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CNN Newsnight Aaron Brown
Oil Price Increases Still Worry Experts; Journalists Enter Imam Ali Mosque To Rescue Friends; Pakistan Offers Reward For Wanted Terrorist
Aired August 20, 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. Aaron is taking the night off.
The other night on this program, Jeff Greenfield stopped by and predicted that we'll continue to fight and re-fight the Vietnam War right up until the last Vietnam vet is dead and gone.
Well, coming from Atlanta, where I do these days, where near a century and a half later people call the Civil War the war of northern aggression and battles are fought over flags, I can understand this concept completely.
Let's take a look at history. Our first president was a war hero. So was John Kennedy. Dwight Eisenhower promised to end a war. Richard Nixon promised to end a war with honor. Bill Clinton was attacked for avoiding a war. And now for the first time two men who served in the military during the Vietnam era are facing each other in a presidential campaign.
The whip begins tonight with the war and the political battle being waged over it. Our Jill Dougherty has the watch tonight, Jill a headline please.
JILL DOUGHERTY, CNN CORRESPONDENT: Well, both campaigns say they deplore these attack ads. Both campaigns say the other guy should stop it. Both campaigns are appealing to the FDC about it but the ads keep coming.
KAGAN: Jill, thank you, more with you in just a moment.
On to Iraq and the confusion surrounding the shrine in Najaf, our John Vause with the duty and a headline, John what is the latest from there?
JOHN VAUSE, CNN CORRESPONDENT: Daryn, Najaf is quiet tonight. Negotiations are underway and the interim Iraqi government seems to be closer than it has ever been at ending the standoff at the Imam Ali Mosque, so close in fact the Iraqi interior ministry announced about 12 hours ago it was all over. It is not, at least not yet -- Daryn.
KAGAN: John, we'll be back to Baghdad in a moment.
Finally to the rising price of oil, our Mary Snow is here with details of a rather crude awakening, excuse the pun, Mary, and please a headline. MARY SNOW, CNN CORRESPONDENT: Daryn, oil prices skirted a $50 barrel (UNINTELLIGIBLE) record today as the oil market reacted to today's news out of Iraq and while oil prices took a breather, many believe that they'll resume their climb next week and climbing with them concerns about the impact on the economy -- Daryn.
KAGAN: All right. We'll be checking on that slippery slope just ahead with Mary here in New York City.
Also on the program tonight the battleground states, while George Bush and John Kerry battle for the White House, NEWSNIGHT is going to focus on some voters' fears about the economy.
And the new face of al Qaeda, a rare move by Pakistan to crack down on the terrorist network but will the decision give birth to more acts of rage? We have all that and a lot more in the hour ahead.
We're going to begin tonight with bare knuckle politics. Today, the veterans group dogging John Kerry launched another attack ad and the Kerry campaign fired back targeting not just the group itself but the Bush campaign as well.
The latest blowup comes as new polling shows that support for Senator Kerry among undecided veterans could be slipping, possibly as a result of the ads. At the very least they represent a distraction for a campaign that would rather be talking about, well, other things, which is why the message from the campaign trail today was somewhat divided.
Here now CNN's Dan Lothian.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): As Senator John Kerry toured Florida neighborhoods devastated by Hurricane Charley...
SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: How are you, sir?
UNIDENTIFIED MALE: Fine.
LOTHIAN: ...his campaign was firing a legal shot at the anti- Kerry group Swift Boat Veterans for Truth and the Bush-Cheney campaign.
ANNOUNCER: He betrayed us in the past. How could we be loyal to him now?
LOTHIAN: The Kerry campaign is complaining to the Federal Election Commission saying these ads are inaccurate and are illegally coordinated with the Bush-Cheney campaign.
TAD DEVINE, KERRY CAMPAIGN SENIOR ADVISER: What the Bush campaign has done here is put out a front group to make their case, try to keep their distance from them and obviously the web of connections is real. The Bush campaign is doing precisely what they did four years ago against John McCain but the truth is going to win out. These charges are scurrilous and false, the charges they've made against John Kerry, and they're not going to survive the light of day.
LOTHIAN: Kerry aides say recent press reports, including Friday's "New York Times" provide "overwhelming evidence." This comes as Senator Kerry spent Friday trying to refocus on domestic issues important to voters. Addressing supporters in Charlotte, North Carolina, he touted his economic plan.
KERRY: We're just going to go back to where we were with Bill Clinton when people got rich and the country did well.
LOTHIAN (on camera): The Kerry campaign says it will continue to vigorously defend the Senator's war record. As for the anti-Kerry ads, aides say the group behind them has a credibility problem after "being caught in lie after lie day after day."
Dan Lothian, CNN, with the Kerry campaign in Fort Myers, Florida.
(END VIDEOTAPE)
KAGAN: Well, all week the president and his spokespeople have declined to disavow the swift boat ads or even discuss them at all turning the conversation to all attack ads from all sides by independent groups.
Today was no different except for this, a tongue-lashing aimed at Senator Kerry by name and for that side of the story we head back to Crawford, Texas and our Jill Dougherty -- Jill.
DOUGHERTY: Well, Daryn, today Democrats and Republicans unleashed a barrage of counter attacks, e-mails, faxes, cell phone calls and also public statements and that statement out here in Crawford, Texas coming from Scott McClellan who's the press secretary for the president.
He denied any connection between the White House or the campaign with those attack ads against Senator Kerry but he also took a personal swipe against Senator Kerry.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We have not been involved in this ad whatsoever and Senator Kerry, you know, appears to have lost his cool and now he's just launching into false and baseless attacks against the president. The Kerry campaign has fueled these very kind of attacks against the president.
(END VIDEO CLIP)
DOUGHERTY: So, as that news came out that Senator Kerry's camp was going to appeal to the FDC about those ads, the Bush campaign said, "Remember we did the same thing. We filed two complaints with the FEC" and they said, "We welcome this focus on these soft money groups." Bush's campaign spokesman Taylor Griffin telling CNN: "For months we've been trying to shine a spotlight on the coordination between the John Kerry campaign and these so-called 527 groups, 527 groups on the Democrat side have run attacks ads accusing President Bush of poisoning pregnant women, complicity with the tragedies of Abu Ghraib Prison that featured a hooded Statue of Liberty."
So, meanwhile, John McCain, who has actually come out criticizing attacks on both candidates, said that both men served honorably and it's time to stop all of this.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: I believe that President Bush served honorably in the National Guard and I believe that service in the National Guard is honorable and I believe that John Kerry served honorably and there are more compelling issues. Today probably an American will die in Iraq, a young American. We should be focusing our attention on winning that war not trying to re-fight one that's been over for 30 years.
(END VIDEO CLIP)
DOUGHERTY: So, McCain actually pointed his finger at the FEC. He said they are not doing their job and he called it disgraceful conduct -- back to you Daryn.
KAGAN: No shortage of finger pointing around America today. Jill Dougherty in Crawford, Texas, Jill thank you.
Let's get some more now on the strategy behind all the back and forth, some observers calling it not just a skirmish but a potentially defining moment for the Kerry campaign.
With us in Washington, John Harwood, a member of Aaron's political Brown table and political editor of the "Wall Street Journal," good to see you, John. Thanks for being with us here tonight.
JOHN HARWOOD, "WALL STREET JOURNAL": Hey, Daryn.
KAGAN: First of all just some basic facts. What does filing this complaint with the FEC even do?
HARWOOD: Not very much to be honest. The biggest purpose of this ad is sort of as a PR gesture so they can we're fighting back. We're complaining. They can in essence put up the specter of a legal complication for the Bush campaign when we know pretty well from the get-go that this isn't going to go much further than the Bush campaign's complaints against alleged coordination between John Kerry and the outside groups on the Democratic side.
KAGAN: There does seem to be plenty of complaints to go all around about these 527 groups. For those people not on the inside of campaigns, not on the inside of the Beltway, what are they and how are they able to do what they're doing? HARWOOD: The coordination you mean, Daryn?
KAGAN: No, an actual 527 group and soft money and their connection to McCain-Feingold and the new campaign finance laws.
HARWOOD: The new campaign finance law that John McCain and Russ Feingold pushed through the Congress and that President Bush signed a couple of years ago bars political party committees from raising what they call soft money. These are the large donations not regulated or limited by federal law.
But what's happened is that groups outside of the political parties, outside of the nominee's campaigns, have been formed and they are collecting this soft money and running advertisements, a lot more of it by the way on the Democratic side, Daryn, than on the Republican side and those soft -- those groups are using those donations that used to go to the party to air their own advertisements in their own get-out-the-vote activities.
And in this year the dominant voice has been the groups on the Democratic side who have been going very aggressively after President Bush and going very aggressively to try to turn out Democratic voters. This represents a small attempt on the Republican side for them to try to get in the game and answer those Democratic ads.
KAGAN: OK. We can do the math another night about who's spending more on the 527 but I have other things I want to get to including where does it go from here and what is the point of all this? Republicans say and are saying, basically alleging, that John Kerry is a liar. Democrats are frustrated with the Republicans saying you're getting us off issue. How do we advance this conversation so that America can get to the business of electing a president?
