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Republican Roadblocks to Auto Bailout; President-Elect Remains Silent on Blagojevich Scandal; Calling in Gay

Aired December 10, 2008 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

HEIDI COLLINS, CNN ANCHOR: Well you may have noticed something a little bit different on the bottom of your screen this morning. The CNN logo has turned green. That's because the second estallment of CNN's award winning series, "Planet in Peril" debuts tomorrow night at 9:00 p.m. Eastern. Make sure you don't miss that.
Final touches as negotiators get an auto bailout loan ready for a vote in Congress. What roadblocks though remain?

And governor busted, but still in office. What's ahead for Illinois's chief executive?

This Wednesday December 10th, I'm Heidi Collins. You're in the CNN NEWSROOM.

Start by taking a look at the big board today. Checking out about 30 minutes into the trading day. We are looking at positive gains, at least a little bit. Double digits there up about 42 points for the Dow Jones industrial averages. So what is happening with your money? That's what lawmakers are talking about and wanting to find out. At this hour, the House Financial Services Committee is looking into how the $700 billion bailout program is being handled. The special panel set up to oversee that program suggests the Treasury Department is not doing enough to help struggling homeowners and businesses.

A deal to bail out Detroit could be close. It depends, though, in large part on whether congressional Democrats can get Republicans on board. CNN's Brianna Keilar is on Capitol Hill for us this morning, covering the story.

So Brianna, a lot of behind-the-scenes deal making going on, right?

BRIANNA KEILAR, CNN CORRESPONDENT: There sure is, Heidi.

A House Democratic aide familiar with the negotiations tells me the plan is this, Democrats in the White House going to work this morning on the last couple of issues that they're having between themselves and then they're going to have a bill.

Now, at last look this Democratic proposal included $15 billion in loans to the car companies. It would also establish what's called a car czar. Automakers would have to prove to this car czar future profitability. This car czar, of course, appointed by the president and then if an auto make doesn't show this car czar that they're up to snuff, basically that official could recall this initial 15 -- some of this initial $15 billion loan and make that car company ineligible basically for future assistance, Heidi.

COLLINS: So what's the holdup? We've been talking a little bit about this group of conservatives, if you will, that I guess will have a press conference in a couple of hours that are sort of standing in the way, if you will? They have their objections.

KEILAR: Yes. As of late last night, there were a couple of issues here. Republicans and sources in the Bush administration have said they're concerned this proposal doesn't go far enough to really ensure that only viable, only firms that could be profitable would get this government financing. There's also that, yes, vocal number of Senate Republicans who you're talking about who just don't like the idea of this smaller amount of cash up front, this $15 billion that could go to the car companies as soon as next week and could go without automakers proving that they're going to rebound.

Democrats are insisting they want strict reform, too. And then there's also another holdup. And that is basically a Democratic provision that would prevent automakers from suing states that want to set their own emission standards.

At this point, though, a Democratic leadership aide, Heidi, telling us there could be a vote in the House as soon as today. Senate Democrats hoping to make progress as well, too. But again, they're up against Senate Republicans who aren't seeing eye to eye with them.

COLLINS: All right. Brianna, we know you're covering it very closely for us.

Let us know if anything develops there. Thank you.

Meanwhile, in Louisiana, it was tornadoes toppling trees, scattering debris and collapsing roofs. The National Weather Service says at least three touched down in and near Alexandria. Two hit near the town's Red Cross headquarters. No injuries reported though. The storms were part of a severe weather system moving across the state.

Icy slide caught on tape in snowy Santa Fe, New Mexico. Affiliate KRQE cameraman held his shot until things got too close. Thankfully no one was seriously hurt. But it is the changing of the season's and most of northern New Mexico is now under a winter storm warning.

In Wisconsin, flowing snow near Grafton made it kind of hard to see, as much as a foot of snow fell in some areas sending snowplows out to clear those roads.

But you never know, as Rob Marciano joins me now, watching all of this weather, where the black ice is. My brother in Minnesota ended up in a ditch yesterday, had to be towed out.

It's scary, you just can't see it.

ROB MARCIANO, CNN, METEOROLOGIST: Your brother, even with all his crazy mad driving skills.

