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CNN Live Saturday

Elusive Chess Champ Bobby Fischer Found In Tokyo; 9/11 Commission To Conclude Turf Battles Made U.S. Vulnerable To Attack; Interview With Gaven Menzies

Aired July 17, 2004 - 18:00   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.


CAROL LIN, CNN ANCHOR: "CNN LIVE SATURDAY" is just ahead, but now in the news, the 9/11 Commission is about to recommend that the FBI and CIA report to a national intelligence director. The committee is expected to conclude in its final report that turf battles made the country vulnerable to the 9/11 attacks.
The FBI is warning law enforcement officers nationwide that al Qaeda may be changing its tactics. It could be recruiting non-Arabs to carry out the attacks in the United States.

In Nevada, firefighters are getting a handle on a wildfire outside of Carson City. Flames have charred 7,500 acres since Wednesday. But with 1,900 firefighters working the lines, the fire is now about 50 percent contained.

Good afternoon. I'm Carol Lin and welcome to CNN LIVE SATURDAY. In the next hour, al Qaeda's elusive strategies. Find out what's inside a terrorist manual.

She says she'll be back. Martha Stewart's looking at five months in jail, but will the celebrity homemaker really serve hard time?

And here's a theory that could rewrite history. The Chinese discovered America. Is that true? I'm going to talk to an author who says he's got the proof.

But right now we begin with the calls for a new U.S. intelligence super boss. A source tells CNN the panel investigating the September 11th attacks will recommend that the CIA and FBI, among others, report to a new intelligence chief, a cabinet level officer who reports to the president. CNN's Elaine Quijano joins us now with more on this.

Elaine, what do you know?

ELAINE QUIJANO, CNN CORRESPONDENT: Good evening, Carol. Well, that report is not due out until next week, but the idea behind that recommendation centers on a question that commissioners have already asked, who is in control in the intelligence community?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I want you...

QUIJANO (voice-over): A source familiar with the commission's final reports says it will include a recommendation to create a cabinet level position, a new national director of intelligence. The purpose, to have one person oversee intelligence now handled by the CIA, Pentagon, FBI and others, an idea commissioners have hinted at in the past.

UNIDENTIFIED MALE: It's certainly a unified command and control that is very, very important. And people have got to know where the buck stops.

QUIJANO: The report also concludes in sharp language, the U.S. was not better prepared for the attacks because intelligence duties were spread too widely across government, and that turf and budget battles ensued. However, the report notes that problems existed long before President Bush took office.

In the wake of the scathing Senate intelligence report, President Bush has indicated he's open to reform.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We must add better coordination about intelligence services. I need and Congress needs the best possible intelligence.

QUIJANO: The president's Democratic opponent, John Kerry, has already seized on the idea.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: I think that the president should long ago -- and this is not the first time I've called it -- I pushed for this previously. It is long overdue that we have a coordinator of national intelligence in this country.

QUIJANO: Others in Congress are also pushing to revamp what they say is an outdated intelligence system. Democratic Congresswoman Jane Harman is saying "Our 15 agencies now operate with different rules, cultures, and databases. That must change. We can't afford to wait for yet another intelligence failure. This is a vital reform, and it's needed now."

RAY TAVEKH, NATIONAL DEFENSE UNIVERSITY: From the collapse of the Soviet Union to 1998 bomb -- when India detonated its bomb being missed at, they certainly missed the events of 9/11. There is something seriously wrong with the American intelligence community that requires a reform.

(END VIDEOTAPE)

QUIJANO: Now, CIA officials say they haven't yet seen the report and don't have a comment. But recently, the acting CIA director said this election year, it was important not to politicize the intelligence issue.

In the meantime, a senior Bush Administration official says that the recommendation is not unexpected but the White House is waiting for the report's release before commenting -- Carol.

LIN: Elaine, how involved -- has the White House said how involved they would like this cabinet level position to be in the day- to-day matters or is this person just going to hold the purse string? QUIJANO: Well, at this point, it's a little unclear because the White House isn't really talking about any details yet of how the duties might be divvied up. Some have suggested though that would be the case, is that this new person would have budgetary authority. And that is a problem for the Pentagon and CIA, of course, which now controls the purse strings largely of that multibillion dollar intelligence budget. But those details yet to be sorted out. At this point, that report not even out yet -- Carol.

LIN: Thank you very much, Elaine Quijano, live at the White House.

Two national magazines are reporting that the Bush Administration went to war with the wrong country. It turns out Iran not Iraq may be the country with the closest ties to al Qaeda and giving terrorists safe passage and clean passports that enabled them to come to the United States. "Newsweek" investigative correspondent Michael Isikoff says the connection turned up in a December 2001 National Security Agency memo.

(BEGIN VIDEO CLIP)

MICHAEL ISIKOFF, "NEWSWEEK" MAGAZINE: Well, it makes clear that the Iranian government did not have advance knowledge of the attacks but it did have this arrangement with al Qaeda, which is quite serious, and actually, in the view of many counterterrorism officials and some on the commission, goes far beyond any connections that al Qaeda had with the Iraqi government of Saddam Hussein. In effect, the Iranian security services, by having this arrangement were acting as -- helping to facilitate the September 11th attacks, whether they knew about the ultimate goal of the September 11th attacks or not.

(END VIDEO CLIP)

LIN: And we move on to Iraq on that note, where they keep on attacking. And no one is spared. A car bomb blast hit the Iraqi minister of justice's convoy in Baghdad, killing five people. The minister though escaped.

A roadside bomb killed a U.S. soldier in Northern Iraq near Beiji when it exploded near his convoy. Another soldier was wounded.

And the Filipino troops are getting out after giving in to save the life of a Filipino truck driver who's still being held hostage.

Abu Musab al-Zarqawi's people say they are responsible for attacking the justice minister and they boldly posted their messages on at least two Islamic militant websites. It turns out the terrorists are hiding in plain sight, on the Internet. CNN's Sean Callebs reports on this.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Al Qaeda terror training is moving from the battlefield to the Internet.

GABRIEL WEIMANN, UNITED STATES INSTITUTION OF PEACE: They can use it to communicate, to recruit, to raise funds, to negotiate.

CALLEBS: The U.S. led war on terror has shut down many terrorist camps. These days, through the online magazine, Al-Battar or The Sword, al Qaeda is using the web to spread fear and promote jihad. Al-Battar looks like a slick, well-produced web magazine, colorful, featuring a table of contents, an op-ed page and a letters to the editor page.

JOSH DEVON, SITE INSTITUTE: It's not a manual that you would probably read at the CIA or something. It's in layman's terms and it's meant for the average person who wants to get involved in this, to start doing what al Qaeda wants them to do.

CALLEBS: Published twice a month, each issue of Al-Battar focuses on one topic, such as cleaning and care of weapons, assassinations, targets inside cities, and in this case, kidnapping.

Al Qaeda watchers point out the rash of kidnappings in Iraq and Saudi Arabia flourished after the magazine articles came out.

WEIMANN: It's a detailed description, who should be chosen as a target, where should it, the action, be held, how should the hostage be kept, about negotiation, informing the media.

CALLEBS: Using the web to promote terror is not a new idea. But al Qaeda watchers say seven years ago the monitored 12 terrorist websites. Today, that number has swelled to more than 4,000. Experts say there is no way to shut down the sites. The same analysts say it may sound odd but the U.S. doesn't want to silence all the sites because they do provide analysts with important, so-called chatter.

WEIMANN: Actually, there's a lot to learn from them and for intelligence purposes, one of the motives would be to keep it alive and get as much as you can and learn from them.

CALLEBS: Al-Battar claims to be published by al Qaeda's military arm in the Arabian Peninsula. As much as anything, the online magazine is aimed at Muslim youth. A computer screen replacing the battlefield and analysts say Al Battar's message of basic terror training is capable of reaching millions.

Sean Callebs, CNN, Washington.

(END VIDEOTAPE)

LIN: All right, let's get to some interesting stories right here at home. Here across America, two men are under arrest in New Haven, Connecticut for apparently random shootings that wounded five people this week. New Haven police tell CNN they recovered a .22 caliber gun in the course of those arrests. They say the victims were all shot from the same gun and there is no word on the motive for those shootings.

Now, Los Alamos National Laboratory of New Mexico is suspended all work as it investigates the disappearance of some classified computer material. A spokesman says the lab's director is ratcheting up his aggressive stance -- that's a quote -- in addressing some of the security and safety incidents that have plagued the lab in recent years. Los Alamos is an important U.S. nuclear research center.

Five minors who narrowly escaped a coal mine flood near Somerset, Pennsylvania two years ago are suing the mine owners. They allege the company could have prevented the accident that poured millions of gallons of icy water into the mine. Nine other miners were trapped for three days before being rescued. Those miners have already filed suit.

Also, out west, it's another busy day for firefighters there because it's a touch-and-go situation. At that wildfire you're watching burning in the Nevada state capital. The fire chief says it is the worst fire he has seen in almost 25 years. CNN's Ted Rowlands is on the fire lines in Carson City.

Any improvement out there, Ted?

TED ROWLANDS, CNN CORRESPONDENT: Yes, there is considerable improvement. Firefighters say they now have 50 percent of this fire contained and they're optimistic about their chances. That said, the wind has picked up here considerably over the last few hours. Firefighters are watching that. And they say because of the wind and the history of this fire, they are not ready to declare victory just yet.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): Despite having the upper hand, firefighters say they're still very concerned about the possibility of the fire coming back to threaten more homes.

UNIDENTIFIED MALE: No, we are not letting our guard down. This fire could come right back out of this cannon right here again and sweep right through and burn what it's already burned.

ROWLANDS: Crews spent the day checking wind speeds and hosing down areas around structures. Sixteen homes have been burned to the ground in what many firefighters say is one of the worst fires in this state's history.