HARWOOD: Well, one of the ways that the conversation will be advanced is when the news media starts paying less attention to it. You know, only about $1 million or less has been spent by this group attacking John Kerry so far but it's been amplified on television, over the Internet, in so-called free media news reports, that sort of thing.
That's really what's been driving this story and we've seen evidence in public polls beginning today that, in fact, it's hurting John Kerry. Republicans are delighted by this because the dynamics of this campaign, the larger fundamentals, what's going on in Iraq, worries about the economy have not been favorable to President Bush. He's behind by a small amount right now. This is something that is helping George Bush and his campaign narrow the gap right now.
KAGAN: And indeed John Kerry's numbers, especially among war vets, have dropped markedly since the Democratic Convention. At what point, though, can this begin to backfire for the Republicans?
HARWOOD: Well, one question is what happens now that John Kerry has personally raised the stakes on this and said "This isn't about me fighting Swift Boat Veterans for Truth. This is about me and George Bush" and saying, in effect, this is a front for George Bush and he needs to come out and deal with this directly.
We haven't yet seen evidence that the president is going to respond personally to that in the way that John Kerry tried to trigger but what's going to happen is when polls start showing this backfiring, if that ever happens on the president, that's when we're going to see Republicans begin to try to turn the page here.
But so far it is helping them, not hurting the president, and that's why they're going to keep trying to drive this story and they like what happened today. They think they can now make an argument about presidential temperament against John Kerry saying he lost his cool.
KAGAN: Yes and you make a fascinating point, as we close, that all over an ad that most people would have never seen if we, the media, hadn't picked it up and run with it.
HARWOOD: Exactly right.
KAGAN: John Harwood of "The Wall Street Journal" thanks for staying up late with us tonight appreciate it.
Now let's take a look now on the issues that both sides say that they are itching to debate. Issue one is the economy. Is it turning the corner or is it stuck in the mud? Where you stand depends a lot where you sit.
Even more than that it depends on where you work or where you don't work as the case might be, reporting for us tonight CNN's Tom Foreman.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT (voice-over): Ask any two voters how the American economy is doing and chances are you will get widely different answers depending on where the people live and what they do for a living. The chief economist for "Business Week" is Michael Mandel.
MICHAEL MANDEL, CHIEF ECONOMIST, "BUSINESS WEEK" MAGAZINE: Most of the country is actually doing well but there's enough fear out there that you can sort of point to a couple of places that are doing poorly and say, you know, you could be going that way too.
FOREMAN: Consider the battleground state of Ohio with its huge manufacturing base. Two hundred thirty-five thousand jobs have been lost here in the past few years, something John Kerry likes to point out.
KERRY: Don't tell us that some worker in Ohio has to not only lose their job but they have to unbolt their own equipment, crate it up, ship it to China and train somebody else for their job.
FOREMAN: The situation, however, is complex. The Timken Company in Canton, for example, is planning to eliminate 1,300 jobs in its precision bearings division but Timken will still be the area's largest employer. It's hired 170 workers in other divisions and it has 120 job openings. Company officials say the cuts will keep them competitive.
JIM GRIFFITH, PRESIDENT AND CEO, TIMKEN COMPANY: That's evolution. That's part of business. That's what makes our living standard go up year after year after year.
FOREMAN: Not far away in Youngstown, this high tech firm started a few years ago and has been expanding ever since. It now employs 19 people. These companies are springing up everywhere in Ohio but they don't grab headlines like a big layoff.
ANDY DOEHREL, PRESIDENT AND CEO, OHIO CHAMBER OF COMMERCE: When you're talking high tech, you're usually not talking about 1,000 jobs. You're looking at more intensive small business types of areas, which is where most of the jobs are coming from so it's a little bit harder to see.
FOREMAN: Plenty of people who are still deciding how to vote clearly remain worried about the high cost of gas, healthcare and undeniably slow job growth.
RICK FARMER, POLITICAL SCIENCE PROF. UNIV. OF AKRON: It's literally going to depend on how they feel about can I pay the bills? What's the price of gasoline? What's the price of milk? How's my rent coming?
FOREMAN (on camera): So, can a president win reelection when voters in critical states are unsure if the economy is good or bad?
(voice-over): Well, there was a year that was shockingly like this one, according to Michael Mandel.
MANDEL: You can barely tell the two economies apart. It's astounding.
FOREMAN: And that was 1996 when Bill Clinton held on to the White House.
Tom Foreman, CNN, Washington.
(END VIDEOTAPE)
KAGAN: Ahead on NEWSNIGHT, the standoff in Najaf and control of the Imam Ali Mosque. The tense situation now enters a critical third week. John Vause will have a live report for us from Baghdad.
Also a combination of images, a photo essay of the stars and the candid moments that are recorded forever.
From NEWSNIGHT -- from New York this is NEWSNIGHT and we're back after this.
(COMMERCIAL BREAK)
KAGAN: In Iraq, the crisis in Najaf took an unexpected turn today when the rebel cleric Muqtada al-Sadr offered to give up control of the Imam Ali shrine to Shiite Muslim religious leaders.
Just yesterday al-Sadr and his followers rejected an ultimatum to withdraw from the shrine, one of the holiest sites in Shiite Islam.
Today's offer provides a potential face-saving way out of the battle that's been playing out in Najaf, potential is the operative word here, more now from CNN's John Vause.
(BEGIN VIDEOTAPE)
VAUSE (voice-over): The loyal followers of Muqtada al-Sadr, no sign of the rebellious cleric at Friday prayers at the Kufa Mosque just outside Najaf, instead an announcement on his behalf. He's ready to give up the Imam Ali Mosque but not to the Iraqi interim government.
SHEIK JABER AL-KHAFAJI, AL-SADR SPOKESMAN (through translator): My wish and request from the highest religious authority that it accepts that the old part of Najaf would be under its control, not under the control of the Mehdi Army.
VAUSE: The Grand Ayatollah al-Sistani, in London for heart treatment, is Iraq's most senior Shiite religious leader. He's agreed to the plan but negotiations are still underway with his aides in Najaf but at mosques in Baghdad calls for al-Sadr's followers to fight on.
UNIDENTIFIED MALE (through translator): We will create another doomsday for the occupiers and the government they have installed.
VAUSE: The reply from the crowd, "We are ready to lay down our souls for Muqtada" they chanted.
After more than two weeks of fighting, Najaf's old city has been seriously damaged. Many buildings have been reduced to rubble, smoke still billowing from others, cars and truck riddled with bullet holes.
All is relatively calm now with yet another temporary ceasefire in place to allow for more peace negotiations. U.S. and Iraqi forces have pulled back but are not standing down.
LT. COL. MYLES MIYAMASU, U.S. MARINES: We are continuing to do planning and preparation for continuous offensive operations to get Mehdi militia destroyed, to capture Muqtada al-Sadr and to return the holy shrine back to the hands of the Iraqi people.
VAUSE: According to the governor of Najaf, Iraqi Police are manning roadblocks around the Imam Ali Mosque and have arrested at least 50 members of al-Sadr's militia who were apparently trying to flee. For the interim government, Muqtada al-Sadr and his Mehdi militia are now its most pressing and biggest challenge.
MOUWAFFAQ ALRUBAIE, IRAQ NATIONAL SECURITY ADVISER: We would like Muqtada al-Sadr to disband and dissolve his militia. There is no way we can build democracy in this country with the militia all over the country. VAUSE: So eager to see this standoff come to an end, Iraq's interior ministry announced prematurely that its police and security forces had taken control of the Imam Ali Mosque but, for now at least, it's clear Sadr remains in charge.
(END VIDEOTAPE)
VAUSE: And, if the Iraqi government can bring this rebellion to a peaceful end without further bloodshed and without damaging the mosque, it will be a major victory and they seem to be closer now than they ever have been but al-Sadr is anything but predictable and a peaceful outcome is anything but guaranteed -- Daryn.
KAGAN: Predictable, do you even know where he is or you don't but no one really seems to know where he is.
VAUSE: Very good question. In fact, U.S. military intelligence says that they have no way of knowing that Muqtada al-Sadr is inside the Imam Ali Mosque and we did hear from al-Sadr's aides saying that, in fact, they believe or they're saying rather that he is not inside that mosque, not telling us where he is but everyone is working on the assumption that he is still inside that mosque. The interim government, for one, believes that he is still there, Daryn, but no concrete evidence of where he may be right now.
KAGAN: All right, John Vause in Baghdad, John thank you.
Our next interview leads us inside that mosque. By most accounts the situation in Najaf was, at best, confusing today. Our guest coming up now, Scott Baldauf, has been reporting from Iraq for the "Christian Science Monitor."
He was in Najaf yesterday before Muqtada al-Sadr made his offer to give up control of the Imam Ali shrine. That didn't stop Mr. Baldauf and some other journalists from making their way into the shrine where they met with Muqtada al-Sadr's spokesman.
Inside the complex they encountered hundreds of Mehdi Army supporters. Mr. Baldauf's account of the visit runs in today's "Christian Science Monitor." The man behind the byline is back in Baghdad tonight, safe, in one piece and with great pleasure we welcome you. Thanks for being with us.
SCOTT BALDAUF, "THE CHRISTIAN SCIENCE MONITOR": Thank you.