COLLINS: Yes. And all the devices that he has in the car. Yes, right in the ditch.

MARCIANO: I'm embarrassed for him actually. But I'm glad that you pointed it out as a teasing sister on the air. Good news is, another batch of snow may be coming across the northern tier. That shouldn't be too much. In New Mexico, the intermountain west, they're clear. But some primo skiing across Tulsa and some of the San Juan mountains, including Telluride, Colorado out there. So enjoy that.

All right. Meanwhile, a clash --

COLLINS: You always seem to get that in. You know.

MARCIANO: I can't help myself. You should see some of the pictures. I'll try to show them tomorrow.

Isolated tornadoes and strong winds, we got some business to take care of down here. There have been, as Heidi mentioned, some light damage in spots from Louisiana, Mississippi and in through Alabama this morning. And the threat for tornadoes exists right on through this afternoon. So that's going to be an ongoing problem.

And the good news, at least, the snow shield has shrunk as compared to yesterday. Right now riding up the I-90 corridor and in through the Saint Lawrence River Valley. Along the I-95 corridor, things are pretty warm in the 50s. So not a problem there. Here's your Right tornado watch in effect at 3:00 p.m. Eastern time. It's pretty much fills rain now last tornado warning has been allowed to expire here. We'll see if they reissue that. That was for south central Alabama.

Pretty strong line moving through the i-85 corridor including Atlanta proper. There will be more showers and thunderstorms rolling through there. Here's the warm air, hard to believe that yesterday morning temperatures were near freezing across parts of New York metropolitan area, 50s and 60s, 20s in Buffalo. Here's your cold front. It will take some time before it gets through the area and starts to cool things off. Today's daytime highs, 59 in New York. 29 degrees in Chicago, 43 in Dallas. I think I mentioned in the last hour Heidi that San Antonio yesterday hit a high of 85 degrees --

COLLINS: Yes.

MARCIANO: And then quickly cooled to 35 by midnight last night. So that's quite a swing in temperatures and gives you an idea of the pretty good intensity of the storm that's heading east.

COLLINS: Yes. No question. All right. We'll check back with you a little bit later on, Rob. A lot still going on. Thank you.

More on the aftermath now of the F-18 crash into a San Diego suburb. Firefighters recovered the body of a 15-month-old child buried beneath the rubble of one of the two homes that were completely destroyed. The man who lost everything, his wife, two young daughters, mother-in-law and his home says he doesn't blame the pilot who ejected seconds before the jet crashed. The military says the F- 18 lost both engines. And obviously when that happens, a jet goes down very, very quickly.

Out on bail. Illinois Governor Rod Blagojevich going back to work this morning, though, ignoring calls to step down, just one day after federal corruption charges were filed. CNN's Susan Roesgen is joining us now live from Chicago this morning.

So Susan, have you seen him?

SUSAN ROESGEN, CNN CORRESPONDENT: I did not see him. There were a lot of state troopers here around his house. This is his neighborhood here in Chicago, hustling one child to school, hustling the governor out to his office in downtown Chicago.

You know, Heidi, some people may be wondering why the governor lives here and not in the capital of Illinois in Springfield. And that's because the governor, his wife, Patricia, and their children have never lived in that governor's mansion. They have always preferred to live here. This is his neighborhood. Neighbors are very familiar with him. As you know, he was arrested yesterday in his pale blue jogging suit. They're used to see the governor jogging through here. After what's happened, Heidi, most people in this neighborhood would rather talk about another Chicago politician.

(BEGIN VIDEO CLIP)

SHERRY ROSEBLUM, NEIGHBOR: It's depressing to see all the cameras here for this reason. It should be for a good thing instead of a bad thing. It should be because we just elected a president from here. And now to have this happen with the governor, we were enjoying something good about our city. We want our city to have a very positive image. And then to have something like this happen makes it more negative, and you don't want people to view us as that.

(END VIDEO CLIP)

ROESGEN: And then, of course, this is what neighbors here are waking up to this morning, a special -- only a four-page edition, extra, extra read all about it, Governor Arrested. This came out last night. "The Chicago Tribune" put it out. They actually had sellers on the street saying and hawking this "Extra, Extra, Governor Arrested." The newspaper, this is again the "Chicago Tribune," they are calling for the governor to resign.