UNIDENTIFIED FEMALE: This is one of the nastiest that we've had in many, many years, especially with the homes burning. And that's kind of the new experience for us in this area.

CALLEBS: People who live in the threatened areas have been allowed back. Many of them came home to see that the fire had come within just a few feet of their homes. Firefighters say they got a major break when the wind shifted late Friday, and they are confident that they will have this fire fully contained by early next week.

(END VIDEOTAPE)

ROWLANDS: In fact, some of the 1,900 firefighters that were deployed to this fire are going to be let go in the next hours and overnight, especially if the weather continues to cooperate. These winds picking up, however, may change that. At this point, however, Carol, they're very confident that they can get this thing contained by early next week and hopefully, declare it completely out.

LIN: Ted, I can't help but notice the background behind you. There's a house there. Can you tell me a little bit about what happened to this neighborhood?

ROWLANDS: Yes, well, you know what, it's amazing. You come up toward an area that was part of the dramatic...

LIN: All right, I'm sorry. Ted, we just lost the picture out there, so we'll try to get back to you on that. I know you're going to join us live at 10:00 while we watch the progress of this fire.

All right, still ahead on CNN LIVE SATURDAY, back to life, we've got an interesting turn on a story we report to you everyday. It actually isn't all bad in Baghdad. Normal life is coming back to some parts of the city.

And one-time king of chess may have finally met his match. For more than a decade, Bobby Fisher stayed one step ahead of the U.S. government but has justice finally caught up to the chess legend?

And it looks like Martha Stewart is going to jail. She's sad, she's angry. Her fans are furious and her neighbors, well, you're going to hear about what they have to say.

(COMMERCIAL BREAK)

LIN: You know it's quite something when the Iraqi justice minister's convoy is attacked and it really simply fades into the violent stage that Iraq is today. The violence is just a part of the bigger picture on how the new Iraqi government is to survive. Ken Pollack has got a theory. He is the head of research of the Savan Center for Middle East Policy at the Brookings Institute. He's also our Mid-East analyst.

Good to see you, Ken.

KEN POLLACK, CNN MID-EAST ANALYST: Hi, Carol, how are you?

LIN: I'm doing just fine. The Iraqis however, they are desperate. They want peace. How is the Iraqi government going to offer them some concrete solutions for the future?

POLLACK: Well, that is, of course, Carol, the biggest challenge for this new government is they've got to come in and they've got to demonstrate to the Iraqi people that first they are independent of the United States and, second, that they're able to provide something to the Iraqis that they've not had beforehand, which is day-to-day security and the provision of basic services. And that creates a real catch-22 for this new government because they ultimately don't have the resources needed to provide security and basic services, only the United States can do that. So on the one hand they've got to show they're independent. On the other hand, they're going to need to stay close to the United States to get the U.S. to give what they can't. LIN: Give what they -- and give what they can, which is, frankly, a lot of money. I mean millions of dollars in the pipeline. What's happened?

POLLACK: Yes, this is a bit of a scandal that's been around Washington for the last few weeks. You know $18 billion was appropriated by the Congress for reconstruction of Iraq. But it turns out that probably less than $300 million of it has actually been spent in Iraq.

Now, there's other money that's already in the pipeline, already in contracts, but the truth is the vast majority of those billions haven't even been contracted yet. They're sitting in U.S. bank accounts. That money needs to be disbursed. The Iraqi economy is looking for a jumpstart. They need jobs. They need job retraining programs. They need investment funds. They need all of that, but it also has to be sustainable development. If it's just a quick shot of cash, they'll be fat and happy for a year, and then the whole economy will come apart.

LIN: So is the money in the bank the carrot on a stick?

POLLACK: It's part of the carrot. Part of the carrot is also the security situation, improving that. But yes, if the money can go into Iraq and be used to start these kinds of sustainable development programs, where they're going to provide job retraining programs to provide Iraqis with new kinds of skills, under those circumstances, you should see the whole Iraqi economy starting to revive and revive in a way that will have good long-term prospects.

LIN: Ken, one thing you can't buy though in Iraq certainly is cooperation. You've got all these different ethnic groups, the Sunni, the Shia, the Kurds. In the process of forming a new constitution and the elections coming up presumably in January, what are some of your predictions, what are some of your recommendations here on how those groups can come together?

POLLACK: Well, I think that you are again putting your finger on a critical issue, Carol, which is that the different Kurdish groups, the various Sunni groups, the various Shia groups, they have differences among themselves. But they also have varied differences between each other. The Kurds are looking for autonomy. The Shia are looking to dominate the new state. After all, they're the majority and they're the ones who have been the most oppressed over the last 70 or 80 years. And finally, the Sunnis, who are now going to be the minority, they're looking to make sure that their rights are going to be respected. And so far we've not yet gotten a sense that their leaders are going to be able to cooperate on working out a power sharing arrangement.

LIN: So what's happening on the ground level then? Are U.S. advisers on the ground negotiating between tribal leaders? How does that actually work in reality there?

POLLACK: Well, again, this is one of those catch-22s. On the one hand, yes, the U.S. is trying to get these different groups to come together and to sit and talk through their differences. The problem is again the U.S. made a very conscious decision that its own direct involvement in these kind of activities was just creating hostility with the Iraqis, that the Iraqis wanted them out of the picture. So instead, what they're hoping is that this new government will be able to broker those arrangements. But the problem is, of course, that that is such a complicated and potentially dangerous issue that for the moment, the new government wants to concentrate on providing some things that the Iraqis can see as immediate benefits and leave those kind of longer, thornier issues aside for the moment.

LIN: Big picture, ken. I want to throw out a theory, frankly, that may sound kind of wacky or a little bit wild. But someone had compared the future of Iraq to the current state of Pakistan, where the government willingly and knowingly separates out definitive areas of the country and just completely gives them over to tribal law, such as the northwest province, frontier, where presumably Osama bin Laden may be hiding and getting cover. Do you see a situation like that in Iraq where in order to control, at least, a majority of the country, that the Iraqi government is going to have to simply write off places like Fallujah where eyewitness accounts say that terrorists are operating at will and out in the open?

POLLACK: It's, of course, a great risk, Carol. And the way I'd put it is I think that there is a tremendous temptation both for this new Iraqi government and for this U.S. administration to do exactly that. I also think that it would be disastrous. In a place like Pakistan, it's a very different kind of society. It is conceivable to do that, although I would suggest in Pakistan there are real problems that are arising from it. In the case of Iraq, that is a recipe for civil war. Iraq is, unfortunately, a country that has a single resource. It doesn't have the kind of economy that can survive being carved up like that. It also has a deeply intermingled population and that population is not going to want to be left to the -- this institute of different tribal warlords.

LIN: Interesting. Thank you very much, Ken Pollack, always good to have you.

POLLACK: Good to see you, Carol.

LIN: Well, the violent headlines we report are only part of the story out of Iraq. Life in so many unexpected ways is getting back to normal. Jane Arraf is our Baghdad bureau chief.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF (voice-over): The trumpet and the city it serenaded were a little battered. But the song, "My Country, My Country," rang even more true. After more than a year of occupation and U.S. soldiers prominent in the streets, Baghdad is being given back to Baghdadis. Dozens of families dressed up their children and came to the reopening of this park on Baghdad's historic Abanuwa (ph) Street. With more Iraqi police in the streets and a few weeks of relative calm, parts of the city are beginning to feel almost normal. "This is a wonderful occasion because it's been over a year that we couldn't go out," said Nada Abdul Kareem (ph). She and her husband, Omar Hassamo Zimaali (ph) came to watch their daughter, Taaiba (ph), at the top of her sixth grade class recite a children's poem.

Reopening the park is part of the campaign to clean up the streets and encourage businesses to open again. Local workers have been hired to do as much of the work as possible. The U.S. Army's 1st Cavalry Division has been could doing the rest. They're trying to bring this riverside street with its famous fish restaurants back to life.

(on camera): On some streets, the city's mayor has even begun dismantling some of the barbed wire and concrete barriers like this, meant to guard against car bombs.

(voice-over): Baghdad still sees some violence. This week at least 10 Iraqis were killed when a car bomb exploded close to the interim government's headquarters. But the mayor says Iraqis are so resilient, they'll continue to go out despite the occasional explosion.

MAYOR ALAA AL-TAMMI, BAGHDAD: This is Iraqis. They are very brave. This is their city. And I don't think this bump will prevent them from normal living. I don't think this would prevent Iraqi to live and to go out.

ARRAF: In Baghdad where neighborhoods come to life after the day's heat, a lot of streets are crowded again at night. Actor Ali Segbaad (ph) said he was robbed at gunpoint not long ago. "I was planning to leave the country," he says but he adds the streets have been safer in the past two weeks, since the transfer of authority. He says now he believes he'll stay.

Jane Arraf, CNN, Baghdad.

(END VIDEOTAPE)

LIN: We've got some interesting stories coming up, chess champ, then fugitive, the mysterious Bobby Fischer finds himself in check. Japanese authorities have him on an immigration charge and wanted in the U.S.

Martha Stewart is looking at five months behind bars, but did she get off easy? Our legal expert, Kendall Coffey, has a lot to tell us.

(COMMERCIAL BREAK)

LIN: Sometimes you wonder what goes wrong. He is one of the most gifted chess players in history. He is also reclusive, a political extremist and, even though his mother was Jewish, he's known for making violent anti-Semitic comments. Today, 61-year-old Bobby Fischer is behind bars. CNN's Atika Shubert has the story of what might be the chess grandmaster's endgame.

(BEGIN VIDEOTAPE) ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): Bobby Fischer, chess prodigy and grandmaster, was once a national hero. In 1972, Fischer, then 29 years old, roundly beat world chess champion Boris Spassky from the Soviet Union. It was hailed as a victory in the Cold War. Now, 61, he is a wanted man. He has been a fugitive since 1992 when he attended a Yugoslav chess tournament in violation of U.N. sanctions. Famously, spitting on a letter from the U.S. government that warned him not to go.