KAGAN: Very interested in getting this journalist perspective of how you and the other journalists, one, had the opportunity to make your way inside the mosque and why from a personal safety standpoint you decided to do that.
BALDAUF: Well, I'll take the second question last.
KAGAN: OK.
BALDAUF: The reason we went in was for a friend. We had a couple of friends inside the mosque who were not being held by the Mehdi Army but who were unable to get out because of snipers up and down that alley leading from the mosque towards the first American checkpoint.
When you're traveling in that area, you're taking your life in definite risk. If you go in as a group and if you've worked out an agreement with both sides, your safety is enhanced and this is what we had to do in a very short period of time.
We had to contact the American military, the Iraqi government and the Mehdi Army inside the shrine to get them to stand down, at least for the time that we were coming into the shrine and coming out, and let them have at it afterward.
KAGAN: And, I would imagine as you're talking to all those different groups, more than one person in more than one language is trying to tell you and the others this is not the brightest idea of your journalism career.
BALDAUF: Well, absolutely. The American military was pretty upfront with me when I was talking with them. "This is foolish what you're doing." On the other hand, I think they respected what we were about to do, the reasons for this and our motives, of course, were to try and do two things.
We wanted to get news out of there. We wanted to get a press conference, the final statement, if it came to that from al-Sadr's spokesman but we also wanted to, again, get our friends, Thorn Anderson (ph) and Phil Robertson (ph) out of that mosque.
KAGAN: And tell us once you did make your way inside what you saw inside.
BALDAUF: Well, it's not a scene that you would expect. The crowd inside, number one, they were unarmed. Most of them were demonstrators. They were people who had come, many of them, from Baghdad as supporters of Muqtada al-Sadr willing human shields, putting their lives on the line in support of their leader.
And so, they're marching around the mosque shouting chants that we've heard over and over again about giving their lives to these saints, they view Muqtada al- Sadr practically as a saint, of contempt for the U.S. and the Allawi government and it was ebullient. You felt like this was a bit of a party.
KAGAN: And looking back did you achieve your goals? Did you help your friends get out and did you get the story you went in to get and was it worth the personal risk?
BALDAUF: It was worth the risk, absolutely. We did get our friends out. There were some hairy moments coming in and coming out. We were a little unsettled by all the shells coming into the perimeter of the mosque within a few hundred meters and we were not sure how long the ceasefire would last. Four-thirty was our deadline. We only had roughly about an hour to do our business and get out and it was -- it was pretty close. KAGAN: Well, we're glad to see that you're out. Thanks for sharing your story. It's fascinating reading, as we said, in "The Christian Science Monitor."
BALDAUF: Thank you.
KAGAN: Scott Baldauf, thank you for being with us.
We move on to another corner of the globe. Terrorism experts around the world are trying to define al Qaeda's new face after the latest crackdown, which began in Pakistan and spread to Great Britain and the U.S. This week Pakistan published six new pictures of people they say are key figures in al Qaeda's evolving network.
Our Maria Ressa has the details.
(BEGIN VIDEOTAPE)
MARIA RESSA, CNN CORRESPONDENT (voice-over): Pakistan's government has its most wanted in a rare move published on the front page of its top newspapers. This is al Qaeda's new breed. Five out of six are Pakistanis showing al Qaeda relying more on homegrown militants as the global crackdown continues.
Like Pakistani Amjad Hussain Farooqi, allegedly trained by Pakistan's intelligence services, he was part of the Jaish-e-Mohammed. Now banned here as a terrorist group, it was born out of Pakistan's covert support for militants in Kashmir.
Authorities say Farooqi was involved in the murder of American journalist Daniel Pearl. Working with al Qaeda's Khalid Shaikh Mohammed, the 9/11 mastermind, Farooqi picked up Pearl and drove him to the Karachi nursery where he was later killed.
Under al Qaeda's direction, authorities here say Farooqi recruited Air Force and Army officers for two assassination attempts against Pakistan's President Pervez Musharraf last December.
FARHAN BOKARI, ANALYST: If you give birth to monsters, to demons, then they are going to come back to haunt you one day and that is precisely what is happening right now.
RESSA: Now, Pakistan is offering 20 million rupies or about $345,000 for any information leading to Farooqi's arrest. Pakistan says Farooqi worked at the direction of Libyan al Qaeda planner Abu Faraj al-Libbi.
Intelligence sources say he replaced Khalid Shaikh Mohammed as al Qaeda's number three. Pakistan warns its renewed crackdown may trigger a backlash from al Qaeda.
(on camera): Despite the dangers, President Musharraf says Pakistan has been 90 percent successful in tracking down the terrorists. He says the ultimate goal is to kill the masterminds, arrest the planners and eliminate al Qaeda.
Maria Ressa, CNN, Islamabad.
(END VIDEOTAPE)
KAGAN: Coming up on NEWSNIGHT, the rising price of oil and the ripple effect that could leave you cold.
Also, safeguarding a city during the Republican National Convention. There is a lot happening just beneath the surface, a break first.
This is NEWSNIGHT.
(COMMERCIAL BREAK)
DARYN KAGAN: It's hard to think of this now but December is around the corner and you might be bundled up and shivering under the covers, the thermostat down around 62. In fact, the only time you stop shivering, the only time your temperature rises at all is when you get the heating bill. The price of oil has jumped more than 50 percent in the last year and when the price of oil goes up, the economy slows down, enough could be to give you goose bumps. The report tonight from CNN's Mary Snow.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Traders describe the tone as jittery with headlines out of Iraq being the latest trigger moving the market. Crude futures eased during the day after coming close to hitting $50 a barrel, a new milestone.
ERIC BOLLING, INDEPENDENT ENERGY TRADER: I think it's mostly psychological. I think the demand picture brought us up from $25 area up to the $40, $45 area and the last few dollars of it was pretty much kind of a snowball effect, people jumping in the markets.
SNOW: Besides tightening supplies, there's also growing demand, especially from China, which has seen demand rise 40 percent this year and there's real concern how all these higher oil prices will impact the economy.
LAKSHMAN ACHUTHAN, ECONOMIC RESEARCH CYCLE INSTITUTE: Already, we've seen that it's been slowing down consumer spending. And that has been going on for a few months now. That's not going to change. I think as long as oil prices remain high, you're going to see the consumer having less disposable income. The economy will be a little bit softer as a result.
SNOW: Gasoline prices for one are expected to go back up after declining in recent weeks and home heating oil is another concern.
PETER BEDTEL, CAMERON HANOVER: Consumers are in for a big shock this winter. They're going to be paying $350 to as much as $600 more to heat their homes this winter season.
(END VIDEOTAPE) SNOW: While gasoline prices are also expected to climb, analysts don't expect it to be a dramatic rise largely due to the fact that as the summer driving season winds down, so will demand. Daryn.
KAGAN: We see prices go all over the place. What is it about the number 50 that makes people so nuts?
SNOW: Really traders say it's a psychological milestone and simply put, just as you would mark your 50th birthday let's say...
KAGAN: Not that I would know about that, for the record.
SNOW: Not anytime soon, of course but the kind of a milestone where you start to assess your life, how things will change. And there's so much hype around this $50 mark, it's really put the oil market on edge, traders on edge and that is one of the factors just kind of contributing to the rise in oil.
KAGAN: All right. Mary Snow, thanks for staying late.
SNOW: Sure.
KAGAN: Appreciate that. Some other bits and pieces now in our money line round up starting with United Airlines. The day after telling a bankruptcy court that it might have to default on its pension fund, the government today lobbied the court to say no. The taxpayer financed Pension Benefit Guaranty Corporation would be left holding the bag if United gets its wish. The bill could total more than $8 billion. United is in Chapter 11 protection and has until the end of the month to come up with a plan to reorganize.
Don't look for any changes in your phone bill for a while. The FCC today imposed a six-month freeze on what the so-called baby Bells can charge, MCI, AT&T and others for access to your home. The agency will take the time to come up with a new set of rules to govern the rates. If it can't, the baby Bells would then be free to jack up prices by 15 percent and higher.
And speaking of up, Wall Street had an up day. The Nasdaq leading the charge, up 1 percent.
And we'll take a break and be back after this.
(COMMERCIAL BREAK)
KAGAN: Well, there are less than two weeks to go. Police at every level are ramping up efforts here to make sure that New York City remains safe during the Republican National Convention. There are big challenges, especially in the city's subways. Our Deborah Feyerick takes a look at that.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Beneath Madison Square Garden, 1,000 subway and commuter trains pass through Penn Station, linking New Jersey and Long Island to New York City. Seven million people on the move underground, every day, more people, one expert says than travel an L.A. freeway in two months. But the tunnels are old and that could complicate rescue efforts if there's a terror attack.
ROBERT PAASWELL, UNIVERSITY TRANSPORTATION RESEARCH CENTER: They need perhaps structural repair, the fact that the communication systems in the tunnels are all in need of being updating. They're not necessarily redundant, so if you kill one communication system, you don't have backups. Radios don't work.
FEYERICK: Police say they can evacuate the trains if they need to, a need highlighted by the coordinated bombings on passenger trains in Madrid last March. NYPD inspector Vincent DeMarino helps oversee the city's subways.
