million fraud case, so there will be a public uproar if a deal is offered but it has been done in the past in situations just like this.

KAGAN: Well, and especially, you know, we're fresh on the heels of Martha Stewart's conviction. She, of course, has yet to be sentenced but there's been a lot of comparison. When you look at what she did and how many people impacted compared to big corporate executives like Kozlowski and Swartz, I know it's not the same jury. I know it's not the same case but in public opinion I think people might have a problem with that.

CALLAN: Well there is a supreme irony when you look at it. This is a case involving allegations of a $600 million fraud. Martha Stewart, you know, at best was involved in maybe $40,000 was the amount that she profited from her crime. So, I think a lot of members of the public will look at this case and say, hey how can this be?

But the truth of the matter is that every case is different and no one was in that courtroom for the past six months except the jurors who are evaluating this evidence and it may very well be that, you know, it's a tougher case than the Martha Stewart case.

I don't know. I wasn't in that courtroom and it's probably not fair to make the comparison but you know people will make the comparison and I think if Kozlowski and Swartz walk a lot of people are going to say, you know, two rich, you know, male defendants got off where a woman was convicted. There will be a lot of second guessing I think of the prosecution in both of the cases. KAGAN: In any case it sounds like it's a little too soon for Swartz and Kozlowski to start planning one of those multimillion dollar parties to celebrate. They're not done yet.

CALLAN: No. I think they've had their last multimillion dollar party and, you know, if they get sentenced to prison, there won't be any $6,000 shower curtain, I can assure you, in the prison system in upstate New York.

KAGAN: Yes, plenty of showers to scrub but not with any fancy shower curtains.

CALLAN: That's for sure, Daryn.

KAGAN: Paul Callan. Paul, thank you tonight, appreciate it.

CALLAN: Thank you.

KAGAN: We're not done on NEWSNIGHT. Still a lot more to do.

News of the day or not news at all, why "The Apprentice" finale is making headlines.

(COMMERCIAL BREAK)

KAGAN: It is the time of the evening where we take a look at a few other stories making news around the country.

Tonight, the government today approved the first rapid test to detect the presence of the virus that causes AIDS. It uses material collected by swabbing the inside of the mouth and gives results within 20 minutes. In the past, HIV tests required blood samples.

In California, 19 jurors have been chosen to sit on the grand jury which will hear the case against pop star Michael Jackson. Mr. Jackson has pleaded not guilty to child molestation charges.

And near San Francisco, a horse names DejaVu gave everyone at the racetrack a scare. After throwing his rider during a morning workout, DejaVu panicked, charged through a gate and galloped down a highway before he was caught. He did need a few stitches but he will be racing again in a few months and hopefully will not have a Dejavu incident.

Our "Moneyline Roundup" tonight begins at the supermarket. Albertson's today agreed to buy the Shaw and Star Market chain from the British grocery giant Sainsbury PLC. Albertson's is strong in the west. Shaw and Star have a major presence in New England. The deal is worth nearly $2.5 billion.

In New York, New York, it opened bidding today on a billion dollar contract to outfit the city with, among other things, high tech public potties, pay toilets if you will, self-cleaning, wheelchair accessible, emergency equipped, billboard covered alternatives to finding a friendly restaurant in the cold, cold city. The markets meanwhile ended the day flat. Profit taking did its job leaving major indexes in the red after a red hot session yesterday.

Still to come on NEWSNIGHT, smashing windows, breaking down doors and rioting in the streets, just a little election trouble in Taiwan.

Around the world this is NEWSNIGHT.

(COMMERCIAL BREAK)

KAGAN: The markets ended the day flat. Profit taking did its job leaving indexes in the red after a red hot session yesterday.

Still to come on NEWSNIGHT: smashing windows, breaking down doors and rioting in the streets. Just a little election trouble in Taiwan.

Around the world, this is NEWSNIGHT from Atlanta.

(COMMERCIAL BREAK)

KAGAN: Taiwan is on edge tonight over a close presidential election that reads like Florida 2000 and then some.