And one of the editorial columnists said, I thought some people might find this interesting, he is governor dead meat, and he can watch or listen to his beloved cubs on the prison radio. So there isn't a lot of people here who believe, Heidi, that this man is completely innocent. In fact, this local newspaper, "The Chicago Tribune" has done story after story after story for months on possible connections to corruption by Governor Blagojevich. The federal news has been tightening around him. And then again, as you know, yesterday arrested here in his neighborhood. We've been talking to some more neighbors and we'll let you hear from them later in the day. COLLINS: All right. CNN's Susan Roesgen for us in Chicago there.

Thanks so much, Susan.

So what is the president-elect saying about the scandal? CNN's Elaine Quijano is also in Chicago this morning covering this angle of the story.

Good morning to you once again, Elaine, anything new coming from the president-elect?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, not today so far. Good morning to you, Heidi.

But President-elect Barack Obama did make it a point to address this story yesterday during a meeting that he had on climate change with former Vice-President Al Gore. It was then that Mr. Obama made a decision to answer the report's question about whether or not the president-elect had any contact with or was aware at all of what was happening with his Senate seat. Here is how the president-elect responded to that question.

(END VIDEO CLIP)

BARACK OBAMA (D), PRESIDENT-ELECT: I had no contact with the governor or his office, and so we were not -- I was not aware of what was happening. As I said, it's a sad day for Illinois. Beyond that I don't think it's appropriate to comment.

(END VIDEO CLIP)

QUIJANO: Now, what he said right there seems to contradict something a senior adviser to Obama had said a couple weeks ago to a local TV reporter here in Chicago, that Obama had a conversation with Governor Blagojevich about his Senate seat.

Well, late yesterday that adviser, David Axelrod, released a written statement correcting his comments from a couple of weeks ago saying, "I was mistaken when I told an interviewer last month that the president-elect had spoken directly to Governor Blagojevich about the Senate vacancy. They did not then or at any time discuss the subject."

We should make clear again, Heidi, that U.S. attorney Patrick Fitzgerald have said there are no allegations against the president- elect in that federal complaint filed yesterday. But it's not clear yet. We still don't know the answers to a lot of questions, including who on the Obama team may have had a conversation with Governor Blagojevich directly or someone in the governor's office for that matter. So still a lot of open questions as this story continues to reverberate. Heidi.

COLLINS: And potentially some communication trouble there, too, by evidence of that, between Axelrod and Obama. We'll have to continue to watch that obviously and ask a lot more questions. Thanks so much, Elaine Quijano, coming to us live from Chicago.

Not the first time, Illinois politics already had a bad name, long before Governor Blagojevich came to town.

(COMMERCIAL BREAK)

COLLINS: We all pretty much know what it means when someone talks about Chicago politics. The state, though, seems to be going the same way these days. Illinois, of course. Many may forget Governor Rod Blagojevich got the job after the last governor was forced from office, too. Alden Loury is editor and publisher of "The Chicago Reporter" magazine.

Alden, thanks for being with us.

Obviously that has not yet happened to the current governor. In fact, going into work today we are hearing, tell us a little bit more. Give us some background here as to what is going on the state of Illinois by way of history.

ALDEN LOURY, "THE CHICAGO REPORTER": Well, how much time do you have, Heidi?

COLLINS: Exactly.

LOURY: This is a very long and protracted story. The history of political corruption in Chicago and throughout the state goes way back. I mean going back to the 1980s -- keep in mind the last Democratic governor actually spent time in prison as well. Going back to the 1980s we had operation gray lord, we had the civil trial scandal, those involved judges, those involved city councilman in Chicago. We've had a number of instances of Alderman in the city of Chicago, as many as 20 to 25 over the last 20 to 30 years who have been indicted and gone to prison in some form or fashion.

COLLINS: Why? What's the deal?

LOURY: Well, I think part of it is machine politics and part of it is racial politics, particularly in Chicago. The machine has used political corruption in a way to -- a shortcut to power, a way to kind of keep power and hold it and keep it from outside of the machine. So as Governor Blagojevich is alleged to have used board appointments, jobs and contracts to curry favor, to build political strength through campaign contributions and to build allegiances and allies, that's the story of Chicago politics. We've seen it with Alderman trying to shakedown businessmen who want to open businesses in their ward. We've seen it with other individuals. This is the way -- this has been the Chicago way of accessing power and doing it quickly.