INSPECTOR VINCENT DEMARINO, NYPD COUNTER TERRORISM UNIT: There's a slight paradigm shift with regards to how those devices went off on those trains. So we were able to immediately change what we do just in case they feel that that was a successful strategy that they might want to employ somewhere else in the world.
FEYERICK: During the convention, specially trained counter terror units will make random frequent subway sweeps, searching for anything suspicious. That includes possible suicide bombers.
WILLIAM MORANGE, SECURITY DIR., METRO TRANSPORTATION AUTHORITY: Intelligence is probably the most important part. We get all the newest intel. In addition, we also know what's credible, what's not credible.
FEYERICK: Police, many undercover, will be riding trains into Manhattan, an attempt to stop any device from reaching there. The city's police Commissioner Ray Kelly said.
RAYMOND KELLY, COMM, NEW YORK POLICE DEPARTMENT: We have a comprehensive program in place to address a lot of those concerns. No guarantees. There are no guarantees in the post-9/11 world.
FEYERICK: And that's the challenge. When a pipe bomb went off in a Times Square subway station mid-July, police swarmed the scene.
(on-camera): One transit expert says it's that kind of incident that shows an attack doesn't have to be big, or for that matter anywhere near the convention, to disrupt the event. Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
KAGAN: Let's check some other quick items from around the headlines, starting with the follow-up to a rather unsettling story. The U.S. Justice Department ruled today that police officers who drew their guns and ordered students to the floor during a raid at a South Carolina high school last year did not violate civil rights laws. The decision means there will be no criminal charges. The raid was videotaped. It was widely covered by the media. Images of students cowering in front of police dogs led to outrage and an investigation. Pete Rose is in trouble again with the Internal Revenue Service which says the baseball great owes nearly $1 million in unpaid taxes. The 63-year-old former all-star spent five months in prison in 1990 and '91 for filing false tax returns. In 1989, he agreed to a lifetime ban from baseball and faced allegations that he bet on games.
And a Japanese court has dismissed a request to halt deportation proceedings against Bobby Fisher. The fugitive chess legend is wanted in the United States for allegedly violating international sanctions on the former Yugoslavia. He was detained in Japan last month while trying to travel on an invalid American passport.
Still to come on NEWSNIGHT, how the Muslim world sees the situation in Najaf. Insights from a Middle East analyst coming up.
(COMMERCIAL BREAK)
KAGAN: That was the scene earlier today in Najaf where the Imam Ali shrine is more than a flash point in Iraq. What is unfolding in Najaf at one of the holiest sites in Shiite Islam is being watched across the world. How it's being seen by Arabs around the world has enormous implications.
Joining us now is Juan Cole, a professor of modern Middle East history at the University of Michigan in Ann Arbor. Good evening. Thanks for being with us professor.
JUAN COLE, UNIVERSITY OF MICHIGAN PROF OF HISTORY: It's my pleasure.
KAGAN: It was certainly confusing in the western world to watch what was taking place at the mosque today. How is it explained in the Arab media?
COLE: Well, everybody is confused. The Arab satellite news is just as confused as our own about what exactly is happening. Al Jazeera is reporting that a representative of Muqtada al-Sadr is denying that they have actually turned over the mosque yet. There may be plans to do so, especially giving it to supporters of Grand Ayatollah Ali Sistani.
KAGAN: I want to ask you more questions about the grand ayatollah in a moment, but first in terms of the mosque and the battle over this mosque, what does it truly represent in the Arab world?
COLE: It's really better spoken of as a shrine. It is the tomb of Ali, who was the son-in-law and cousin of the prophet Mohammad. And Shiites believe he was the proper successor of the prophet Mohammad. So he's kind of like St. Peter is in Roman Catholicism and it's a very holy place, not only for Shiites but also for Sunnis. And the holiness of it I think extends to the whole city of Najaf, the cemetery that's there and all the buildings around it. The city is considered a holy place.
KAGAN: How is the Arab media portraying Muqtada al-Sadr? Is he a martyr or is he somebody who's getting in the way of the peaceful process and elections in Iraq?
COLE: Well, within Najaf itself, Muqtada is not well liked and his men are mostly not from there. But the further away you get from Najaf, in Iraq and then in the Arab world more generally, Muqtada is generally seen as a symbol of defiance against what they think of as American occupation of Iraq. They feel that the United States presence there is not legitimate, that the Allawi government is really nothing more than a puppet. Now they have started calling it an agent of the United States. And so generally, he is seen as a sympathetic figure in the Arab press.
KAGAN: I interviewed the Iraqi national security adviser earlier today. He didn't really seem to be able to define how that government sees Muqtada al-Sadr, whether he is a wanted man for all the insurgencies that he is stirring up around the country or whether he's somebody they want to come sit at the table and be a political partner.
COLE: Caretaker/prime minister Ayad Allawi has repeatedly said that there is a place at the political table for Muqtada if he'll take it.
KAGAN: But they also say they're going to storm the shrine if he doesn't give up his people.
COLE: That's right. The line of the interim government is that Muqtada has a militia. That militia would interfere with any kind of democracy in Iraq, that he must give it up. He must disarm his men and turn his government into a political party if they want to contest for seats in parliament, Mr. Allawi says they would be welcome to do so. At this moment, from Allawi's point of view, at least with regard to his public pronouncements, Muqtada is not a wanted man.
KAGAN: And finally your point about the Grand Ayatollah al Sistani, things really seemed to heat up in Najaf as he left to go to London to get medical treatment. Any chance he can come back and regain the power that he had before he left?
I don't believe that Sistani's authority has been damaged by his absence. I think he was very much against being drawn into this fighting. Either he would have been asked to mediate or it was entirely possible that if Muqtada were killed, that some of his followers might assassinate Sistani in revenge. So he absented himself from the scene and he is playing a role from a distance and that role is important if it can in fact end the standoff at the shrine. But he continues to be the person to whom most Iraqi Shiites and indeed Shiites in Lebanon and elsewhere in the Arab world listen.
KAGAN: And we will be watching what happens in Najaf and around the Arab world. Professor Juan Cole from the University of Michigan, thank you.
Still ahead on our program, our love affair with the still photograph and a photographer's love affair with a generation of celebrities. First, take a look at some of the snapshots from our sponsors. This is NEWSNIGHT on CNN. (COMMERCIAL BREAK)
KAGAN: Regular viewers of NEWSNIGHT know that we have a thing for still photographs around here. We also have a thing for the stories behind them. And this being Friday, we're going to indulge on both. Over the last decade, British photographer Platon has had extraordinary access to some of the most powerful people in America, all leaders in their fields. He recently released a collection of his photographs. Here's a look.
(BEGIN VIDEOTAPE)
PLATON, PHOTOGRAPHER, PLATON'S REPUBLIC: Platon's Republic has been an amalgamation of all my favorite portraits and documentary pictures. It's sort of like channel surfing through contemporary culture. I really wanted to convey what it feels like to go to the White House, to go to the mayor's office, to go to city hall, what it's like to talk to Al Pacino.
It's my job to meet fascinating people, interact with them, record my findings on film and then present it to people to show, this is what I feel it's really like to meet this person. I am in love with Pammy, there's no doubt about it. On the day of the shoot, I remember we had racks and racks of couture dresses for her to wear. I left the studio. I ran to the nearest store and bought a $20 American flag. They wrapped it in a brown paper bag and I rushed back to the studio and gave to it Pammy and I said, "I don't want you to wear any of these dresses, I want you to wear what's in this bag." And she opened it up and within seconds, she knew exactly what I wanted. She's an American icon. It doesn't get more American than stars and stripes and Pammy. Ironically, she's Canadian.
I was asked by John Kennedy, Jr. to photograph the congressmen who all fought in the Vietnam War and they wanted to do it at the memorial in Washington. What I was struck by was that the surface of the marble was so shiny that when you look at the names of all the poor soldiers that lost their lives in the war, you're actually also looking at the reflection of your face at the same time. I lied down on the floor as they arrived and asked them to literally stand around my head. So what it creates is this circle. It's almost like the circle of memory or the circle of trust.
I'm fascinated by mannerisms, what makes somebody tick, what goes on inside their mind, how their body language expresses their feelings. Once in awhile I'm confronted with someone who has incredible visual flair and Michael Stipe was one of these people. In a way, he did all the talking with his mannerisms and with his body and it doesn't really matter whether it's an everyday person on the street or president of the United States.
I have to be honest, I've never get anyone who had the charisma that Clinton has. I really wanted some of the Clinton magic. So I leaned forward and I said, "Mr. President, will you show me the love?" and I remember, he put his hands on his knees and he smiled the Clinton smile and I got it on film. There's no room for two egos in my studio. If I go in humble, then that allows me to fill my space with the person's personality I'm photographing. They walk in. They have a camera pointed at their face, in this hyper-real situation. Even though it's only 15 minutes they are very aware that everything they do, every gesture they make, can be recorded forever. So they do get nervous and it's my job to break the nerves, to break down the barriers, very, very quickly, so that suddenly, all these wonderful, instinctive gestures and mannerisms come alive.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
KAGAN: And that's going to wrap up NEWSNIGHT for the week. I'm Daryn Kagan. Aaron Brown right back in the seat on Monday night. Have a great weekend.