Already there's been rioting, an assassination attempt and more than a little international attention. And that's only the beginning.

Here's CNN's Mike Chinoy.

(BEGIN VIDEOTAPE)

MIKE CHINOY, CNN CORRESPONDENT (voice-over): Opposition supporters storming the central election commission in an unsuccessful bid to stop Chen Shui-bian from being declared the official winner of last weekend's election. Smashing doors and windows, occupying the building's grand floor, testing the patience of beleaguered, but restrained riot police.

The opposition contends, without much detailed evidence, that Chen stole the election and they have called variously for a recount, a new election and resistance in the streets.

They camped out all week in front of the presidential palace, accusing Chen of staging his own shooting the day before the election to win sympathy votes that they say tipped the balance in a close race.

(on camera) Is it imaginable that the president would arrange for his own shooting?

UNIDENTIFIED MALE: That's the way of this kind of a party would do it.

UNIDENTIFIED MALE: If he was hit by the bullet, he can walk like that.

CHINOY: So this was a plot? A plot, a conspiracy, you think?

UNIDENTIFIED MALE: Definitely.

CHINOY: Chen has dismissed these allegations. So have the police, who, on Friday, released videotapes of two potential suspects, both recorded by security cameras as they hurredly left the area of the shooting just after it happened.

The clashes coincide with the failure of Taiwan's legislature to pass a bill that would have authorized a recount. The political crisis has now prompted the Chinese government to issue a tough warning, Beijing declaring that if the situation here goes out of control it will not sit back and look on unconcerned.

China claims Taiwan is a break-away province and has never ruled out using force to impose its control.

(END VIDEOTAPE)

CHINOY: The concern now is that things could come to a head here in the next few hours, already, thousands of opposition supporters have gathered in front of the presidential palace behind me.

Opposition leaders have called for hundreds of thousands to take to the streets, and some opposition activists have urged street fighting is the only way to press their case.

The mayor of Taipei and Taiwan's premiere have appealed for calm. And the Bush administration in a statement congratulate Chen, now that his election has been certified, has also called on the people of Taiwan to reject violence means to resolve this political crisis -- Daryn.

KAGAN: Well, comparing to what happened here in the U.S., the course, the recourse was to go through the U.S. Supreme Court. What happens there in Taiwan? Is there any kind of recourse?

CHINOY: Well, the opposition has filed a suit in the court, demanding that the election be overturned and that a recount be ordered. That process could take months.

In the meantime, government and opposition legislatures have been trying to find a way to pass a law that would allow a recount. There is no such law at the moment under Taiwan's legal system.

But they're so far apart. There's so little trust between the two sides that the talks broke down on Friday. And that has now left the way open for hard-line opposition supporters who want to press their case in the streets -- Daryn.

KAGAN: And Mike, the picture behind you tells so much of the story. You can see the hundreds of thousands of people gathering.

Besides the call for calm, any other measures being taken to keep things from getting out of control in Taipei? CHINOY: Well, a large contingent of riot police have been mobilized. They've blocked access to many of the roads leading into this area, although they're letting demonstrators come in.

The government has said, in the interest of democracy, it's not going to suppress the demonstration. But there were calls from some of the more extreme members of the opposition to try and use violent means to break through police cordons and actually go besiege the presidential palace.

Several buses have been lined up in front of the palace to prevent that from happening. And we'll just have to see over the next few hours whether the crowd gets disorderly and whether or not the authorities can maintain control -- Daryn.

KAGAN: Our Mike Chinoy watching the situation from Taipei on what is now Saturday morning.

Mike, thank you.

Now, let's take a quick look at some other stories making news around the world.

We begin in Iraq where two Iraqi nationals working for American U.S. news organizations died today. One was a translator for "TIME" magazine. The man was shot in an ambush two days ago in Baghdad.

The other was a freelance cameraman for ABC News. He was killed while covering a firefight in the Sunni Triangle in the city of Fallujah today.