BOBBY FISHCHER, CHESS PRODIGY: So this is my reply to whether or not I should defend my title here. That's my answer.

SHUBERT: After that, Fischer went underground shuttling between Europe and Asia amid rumors that he continued to play chess on the Internet under assumed names. He surfaced occasionally to broadcast anti-Semitic rants against his home country, the most controversial aired on a Philippine radio program just after the World Trade Center attacks.

FISCHER: Well, this is all wonderful news. A sign for the (EXPLETIVE DELETED) U.S. to get their heads kicked in.

SHUBERT: He also boasted of his place in history.

FISCHER: You know when I won the world championship in 1972, the United States had an image of -- you know, it was a football country, a baseball country, but nobody thought of it as an intellectual country. I turned all that around single handedly.

I think it was a very risky move.

SHUBERT: Yet, he made a strategic error in coming to Japan. Fischer was detained Thursday at Tokyo's Narita Airport on an immigration violation. Japanese and U.S. officials will not say whether Fischer will be extradited to the U.S. to face charges. An ignominious endgame for the man once hailed at the world's greatest living chess player.

Atika Shubert CNN, Tokyo.

(END VIDEOTAPE)

LIN: All right. News around the world begins with an emotional task for parents in southern India. They're remembering the 90 children killed in Friday's devastating school fire. Forty-five of the victims' bodies were cremated in mass ceremonies today. The others were cremated yesterday. In the wake of the tragedy, the government has ordered that all private schools there be inspected.

Palestinian Authority president Yasser Arafat has announced a major restructuring of security services. His plan calls for consolidating nearly a dozen security services into three branches. Many Palestinians are protesting that plan.

And on a much lighter note, Lance Armstrong is dominating the course as the Tour de France heads into its final week. Armstrong overpowered his rivals to win the 13th stage today through the Pyrenees Mountains. Barring a major upset, experts say, the Texan appears actually poised to grab an unprecedented six Tour de France victory. It would be pretty amazing, never done before by a man over 30.

Well, it's safe to say, Martha Stewart may be the most talked about woman in America this weekend, especially in her hometown of Westport, Connecticut.

And then Columbus did sail the ocean blue in 1492, but did the Chinese actually discover America? I'm going to interview a man who says that the history books have it wrong.

Plus one company that's banking on your need for a nap. I've got all that on CNN LIVE SATURDAY.

(COMMERCIAL BREAK)

LIN: More of CNN LIVE SATURDAY in just a moment. But first a quick look at what's happening now in the news. Details leaked. The 9/11 Commission's final report calls for a new cabinet level post to oversee U.S. intelligence gathering.

A bad ride -- an out of control balloon lands safely. The helium filled balloon carrying five children and 10 adults was floating out of control over Baltimore this afternoon. It's now been reeled in and some passengers are being treated for minor injuries.

Sitting this one out -- defending Olympic champion Marion Jones pulls out of the 200 meters at the U.S. track and field trials. Why?

(BEGIN VIDEO CLIP)

MARION JONES, DEFENDING OLYMPIC CHAMPION: My reasoning for pulling out of the 200 today is simply because of fatigue. There's no other reason. There are no other excuses. After running my rounds yesterday, I was simply tired, exhausted. It happens. It happened to me.

(END VIDEO CLIP)

LIN: And that leaves Jones competing in the long jump event and perhaps the relays. We'll see.

John Edwards finds gold in California. The Democratic vice presidential candidate has raised about $1 million during the West Coast swing. He's campaigning in Newport Beach today and heads to the battleground state of Florida.

Even convicted felons have neighbors, and they have mixed opinions about whether Martha Stewart got a fair deal. Deborah Feyerick reports from Stewart's hometown now of Westport, Connecticut.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): On Main Street in the town where Martha Stewart started her empire, art and music mixed with opinion at an annual street festival. Real estate agent, Nancy Shutter (ph), a longtime Westport native and fan.

UNIDENTIFIED FEMALE: I'm sure she's remorseful. I think that she's ashamed. I mean she will have that on her resume, so to speak, a convicted felon. But I think in all she'd like to clear her name.

MARTHA STEWART, DOMESTIC DIVA: And I'll be back.

FEYERICK: While five months of Stewart's sentence will be served in prison, the other five will be served under house arrest not here in Westport, but likely at another home in nearby Bedford.

CHRISTIN MARANDINO, WESTPORT RESIDENT: She doesn't do a lot for the town, so the town doesn't necessarily own her as one of our own, as one of our town celebs.

FEYERICK: Some residents, Whitney Finn, see the sentence as too lenient.

WHITNEY FINN, WESPORT RESIDENT: I think she should just take responsibility for what she did and that is what she did to her company not what other people did to her company.

FEYERICK: Others like Westport visitor, Mark Moreno say it's too harsh.

MARK MORENO, WESTPORT VISITOR: She didn't murder anybody. I mean try to put it fair perspective, you know. And I'm sure she'll bounce back.

FEYERICK: And though Stewart has minimized her crime, calling it a small personal matter, Westport native, David Waldman says she can't really separate herself from corporate criminals like Enron's Ken Lay or WorldCom's Bernie Ebbers.

DAVID WALDMAN, WESPORT RESIDENT: She ran her own company. It was a billion dollar company. She had employees that lost their jobs. And it was a difficult situation all around and you know, hindsight being 20/20, she probably wouldn't have done it for such a minuscule amount.

FEYERICK: As for Stewart's promise that she'll be back...

DAVID KELLY, WESTPORT RESDIENT: I think she will be back. I hope so. I mean, this whole thing has destroyed pretty much her Martha Stewart empire for no good reason.

FEYERICK (on camera): Stewart's lawyers will be filing a formal appeal within the next two weeks. Pending the court's ruling, Martha Stewart remains free.

Deborah Feyerick, CNN, Westport, Connecticut.

(END VIDEOTAPE)

LIN: Well, it's the price of fame. That's what former U.S. Attorney Kendall Coffey thinks. He joins us right now.

Kendall, you think that Martha Stewart's celebrity really contributed to her sentencing?

KENDALL COFFEY, FORMER U.S. ATTORNEY: Well, I think the reality is that it certainly contributed to the investigation in the first place. When you're a celebrity and you're on the radar of law enforcement, they're going to get an electron microscope and go behind every blade of grass, under every rock. And that's the occupational hazard for the rich and famous. But once the charges were brought, I think she got a very fair trial and ultimately, Carol, a fair sentence. For sure, it was at the very low end, but let's face it, Martha Stewart was not a master criminal. In fact, based on the clumsiness of the cover-up scheme she's not even a very accomplished liar. This was not a securities fraud matter. It's not what she did, it's what she fibbed. I think it was a fair sentence and ultimately, she's going to jail.

LIN: Well, but it also sounds like you're saying it was a waste of taxpayers' money?

COFFEY: Well, I wouldn't say it's a waste of taxpayers' money, but what happens is these investigations take on a life of themselves. They were looking for securities fraud. Then she gave them a case that they couldn't really ignore. If she's going to lie, if she's going to cover up, obstruct justice, they've really got no choice. So ultimately, my view would be that the real author of this crime, the real author of this indictment was Martha Stewart herself.

LIN: Really? Well, you know, prosecutors were pretty frustrated in the courtroom. They wanted her to get the maximum, clearly. I don't know if that was competitive instinct or they really truly thought that what she did was so criminal. But they said that, for example, she gave cocoa to the parents of kids who appeared on her show and that she complimented her staff at lunches and on holidays. And that that was not -- that was short of extraordinary to give leniency the way she got.

COFFEY: Well, she did not get a downward departure. The big issue is whether there was anything so astonishing about this case that the judge should go below the guidelines. What the judge did was stay within the guidelines but give Martha Stewart the lowest penalty possible. And I that prosecutors had to be frustrated, Carol, because let's face it, she was humble pie inside the courtroom, throwing pies the minute she got out of there, still basically denying to the bitter end that she did anything wrong.

LIN: Yes, but not forgetting to pitch her magazines, mind you.

COFFEY: Yes, that was striking.

LIN: She is no longer CEO of her company. What does the law allow her to do in the future for her career?

COFFEY: Well, I think she's got to be careful and can't become a de facto CEO. They defined her position as founding editorial director, whatever that means. And while I think she continued to contribute, I think she's got to be a little bit careful about acting as a director, acting as a CEO at a time when the securities filings by her company are saying that's not so. The last thing she needs to do is get into anything that looks deceptive, bad faith, and get into any more trouble.

LIN: And that is forever and ever, she can't ever be a CEO of a publicly traded company?

COFFEY: I don't -- when we talk about the fact that this might seem like light punishment, in a certain way it is. When was the last time a person fought the federal government tooth and nail, was convicted on four penalties and only got five months? But the reality is this is a lifetime stigma. This will disable her for many things. We all know what being a felon means...

LIN: Even if she wins on appeal?

COFFEY: Well, if she wins on appeal, she could get a new trial. And if she wins the new trial, then, of course, everything changes, but, Carol, I think that's a real long shot. And I think what really -- the reality is that Martha Stewart is going to be serving those five months and at some point she's going to be coming out. That is something that is within her power to affect. Maybe who knows, she'll end up writing a book. But sooner or later the day of decision is going to come.

LIN: Yes, I wouldn't be surprised about the book. All right. Thanks, Kendall.

COFFEY: Thanks, Carol.

LIN: I happened to be interviewing "Vogue" magazine's Julia Reed at the very moment Martha Stewart was sentenced. This is what she said.