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 August 20, 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. Aaron is taking the night off.
The other night on this program, Jeff Greenfield stopped by and predicted that we'll continue to fight and re-fight the Vietnam War right up until the last Vietnam vet is dead and gone.
Well, coming from Atlanta, where I do these days, where near a century and a half later people call the Civil War the war of northern aggression and battles are fought over flags, I can understand this concept completely.
Let's take a look at history. Our first president was a war hero. So was John Kennedy. Dwight Eisenhower promised to end a war. Richard Nixon promised to end a war with honor. Bill Clinton was attacked for avoiding a war. And now for the first time two men who served in the military during the Vietnam era are facing each other in a presidential campaign.
The whip begins tonight with the war and the political battle being waged over it. Our Jill Dougherty has the watch tonight, Jill a headline please.
JILL DOUGHERTY, CNN CORRESPONDENT: Well, both campaigns say they deplore these attack ads. Both campaigns say the other guy should stop it. Both campaigns are appealing to the FDC about it but the ads keep coming.
KAGAN: Jill, thank you, more with you in just a moment.
On to Iraq and the confusion surrounding the shrine in Najaf, our John Vause with the duty and a headline, John what is the latest from there?
JOHN VAUSE, CNN CORRESPONDENT: Daryn, Najaf is quiet tonight. Negotiations are underway and the interim Iraqi government seems to be closer than it has ever been at ending the standoff at the Imam Ali Mosque, so close in fact the Iraqi interior ministry announced about 12 hours ago it was all over. It is not, at least not yet -- Daryn.
KAGAN: John, we'll be back to Baghdad in a moment.
Finally to the rising price of oil, our Mary Snow is here with details of a rather crude awakening, excuse the pun, Mary, and please a headline. MARY SNOW, CNN CORRESPONDENT: Daryn, oil prices skirted a $50 barrel (UNINTELLIGIBLE) record today as the oil market reacted to today's news out of Iraq and while oil prices took a breather, many believe that they'll resume their climb next week and climbing with them concerns about the impact on the economy -- Daryn.
KAGAN: All right. We'll be checking on that slippery slope just ahead with Mary here in New York City.
Also on the program tonight the battleground states, while George Bush and John Kerry battle for the White House, NEWSNIGHT is going to focus on some voters' fears about the economy.
And the new face of al Qaeda, a rare move by Pakistan to crack down on the terrorist network but will the decision give birth to more acts of rage? We have all that and a lot more in the hour ahead.
We're going to begin tonight with bare knuckle politics. Today, the veterans group dogging John Kerry launched another attack ad and the Kerry campaign fired back targeting not just the group itself but the Bush campaign as well.
The latest blowup comes as new polling shows that support for Senator Kerry among undecided veterans could be slipping, possibly as a result of the ads. At the very least they represent a distraction for a campaign that would rather be talking about, well, other things, which is why the message from the campaign trail today was somewhat divided.
Here now CNN's Dan Lothian.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): As Senator John Kerry toured Florida neighborhoods devastated by Hurricane Charley...
SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: How are you, sir?
UNIDENTIFIED MALE: Fine.
LOTHIAN: ...his campaign was firing a legal shot at the anti- Kerry group Swift Boat Veterans for Truth and the Bush-Cheney campaign.
ANNOUNCER: He betrayed us in the past. How could we be loyal to him now?
LOTHIAN: The Kerry campaign is complaining to the Federal Election Commission saying these ads are inaccurate and are illegally coordinated with the Bush-Cheney campaign.
TAD DEVINE, KERRY CAMPAIGN SENIOR ADVISER: What the Bush campaign has done here is put out a front group to make their case, try to keep their distance from them and obviously the web of connections is real. The Bush campaign is doing precisely what they did four years ago against John McCain but the truth is going to win out. These charges are scurrilous and false, the charges they've made against John Kerry, and they're not going to survive the light of day.
LOTHIAN: Kerry aides say recent press reports, including Friday's "New York Times" provide "overwhelming evidence." This comes as Senator Kerry spent Friday trying to refocus on domestic issues important to voters. Addressing supporters in Charlotte, North Carolina, he touted his economic plan.
KERRY: We're just going to go back to where we were with Bill Clinton when people got rich and the country did well.
LOTHIAN (on camera): The Kerry campaign says it will continue to vigorously defend the Senator's war record. As for the anti-Kerry ads, aides say the group behind them has a credibility problem after "being caught in lie after lie day after day."
Dan Lothian, CNN, with the Kerry campaign in Fort Myers, Florida.
(END VIDEOTAPE)
KAGAN: Well, all week the president and his spokespeople have declined to disavow the swift boat ads or even discuss them at all turning the conversation to all attack ads from all sides by independent groups.
Today was no different except for this, a tongue-lashing aimed at Senator Kerry by name and for that side of the story we head back to Crawford, Texas and our Jill Dougherty -- Jill.
DOUGHERTY: Well, Daryn, today Democrats and Republicans unleashed a barrage of counter attacks, e-mails, faxes, cell phone calls and also public statements and that statement out here in Crawford, Texas coming from Scott McClellan who's the press secretary for the president.
He denied any connection between the White House or the campaign with those attack ads against Senator Kerry but he also took a personal swipe against Senator Kerry.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We have not been involved in this ad whatsoever and Senator Kerry, you know, appears to have lost his cool and now he's just launching into false and baseless attacks against the president. The Kerry campaign has fueled these very kind of attacks against the president.
(END VIDEO CLIP)
DOUGHERTY: So, as that news came out that Senator Kerry's camp was going to appeal to the FDC about those ads, the Bush campaign said, "Remember we did the same thing. We filed two complaints with the FEC" and they said, "We welcome this focus on these soft money groups." Bush's campaign spokesman Taylor Griffin telling CNN: "For months we've been trying to shine a spotlight on the coordination between the John Kerry campaign and these so-called 527 groups, 527 groups on the Democrat side have run attacks ads accusing President Bush of poisoning pregnant women, complicity with the tragedies of Abu Ghraib Prison that featured a hooded Statue of Liberty."
So, meanwhile, John McCain, who has actually come out criticizing attacks on both candidates, said that both men served honorably and it's time to stop all of this.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: I believe that President Bush served honorably in the National Guard and I believe that service in the National Guard is honorable and I believe that John Kerry served honorably and there are more compelling issues. Today probably an American will die in Iraq, a young American. We should be focusing our attention on winning that war not trying to re-fight one that's been over for 30 years.
(END VIDEO CLIP)
DOUGHERTY: So, McCain actually pointed his finger at the FEC. He said they are not doing their job and he called it disgraceful conduct -- back to you Daryn.
KAGAN: No shortage of finger pointing around America today. Jill Dougherty in Crawford, Texas, Jill thank you.
Let's get some more now on the strategy behind all the back and forth, some observers calling it not just a skirmish but a potentially defining moment for the Kerry campaign.
With us in Washington, John Harwood, a member of Aaron's political Brown table and political editor of the "Wall Street Journal," good to see you, John. Thanks for being with us here tonight.
JOHN HARWOOD, "WALL STREET JOURNAL": Hey, Daryn.
KAGAN: First of all just some basic facts. What does filing this complaint with the FEC even do?
HARWOOD: Not very much to be honest. The biggest purpose of this ad is sort of as a PR gesture so they can we're fighting back. We're complaining. They can in essence put up the specter of a legal complication for the Bush campaign when we know pretty well from the get-go that this isn't going to go much further than the Bush campaign's complaints against alleged coordination between John Kerry and the outside groups on the Democratic side.
KAGAN: There does seem to be plenty of complaints to go all around about these 527 groups. For those people not on the inside of campaigns, not on the inside of the Beltway, what are they and how are they able to do what they're doing? HARWOOD: The coordination you mean, Daryn?
KAGAN: No, an actual 527 group and soft money and their connection to McCain-Feingold and the new campaign finance laws.
HARWOOD: The new campaign finance law that John McCain and Russ Feingold pushed through the Congress and that President Bush signed a couple of years ago bars political party committees from raising what they call soft money. These are the large donations not regulated or limited by federal law.
But what's happened is that groups outside of the political parties, outside of the nominee's campaigns, have been formed and they are collecting this soft money and running advertisements, a lot more of it by the way on the Democratic side, Daryn, than on the Republican side and those soft -- those groups are using those donations that used to go to the party to air their own advertisements in their own get-out-the-vote activities.
And in this year the dominant voice has been the groups on the Democratic side who have been going very aggressively after President Bush and going very aggressively to try to turn out Democratic voters. This represents a small attempt on the Republican side for them to try to get in the game and answer those Democratic ads.
KAGAN: OK. We can do the math another night about who's spending more on the 527 but I have other things I want to get to including where does it go from here and what is the point of all this? Republicans say and are saying, basically alleging, that John Kerry is a liar. Democrats are frustrated with the Republicans saying you're getting us off issue. How do we advance this conversation so that America can get to the business of electing a president?