The 15 nation Caribbean communities said today it does not plan to recognize Haiti's new U.S.-backed interim government. The group has been holding a summit on St. Kits. Yesterday the 15 leaders called for the U.N. general assembly to investigate Jean-Bertrand Aristide's claims that U.S. agents forced him from power.

In Russia, a court has barred Jehovah's Witnesses from operating in Moscow. The court said the group's practices broke up families, encouraged suicide and threatened its members' health by not allowing blood transfusions.

Lawyers for the group said the ruling was a step back for democracy and a punishment reminiscent of Soviet rule.

Ahead on NEWSNIGHT: is it entertainment or is it news? Why Donald Trump's hit reality show is blurring the lines between the two.

We're in Atlanta tonight with NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

KAGAN: Unless you've been living in a cave, you probably have heard of NBC's hit reality television show "The Apprentice."

On the show each week, young executives compete for their dream job working for Donald Trump, the show's star and executive producer.

Well, next month is the season's finale, and in the days leading up to it, NBC's news magazine "Dateline" plans to run roughly two hours of stories about the hit show, which has a lot of people asking the question, is "The Apprentice" really news or is this just another example of the line between news and entertainment being even more blurred.

Lawrence Grossman is former president of NBC News, and he's joining us from Westport, Connecticut.

Larry, good evening, thanks for being with us.

LAWRENCE GROSSMAN, FORMER PRESIDENT, NBC News: Good evening, Daryn, good to be with you.

KAGAN: Two hours of "Dateline" as a news program leading up to the "Apprentice" finale, good or bad idea?

GROSSMAN: Well, it sounds pretty terrible to me. NBC News is a long-standing and proud news organization, and I hardly think that a two-hour promotion for an entertainment show like "The Apprentice" is a major news story that's worth two precious hours of prime-time television.

KAGAN: Now there's some have been accusing, Larry, of kind of being holier than thou. Of sitting up on the perch, because you don't have to be in it, any more.

Isn't the idea of having a hit show that can attract viewers, isn't that a great problem to have?

GROSSMAN: It's a great problem to have, but if you're running NBC News, you're worried about where the world is going and all of the major issues we have.

To take two hours -- I mean, one doesn't have to be a purist. It's understandable that you want to do some promotion for your entertainment shows.

But to take two hours of prime-time to deal with a trivial issue like -- unless you're going to expose "The Apprentice" for some scandal, which I'm sure is not going to happen, seems like a disgrace is the word for it.

It's shameful. And I'm sure that the serious people at NBC News are embarrassed by it, as well.

KAGAN: OK. One more devil's advocate point here.

If you do it on that night, if you take your two hours of "Dateline" and dedicate it to "The Apprentice," which is going to draw millions of viewers.

Brokaw will still have his 22 minutes earlier in the night. You still have MSNBC, another place on the dial where you can be doing 24- hour news. In the environment today, isn't there enough room to do it all?

GROSSMAN: There's enough room to do it all if you're not in the news business. If you're in the news business, what they're doing is not news. What it is is a promotion and a hype. And it's certainly nothing serious.

I can't imagine that you would be doing it on your show, to spend the whole show promoting another CNN program or, indeed, another entertainment show that belongs to Time Warner, which owns CNN.

KAGAN: And I appreciate that vote of confidence in being a quality program. Thank you so much for that.

But let me also use an argument from the playground and say, "Come on, Larry. All the other kids are doing it."

You turn on CBS, they're promoting "Survivor." Any other network that has a hit show and even in the days when you had "The Today Show," I'm sure you were promoting NBC shows.

GROSSMAN: Certainly, as I say, but there are limits. And the idea of taking two hours of prime-time is simply stunning to me.

And the idea that everybody else is doing this so this is all right is just a testimonial to how serious network news has descended, if that's the kind of criteria and those are the kind of standards that they operate by.

I find it really distressing.

KAGAN: And if and when it comes to that day, will you watch?