(BEGIN VIDEOTAPE)

JULIA REED, "VOGUE": This is good news because there's a possibility that it could have been a few months longer. And you know it's extraordinary to me how the tide has really changed as far as public opinion toward Martha. I think she's had enormous sympathy as a result of her conviction. And she's done a great job in the last couple of weeks or, in fact, several weeks, going out, business as usual. It wasn't the dour Martha that we saw during the trial.

LIN: Have you seen her out there and talked to her?

REED: Yes, I mean she's been at the -- to the Council of Fashion Designers of America gala. She's been at parties in South Hampton. I mean she makes the social pages more than most movie stars these days.

LIN: What does she say to you about her...

REED: Oh, no, I mean I didn't talk to her. I mean I just sort of see her walking in and out of these buildings on the arm of various escorts. But I mean the point is that she's out there flashing a smile and looking good. And I think people are sort of oh, look at Martha, she's so brave. She's keeping up a good front. And so I think, you know -- she'll -- I think she's going to get out in five months and -- I mean, she may -- I mean if she appeals, fine, but I think she's actually lucky to get five months and two years. And when she comes out of that, I think that she'll be sort of a heroine of sorts. I mean...

LIN: Really?

REED: ... she could play this really well.

LIN: You know New York society, very accepting of her, supportive of her, would you say?

REED: Oh, yes. I mean, you know, listen Martha's always been a tough cookie. But I mean she's a -- you know everybody respects her business acumen and the empire that she did build. And I think when she gets out of prison, that she can, you know, start rebuilding her life because -- and I think that already she's sort of been rehabilitating herself in a way prior to this sentencing day.

(END VIDEOTAPE)

LIN: It sounds like I was interviewing her in a middle of a wrestling match. But all of us had the monitors up as we were listening to the sentencing and Martha Stewart's remarks at the microphones yesterday. That's why it was so loud.

You know I was actually interviewing Julia Reed about the president's daughters' first interview, which "Vogue" scooped. And she told me a lot about what goes on inside the Bush family and about Barbara and Jenna Bush. You'll see it tomorrow night in our primetime show at 10:00 p.m. Eastern Sunday night.

Martha Stewart is going to be with our Larry King as well and it's going to be her first and only live primetime interview. That is going to be Monday night at 9:00 Eastern and she'll be taking your phone calls.

In the meantime, we want to get you up to speed on that dramatic story of that balloon rescue attempt out in Baltimore where five children and 10 adults were trapped inside this hot air balloon. Our Sean Callebs is out on the scene in Baltimore. He joins us right now on the telephone.

Sean, what's the latest? We've given the basics of the story. What's new here?

CALLEBS: Well, Carol, we can tell you we just spoke with Chris Gorman. He is an employee at Balloon Over Baltimore. He was up in the balloon when it got stuck about somewhere between two and 300 feet above the city. He said he told the 15 passengers to lie down on the ground.

And to give you an idea, this isn't like your typical hot air balloon where you may picture some kind of wicker basket. This is a large balloon with in essence a huge cage. It's almost like a carnival ride where 15 to 30 people could squeeze in there. So once he did get the passengers to lie on the ground, the wind kicked up and that is when the balloon apparently made contact at least once perhaps twice with the city building here. And a couple of people suffered some scratches, some scraps. Obviously, they were very shook up.

Chris Gorman tells me that a lot of the people up there the whole time were obviously very scared. They were high above the city. It was windy. They didn't know exactly what would happen. And there's a giant wench -- and to give you a -- it's really hard to describe this. It's a huge, huge mechanism that is responsible for taking this thing up, bringing it down.

This is something the city does 20 times a day. It's a very popular tourist attraction. The employees here say they have never had this kind of problem before, but obviously they're going to be looking into it to see what caused it. There's some speculation that the windy weather may have jerked that cable and made it stick in some capacity. There's still a lot of emergency officials here. But basically the area is clearing out. And a number of people were taken to University and Mercy Hospital. None of the injuries considered serious -- Carol.

LIN: Sean, the balloon never actually got untethered. It was still tethered to the ground. It was...

CALLEBS: That's a good point. This balloon was actually tethered to the ground in 20 different places. I counted 20 large, concrete slabs that are maybe four feet by four feet and about two- and-a-half feet high. And each one of those is tethered with very secure ropes and then there is this giant winch. And the cable looks to be at least an inch in diameter. And it looks almost kind of like the mechanism you see on a ski lift that moves -- that brings the chairs back and around off the slopes, but it was never untethered. In a way this cage constructed, it's padded and he says the people were never in threat of serious injury.

LIN: Got you. Got you. So tethered to the ground but its guiding wires got out of whack and that's what controls the direction of the balloon. Thanks very much. Sean Callebs reporting on the telephone from Baltimore.

Still ahead on CNN LIVE SATURDAY, could Christopher Columbus have missed the boat more than 70 years ago? I'm going to be talking with one man who says China actually discovered America.

(COMMERCIAL BREAK)

LIN: One of the basic facts of an American school kid's education is that Christopher Columbus discovered America in 1492. But what if that was wrong? My next guest thinks it is. Gavin Menzies is a former British submarine commander who has researched and written an alternative history. He says it was the Chinese that got here first and he joins us live from London. Gavin, I'm so pleased to have you, because, you know, there is so much controversy around your theory. Where do we begin? What proof do you have?

GAVIN MENZIES, AUTHOR, "1421": Carol, good evening. Thank you very much for asking me. My argument essentially goes like this, Carol: first of all, I found by complete accident that all of the great European explorers had maps showing them where they were going. Columbus had a map which showed islands in the Caribbean. He knew where he was going. Magellan had a map which showed what we now call the Straits of the Magellan in the Pacific. He knew how to get into the Pacific from the Atlantic. He knew how to cross the Pacific. Vasco Da Gama had a map of South Africa. Captain Cook had a map of Australia. Cabral had a map of Brazil. All of the great European explorers...

LIN: All right.

MENZIES: ...had maps. There was a master chart of the world produced in the 1420s.

LIN: And then?

MENZIES: And it obviously wasn't produced by Europeans because they used it. So that's my first point. The second point is that the great European explorers, brave men as they were, when they got to the new world, they found Chinese people already there. And to take the most extreme example, Christopher Columbus, he met so many Chinese people when he got to the new world that he thought he'd actually reached China. He believed he reached Cathay to his dying day.

LIN: Where was this recorded? How was it documented? How was this documented, Gavin?

MENZIES: This is documented in the records of Columbus and all the great explorers. If you go to my website, www.1421.tv., go to paragraph six of the synopsis of evidence and I list all of the explorers who had maps and...

LIN: All right, Gavin, let me -- OK, I want to -- I don't -- I want to hear about your story and less about your website because I want to get a sense of what physical evidence you have that -- I mean, you have these alleged sightings by Christopher Columbus that he wrote about. What else do you have? We have a map, for example. I'm going to put it up on our screen and I want you to describe what we're seeing because this looks like a comparative.

MENZIES: Well, Carol, I must say, I don't -- I'm looking at a black screen.

LIN: Oh, OK. It looks like South America to me. Well, you know what I'm going to take...

MENZIES: Right. Well, there should be -- I'm pretty sure I can explain what it is, Carol, even though I can't see it.

LIN: OK. OK.

MENZIES: Have you got four globes, four hemispheres...

LIN: Yes. Yes.

MENZIES: ...on your screen?

LIN: One looks like South America as it exists today.

MENZIES: Right. And then the one below it is South America as it appears on a map before Balboa discovered the Pacific, before Magellan got to South America, before Cook got to North America, before Barrettano discovered what is now New York and so on. So you're looking at the Eastern Hemisphere today, the Western Hemisphere today. And then you're looking at two maps, which were published before the great European voyages of exploration started. And as you can see, if you look at the Eastern Hemisphere map, there is the whole Eastern Hemisphere of the world...

LIN: Gavin, we're running out of time. You have to explain to me how this proves -- we're running out of time. You have to explain to me how this proves that the Chinese were first into the Americas and not the Europeans.

MENZIES: Well, as I say, the first Europeans who got to America found Chinese people. That's number one. Number two, the people who live in those places today have Chinese DNA. There are lots of descendants of that Chinese fleet alive and well living in America today. And the third point is we've recently found enough Chinese charts of these great voyagers, which have not been destroyed contrary to popular fiction, which show that the Chinese did indeed reach North and South America.

LIN: Gavin, why do you think so many noted historians, and authors and Chinese scholars say that you're wrong, that your research is fast and loose and that you jump to conclusions?

MENZIES: No, they don't -- Carol, they don't say that at all.

LIN: They do.

MENZIES: Well, I don't agree with you. On the 16th of April, the Chinese scholars met in Taiwan to decide whether they thought my theory was nonsense or true. One-third of the scholars thought I was right lock, stock and barrel. Another third thought I was right with a number of qualifications. And one-third thought it was -- my theory was absolute rubbish beginning to end. So two-thirds of the Chinese scholars from all across China, from Hong Kong, Singapore and Taiwan on the 16th of April, they concluded, two-thirds of them, that I was either completely right or right with reservations.

LIN: Gavin, this is going to become an interesting story as your theories are challenged and you get the opportunity to present them. Thank you very much.

MENZIES: Thank you very much for inviting me, Carol. LIN: Thank you, Gavin Menzies.

We are going to be right back.

(COMMERCIAL BREAK)

LIN: That's all the time we have for this hour. I'm going to be back at 10:00 Eastern for "CNN SATURDAY NIGHT." Should the government pay for stomach stapling and other obesity related surgeries? New Medicare rules and what they're going to mean to you is our hot topic.

But right now, Mark Shields tells us what the gang has.

MARK SHIELDS, CO-HOST, "THE CAPITAL GANG': Republican Senator Mitch McConnell of Kentucky, the Senate Majority Whip, joins us to look at Senate defeat for the marriage amendment and the latest dump Cheney rumor. "THE CAPITAL GANG" also will talk about the ethics case against Congressman Tom Delay. All that and much more right next on CNN.