HARWOOD: Well, one of the ways that the conversation will be advanced is when the news media starts paying less attention to it. You know, only about $1 million or less has been spent by this group attacking John Kerry so far but it's been amplified on television, over the Internet, in so-called free media news reports, that sort of thing.
That's really what's been driving this story and we've seen evidence in public polls beginning today that, in fact, it's hurting John Kerry. Republicans are delighted by this because the dynamics of this campaign, the larger fundamentals, what's going on in Iraq, worries about the economy have not been favorable to President Bush. He's behind by a small amount right now. This is something that is helping George Bush and his campaign narrow the gap right now.
KAGAN: And indeed John Kerry's numbers, especially among war vets, have dropped markedly since the Democratic Convention. At what point, though, can this begin to backfire for the Republicans?
HARWOOD: Well, one question is what happens now that John Kerry has personally raised the stakes on this and said "This isn't about me fighting Swift Boat Veterans for Truth. This is about me and George Bush" and saying, in effect, this is a front for George Bush and he needs to come out and deal with this directly.
We haven't yet seen evidence that the president is going to respond personally to that in the way that John Kerry tried to trigger but what's going to happen is when polls start showing this backfiring, if that ever happens on the president, that's when we're going to see Republicans begin to try to turn the page here.
But so far it is helping them, not hurting the president, and that's why they're going to keep trying to drive this story and they like what happened today. They think they can now make an argument about presidential temperament against John Kerry saying he lost his cool.
KAGAN: Yes and you make a fascinating point, as we close, that all over an ad that most people would have never seen if we, the media, hadn't picked it up and run with it.
HARWOOD: Exactly right.
KAGAN: John Harwood of "The Wall Street Journal" thanks for staying up late with us tonight appreciate it.
Now let's take a look now on the issues that both sides say that they are itching to debate. Issue one is the economy. Is it turning the corner or is it stuck in the mud? Where you stand depends a lot where you sit.
Even more than that it depends on where you work or where you don't work as the case might be, reporting for us tonight CNN's Tom Foreman.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT (voice-over): Ask any two voters how the American economy is doing and chances are you will get widely different answers depending on where the people live and what they do for a living. The chief economist for "Business Week" is Michael Mandel.
MICHAEL MANDEL, CHIEF ECONOMIST, "BUSINESS WEEK" MAGAZINE: Most of the country is actually doing well but there's enough fear out there that you can sort of point to a couple of places that are doing poorly and say, you know, you could be going that way too.
FOREMAN: Consider the battleground state of Ohio with its huge manufacturing base. Two hundred thirty-five thousand jobs have been lost here in the past few years, something John Kerry likes to point out.
KERRY: Don't tell us that some worker in Ohio has to not only lose their job but they have to unbolt their own equipment, crate it up, ship it to China and train somebody else for their job.
FOREMAN: The situation, however, is complex. The Timken Company in Canton, for example, is planning to eliminate 1,300 jobs in its precision bearings division but Timken will still be the area's largest employer. It's hired 170 workers in other divisions and it has 120 job openings. Company officials say the cuts will keep them competitive.
JIM GRIFFITH, PRESIDENT AND CEO, TIMKEN COMPANY: That's evolution. That's part of business. That's what makes our living standard go up year after year after year.
FOREMAN: Not far away in Youngstown, this high tech firm started a few years ago and has been expanding ever since. It now employs 19 people. These companies are springing up everywhere in Ohio but they don't grab headlines like a big layoff.
ANDY DOEHREL, PRESIDENT AND CEO, OHIO CHAMBER OF COMMERCE: When you're talking high tech, you're usually not talking about 1,000 jobs. You're looking at more intensive small business types of areas, which is where most of the jobs are coming from so it's a little bit harder to see.
FOREMAN: Plenty of people who are still deciding how to vote clearly remain worried about the high cost of gas, healthcare and undeniably slow job growth.
RICK FARMER, POLITICAL SCIENCE PROF. UNIV. OF AKRON: It's literally going to depend on how they feel about can I pay the bills? What's the price of gasoline? What's the price of milk? How's my rent coming?
FOREMAN (on camera): So, can a president win reelection when voters in critical states are unsure if the economy is good or bad?
(voice-over): Well, there was a year that was shockingly like this one, according to Michael Mandel.
MANDEL: You can barely tell the two economies apart. It's astounding.
FOREMAN: And that was 1996 when Bill Clinton held on to the White House.
Tom Foreman, CNN, Washington.
(END VIDEOTAPE)
KAGAN: Ahead on NEWSNIGHT, the standoff in Najaf and control of the Imam Ali Mosque. The tense situation now enters a critical third week. John Vause will have a live report for us from Baghdad.
Also a combination of images, a photo essay of the stars and the candid moments that are recorded forever.
From NEWSNIGHT -- from New York this is NEWSNIGHT and we're back after this.
(COMMERCIAL BREAK)
KAGAN: In Iraq, the crisis in Najaf took an unexpected turn today when the rebel cleric Muqtada al-Sadr offered to give up control of the Imam Ali shrine to Shiite Muslim religious leaders.
Just yesterday al-Sadr and his followers rejected an ultimatum to withdraw from the shrine, one of the holiest sites in Shiite Islam.
Today's offer provides a potential face-saving way out of the battle that's been playing out in Najaf, potential is the operative word here, more now from CNN's John Vause.
(BEGIN VIDEOTAPE)
VAUSE (voice-over): The loyal followers of Muqtada al-Sadr, no sign of the rebellious cleric at Friday prayers at the Kufa Mosque just outside Najaf, instead an announcement on his behalf. He's ready to give up the Imam Ali Mosque but not to the Iraqi interim government.
SHEIK JABER AL-KHAFAJI, AL-SADR SPOKESMAN (through translator): My wish and request from the highest religious authority that it accepts that the old part of Najaf would be under its control, not under the control of the Mehdi Army.
VAUSE: The Grand Ayatollah al-Sistani, in London for heart treatment, is Iraq's most senior Shiite religious leader. He's agreed to the plan but negotiations are still underway with his aides in Najaf but at mosques in Baghdad calls for al-Sadr's followers to fight on.
UNIDENTIFIED MALE (through translator): We will create another doomsday for the occupiers and the government they have installed.
VAUSE: The reply from the crowd, "We are ready to lay down our souls for Muqtada" they chanted.
After more than two weeks of fighting, Najaf's old city has been seriously damaged. Many buildings have been reduced to rubble, smoke still billowing from others, cars and truck riddled with bullet holes.
All is relatively calm now with yet another temporary ceasefire in place to allow for more peace negotiations. U.S. and Iraqi forces have pulled back but are not standing down.
LT. COL. MYLES MIYAMASU, U.S. MARINES: We are continuing to do planning and preparation for continuous offensive operations to get Mehdi militia destroyed, to capture Muqtada al-Sadr and to return the holy shrine back to the hands of the Iraqi people.
VAUSE: According to the governor of Najaf, Iraqi Police are manning roadblocks around the Imam Ali Mosque and have arrested at least 50 members of al-Sadr's militia who were apparently trying to flee. For the interim government, Muqtada al-Sadr and his Mehdi militia are now its most pressing and biggest challenge.
MOUWAFFAQ ALRUBAIE, IRAQ NATIONAL SECURITY ADVISER: We would like Muqtada al-Sadr to disband and dissolve his militia. There is no way we can build democracy in this country with the militia all over the country. VAUSE: So eager to see this standoff come to an end, Iraq's interior ministry announced prematurely that its police and security forces had taken control of the Imam Ali Mosque but, for now at least, it's clear Sadr remains in charge.
(END VIDEOTAPE)
VAUSE: And, if the Iraqi government can bring this rebellion to a peaceful end without further bloodshed and without damaging the mosque, it will be a major victory and they seem to be closer now than they ever have been but al-Sadr is anything but predictable and a peaceful outcome is anything but guaranteed -- Daryn.
KAGAN: Predictable, do you even know where he is or you don't but no one really seems to know where he is.
VAUSE: Very good question. In fact, U.S. military intelligence says that they have no way of knowing that Muqtada al-Sadr is inside the Imam Ali Mosque and we did hear from al-Sadr's aides saying that, in fact, they believe or they're saying rather that he is not inside that mosque, not telling us where he is but everyone is working on the assumption that he is still inside that mosque. The interim government, for one, believes that he is still there, Daryn, but no concrete evidence of where he may be right now.
KAGAN: All right, John Vause in Baghdad, John thank you.
Our next interview leads us inside that mosque. By most accounts the situation in Najaf was, at best, confusing today. Our guest coming up now, Scott Baldauf, has been reporting from Iraq for the "Christian Science Monitor."
He was in Najaf yesterday before Muqtada al-Sadr made his offer to give up control of the Imam Ali shrine. That didn't stop Mr. Baldauf and some other journalists from making their way into the shrine where they met with Muqtada al-Sadr's spokesman.
Inside the complex they encountered hundreds of Mehdi Army supporters. Mr. Baldauf's account of the visit runs in today's "Christian Science Monitor." The man behind the byline is back in Baghdad tonight, safe, in one piece and with great pleasure we welcome you. Thanks for being with us.
SCOTT BALDAUF, "THE CHRISTIAN SCIENCE MONITOR": Thank you.