COLLINS: But how is it racial? What do you mean by that?

LOURY: Well, in Chicago, it's always been a racially polarized city, dating back to the 1950s. And some I would say white politicians have used political corruption or patronage hiring to essentially gain favor with communities where they felt they couldn't actually make an appeal on a normal basis of credibility with black voters or Latino voters.

And so they gained power by doling out political gifts, if you will. And some of this includes non-profit grants, CDBG dollars. This is a way -- if I can influence some of the key people in the African-American or Latino community, they can then be my ambassador to the masses. We should support this individual. They're looking out for our community, so on and so forth. So I think that's a way how this has played out as well.

COLLINS: So is this something that is widely known, widely discussed, or you assessment there?

LOURY: It's widely known in Chicago and relatively known pretty well throughout the state. I think what the world, what the nation certainly is finding out now is just how deep the culture of political corruption just may be in this state.

COLLINS: You know, I want to talk a little bit more about Blagojevich himself. Because we're starting to see now, and I'm sure you're more familiar with this, being where you are of course geographically and the coverage you have done on him specifically. But we're seeing a lot of people sort of questioning now mental capacity. In fact, just one of the things that I found this morning from "The New York Times," this is from Mark Jacobs, who is a Democratic state senator and actually former friend of the governor.

He said this, "I'm not sure he's playing with a full deck anymore. I think he brought a lot of this on himself. He's so gifted but so flawed in a number of fundamental areas. It's like he dared the feds to come and get him." What do you think of that?

LOURY: Yes, there are a number of people who are suggesting that perhaps Blagojevich had delusions of grandeur, perhaps he just wasn't seeing reality quite clearly. He's talked -- some of these alleged to have talked about trying to use the Senate appointment perhaps as a way to get himself into the Senate and perhaps even launch a run at some point for president in 2016 which I think -- whoever his advisers are either aren't very good or they were just afraid to kind of give him the political truth. He had a 13 percent approval rating here in Illinois. Just a day before this news he talked about how he's never had more friends. So he's either paying a really good game --

COLLINS: Now the sun keeps shining on him, right?

LOURY: Yes, or he really isn't watching what the rest of us are watching.

COLLINS: All right. We will continue to follow the story obviously I think for quite some time.

Alden Loury, editor and publisher of "The Chicago Reporter" magazine. Thanks so much.

LOURY: Thank you.

COLLINS: A fourth person arrested in California in the disturbing case of a teen allegedly held captive for a year. Police say charges against the new suspect include torture and false imprisonment. Three others are already in custody, accused of torturing a 16-year-old boy and keeping him shackled in a house near San Francisco.

Convicted murderer Brian Nichols may find out today if he lives or dies. Deliberations on his sentence continue this morning. Nichols was found guilty last month in the March 2005 killing spree that began at a downtown Atlanta courthouse. Nichols confessed to the four murders, but claimed he was legally insane. The prosecutor in the case is calling for the death sentence saying Nichols is extremely, extremely dangerous.

Suspect supplements, vitamins not doing enough in the fight against prostate cancer.

(COMMERCIAL BREAK)

COLLINS: Today is world human rights day. It marks the 60th anniversary of the universal declaration of human rights by the United Nations. The document is the backbone for any U.N. action aimed at stopping human rights abuses worldwide. U.N. Secretary General Ban Ki-Moon says ongoing political unrest and global financial problems remain the key threats to human rights.

Vitamins and cancer. Two major studies just came out and say protective measures may not be measuring up. CNN medical correspondent Elizabeth Cohen joining us here now with more on this.

So people are not taking enough vitamins or the wrong ones? What's the scoop?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, it was misplaced hope. I think that's the best way to put it. There was hope that if you take certain vitamins you could reduce your chances of getting certain cancers. Prostate cancer was one of these cancers. There were some relatively small studies that said if you took certain vitamins, you could keep prostate cancer at bay.