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Aired July 17, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: "CNN LIVE SATURDAY" is just ahead, but now in the news, the 9/11 Commission is about to recommend that the FBI and CIA report to a national intelligence director. The committee is expected to conclude in its final report that turf battles made the country vulnerable to the 9/11 attacks.
The FBI is warning law enforcement officers nationwide that al Qaeda may be changing its tactics. It could be recruiting non-Arabs to carry out the attacks in the United States.

In Nevada, firefighters are getting a handle on a wildfire outside of Carson City. Flames have charred 7,500 acres since Wednesday. But with 1,900 firefighters working the lines, the fire is now about 50 percent contained.

Good afternoon. I'm Carol Lin and welcome to CNN LIVE SATURDAY. In the next hour, al Qaeda's elusive strategies. Find out what's inside a terrorist manual.

She says she'll be back. Martha Stewart's looking at five months in jail, but will the celebrity homemaker really serve hard time?

And here's a theory that could rewrite history. The Chinese discovered America. Is that true? I'm going to talk to an author who says he's got the proof.

But right now we begin with the calls for a new U.S. intelligence super boss. A source tells CNN the panel investigating the September 11th attacks will recommend that the CIA and FBI, among others, report to a new intelligence chief, a cabinet level officer who reports to the president. CNN's Elaine Quijano joins us now with more on this.

Elaine, what do you know?

ELAINE QUIJANO, CNN CORRESPONDENT: Good evening, Carol. Well, that report is not due out until next week, but the idea behind that recommendation centers on a question that commissioners have already asked, who is in control in the intelligence community?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I want you...

QUIJANO (voice-over): A source familiar with the commission's final reports says it will include a recommendation to create a cabinet level position, a new national director of intelligence. The purpose, to have one person oversee intelligence now handled by the CIA, Pentagon, FBI and others, an idea commissioners have hinted at in the past.

UNIDENTIFIED MALE: It's certainly a unified command and control that is very, very important. And people have got to know where the buck stops.

QUIJANO: The report also concludes in sharp language, the U.S. was not better prepared for the attacks because intelligence duties were spread too widely across government, and that turf and budget battles ensued. However, the report notes that problems existed long before President Bush took office.

In the wake of the scathing Senate intelligence report, President Bush has indicated he's open to reform.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We must add better coordination about intelligence services. I need and Congress needs the best possible intelligence.

QUIJANO: The president's Democratic opponent, John Kerry, has already seized on the idea.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: I think that the president should long ago -- and this is not the first time I've called it -- I pushed for this previously. It is long overdue that we have a coordinator of national intelligence in this country.

QUIJANO: Others in Congress are also pushing to revamp what they say is an outdated intelligence system. Democratic Congresswoman Jane Harman is saying "Our 15 agencies now operate with different rules, cultures, and databases. That must change. We can't afford to wait for yet another intelligence failure. This is a vital reform, and it's needed now."

RAY TAVEKH, NATIONAL DEFENSE UNIVERSITY: From the collapse of the Soviet Union to 1998 bomb -- when India detonated its bomb being missed at, they certainly missed the events of 9/11. There is something seriously wrong with the American intelligence community that requires a reform.

(END VIDEOTAPE)

QUIJANO: Now, CIA officials say they haven't yet seen the report and don't have a comment. But recently, the acting CIA director said this election year, it was important not to politicize the intelligence issue.

In the meantime, a senior Bush Administration official says that the recommendation is not unexpected but the White House is waiting for the report's release before commenting -- Carol.

LIN: Elaine, how involved -- has the White House said how involved they would like this cabinet level position to be in the day- to-day matters or is this person just going to hold the purse string? QUIJANO: Well, at this point, it's a little unclear because the White House isn't really talking about any details yet of how the duties might be divvied up. Some have suggested though that would be the case, is that this new person would have budgetary authority. And that is a problem for the Pentagon and CIA, of course, which now controls the purse strings largely of that multibillion dollar intelligence budget. But those details yet to be sorted out. At this point, that report not even out yet -- Carol.

LIN: Thank you very much, Elaine Quijano, live at the White House.

Two national magazines are reporting that the Bush Administration went to war with the wrong country. It turns out Iran not Iraq may be the country with the closest ties to al Qaeda and giving terrorists safe passage and clean passports that enabled them to come to the United States. "Newsweek" investigative correspondent Michael Isikoff says the connection turned up in a December 2001 National Security Agency memo.

(BEGIN VIDEO CLIP)

MICHAEL ISIKOFF, "NEWSWEEK" MAGAZINE: Well, it makes clear that the Iranian government did not have advance knowledge of the attacks but it did have this arrangement with al Qaeda, which is quite serious, and actually, in the view of many counterterrorism officials and some on the commission, goes far beyond any connections that al Qaeda had with the Iraqi government of Saddam Hussein. In effect, the Iranian security services, by having this arrangement were acting as -- helping to facilitate the September 11th attacks, whether they knew about the ultimate goal of the September 11th attacks or not.

(END VIDEO CLIP)

LIN: And we move on to Iraq on that note, where they keep on attacking. And no one is spared. A car bomb blast hit the Iraqi minister of justice's convoy in Baghdad, killing five people. The minister though escaped.

A roadside bomb killed a U.S. soldier in Northern Iraq near Beiji when it exploded near his convoy. Another soldier was wounded.

And the Filipino troops are getting out after giving in to save the life of a Filipino truck driver who's still being held hostage.

Abu Musab al-Zarqawi's people say they are responsible for attacking the justice minister and they boldly posted their messages on at least two Islamic militant websites. It turns out the terrorists are hiding in plain sight, on the Internet. CNN's Sean Callebs reports on this.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Al Qaeda terror training is moving from the battlefield to the Internet.

GABRIEL WEIMANN, UNITED STATES INSTITUTION OF PEACE: They can use it to communicate, to recruit, to raise funds, to negotiate.

CALLEBS: The U.S. led war on terror has shut down many terrorist camps. These days, through the online magazine, Al-Battar or The Sword, al Qaeda is using the web to spread fear and promote jihad. Al-Battar looks like a slick, well-produced web magazine, colorful, featuring a table of contents, an op-ed page and a letters to the editor page.

JOSH DEVON, SITE INSTITUTE: It's not a manual that you would probably read at the CIA or something. It's in layman's terms and it's meant for the average person who wants to get involved in this, to start doing what al Qaeda wants them to do.

CALLEBS: Published twice a month, each issue of Al-Battar focuses on one topic, such as cleaning and care of weapons, assassinations, targets inside cities, and in this case, kidnapping.

Al Qaeda watchers point out the rash of kidnappings in Iraq and Saudi Arabia flourished after the magazine articles came out.

WEIMANN: It's a detailed description, who should be chosen as a target, where should it, the action, be held, how should the hostage be kept, about negotiation, informing the media.

CALLEBS: Using the web to promote terror is not a new idea. But al Qaeda watchers say seven years ago the monitored 12 terrorist websites. Today, that number has swelled to more than 4,000. Experts say there is no way to shut down the sites. The same analysts say it may sound odd but the U.S. doesn't want to silence all the sites because they do provide analysts with important, so-called chatter.

WEIMANN: Actually, there's a lot to learn from them and for intelligence purposes, one of the motives would be to keep it alive and get as much as you can and learn from them.

CALLEBS: Al-Battar claims to be published by al Qaeda's military arm in the Arabian Peninsula. As much as anything, the online magazine is aimed at Muslim youth. A computer screen replacing the battlefield and analysts say Al Battar's message of basic terror training is capable of reaching millions.

Sean Callebs, CNN, Washington.

(END VIDEOTAPE)

LIN: All right, let's get to some interesting stories right here at home. Here across America, two men are under arrest in New Haven, Connecticut for apparently random shootings that wounded five people this week. New Haven police tell CNN they recovered a .22 caliber gun in the course of those arrests. They say the victims were all shot from the same gun and there is no word on the motive for those shootings.

Now, Los Alamos National Laboratory of New Mexico is suspended all work as it investigates the disappearance of some classified computer material. A spokesman says the lab's director is ratcheting up his aggressive stance -- that's a quote -- in addressing some of the security and safety incidents that have plagued the lab in recent years. Los Alamos is an important U.S. nuclear research center.

Five minors who narrowly escaped a coal mine flood near Somerset, Pennsylvania two years ago are suing the mine owners. They allege the company could have prevented the accident that poured millions of gallons of icy water into the mine. Nine other miners were trapped for three days before being rescued. Those miners have already filed suit.

Also, out west, it's another busy day for firefighters there because it's a touch-and-go situation. At that wildfire you're watching burning in the Nevada state capital. The fire chief says it is the worst fire he has seen in almost 25 years. CNN's Ted Rowlands is on the fire lines in Carson City.

Any improvement out there, Ted?

TED ROWLANDS, CNN CORRESPONDENT: Yes, there is considerable improvement. Firefighters say they now have 50 percent of this fire contained and they're optimistic about their chances. That said, the wind has picked up here considerably over the last few hours. Firefighters are watching that. And they say because of the wind and the history of this fire, they are not ready to declare victory just yet.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): Despite having the upper hand, firefighters say they're still very concerned about the possibility of the fire coming back to threaten more homes.

UNIDENTIFIED MALE: No, we are not letting our guard down. This fire could come right back out of this cannon right here again and sweep right through and burn what it's already burned.

ROWLANDS: Crews spent the day checking wind speeds and hosing down areas around structures. Sixteen homes have been burned to the ground in what many firefighters say is one of the worst fires in this state's history.

UNIDENTIFIED FEMALE: This is one of the nastiest that we've had in many, many years, especially with the homes burning. And that's kind of the new experience for us in this area.