GROSSMAN: Well, I haven't seen "The Apprentice," I must confess. And I see no reason to watch "Dateline's" two-hour hype of it, even if they're doing it because they themselves will get a very high rating.

It's just irresponsible to ignore what's going on in the rest of the world and in the political campaign and all the other major news items and to spend all that much time. For a serious news organization, it just doesn't -- doesn't parse.

KAGAN: We appreciate your take on it and on that night, a personal invitation to watch CNN. We'll be doing news. How about that?

GROSSMAN: OK, Daryn, I'd be happy to take you up on it.

KAGAN: Excellent. Larry Grossman joining us from Connecticut tonight. Appreciate that.

Still ahead on NEWSNIGHT: broken dryers, rotten mattresses, crumbling wooden signs, all praising Jesus.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK) KAGAN: This week the U.S. Supreme Court heard arguments in a landmark case stemming from the words "under God" and whether they belong in the Pledge of Allegiance.

The case has set off a heated debate in many places. Tonight we thought we'd take a look and take you some place where the question of the public role of religion is somewhat more settled.

Here's CNN's Bruce Burkhardt.

(BEGIN VIDEOTAPE)

BRUCE BURKHARDT, CNN CORRESPONDENT (voice-over): Alabama may be hot come summertime, but not hot, hot, hot. Not that kind of hot.

UNIDENTIFIED FEMALE: A lot of people don't like that, but that's in the Bible.

BURKHARDT (on camera): What, that expression?

UNIDENTIFIED FEMALE: Yes. Hell is hot, hot.

BURKHARDT (voice-over): Mozell Rice (ph) is the widow of the man who built this haunting place, W.C. Rice. It was his passion. He called it the Cross Garden. He died only a couple of months ago.

UNIDENTIFIED FEMALE: I think that's a dryer there.

BURKHARDT (on camera): That's a dryer?

UNIDENTIFIED FEMALE: Yes.

BURKHARDT: Any symbolism there to why a dryer?

UNIDENTIFIED FEMALE: He just used them to put out signs for Jesus.

BURKHARDT (voice-over): He started putting up his signs and crosses and displays back in 1976, displays like the Devil's Hellpit, where old beer cans and toy soldiers warn us to change our ways.

But the Cross Garden is only an extreme example of how Jesus is celebrated in much of the rural South by the side of the road.

JOE YORK, GRADUATE STUDENT/PHOTOGRAPHER: No matter where you go in the South, whether or not you're looking for God, you're going to find him. He's out there in these signs.

BURKHARDT: Signs that Joe York spent several months photographing. A graduate student in Southern Studies at the University of Mississippi, York put his photos in an online exhibit.

In the best tradition of roadside marketing, like the old Burma Shave signs, the message is kept simple. Like this sign where you can vote for Jesus or the devil. YORK: That picture, in particular, encapsulates this battle that goes on on the roadside, in between, you know, this world and the next world.

BURKHARDT: But it takes other forms, too.

Here Jesus presides over the 18th hole of a miniature golf course.

And then there's the clever marquis in front of churches. "The price is right with God, come on down."

But be it a church or an individual shrine like the Cross Garden, it speaks to an evangelical tradition that runs deep in the South.

PROF. WAYNE FLYNT, PASTOR: But the main thing is, it wells up in a heart of deeply emotional, deeply committed people who want others to share their faith.

UNIDENTIFIED FEMALE (singing): There's a garden down in...

BURKHARDT: Sharing the faith, any way you want to, every person, their own pope. That, too, is part of the tradition.

FLYNT: And so the point is, everybody can do it himself. That cross in the garden is a sort of ultimate symbol of the democratization of religion so that that cross can mean whatever you want it to mean.

BURKHARDT: No matter what you think all this means, it does make you stop and wonder.

FLYNT: You react to it. You think about it. In fact, Kate Campbell, one of my former students was so moved by the Cross Garden, that she wrote this poem, folk song, about the Cross Garden and what it meant to her.

