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CNN Live Saturday

Enron Defendants Go Down Hard; Fighting Worsening in Afghanistan;

Aired May 27, 2006 - 14:30   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: Bottom of the hour now. Here's what's happening now in the news. CNN has learned that Attorney General Alberto Gonzales, his deputy Paul McNulty and FBI Director Robert Mueller threatened to resign rather than give up the evidence found during last week's search of Congressman William Jefferson's office. Several congressional leaders have objected to the search saying it violated the separation of powers.
The death toll now tops 3,000 following an earthquake in Indonesia. The quake measuring at 6.3 magnitude rocked the island of Java, it was centered near Yojakarta, a popular tourist spot 250 miles east of Jakarta.

At West Point today, President Bush declared that America will fight terrorists on every battlefront. He promised not to rest until the threat ends. The president delivered the commencement address at the U.S. military academy at West Point.

Among the latest casualties in Iraq, an American marine killed in Anbar province. Now, the search is on for two Marines missing after their helicopter crashed. The crash does not appear to be the result of enemy fire. Also today attacks across Iraq killed more than 20 people.

In New York City, thousands of sailors are in town. It is Fleet Week after all and the festivities continue. Among today's activities, a service as the United War Veterans Memorial and a tug of war competition between the military and police and firefighters. We update the top stories every 15 minutes on CNN LIVE SATURDAY.

The Taliban making a comeback right now. Afghanistan is going through its most intense period of violence since the U.S. invasion in 2001. Coalition forces targeted the Taliban in night time air strikes on the site in southern Afghanistan. CNN Pentagon Correspondent Barbara Starr has detailed from Kabul.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Coalition forces conducted an air strike Friday night against a suspected Taliban training camp in southern Afghanistan, quite close to the Pakistan border, according to U.S. military officials here. It is the latest operation against what some officials are saying is a regrouping of Taliban, both in eastern Afghanistan and down south. In that strike, officials say they believe they killed a number of Taliban and destroyed a facility they also believe was responsible for making some IEDs. It is that type of threat that U.S. forces are now seeing here in Afghanistan, improvised explosive devices, suicide bomb attacks.

It's not as bad as Iraq, but military commanders say there is a great deal of concern that they have about these pockets where they believe the Taliban is operating because, they say, the new Afghan National Army, Afghan security forces, and the U.S. military has not been operating in those areas. So in these rural areas, there has been a bit of a vacuum.

Expect to see an increased number of U.S. and coalition military operations in the weeks and months ahead. We have been traveling with Lieutenant General Carl Eichenberry, the top military commander throughout eastern Afghanistan. He is really planning the way ahead here.

He says that this insurgency, and that's what they call it. These are insurgents now, he says, is not as bad as Iraq, but it's something that has to be dealt with, and he says it will not be U.S. military power that will succeed in defeating this insurgency in Afghanistan. He says it will have to be a number of things, and the defeat will have to come at the hands of Afghans. They will have to succeed with their new security forces and the coalition will have to put more resources into this country, more aid, more assistance, more reconstruction and, most importantly, he says, economic development that the insurgency here in Afghanistan will be defeated when Afghan men have an economic future in jobs.

The most important thing for them to look forward to when they have a job, and they don't join extremist movements. Barbara Starr, CNN, Kabul, Afghanistan.

(END VIDEOTAPE)

WHITFIELD: Now across America a display of support for the Duke University men's lacrosse team. Members of the women's lacrosse team playing in the NCAA semifinals wore wrist and head bands featuring the logo of the men's team. Some display the numbers 45, 13, and six the numbers of the Duke men charged with raping a stripper at a team party. The women's lacrosse team lost to Northwestern in that semi final.

Investigators seized boxes of records and personal belongings during a raid this week at a polygamist compound in Arizona, investigating charges of underage marriage and sexual abuse related to eight indictments handed up last summer.

Here is a look at a Dallas robbery attempt that didn't work out too good at least for the bad guy. The surveillance tape tells the tale. When the clerk realizes that the would-be robber's gun is a fake, he lets him have it. Ouch. Don't money let him have the money. We mean in that form. He gives him a big whack.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Someone was actually ejected from a Chevy Blazer and that person was barely moving. Oh, gosh.

(END VIDEO CLIP)

WHITFIELD: Not exactly according to script. The Louisville, Kentucky, reporter was on the air live covering a story about an accident at this very intersection when, wham, yet another accident happened right behind him. No one appeared to be seriously injured, thankfully.

A lot of former Enron employees and investors are giving each other high-fives. The men they blame for the loss of their jobs and money, Ken Lay and Jeffrey Skilling, have been found guilty. Ali Velshi has the story of one man who lost his entire life savings.

(BEGIN VIDEOTAPE)

CHARLIE PRESTWOOD, RETIRED 33 YEAR ENRON EMPLOYEE: You get caught why your hand in the cookie jar, you get your hand cut off.