CALLEBS: People who live in the threatened areas have been allowed back. Many of them came home to see that the fire had come within just a few feet of their homes. Firefighters say they got a major break when the wind shifted late Friday, and they are confident that they will have this fire fully contained by early next week.

(END VIDEOTAPE)

ROWLANDS: In fact, some of the 1,900 firefighters that were deployed to this fire are going to be let go in the next hours and overnight, especially if the weather continues to cooperate. These winds picking up, however, may change that. At this point, however, Carol, they're very confident that they can get this thing contained by early next week and hopefully, declare it completely out.

LIN: Ted, I can't help but notice the background behind you. There's a house there. Can you tell me a little bit about what happened to this neighborhood?

ROWLANDS: Yes, well, you know what, it's amazing. You come up toward an area that was part of the dramatic...

LIN: All right, I'm sorry. Ted, we just lost the picture out there, so we'll try to get back to you on that. I know you're going to join us live at 10:00 while we watch the progress of this fire.

All right, still ahead on CNN LIVE SATURDAY, back to life, we've got an interesting turn on a story we report to you everyday. It actually isn't all bad in Baghdad. Normal life is coming back to some parts of the city.

And one-time king of chess may have finally met his match. For more than a decade, Bobby Fisher stayed one step ahead of the U.S. government but has justice finally caught up to the chess legend?

And it looks like Martha Stewart is going to jail. She's sad, she's angry. Her fans are furious and her neighbors, well, you're going to hear about what they have to say.

(COMMERCIAL BREAK)

LIN: You know it's quite something when the Iraqi justice minister's convoy is attacked and it really simply fades into the violent stage that Iraq is today. The violence is just a part of the bigger picture on how the new Iraqi government is to survive. Ken Pollack has got a theory. He is the head of research of the Savan Center for Middle East Policy at the Brookings Institute. He's also our Mid-East analyst.

Good to see you, Ken.

KEN POLLACK, CNN MID-EAST ANALYST: Hi, Carol, how are you?

LIN: I'm doing just fine. The Iraqis however, they are desperate. They want peace. How is the Iraqi government going to offer them some concrete solutions for the future?

POLLACK: Well, that is, of course, Carol, the biggest challenge for this new government is they've got to come in and they've got to demonstrate to the Iraqi people that first they are independent of the United States and, second, that they're able to provide something to the Iraqis that they've not had beforehand, which is day-to-day security and the provision of basic services. And that creates a real catch-22 for this new government because they ultimately don't have the resources needed to provide security and basic services, only the United States can do that. So on the one hand they've got to show they're independent. On the other hand, they're going to need to stay close to the United States to get the U.S. to give what they can't. LIN: Give what they -- and give what they can, which is, frankly, a lot of money. I mean millions of dollars in the pipeline. What's happened?

POLLACK: Yes, this is a bit of a scandal that's been around Washington for the last few weeks. You know $18 billion was appropriated by the Congress for reconstruction of Iraq. But it turns out that probably less than $300 million of it has actually been spent in Iraq.

Now, there's other money that's already in the pipeline, already in contracts, but the truth is the vast majority of those billions haven't even been contracted yet. They're sitting in U.S. bank accounts. That money needs to be disbursed. The Iraqi economy is looking for a jumpstart. They need jobs. They need job retraining programs. They need investment funds. They need all of that, but it also has to be sustainable development. If it's just a quick shot of cash, they'll be fat and happy for a year, and then the whole economy will come apart.

LIN: So is the money in the bank the carrot on a stick?

POLLACK: It's part of the carrot. Part of the carrot is also the security situation, improving that. But yes, if the money can go into Iraq and be used to start these kinds of sustainable development programs, where they're going to provide job retraining programs to provide Iraqis with new kinds of skills, under those circumstances, you should see the whole Iraqi economy starting to revive and revive in a way that will have good long-term prospects.

LIN: Ken, one thing you can't buy though in Iraq certainly is cooperation. You've got all these different ethnic groups, the Sunni, the Shia, the Kurds. In the process of forming a new constitution and the elections coming up presumably in January, what are some of your predictions, what are some of your recommendations here on how those groups can come together?

POLLACK: Well, I think that you are again putting your finger on a critical issue, Carol, which is that the different Kurdish groups, the various Sunni groups, the various Shia groups, they have differences among themselves. But they also have varied differences between each other. The Kurds are looking for autonomy. The Shia are looking to dominate the new state. After all, they're the majority and they're the ones who have been the most oppressed over the last 70 or 80 years. And finally, the Sunnis, who are now going to be the minority, they're looking to make sure that their rights are going to be respected. And so far we've not yet gotten a sense that their leaders are going to be able to cooperate on working out a power sharing arrangement.

LIN: So what's happening on the ground level then? Are U.S. advisers on the ground negotiating between tribal leaders? How does that actually work in reality there?

POLLACK: Well, again, this is one of those catch-22s. On the one hand, yes, the U.S. is trying to get these different groups to come together and to sit and talk through their differences. The problem is again the U.S. made a very conscious decision that its own direct involvement in these kind of activities was just creating hostility with the Iraqis, that the Iraqis wanted them out of the picture. So instead, what they're hoping is that this new government will be able to broker those arrangements. But the problem is, of course, that that is such a complicated and potentially dangerous issue that for the moment, the new government wants to concentrate on providing some things that the Iraqis can see as immediate benefits and leave those kind of longer, thornier issues aside for the moment.

LIN: Big picture, ken. I want to throw out a theory, frankly, that may sound kind of wacky or a little bit wild. But someone had compared the future of Iraq to the current state of Pakistan, where the government willingly and knowingly separates out definitive areas of the country and just completely gives them over to tribal law, such as the northwest province, frontier, where presumably Osama bin Laden may be hiding and getting cover. Do you see a situation like that in Iraq where in order to control, at least, a majority of the country, that the Iraqi government is going to have to simply write off places like Fallujah where eyewitness accounts say that terrorists are operating at will and out in the open?

POLLACK: It's, of course, a great risk, Carol. And the way I'd put it is I think that there is a tremendous temptation both for this new Iraqi government and for this U.S. administration to do exactly that. I also think that it would be disastrous. In a place like Pakistan, it's a very different kind of society. It is conceivable to do that, although I would suggest in Pakistan there are real problems that are arising from it. In the case of Iraq, that is a recipe for civil war. Iraq is, unfortunately, a country that has a single resource. It doesn't have the kind of economy that can survive being carved up like that. It also has a deeply intermingled population and that population is not going to want to be left to the -- this institute of different tribal warlords.

LIN: Interesting. Thank you very much, Ken Pollack, always good to have you.

POLLACK: Good to see you, Carol.

LIN: Well, the violent headlines we report are only part of the story out of Iraq. Life in so many unexpected ways is getting back to normal. Jane Arraf is our Baghdad bureau chief.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF (voice-over): The trumpet and the city it serenaded were a little battered. But the song, "My Country, My Country," rang even more true. After more than a year of occupation and U.S. soldiers prominent in the streets, Baghdad is being given back to Baghdadis. Dozens of families dressed up their children and came to the reopening of this park on Baghdad's historic Abanuwa (ph) Street. With more Iraqi police in the streets and a few weeks of relative calm, parts of the city are beginning to feel almost normal. "This is a wonderful occasion because it's been over a year that we couldn't go out," said Nada Abdul Kareem (ph). She and her husband, Omar Hassamo Zimaali (ph) came to watch their daughter, Taaiba (ph), at the top of her sixth grade class recite a children's poem.

Reopening the park is part of the campaign to clean up the streets and encourage businesses to open again. Local workers have been hired to do as much of the work as possible. The U.S. Army's 1st Cavalry Division has been could doing the rest. They're trying to bring this riverside street with its famous fish restaurants back to life.

(on camera): On some streets, the city's mayor has even begun dismantling some of the barbed wire and concrete barriers like this, meant to guard against car bombs.

(voice-over): Baghdad still sees some violence. This week at least 10 Iraqis were killed when a car bomb exploded close to the interim government's headquarters. But the mayor says Iraqis are so resilient, they'll continue to go out despite the occasional explosion.

MAYOR ALAA AL-TAMMI, BAGHDAD: This is Iraqis. They are very brave. This is their city. And I don't think this bump will prevent them from normal living. I don't think this would prevent Iraqi to live and to go out.

ARRAF: In Baghdad where neighborhoods come to life after the day's heat, a lot of streets are crowded again at night. Actor Ali Segbaad (ph) said he was robbed at gunpoint not long ago. "I was planning to leave the country," he says but he adds the streets have been safer in the past two weeks, since the transfer of authority. He says now he believes he'll stay.

Jane Arraf, CNN, Baghdad.

(END VIDEOTAPE)

LIN: We've got some interesting stories coming up, chess champ, then fugitive, the mysterious Bobby Fischer finds himself in check. Japanese authorities have him on an immigration charge and wanted in the U.S.

Martha Stewart is looking at five months behind bars, but did she get off easy? Our legal expert, Kendall Coffey, has a lot to tell us.

(COMMERCIAL BREAK)

LIN: Sometimes you wonder what goes wrong. He is one of the most gifted chess players in history. He is also reclusive, a political extremist and, even though his mother was Jewish, he's known for making violent anti-Semitic comments. Today, 61-year-old Bobby Fischer is behind bars. CNN's Atika Shubert has the story of what might be the chess grandmaster's endgame.

(BEGIN VIDEOTAPE) ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): Bobby Fischer, chess prodigy and grandmaster, was once a national hero. In 1972, Fischer, then 29 years old, roundly beat world chess champion Boris Spassky from the Soviet Union. It was hailed as a victory in the Cold War. Now, 61, he is a wanted man. He has been a fugitive since 1992 when he attended a Yugoslav chess tournament in violation of U.N. sanctions. Famously, spitting on a letter from the U.S. government that warned him not to go.