Well, now, a really big study, many people say very well done, 50,000 men published in the "Journal of the American Medical Association" says huh-uh, taking those vitamins does not work. In particular what they found is that men who took vitamins C, E and selenium supplements do not lower their risk of prostate cancer. They were just as likely to get prostate cancer as anybody else.

COLLINS: Well, there are some other information I think too in this report about the effects of getting married on prostate cancer?

COHEN: Yes. It sounds very strange why would having a ring on your finger affect your chances of getting cancer? But the reason has to do with how wonderful wives are or duh.

COLLINS: Well, duh.

COHEN: Because we're both wives so we can say that. And what's going on here is that single men are 40 percent less likely to get screened for prostate cancer because they don't have wives who are bugging them.

COLLINS: The nagging.

COHEN: Right. So you want to be healthier. A lot of studies have shown this, Heidi, if a man wants to be healthier, wants to live longer, he should get married because his wife will take care of him.

COLLINS: Well, we knew this all along.

COHEN: Right. It doesn't work just way much the other way.

COLLINS: That's another segment.

COHEN: That's another segment.

COLLINS: All right, Elizabeth. Thank you.

Calling in gay. Organizers of a Day Without a Gay are urging people to skip work today. The organizers are also calling on supporters to perform volunteer work and not spend money. The couple who came up with the idea want to show how much the country relies on gays and lesbians.

Gas prices looking great right now, but what goes down must come up. What can a driver do? We'll look at the future of alternative fuels with one oil company chief.

(COMMERCIAL BREAK)

COLLINS: 10:30 Eastern time now. Obviously the trading day has been open for about an hour. Now we're looking at triple digit gains. Dow Jones industrial averages up by about 126 points at this time. We'll continue to follow those numbers as always right here in the CNN NEWSROOM.

If you are in search of a bargain, head to the nearest gas station. And that's a very different story than a little while ago.

AAA reports prices have fallen another penny and a half. It's actually the 84th day in a row for going down. On average, the price of regular unleaded is $1.68 a gallon. Can you believe it was just five months ago we were paying more than $4.00 a gallon? Yes, everybody remembers that. So what can we expect down the road? And is cheap gas a good thing after all, what about alternative fuels? Marvin Odum who only recently took over at Shell Oil is ready to tackle all of it. He's joining us now from New York.

Welcome not only to your new position but also to the CNN NEWSROOM.

MARVIN ODUM, PRESIDENT, SHELL OIL: Thank you, Heidi.

COLLINS: What's going to make you a different president, than those in the past? President of Shell Oil? ODUM: Well, I think what I can do is I can extend what previous presidents of Shell have done. And that is really stay focused on being a very progressive energy company that's all about solving our energy problems.

COLLINS: What are these solutions? I'll put you right on the spot.

ODUM: Well -- and let's talk about the solutions. The first real opportunity we have, I think, is with this new administration coming into office. Because for the very first time, this country could develop a combined energy and climate policy that puts that comprehensive strategy together for our country. And it could be implemented in a way that really helps stimulate the economy through some very specific actions.

COLLINS: Give us a couple of those specifics.

What will be different than the last administration?

ODUM: Well, there's really four that come to the top of my mind.

The first one is, I like the idea of a czar. A czar around energy and environment. Because there's an opportunity to concentrate all of the elements of government that are involved in approving some of these infrastructure projects and then accelerating some of that process. That's No. 1.

The second thing that would help would be to have some predictability around government support for the new alternative energies; wind, solar, hydrogen, second-generation biofuels. Predictability there is very important to investment.

Third piece, the government should, can and you hear Obama say it quite a bit, really go after efficiency measures. Because it is the low-hanging fruit, both in terms of energy protection, but also investment in stimulating the economy.

And then the fourth, which I can consider an absolute no-brainer is more investment in domestic oil and gas.

COLLINS: Yes. Well, how do you get people to understand that? You know, there are a lot of people out there who still have a great deal of trouble with the profit margins and some of the large oil companies, like Shell Oil, are making.

Do you explain that by saying, well hey, you know, I'm in the right business. It's capitalism. Deserve to be able to make this profit. Or, do you say, we're not going to take as much of a profit anymore?