ALI VELSHI, CNN CORRESPONDENT: Charlie Prestwood couldn't contain his joy when he heard the verdict of the Enron trial on his little TV with one working channel.

PRESTWOOD: I feel a whole lot better. I feel like justice has been served.

VELSHI: Prestwood worked more than three decades at a power plant that was bought by Enron welding and filling gas tanks, hard work. And he loved it.

PRESTWOOD: When I hook back over my life, I see one great big 33-1/2 year void. I worked so hard.

VELSHI: Like so many Enron millionaires, Prestwood retired early six years ago to enjoy his golden years. And like others, he thought he had enough money.

PRESTWOOD: $1,310,507.47.

VELSHI (on camera): Charlie Prestwood's retirement fund was loaded with Enron stock, stock that started to nosedive. But his faith in the company and the relentless cheer leading of Enron executives stopped him from dumping his shares while he had the chance.

PRESTWOOD: I was still listening to the executives. They said hang on. Ken Lay was saying hang on, we're just having a bad slump, but it will come back, it will do this and do that. And so therefore, we didn't sell our stock.

VELSHI (voice-over): A decision Prestwood regrets every day.

PRESTWOOD: Right after Enron started down and went down, right after they started that, well everybody said, oh, you should have diversified. You ought to have done this and done that.

VELSHI: Now that $1.3 million worth of Enron stock is gone. In fact, Enron's collapse lost more than $2 billion in retirement funds. Now Prestwood and his girlfriend of 20 years, Helen, are living on social security and a $100 a month Enron pension.

PRESTWOOD: I'm living 180 degrees of what I had planned on living. I had planned of Helen and I -- we'd do some sightseeing. But man, right now, I guarantee you I'd have to make a loan to go to the county line.

VELSHI: Suffering heart problems, Prestwood can barely afford his monthly medicine, dinner and feed for his two beloved horses. Home repairs left undone. Prestwood blames Ken Lay and Jeff Skilling for everything.

PRESTWOOD: Now they're going to know how we feel, to be confined. We've been confined because of, you know what I mean, no money.

VELSHI: Charlie Prestwood says he spent more than half his life serving a company that eventually gave him nothing in return. Nothing except the satisfaction of a guilty verdict.

Ali Velshi, CNN, Houston.

(END VIDEOTAPE)

WHITFIELD: We know what former Enron employees and investors think of the verdicts? Let's see what our legal experts have to say. Once again Avery Friedman, a civil rights attorney and law professor joining us from Baltimore and joining him Richard Herman in New York, criminal defense attorney. In Sunny Florida. You kill me. What is this?

RICHARD HERMAN, CRIMINAL DEFENSE ATTORNEY: Beautiful down here.

AVERY FRIEDMAN, CIVIL RIGHTS ATTORNEY: Do you ever work? Holy smoke.

HERMAN: Back and forth. Back and forth.

WHITFIELD: All right. Let's talk about this Enron case. You have to wonder if the verdict would have been just as hard hitting had it been in some other city other than Houston. Was this payback from the people of Houston, Richard?

HERMAN: You know, Fred, this was the largest fraud in the history of the United States. You hear about Fortune 500 companies, this was a fortune seven company. I mean, $60 billion dollar market share loss, $2 billion dollars in retirement funds. The devastation is just unmatched in United States history. These people got wiped out. These were the two men at the top of the food chain, and the defense that they just didn't know, well, this jury, I don't care if it was in Houston or anywhere else, they just didn't buy it. You know, it belied the testimony when they got on the stand and testified about how they bled, Enron blew and how much they loved the company and yet, while the stock was going from $90 down to a dollar, they were selling off all their shares. The jury couldn't buy it. It was devastating, and this verdict -- the jury has spoken.

WHITFIELD: Wow. And so, Avery, while we're seeing that, you know, the jury spoke and they gave them a pretty hard-hitting verdict, we don't know about the sentencing yet, but it's expected they're going to spend many years in prison.

But this really nothing -- it doesn't offer really any relief to the many employees who lost their life savings, like the man we saw in the piece. Is there any potential that perhaps the assets would have to be sold off from Skilling or Lay to help recompensate any of the people of or their losses?

FRIEDMAN: Well, that will be part of it, Fredricka. The difficulty is, there really, in a comparative sense, really isn't very much money left. They're going to be lawsuits involving insurers for the accountants, for the lawyers, for these individuals. This is going to go on from a civil perspective for a long, long time.

But what's important to understand is that Ali's story -- Ali Velshi's story about one individual, he's one of 5,600 people that lost all their pensions. So any effort on the part of the civil lawyers to try to recoup some part of that is going to be pursued for years to come.

WHITFIELD: And this really is a message being sent to corporate corruption as a whole. This is precedent-setting, isn't it, Richard?

HERMAN: Yes, Fredricka. You know, you're not going to be able to hide behind the ostrich defense. I didn't know. I relied on others to do this. If you're running a company, you're going to be held responsible.