KAGAN: Very interested in getting this journalist perspective of how you and the other journalists, one, had the opportunity to make your way inside the mosque and why from a personal safety standpoint you decided to do that.
BALDAUF: Well, I'll take the second question last.
KAGAN: OK.
BALDAUF: The reason we went in was for a friend. We had a couple of friends inside the mosque who were not being held by the Mehdi Army but who were unable to get out because of snipers up and down that alley leading from the mosque towards the first American checkpoint.
When you're traveling in that area, you're taking your life in definite risk. If you go in as a group and if you've worked out an agreement with both sides, your safety is enhanced and this is what we had to do in a very short period of time.
We had to contact the American military, the Iraqi government and the Mehdi Army inside the shrine to get them to stand down, at least for the time that we were coming into the shrine and coming out, and let them have at it afterward.
KAGAN: And, I would imagine as you're talking to all those different groups, more than one person in more than one language is trying to tell you and the others this is not the brightest idea of your journalism career.
BALDAUF: Well, absolutely. The American military was pretty upfront with me when I was talking with them. "This is foolish what you're doing." On the other hand, I think they respected what we were about to do, the reasons for this and our motives, of course, were to try and do two things.
We wanted to get news out of there. We wanted to get a press conference, the final statement, if it came to that from al-Sadr's spokesman but we also wanted to, again, get our friends, Thorn Anderson (ph) and Phil Robertson (ph) out of that mosque.
KAGAN: And tell us once you did make your way inside what you saw inside.
BALDAUF: Well, it's not a scene that you would expect. The crowd inside, number one, they were unarmed. Most of them were demonstrators. They were people who had come, many of them, from Baghdad as supporters of Muqtada al-Sadr willing human shields, putting their lives on the line in support of their leader.
And so, they're marching around the mosque shouting chants that we've heard over and over again about giving their lives to these saints, they view Muqtada al- Sadr practically as a saint, of contempt for the U.S. and the Allawi government and it was ebullient. You felt like this was a bit of a party.
KAGAN: And looking back did you achieve your goals? Did you help your friends get out and did you get the story you went in to get and was it worth the personal risk?
BALDAUF: It was worth the risk, absolutely. We did get our friends out. There were some hairy moments coming in and coming out. We were a little unsettled by all the shells coming into the perimeter of the mosque within a few hundred meters and we were not sure how long the ceasefire would last. Four-thirty was our deadline. We only had roughly about an hour to do our business and get out and it was -- it was pretty close. KAGAN: Well, we're glad to see that you're out. Thanks for sharing your story. It's fascinating reading, as we said, in "The Christian Science Monitor."
BALDAUF: Thank you.
KAGAN: Scott Baldauf, thank you for being with us.
We move on to another corner of the globe. Terrorism experts around the world are trying to define al Qaeda's new face after the latest crackdown, which began in Pakistan and spread to Great Britain and the U.S. This week Pakistan published six new pictures of people they say are key figures in al Qaeda's evolving network.
Our Maria Ressa has the details.
(BEGIN VIDEOTAPE)
MARIA RESSA, CNN CORRESPONDENT (voice-over): Pakistan's government has its most wanted in a rare move published on the front page of its top newspapers. This is al Qaeda's new breed. Five out of six are Pakistanis showing al Qaeda relying more on homegrown militants as the global crackdown continues.
Like Pakistani Amjad Hussain Farooqi, allegedly trained by Pakistan's intelligence services, he was part of the Jaish-e-Mohammed. Now banned here as a terrorist group, it was born out of Pakistan's covert support for militants in Kashmir.
Authorities say Farooqi was involved in the murder of American journalist Daniel Pearl. Working with al Qaeda's Khalid Shaikh Mohammed, the 9/11 mastermind, Farooqi picked up Pearl and drove him to the Karachi nursery where he was later killed.
Under al Qaeda's direction, authorities here say Farooqi recruited Air Force and Army officers for two assassination attempts against Pakistan's President Pervez Musharraf last December.
FARHAN BOKARI, ANALYST: If you give birth to monsters, to demons, then they are going to come back to haunt you one day and that is precisely what is happening right now.
RESSA: Now, Pakistan is offering 20 million rupies or about $345,000 for any information leading to Farooqi's arrest. Pakistan says Farooqi worked at the direction of Libyan al Qaeda planner Abu Faraj al-Libbi.
Intelligence sources say he replaced Khalid Shaikh Mohammed as al Qaeda's number three. Pakistan warns its renewed crackdown may trigger a backlash from al Qaeda.
(on camera): Despite the dangers, President Musharraf says Pakistan has been 90 percent successful in tracking down the terrorists. He says the ultimate goal is to kill the masterminds, arrest the planners and eliminate al Qaeda.
Maria Ressa, CNN, Islamabad.
(END VIDEOTAPE)
KAGAN: Coming up on NEWSNIGHT, the rising price of oil and the ripple effect that could leave you cold.
Also, safeguarding a city during the Republican National Convention. There is a lot happening just beneath the surface, a break first.
This is NEWSNIGHT.
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DARYN KAGAN: It's hard to think of this now but December is around the corner and you might be bundled up and shivering under the covers, the thermostat down around 62. In fact, the only time you stop shivering, the only time your temperature rises at all is when you get the heating bill. The price of oil has jumped more than 50 percent in the last year and when the price of oil goes up, the economy slows down, enough could be to give you goose bumps. The report tonight from CNN's Mary Snow.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Traders describe the tone as jittery with headlines out of Iraq being the latest trigger moving the market. Crude futures eased during the day after coming close to hitting $50 a barrel, a new milestone.
ERIC BOLLING, INDEPENDENT ENERGY TRADER: I think it's mostly psychological. I think the demand picture brought us up from $25 area up to the $40, $45 area and the last few dollars of it was pretty much kind of a snowball effect, people jumping in the markets.
SNOW: Besides tightening supplies, there's also growing demand, especially from China, which has seen demand rise 40 percent this year and there's real concern how all these higher oil prices will impact the economy.
LAKSHMAN ACHUTHAN, ECONOMIC RESEARCH CYCLE INSTITUTE: Already, we've seen that it's been slowing down consumer spending. And that has been going on for a few months now. That's not going to change. I think as long as oil prices remain high, you're going to see the consumer having less disposable income. The economy will be a little bit softer as a result.
SNOW: Gasoline prices for one are expected to go back up after declining in recent weeks and home heating oil is another concern.
PETER BEDTEL, CAMERON HANOVER: Consumers are in for a big shock this winter. They're going to be paying $350 to as much as $600 more to heat their homes this winter season.
(END VIDEOTAPE) SNOW: While gasoline prices are also expected to climb, analysts don't expect it to be a dramatic rise largely due to the fact that as the summer driving season winds down, so will demand. Daryn.
KAGAN: We see prices go all over the place. What is it about the number 50 that makes people so nuts?
SNOW: Really traders say it's a psychological milestone and simply put, just as you would mark your 50th birthday let's say...
KAGAN: Not that I would know about that, for the record.
SNOW: Not anytime soon, of course but the kind of a milestone where you start to assess your life, how things will change. And there's so much hype around this $50 mark, it's really put the oil market on edge, traders on edge and that is one of the factors just kind of contributing to the rise in oil.
KAGAN: All right. Mary Snow, thanks for staying late.
SNOW: Sure.
KAGAN: Appreciate that. Some other bits and pieces now in our money line round up starting with United Airlines. The day after telling a bankruptcy court that it might have to default on its pension fund, the government today lobbied the court to say no. The taxpayer financed Pension Benefit Guaranty Corporation would be left holding the bag if United gets its wish. The bill could total more than $8 billion. United is in Chapter 11 protection and has until the end of the month to come up with a plan to reorganize.
Don't look for any changes in your phone bill for a while. The FCC today imposed a six-month freeze on what the so-called baby Bells can charge, MCI, AT&T and others for access to your home. The agency will take the time to come up with a new set of rules to govern the rates. If it can't, the baby Bells would then be free to jack up prices by 15 percent and higher.
And speaking of up, Wall Street had an up day. The Nasdaq leading the charge, up 1 percent.
And we'll take a break and be back after this.
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KAGAN: Well, there are less than two weeks to go. Police at every level are ramping up efforts here to make sure that New York City remains safe during the Republican National Convention. There are big challenges, especially in the city's subways. Our Deborah Feyerick takes a look at that.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Beneath Madison Square Garden, 1,000 subway and commuter trains pass through Penn Station, linking New Jersey and Long Island to New York City. Seven million people on the move underground, every day, more people, one expert says than travel an L.A. freeway in two months. But the tunnels are old and that could complicate rescue efforts if there's a terror attack.
ROBERT PAASWELL, UNIVERSITY TRANSPORTATION RESEARCH CENTER: They need perhaps structural repair, the fact that the communication systems in the tunnels are all in need of being updating. They're not necessarily redundant, so if you kill one communication system, you don't have backups. Radios don't work.
FEYERICK: Police say they can evacuate the trains if they need to, a need highlighted by the coordinated bombings on passenger trains in Madrid last March. NYPD inspector Vincent DeMarino helps oversee the city's subways.