ODUM: Well, I think the way to think about the energy business -- first of all, we've seen the extreme volatility in prices. So, prices -- we do have a situation of supply and demand. And it does respond to the market. So, I think the last six months have really given us -- to the people that doubted it, real proof of that fact. But the opportunity in terms of more domestic oil and gas -- the reason I call it a no-brainer is no matter what direction you come from, it makes sense for this country. And you have to --

COLLINS: You're talking about drilling more and possibly getting more capacity?

ODUM: That's right. Opening new areas to exploration and production, more investment. What is does it, we know we can do it in a way that protects the environment.

We import 60 percent of our oil in this country. What new production in the country allows us to do is offset some of those imports, keep that revenue in the country. It keeps and generates more jobs in this country, and it adds to our national security. So again, any way you come at it, it's the right thing to do.

COLLINS: Less dependence on foreign oil obviously, what you're talking about there. Do me a favor if you would. Explain to people who may not understand. You know, we are all really celebrating and very happy about the price of gas.

But, when we talk about supply and demand, as you mention and we talk about the price of a barrel of oil, there is certainly a margin where, if it gets too low, we are also going to be in trouble.

ODUM: Well here's -- it's a great question. Because here is what I worry about with low oil prices of oil at this point in time.

That is, investment in oil then as you look at the entire industry is dropping off, as well. And energy demand globally will move with the economy. And when the global economies start to recover, the demand growth will return.

And so I think of the energy business, if you will, in this latest swing, as being -- the challenge around it being in somewhat of remission. But, that's going to come back. And when it comes back, I think it will come back with a vengeance. And so the decisions we make now on how we invest in energy as a country and as a world, are critical.

COLLINS: Yes. No more waiting around. I think it would be hard to find someone who disagrees with you on that. Certainly by the way of alternative energy.

We sure do appreciate your time. New president, if you will, of Shell Oil Company, Marvin Odum. Thanks again.

ODUM: Thank you, Heidi.

(BUSINESS HEADLINES)

COLLINS: As Congress and the White House near a bailout deal, automakers are promising more hybrids and electric cars. But, are they really the answer to the industry's problems? CNNMoney.com's Poppy Harlow has our Energy Fix now from New York. Hi there, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hi, Heidi. You know, so much buzz, especially right now, as lawmakers debate a potential bailout about these green cars.

The real problem, they're not going to save Detroit any time soon. For starters, they're high-tech and zero emission. That means they cost millions of dollars to develop at a time when cash is running out. Case in point, is GM's electric plug-in, the Chevy Volt. That's set to debut in 2010. GM says it won't be profitable for at least a decade, mainly because the battery costs so much to make. Falling gas prices there, complicating matters, pushing demand for hybrids sharply lower.

Look at those numbers. November, the demand for hybrids fell 50 percent from a year ago. It now stands at 2005 levels. Hybrids are expensive, Heidi. Not a good thing to be during a recession -- Heidi.

COLLINS: Yes, definitely not.

What about the long-term view though? I mean, energy-efficient cars can be the key to Detroit's ultimate survival. You know, obviously a lot of details to be worked out.

HARLOW: That's what the heads of GM, Ford and Chrysler are saying. That's what auto experts we talk to say. Even though they don't help the bottom line right away, closing the door on them would put Detroit behind the curve, yet again. Some lawmakers certainly agree.

Take a listen.

(BEGIN VIDEO CLIP)

REP. EDWARD MARKEY (D), CHMN, SELECT CMTE, ON ENERGY INDEPENDENCE: A business model premised on bigger cars, wider highways and more oil is a failed equation. Any recovery of these companies will require more than just fresh cash. It will require a change of culture.

(END VIDEO CLIP)

HARLOW: On that note, the bailout legislation as it stands now may require the big three to drop lawsuits against states that impose tougher emission standards than the federal government currently does. That's one of the last issues that negotiators right now, Heidi, are working on. It could mean a major change in how Detroit works.

More on our site right there, CNNMoney.com -- Heidi.

COLLINS: Yes. A major change for sure. All right. Poppy Harlow. Sure do appreciate that, thanks.

(WEATHER REPORT) COLLINS: Tracking down terrorists. Pakistani officials say they've captured two men with ties to the Mumbai attacks. We've got a report coming in from Islamabad.