UNIDENTIFIED FEMALE (singing): Signs and crosses by the road. One says Jesus is the way home.

BURKHARDT: Bruce Burkhardt, CNN, Plattville, Alabama.

(END VIDEOTAPE)

KAGAN: Our coverage takes a turn, still ahead on NEWSNIGHT: 25 years after Three Mile Island, could it happen again?

(COMMERCIAL BREAK)

KAGAN: It was life imitating the movies, 1979, Jane Fonda was playing a reporter covering a nuclear disaster in "China Syndrome," and suddenly it all became terrifyingly real.

(BEGIN VIDEOTAPE)

KAGAN (voice-over): It was a national nightmare on a small island in Central Pennsylvania.

UNIDENTIFIED MALE: An emergency.

KAGAN: There were new and terrifying phrases, core meltdown, coolant leak, radiation plumes.

Finally, it took a presidential visit to reassure the nation.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: All those who are involved here, who are highly qualified, tell me that the reactor core is indeed, stable.

KAGAN: After Three Mile Island, Americans took a hard look at the nuclear future. Protests spread, dozens of plants were canceled and no new plant licenses have been granted since.

Anti-nuclear activist Paul Gunter says that Three Mile Island turned nuclear energy from a growing to a dying industry. But even he admits it's not dead yet.

PAUL GUNTER, ANTI-NUCLEAR ACTIVIST: Here's the deal. I've been fighting this for, you know, over 30 years now, and it's certainly a struggle that is similar to trying to drive a stake through a vampire's heart.

KAGAN: In fact, nuclear power output has risen steadily, going from 11 to 20 percent of our national electrical power supply, as plants already under construction came online and existing plants grew more efficient.

ANGIE HOWARD, EVP, NUCLEAR ENERGY INSTITUTE: That's one of every five homes and businesses receiving power from nuclear energy, and it does so safely. It does so cleanly. It does so economically and reliably.

KAGAN: There is no better example of this than at Three Mile Island, where right next to the infamous Reactor 2, mothballed at a cost of a billion dollars, TMI-1 is setting records for electrical production.

There are still incidents. The Davis Vessey (ph) nuclear power plant came close to failure in 2002.

But the chairman of the Nuclear Regulatory Commission says today's improved safety record reflects the lessons learned back in 1979.

DR. NILS J. DIAZ, CHAIRMAN, NUCLER REGULATORY COMMISSION: They are safer than TMI. They're safer because of TMI, because we know a lot more about them now than we did then.

We know the systems better; we know the human responses better. We have actually established better regulatory systems and better operating systems.

KAGAN: Critics admit that the industry has learned from experience, but warn against complacency.

DAVID LOCHBAUM, NUCLEAR ENGINEER, UNION OF CONCERNED SCIENTISTS: We're having plants getting older, equipment getting older, safety margins being challenged at a time when we're cutting back on the safety inspections.

KAGAN: Others point to the failure to solve the problem of how to store nuclear waste. A planned depository at Yucca Mountain won't open until 2010 at the earliest.

GUNTER: The legacy of nuclear waste is a timeless legacy that will outlive the last watt of electricity coming from these facilities.

KAGAN: And despite increased security, Gunter warns nuclear plants remain an ideal terrorist target.

But in a world where blackouts are unacceptable, increased nuclear power is a key part of the U.S. energy plan.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Congress should promote research into the next generation of nuclear plants and encourage investment in existing nuclear plants to expand a clean and unlimited source of energy.

KAGAN: Despite government encouragement, there are no new plants on the drawing board yet.

HOWARD: Right now we have an excess capacity -- generating capacity in this country. But by the next four or five years, that capacity, if we see economic recovery, is going to be used and we're going to have a need to build new plants.

And so we will expect nuclear to be one of the choices that utilities companies will need.

(END VIDEOTAPE)

KAGAN: And that's it for tonight. I'm Daryn Kagan. Thanks for watching. I'll see you Monday morning.

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