BOBBY FISHCHER, CHESS PRODIGY: So this is my reply to whether or not I should defend my title here. That's my answer.

SHUBERT: After that, Fischer went underground shuttling between Europe and Asia amid rumors that he continued to play chess on the Internet under assumed names. He surfaced occasionally to broadcast anti-Semitic rants against his home country, the most controversial aired on a Philippine radio program just after the World Trade Center attacks.

FISCHER: Well, this is all wonderful news. A sign for the (EXPLETIVE DELETED) U.S. to get their heads kicked in.

SHUBERT: He also boasted of his place in history.

FISCHER: You know when I won the world championship in 1972, the United States had an image of -- you know, it was a football country, a baseball country, but nobody thought of it as an intellectual country. I turned all that around single handedly.

I think it was a very risky move.

SHUBERT: Yet, he made a strategic error in coming to Japan. Fischer was detained Thursday at Tokyo's Narita Airport on an immigration violation. Japanese and U.S. officials will not say whether Fischer will be extradited to the U.S. to face charges. An ignominious endgame for the man once hailed at the world's greatest living chess player.

Atika Shubert CNN, Tokyo.

(END VIDEOTAPE)

LIN: All right. News around the world begins with an emotional task for parents in southern India. They're remembering the 90 children killed in Friday's devastating school fire. Forty-five of the victims' bodies were cremated in mass ceremonies today. The others were cremated yesterday. In the wake of the tragedy, the government has ordered that all private schools there be inspected.

Palestinian Authority president Yasser Arafat has announced a major restructuring of security services. His plan calls for consolidating nearly a dozen security services into three branches. Many Palestinians are protesting that plan.

And on a much lighter note, Lance Armstrong is dominating the course as the Tour de France heads into its final week. Armstrong overpowered his rivals to win the 13th stage today through the Pyrenees Mountains. Barring a major upset, experts say, the Texan appears actually poised to grab an unprecedented six Tour de France victory. It would be pretty amazing, never done before by a man over 30.

Well, it's safe to say, Martha Stewart may be the most talked about woman in America this weekend, especially in her hometown of Westport, Connecticut.

And then Columbus did sail the ocean blue in 1492, but did the Chinese actually discover America? I'm going to interview a man who says that the history books have it wrong.

Plus one company that's banking on your need for a nap. I've got all that on CNN LIVE SATURDAY.

(COMMERCIAL BREAK)

LIN: More of CNN LIVE SATURDAY in just a moment. But first a quick look at what's happening now in the news. Details leaked. The 9/11 Commission's final report calls for a new cabinet level post to oversee U.S. intelligence gathering.

A bad ride -- an out of control balloon lands safely. The helium filled balloon carrying five children and 10 adults was floating out of control over Baltimore this afternoon. It's now been reeled in and some passengers are being treated for minor injuries.

Sitting this one out -- defending Olympic champion Marion Jones pulls out of the 200 meters at the U.S. track and field trials. Why?

(BEGIN VIDEO CLIP)

MARION JONES, DEFENDING OLYMPIC CHAMPION: My reasoning for pulling out of the 200 today is simply because of fatigue. There's no other reason. There are no other excuses. After running my rounds yesterday, I was simply tired, exhausted. It happens. It happened to me.

(END VIDEO CLIP)

LIN: And that leaves Jones competing in the long jump event and perhaps the relays. We'll see.

John Edwards finds gold in California. The Democratic vice presidential candidate has raised about $1 million during the West Coast swing. He's campaigning in Newport Beach today and heads to the battleground state of Florida.

Even convicted felons have neighbors, and they have mixed opinions about whether Martha Stewart got a fair deal. Deborah Feyerick reports from Stewart's hometown now of Westport, Connecticut.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): On Main Street in the town where Martha Stewart started her empire, art and music mixed with opinion at an annual street festival. Real estate agent, Nancy Shutter (ph), a longtime Westport native and fan.

UNIDENTIFIED FEMALE: I'm sure she's remorseful. I think that she's ashamed. I mean she will have that on her resume, so to speak, a convicted felon. But I think in all she'd like to clear her name.

MARTHA STEWART, DOMESTIC DIVA: And I'll be back.

FEYERICK: While five months of Stewart's sentence will be served in prison, the other five will be served under house arrest not here in Westport, but likely at another home in nearby Bedford.

CHRISTIN MARANDINO, WESTPORT RESIDENT: She doesn't do a lot for the town, so the town doesn't necessarily own her as one of our own, as one of our town celebs.

FEYERICK: Some residents, Whitney Finn, see the sentence as too lenient.

WHITNEY FINN, WESPORT RESIDENT: I think she should just take responsibility for what she did and that is what she did to her company not what other people did to her company.

FEYERICK: Others like Westport visitor, Mark Moreno say it's too harsh.

MARK MORENO, WESTPORT VISITOR: She didn't murder anybody. I mean try to put it fair perspective, you know. And I'm sure she'll bounce back.

FEYERICK: And though Stewart has minimized her crime, calling it a small personal matter, Westport native, David Waldman says she can't really separate herself from corporate criminals like Enron's Ken Lay or WorldCom's Bernie Ebbers.

DAVID WALDMAN, WESPORT RESIDENT: She ran her own company. It was a billion dollar company. She had employees that lost their jobs. And it was a difficult situation all around and you know, hindsight being 20/20, she probably wouldn't have done it for such a minuscule amount.

FEYERICK: As for Stewart's promise that she'll be back...

DAVID KELLY, WESTPORT RESDIENT: I think she will be back. I hope so. I mean, this whole thing has destroyed pretty much her Martha Stewart empire for no good reason.

FEYERICK (on camera): Stewart's lawyers will be filing a formal appeal within the next two weeks. Pending the court's ruling, Martha Stewart remains free.

Deborah Feyerick, CNN, Westport, Connecticut.

(END VIDEOTAPE)

LIN: Well, it's the price of fame. That's what former U.S. Attorney Kendall Coffey thinks. He joins us right now.

Kendall, you think that Martha Stewart's celebrity really contributed to her sentencing?

KENDALL COFFEY, FORMER U.S. ATTORNEY: Well, I think the reality is that it certainly contributed to the investigation in the first place. When you're a celebrity and you're on the radar of law enforcement, they're going to get an electron microscope and go behind every blade of grass, under every rock. And that's the occupational hazard for the rich and famous. But once the charges were brought, I think she got a very fair trial and ultimately, Carol, a fair sentence. For sure, it was at the very low end, but let's face it, Martha Stewart was not a master criminal. In fact, based on the clumsiness of the cover-up scheme she's not even a very accomplished liar. This was not a securities fraud matter. It's not what she did, it's what she fibbed. I think it was a fair sentence and ultimately, she's going to jail.

LIN: Well, but it also sounds like you're saying it was a waste of taxpayers' money?

COFFEY: Well, I wouldn't say it's a waste of taxpayers' money, but what happens is these investigations take on a life of themselves. They were looking for securities fraud. Then she gave them a case that they couldn't really ignore. If she's going to lie, if she's going to cover up, obstruct justice, they've really got no choice. So ultimately, my view would be that the real author of this crime, the real author of this indictment was Martha Stewart herself.

LIN: Really? Well, you know, prosecutors were pretty frustrated in the courtroom. They wanted her to get the maximum, clearly. I don't know if that was competitive instinct or they really truly thought that what she did was so criminal. But they said that, for example, she gave cocoa to the parents of kids who appeared on her show and that she complimented her staff at lunches and on holidays. And that that was not -- that was short of extraordinary to give leniency the way she got.

COFFEY: Well, she did not get a downward departure. The big issue is whether there was anything so astonishing about this case that the judge should go below the guidelines. What the judge did was stay within the guidelines but give Martha Stewart the lowest penalty possible. And I that prosecutors had to be frustrated, Carol, because let's face it, she was humble pie inside the courtroom, throwing pies the minute she got out of there, still basically denying to the bitter end that she did anything wrong.

LIN: Yes, but not forgetting to pitch her magazines, mind you.

COFFEY: Yes, that was striking.

LIN: She is no longer CEO of her company. What does the law allow her to do in the future for her career?

COFFEY: Well, I think she's got to be careful and can't become a de facto CEO. They defined her position as founding editorial director, whatever that means. And while I think she continued to contribute, I think she's got to be a little bit careful about acting as a director, acting as a CEO at a time when the securities filings by her company are saying that's not so. The last thing she needs to do is get into anything that looks deceptive, bad faith, and get into any more trouble.

LIN: And that is forever and ever, she can't ever be a CEO of a publicly traded company?

COFFEY: I don't -- when we talk about the fact that this might seem like light punishment, in a certain way it is. When was the last time a person fought the federal government tooth and nail, was convicted on four penalties and only got five months? But the reality is this is a lifetime stigma. This will disable her for many things. We all know what being a felon means...

LIN: Even if she wins on appeal?

COFFEY: Well, if she wins on appeal, she could get a new trial. And if she wins the new trial, then, of course, everything changes, but, Carol, I think that's a real long shot. And I think what really -- the reality is that Martha Stewart is going to be serving those five months and at some point she's going to be coming out. That is something that is within her power to affect. Maybe who knows, she'll end up writing a book. But sooner or later the day of decision is going to come.

LIN: Yes, I wouldn't be surprised about the book. All right. Thanks, Kendall.

COFFEY: Thanks, Carol.

LIN: I happened to be interviewing "Vogue" magazine's Julia Reed at the very moment Martha Stewart was sentenced. This is what she said.

(BEGIN VIDEOTAPE)

JULIA REED, "VOGUE": This is good news because there's a possibility that it could have been a few months longer. And you know it's extraordinary to me how the tide has really changed as far as public opinion toward Martha. I think she's had enormous sympathy as a result of her conviction. And she's done a great job in the last couple of weeks or, in fact, several weeks, going out, business as usual. It wasn't the dour Martha that we saw during the trial.