INSPECTOR VINCENT DEMARINO, NYPD COUNTER TERRORISM UNIT: There's a slight paradigm shift with regards to how those devices went off on those trains. So we were able to immediately change what we do just in case they feel that that was a successful strategy that they might want to employ somewhere else in the world.
FEYERICK: During the convention, specially trained counter terror units will make random frequent subway sweeps, searching for anything suspicious. That includes possible suicide bombers.
WILLIAM MORANGE, SECURITY DIR., METRO TRANSPORTATION AUTHORITY: Intelligence is probably the most important part. We get all the newest intel. In addition, we also know what's credible, what's not credible.
FEYERICK: Police, many undercover, will be riding trains into Manhattan, an attempt to stop any device from reaching there. The city's police Commissioner Ray Kelly said.
RAYMOND KELLY, COMM, NEW YORK POLICE DEPARTMENT: We have a comprehensive program in place to address a lot of those concerns. No guarantees. There are no guarantees in the post-9/11 world.
FEYERICK: And that's the challenge. When a pipe bomb went off in a Times Square subway station mid-July, police swarmed the scene.
(on-camera): One transit expert says it's that kind of incident that shows an attack doesn't have to be big, or for that matter anywhere near the convention, to disrupt the event. Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
KAGAN: Let's check some other quick items from around the headlines, starting with the follow-up to a rather unsettling story. The U.S. Justice Department ruled today that police officers who drew their guns and ordered students to the floor during a raid at a South Carolina high school last year did not violate civil rights laws. The decision means there will be no criminal charges. The raid was videotaped. It was widely covered by the media. Images of students cowering in front of police dogs led to outrage and an investigation. Pete Rose is in trouble again with the Internal Revenue Service which says the baseball great owes nearly $1 million in unpaid taxes. The 63-year-old former all-star spent five months in prison in 1990 and '91 for filing false tax returns. In 1989, he agreed to a lifetime ban from baseball and faced allegations that he bet on games.
And a Japanese court has dismissed a request to halt deportation proceedings against Bobby Fisher. The fugitive chess legend is wanted in the United States for allegedly violating international sanctions on the former Yugoslavia. He was detained in Japan last month while trying to travel on an invalid American passport.
Still to come on NEWSNIGHT, how the Muslim world sees the situation in Najaf. Insights from a Middle East analyst coming up.
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KAGAN: That was the scene earlier today in Najaf where the Imam Ali shrine is more than a flash point in Iraq. What is unfolding in Najaf at one of the holiest sites in Shiite Islam is being watched across the world. How it's being seen by Arabs around the world has enormous implications.
Joining us now is Juan Cole, a professor of modern Middle East history at the University of Michigan in Ann Arbor. Good evening. Thanks for being with us professor.
JUAN COLE, UNIVERSITY OF MICHIGAN PROF OF HISTORY: It's my pleasure.
KAGAN: It was certainly confusing in the western world to watch what was taking place at the mosque today. How is it explained in the Arab media?
COLE: Well, everybody is confused. The Arab satellite news is just as confused as our own about what exactly is happening. Al Jazeera is reporting that a representative of Muqtada al-Sadr is denying that they have actually turned over the mosque yet. There may be plans to do so, especially giving it to supporters of Grand Ayatollah Ali Sistani.
KAGAN: I want to ask you more questions about the grand ayatollah in a moment, but first in terms of the mosque and the battle over this mosque, what does it truly represent in the Arab world?
COLE: It's really better spoken of as a shrine. It is the tomb of Ali, who was the son-in-law and cousin of the prophet Mohammad. And Shiites believe he was the proper successor of the prophet Mohammad. So he's kind of like St. Peter is in Roman Catholicism and it's a very holy place, not only for Shiites but also for Sunnis. And the holiness of it I think extends to the whole city of Najaf, the cemetery that's there and all the buildings around it. The city is considered a holy place.
KAGAN: How is the Arab media portraying Muqtada al-Sadr? Is he a martyr or is he somebody who's getting in the way of the peaceful process and elections in Iraq?
COLE: Well, within Najaf itself, Muqtada is not well liked and his men are mostly not from there. But the further away you get from Najaf, in Iraq and then in the Arab world more generally, Muqtada is generally seen as a symbol of defiance against what they think of as American occupation of Iraq. They feel that the United States presence there is not legitimate, that the Allawi government is really nothing more than a puppet. Now they have started calling it an agent of the United States. And so generally, he is seen as a sympathetic figure in the Arab press.
KAGAN: I interviewed the Iraqi national security adviser earlier today. He didn't really seem to be able to define how that government sees Muqtada al-Sadr, whether he is a wanted man for all the insurgencies that he is stirring up around the country or whether he's somebody they want to come sit at the table and be a political partner.
COLE: Caretaker/prime minister Ayad Allawi has repeatedly said that there is a place at the political table for Muqtada if he'll take it.
KAGAN: But they also say they're going to storm the shrine if he doesn't give up his people.
COLE: That's right. The line of the interim government is that Muqtada has a militia. That militia would interfere with any kind of democracy in Iraq, that he must give it up. He must disarm his men and turn his government into a political party if they want to contest for seats in parliament, Mr. Allawi says they would be welcome to do so. At this moment, from Allawi's point of view, at least with regard to his public pronouncements, Muqtada is not a wanted man.
KAGAN: And finally your point about the Grand Ayatollah al Sistani, things really seemed to heat up in Najaf as he left to go to London to get medical treatment. Any chance he can come back and regain the power that he had before he left?
I don't believe that Sistani's authority has been damaged by his absence. I think he was very much against being drawn into this fighting. Either he would have been asked to mediate or it was entirely possible that if Muqtada were killed, that some of his followers might assassinate Sistani in revenge. So he absented himself from the scene and he is playing a role from a distance and that role is important if it can in fact end the standoff at the shrine. But he continues to be the person to whom most Iraqi Shiites and indeed Shiites in Lebanon and elsewhere in the Arab world listen.
KAGAN: And we will be watching what happens in Najaf and around the Arab world. Professor Juan Cole from the University of Michigan, thank you.
Still ahead on our program, our love affair with the still photograph and a photographer's love affair with a generation of celebrities. First, take a look at some of the snapshots from our sponsors. This is NEWSNIGHT on CNN. (COMMERCIAL BREAK)
KAGAN: Regular viewers of NEWSNIGHT know that we have a thing for still photographs around here. We also have a thing for the stories behind them. And this being Friday, we're going to indulge on both. Over the last decade, British photographer Platon has had extraordinary access to some of the most powerful people in America, all leaders in their fields. He recently released a collection of his photographs. Here's a look.
(BEGIN VIDEOTAPE)
PLATON, PHOTOGRAPHER, PLATON'S REPUBLIC: Platon's Republic has been an amalgamation of all my favorite portraits and documentary pictures. It's sort of like channel surfing through contemporary culture. I really wanted to convey what it feels like to go to the White House, to go to the mayor's office, to go to city hall, what it's like to talk to Al Pacino.
It's my job to meet fascinating people, interact with them, record my findings on film and then present it to people to show, this is what I feel it's really like to meet this person. I am in love with Pammy, there's no doubt about it. On the day of the shoot, I remember we had racks and racks of couture dresses for her to wear. I left the studio. I ran to the nearest store and bought a $20 American flag. They wrapped it in a brown paper bag and I rushed back to the studio and gave to it Pammy and I said, "I don't want you to wear any of these dresses, I want you to wear what's in this bag." And she opened it up and within seconds, she knew exactly what I wanted. She's an American icon. It doesn't get more American than stars and stripes and Pammy. Ironically, she's Canadian.
I was asked by John Kennedy, Jr. to photograph the congressmen who all fought in the Vietnam War and they wanted to do it at the memorial in Washington. What I was struck by was that the surface of the marble was so shiny that when you look at the names of all the poor soldiers that lost their lives in the war, you're actually also looking at the reflection of your face at the same time. I lied down on the floor as they arrived and asked them to literally stand around my head. So what it creates is this circle. It's almost like the circle of memory or the circle of trust.
I'm fascinated by mannerisms, what makes somebody tick, what goes on inside their mind, how their body language expresses their feelings. Once in awhile I'm confronted with someone who has incredible visual flair and Michael Stipe was one of these people. In a way, he did all the talking with his mannerisms and with his body and it doesn't really matter whether it's an everyday person on the street or president of the United States.
I have to be honest, I've never get anyone who had the charisma that Clinton has. I really wanted some of the Clinton magic. So I leaned forward and I said, "Mr. President, will you show me the love?" and I remember, he put his hands on his knees and he smiled the Clinton smile and I got it on film. There's no room for two egos in my studio. If I go in humble, then that allows me to fill my space with the person's personality I'm photographing. They walk in. They have a camera pointed at their face, in this hyper-real situation. Even though it's only 15 minutes they are very aware that everything they do, every gesture they make, can be recorded forever. So they do get nervous and it's my job to break the nerves, to break down the barriers, very, very quickly, so that suddenly, all these wonderful, instinctive gestures and mannerisms come alive.
(END VIDEOTAPE)
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KAGAN: And that's going to wrap up NEWSNIGHT for the week. I'm Daryn Kagan. Aaron Brown right back in the seat on Monday night. Have a great weekend.
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