(COMMERCIAL BREAK)

COLLINS: Police and protesters battling each other on a fifth day of violence in Athens, Greece. Thousands of people there already unhappy with the government, have been on a rampage since police shot and killed a teenage boy last Saturday.

The two officers accused of the killings were in court today. A lawyer for the officer who fired the fatal shot says a ballistics report shows the boy was killed by a ricochet and not a direct shot. But authorities have not yet released the official results.

Pakistan security forces say they are still raiding suspected terror camps and claim they have made significant arrests as part of the investigation into the Mumbai attacks.

CNN International correspondent Reza Sayah has the latest now from Islamabad.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (on camera): It took a while that Pakistan's prime minister finally confirming the arrests of two Pakistanis with suspected links to the Mumbai attacks. On Wednesday, Prime Minister Gilani also demanding India to turn over more evidence, more information if it wants Pakistan to continue helping with the investigation.

In a press conference on Wednesday, Prime Minister Gilani saying in a raid on Sunday, targeting a camp in Pakistani Kashmir, security forces picked up Zaki-ur Rehman Lakhvi as well as Zara Shah. Both members of the notorious Pakistani militant group Lashkar-e-Toiba. Lashkar-e-Toiba, a group formed a couple decades ago to fight Indian control of Kashmir. Now according to the Indian government, they are suspect No. 1 in the Mumbai attacks.

In those raids Pakistani officials say at least 15 people were arrested. But, it is not clear who all these 15 are. How they're connected to the Mumbai attacks if at all they are and what's going to happen to them.

Keep in mind, New Delhi has demanded Pakistan to turn over the suspects. But, this week Pakistan has made it clear that they are not going to turn them over. And if there are going to be charges, they're going to put these men on trial on Pakistani soil. It'll be interested to see how New Delhi reacts to this. So, even with these arrests, you see more tension, more disagreement between New Delhi and Islamabad.

Reza Sayah, CNN, Islamabad.

(END VIDEOTAPE) COLLINS: North Korea, not cooperative in nuclear talks, this morning. A lead negotiator for the U.S. calling it a tough, long day. Assistant Secretary of State Christopher Hill says talks aren't going in the right direction. Six nations meeting in Beijing, are unable to agree on how to verify North Korea's past nuclear activities. North Korea still will not accept outside inspectors.

A time table from England on troop withdrawal from Iraq. Britain's Ministry of Defense confirms most of their soldiers will begin exiting the sovereign nation in March, and should have most troops out of Iraq by June. Britain has about 4,000 troops in southern Iraq. A new U.S.-Iraqi pact calls for 150,000 American troops to be withdrawn from Iraq in two stages by 2011.

The U.S. Military is calling it, quote, a tragic case of mistaken identity. A coalition war plane bombed in an Afghan police outpost in Zabul Province, that's northeast of Kandahar. Six Afghan police officers were killed, at least 13 wounded. The U.S. Military says it deeply regrets the incident.

Hide the cigarettes. One country's attempt to stop teenage smoking. The idea showing positive results.

(COMMERCIAL BREAK)

COLLINS: Out of plain sight. England hoping teenagers will stop smoking if they can't see the cigarettes. ITN's Neil Connery has the story.

(BEGIN VIDEOTAPE)

NEIL CONNERY, ITV CORRESPONDENT: Over the years governments have tried everything to stop us smoking. Now, in the latest blitz, ministers believe out of sight is out of mind. The open display of tobacco in shops is to be banned in England and Wales. In future, cigarettes will have to be sold under the counter. A move designed to cut underage smoking.

But will it work?

We took the temperature with the generation who has been targeted by the anti-smoking message.

UNIDENTIFIED MALE: You're not just going to walk into a shop one day and just decide there's a cigarette pack over there, I want to start smoking. There's a reason behind it. And it's -- if you decide that you want to start smoking, you're actually just going to ask for them.

UNIDENTIFIED FEMALE: I don't think it will make too much of a difference, because I think if you're going to be influenced into smoking it will be by seeing people smoking, not just necessarily seeing the cigarette packs behind the counter.