LIN: Have you seen her out there and talked to her?

REED: Yes, I mean she's been at the -- to the Council of Fashion Designers of America gala. She's been at parties in South Hampton. I mean she makes the social pages more than most movie stars these days.

LIN: What does she say to you about her...

REED: Oh, no, I mean I didn't talk to her. I mean I just sort of see her walking in and out of these buildings on the arm of various escorts. But I mean the point is that she's out there flashing a smile and looking good. And I think people are sort of oh, look at Martha, she's so brave. She's keeping up a good front. And so I think, you know -- she'll -- I think she's going to get out in five months and -- I mean, she may -- I mean if she appeals, fine, but I think she's actually lucky to get five months and two years. And when she comes out of that, I think that she'll be sort of a heroine of sorts. I mean...

LIN: Really?

REED: ... she could play this really well.

LIN: You know New York society, very accepting of her, supportive of her, would you say?

REED: Oh, yes. I mean, you know, listen Martha's always been a tough cookie. But I mean she's a -- you know everybody respects her business acumen and the empire that she did build. And I think when she gets out of prison, that she can, you know, start rebuilding her life because -- and I think that already she's sort of been rehabilitating herself in a way prior to this sentencing day.

(END VIDEOTAPE)

LIN: It sounds like I was interviewing her in a middle of a wrestling match. But all of us had the monitors up as we were listening to the sentencing and Martha Stewart's remarks at the microphones yesterday. That's why it was so loud.

You know I was actually interviewing Julia Reed about the president's daughters' first interview, which "Vogue" scooped. And she told me a lot about what goes on inside the Bush family and about Barbara and Jenna Bush. You'll see it tomorrow night in our primetime show at 10:00 p.m. Eastern Sunday night.

Martha Stewart is going to be with our Larry King as well and it's going to be her first and only live primetime interview. That is going to be Monday night at 9:00 Eastern and she'll be taking your phone calls.

In the meantime, we want to get you up to speed on that dramatic story of that balloon rescue attempt out in Baltimore where five children and 10 adults were trapped inside this hot air balloon. Our Sean Callebs is out on the scene in Baltimore. He joins us right now on the telephone.

Sean, what's the latest? We've given the basics of the story. What's new here?

CALLEBS: Well, Carol, we can tell you we just spoke with Chris Gorman. He is an employee at Balloon Over Baltimore. He was up in the balloon when it got stuck about somewhere between two and 300 feet above the city. He said he told the 15 passengers to lie down on the ground.

And to give you an idea, this isn't like your typical hot air balloon where you may picture some kind of wicker basket. This is a large balloon with in essence a huge cage. It's almost like a carnival ride where 15 to 30 people could squeeze in there. So once he did get the passengers to lie on the ground, the wind kicked up and that is when the balloon apparently made contact at least once perhaps twice with the city building here. And a couple of people suffered some scratches, some scraps. Obviously, they were very shook up.

Chris Gorman tells me that a lot of the people up there the whole time were obviously very scared. They were high above the city. It was windy. They didn't know exactly what would happen. And there's a giant wench -- and to give you a -- it's really hard to describe this. It's a huge, huge mechanism that is responsible for taking this thing up, bringing it down.

This is something the city does 20 times a day. It's a very popular tourist attraction. The employees here say they have never had this kind of problem before, but obviously they're going to be looking into it to see what caused it. There's some speculation that the windy weather may have jerked that cable and made it stick in some capacity. There's still a lot of emergency officials here. But basically the area is clearing out. And a number of people were taken to University and Mercy Hospital. None of the injuries considered serious -- Carol.

LIN: Sean, the balloon never actually got untethered. It was still tethered to the ground. It was...

CALLEBS: That's a good point. This balloon was actually tethered to the ground in 20 different places. I counted 20 large, concrete slabs that are maybe four feet by four feet and about two- and-a-half feet high. And each one of those is tethered with very secure ropes and then there is this giant winch. And the cable looks to be at least an inch in diameter. And it looks almost kind of like the mechanism you see on a ski lift that moves -- that brings the chairs back and around off the slopes, but it was never untethered. In a way this cage constructed, it's padded and he says the people were never in threat of serious injury.

LIN: Got you. Got you. So tethered to the ground but its guiding wires got out of whack and that's what controls the direction of the balloon. Thanks very much. Sean Callebs reporting on the telephone from Baltimore.

Still ahead on CNN LIVE SATURDAY, could Christopher Columbus have missed the boat more than 70 years ago? I'm going to be talking with one man who says China actually discovered America.

(COMMERCIAL BREAK)

LIN: One of the basic facts of an American school kid's education is that Christopher Columbus discovered America in 1492. But what if that was wrong? My next guest thinks it is. Gavin Menzies is a former British submarine commander who has researched and written an alternative history. He says it was the Chinese that got here first and he joins us live from London. Gavin, I'm so pleased to have you, because, you know, there is so much controversy around your theory. Where do we begin? What proof do you have?

GAVIN MENZIES, AUTHOR, "1421": Carol, good evening. Thank you very much for asking me. My argument essentially goes like this, Carol: first of all, I found by complete accident that all of the great European explorers had maps showing them where they were going. Columbus had a map which showed islands in the Caribbean. He knew where he was going. Magellan had a map which showed what we now call the Straits of the Magellan in the Pacific. He knew how to get into the Pacific from the Atlantic. He knew how to cross the Pacific. Vasco Da Gama had a map of South Africa. Captain Cook had a map of Australia. Cabral had a map of Brazil. All of the great European explorers...

LIN: All right.

MENZIES: ...had maps. There was a master chart of the world produced in the 1420s.

LIN: And then?

MENZIES: And it obviously wasn't produced by Europeans because they used it. So that's my first point. The second point is that the great European explorers, brave men as they were, when they got to the new world, they found Chinese people already there. And to take the most extreme example, Christopher Columbus, he met so many Chinese people when he got to the new world that he thought he'd actually reached China. He believed he reached Cathay to his dying day.

LIN: Where was this recorded? How was it documented? How was this documented, Gavin?

MENZIES: This is documented in the records of Columbus and all the great explorers. If you go to my website, www.1421.tv., go to paragraph six of the synopsis of evidence and I list all of the explorers who had maps and...

LIN: All right, Gavin, let me -- OK, I want to -- I don't -- I want to hear about your story and less about your website because I want to get a sense of what physical evidence you have that -- I mean, you have these alleged sightings by Christopher Columbus that he wrote about. What else do you have? We have a map, for example. I'm going to put it up on our screen and I want you to describe what we're seeing because this looks like a comparative.

MENZIES: Well, Carol, I must say, I don't -- I'm looking at a black screen.

LIN: Oh, OK. It looks like South America to me. Well, you know what I'm going to take...

MENZIES: Right. Well, there should be -- I'm pretty sure I can explain what it is, Carol, even though I can't see it.

LIN: OK. OK.

MENZIES: Have you got four globes, four hemispheres...

LIN: Yes. Yes.

MENZIES: ...on your screen?

LIN: One looks like South America as it exists today.

MENZIES: Right. And then the one below it is South America as it appears on a map before Balboa discovered the Pacific, before Magellan got to South America, before Cook got to North America, before Barrettano discovered what is now New York and so on. So you're looking at the Eastern Hemisphere today, the Western Hemisphere today. And then you're looking at two maps, which were published before the great European voyages of exploration started. And as you can see, if you look at the Eastern Hemisphere map, there is the whole Eastern Hemisphere of the world...

LIN: Gavin, we're running out of time. You have to explain to me how this proves -- we're running out of time. You have to explain to me how this proves that the Chinese were first into the Americas and not the Europeans.

MENZIES: Well, as I say, the first Europeans who got to America found Chinese people. That's number one. Number two, the people who live in those places today have Chinese DNA. There are lots of descendants of that Chinese fleet alive and well living in America today. And the third point is we've recently found enough Chinese charts of these great voyagers, which have not been destroyed contrary to popular fiction, which show that the Chinese did indeed reach North and South America.

LIN: Gavin, why do you think so many noted historians, and authors and Chinese scholars say that you're wrong, that your research is fast and loose and that you jump to conclusions?

MENZIES: No, they don't -- Carol, they don't say that at all.

LIN: They do.

MENZIES: Well, I don't agree with you. On the 16th of April, the Chinese scholars met in Taiwan to decide whether they thought my theory was nonsense or true. One-third of the scholars thought I was right lock, stock and barrel. Another third thought I was right with a number of qualifications. And one-third thought it was -- my theory was absolute rubbish beginning to end. So two-thirds of the Chinese scholars from all across China, from Hong Kong, Singapore and Taiwan on the 16th of April, they concluded, two-thirds of them, that I was either completely right or right with reservations.

LIN: Gavin, this is going to become an interesting story as your theories are challenged and you get the opportunity to present them. Thank you very much.

MENZIES: Thank you very much for inviting me, Carol. LIN: Thank you, Gavin Menzies.

We are going to be right back.

(COMMERCIAL BREAK)

LIN: That's all the time we have for this hour. I'm going to be back at 10:00 Eastern for "CNN SATURDAY NIGHT." Should the government pay for stomach stapling and other obesity related surgeries? New Medicare rules and what they're going to mean to you is our hot topic.

But right now, Mark Shields tells us what the gang has.

MARK SHIELDS, CO-HOST, "THE CAPITAL GANG': Republican Senator Mitch McConnell of Kentucky, the Senate Majority Whip, joins us to look at Senate defeat for the marriage amendment and the latest dump Cheney rumor. "THE CAPITAL GANG" also will talk about the ethics case against Congressman Tom Delay. All that and much more right next on CNN.

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