CONNERY: Cancer patient Helen O'Dwyer unfortunately knows the true cost of smoking. HELEN O'DWYER, CANCER PATIENT: Don't touch them. Knowing what I know now -- I would never have touched them if I had known all the things that I know now. And look at the state I'm in.

I'd say to the young ones, look at me, 50 years from now that could be you, and you know what I'm talking about.

CONNERY: It's estimated 215,000 11 to 15-year-olds smoke in the England and Wales. They are three times more likely to die prematurely than someone who starts smoking in their 20s. And smoking amongst young people has fallen by up to 10 percent in countries like Iceland, where tobacco displays have been removed.

UNIDENTIFIED MALE: We have to focus on preventing bad health, not just diagnosing and curing it when it occurs. Smoking is still the biggest public health issue -- 87,000 people die prematurely every year, $1.5 billion cost to the NHS.

CONNERY: Vending machines, where up to a fifth of young smokers get their cigarettes, are also set to be band. Supermarkets will be the first to remove their displays from 2011, followed by corner shops and news agents two years later.

The display ban is also under consideration in Scotland, and Northern Ireland has yet to decide a policy.

(on camera): Despite the fears of some retailers, the government insists it's doing the right thing enforcing the sale of cigarettes under the counter. It stresses that similar measures abroad haven't forced retailers out of business and have cut underage smoking by as much as 10 percent.

(voice-over): The age limit for buying tobacco has already been raised from 16 to 18. But the government believes this new ban is needed to drive home its anti-smoking message.

Neil Connery, ITV News.

(END VIDEOTAPE)

COLLINS: Putting the numbers in perspective, in England, smoking kills 87,000 people every year. Here in the United States, it's 443,000 every year. Current studies from the American Cancer Society show more than 43 million American adults smoke, 20 percent of high school students are smokers and 6 percent of kids in middle school smoke.

Memo to President-elect Barack Obama from the newest Nobel Peace Prize winner. Martti Ahtisaari is urging the soon-to-be president to focus on the Middle East crisis during his first year in office. The former Finnish president accepted his 2008 Nobel Peace Prize at a ceremony today in Oslo, Norway. Ahtisaari was honored for his efforts to resolve conflicts from Kosovo to Indonesia to Namibia. As Ahtisaari put it, all crises can be solved.

More on the Blagojevich scandal. And we're taking your e-mails on this. Do you trust your elected officials?

(COMMERCIAL BREAK)

COLLINS: A good guard dog, fighting off an armed robber intent on hurting his owners.

Amy Lester of affiliate KWTV in Oklahoma City has the story.

(BEGIN VIDEOTAPE)

ROBERT TRAWICK, HOMEOWNER (INAUDIBLE) ... as a hero.

AMY LESTER, KWTV REPORTER: This family's hero is not a person, it's their dog, D-Boy (ph).

TRAWICK: He saved my life. He saved everybody's life.

LESTER: Roberta Trawick was sitting on the couch when a man busted in through the front door.

TRAWICK: He came in, pointed a gun at me and said get down on the ground.

LESTER: The next thing Roberta knew, her dog --

(CROSSTALK)

TRAWICK: I was too scared to move. I didn't know what to think.

LESTER: But before the dog could get a hold of the intruder, the man started shooting.

TRAWICK: I seen him shoot the dog twice. He shot him once in the head and he was still going after him. And the guy shot him again.

These are the exit wounds right here.

LESTER: D-Boy was shot three times altogether. The intruder, apparently spooked, took off out the front door.

TRAWICK: He's amazing. It's amazing that he went after that guy and I still have a family.

LESTER: The family has no idea why the man broke in, or how the dog survived.

TRAWICK: The vet said, if it wasn't for his hard head he wouldn't be here. He's got a hard head.

LESTER: A hard-headed dog, determined to protect his family, and a family that owes a debt of gratitude to their four-legged friend.

TRAWICK: I'm sorry my dog got shot, but, you know, I still got my family and we still got our dog.

(END VIDEOTAPE)

COLLINS: The attacker is still on the loose. The family says they cannot afford their dog's medical bills which are now up to $1,500.

I'm Heidi Collins. You can join us again tomorrow morning beginning at 9:00 Eastern.

For now CNN NEWSROOM continues with Tony Harris.