I think that's the big message coming out of this Enron case. And you said earlier that they're going to spend a few years in prison. I believe both of these guys, if Lay doesn't flee -- which I think is a good chance he's going to take off.

FRIEDMAN: No, he's not fleeing.

WHITFIELD: Well, they had to surrender their passports, though, didn't they?

HERMAN: Oh, come on, Fred. Just because he surrendered his passport doesn't mean he can't get away.

FRIEDMAN: He's not going anywhere. He's not going anywhere.

HERMAN: These guys are both -- these guys are going to die in prison. That's what going to happen.

FRIEDMAN: That's right. HERMAN: They're going to get incredible sentences.

WHITFIELD: All right, Avery, real quick, what precedents do you believe this lays?

(CROSSTALK)

FRIEDMAN: Well, Michael Douglas, remember, greed is good from "Wall Street"? These guys are an example of the legacy of this case, that period, that time. They're still going to be greedy but there are enough controls to watch over future directors and CEOs.

WHITFIELD: All right. Well, we're not done with you guys. It's been almost four years since the Washington area snipers terrorized the public. And already convicted in one state, why in the world are they on trial again now but in another? Straight ahead our legal experts will be weighing in on that case when we come right back.

(COMMERCIAL BREAK)

WHITFIELD: Forty-five minutes past the hour now. Here's what's happening now in the news.

More than 3,000 now counted among the dead in a 6.3 magnitude earthquake in Indonesia. Rescue crews are overwhelmed. Many areas remain without help, and as many as 150,000 people have been displaced. Our correspondents are in the region, and we'll have live reports throughout the day.

In Washington, a new twist in the showdown over an FBI raid on Congressman William Jefferson's office. Word today that these three top Justice Department officials threatened to resign. Administration officials tell CNN that Attorney General Alberto Gonzales, Deputy Attorney General Paul McNulty, and FBI Director Robert Mueller said they would quit before returning materials seized in the raid. Stay with CNN for details on this developing story.

Hamas is rejecting a plan that calls for a Palestinian state that exists alongside Israel. Palestinian President Mahmoud Abbas had given the government 10 days to accept the plan or face a referendum on the issue.

Hello, sailor. The fleet is in New York. And with all those white uniforms in town, there's plenty of action this Memorial Day weekend. On the dock today, the blessing of the fleet and a best chow competition among Navy chefs.

We update the top stories every 15 minutes on CNN LIVE SATURDAY. You're next update is coming up at the top of the hour, 1:00 Eastern.

The D.C. area snipers were convicted Virginia, and now a jury is about to start deliberating charges against them in Maryland where some chilling allegations have emerged. The younger man, Lee Boyd Malvo says the plan was to kill six people a day for a month, and then bomb school buses and children's hospitals.

Let's bring in our legal experts back to discuss this case, once again Avery Friedman and Richard Herman. Gentlemen.

Avery, let me begin with you. There was a lot discussion just leading up to this case that they'd already been convicted and given life sentences, or death sentences in Virginia. Why go through this again in Montgomery County, Maryland?

FRIEDMAN: I think it has everything to do with the integrity of our system of justice. The fact is there were victims in Maryland. The state attorney general and local prosecutors are doing exactly the right thing. Muhammad has to accountable for his behavior, so I don't think there's any questions that these prosecutions had to move forward.

WHITFIELD: So Richard what kind of impact do you think this made legally?

HERMAN: Well, Fred, there are different crimes in different jurisdictions. It's just not one crime, so each crime is going to be prosecuted like Avery said. And, you know, each conviction is going to be put on appeal for years and years and years, and just in case one or two of these things for some reason should get reversed and retrials ordered, perhaps another jurisdiction's verdict may stand. I think this guy's finished. Muhammad is done. Turn out the lights. It's over for him.

WHITFIELD: Yes, and we're talking about six people killed in Montgomery County alone. In all in the Metropolitan area 10 people were killed. Muhammad defending himself, and in one point, Richard, he went on for over three-and-a-half hours and talked about how the prosecution, everyone from the police and on made up evidence and really kind of overdid their case. Was he in any way or could he possibly be convincing at all to the jurors?

HERMAN: Fred, he's a dead man walking. I don't care who represented him in this case, there's no way he was walking out of there with an acquittal. He rambled. He didn't know what he was doing.

He didn't follow the procedure which hampered his ability to call witnesses. It just was complete destruction, devastation, and, you know, he got annihilated by this Lee Boyd Malvo who absolutely crushed him on cross examination.

WHITFIELD: And so how impactful do you think that was, Avery, that Malvo was testifying and while -- Muhammad continuing to call him his son?

FRIEDMAN: Well, I mean, that's a trick. That's silliness. You know, this is sort of the equivalent of having appendicitis and trying to take it out yourself instead of calling the doctor. This guy missed everything.

And then finally, the key witness, when Malvo testified and said you've created a monster, that was the end of it. I totally agree with Richard. This guy did himself in. And I don't think if you would have resurrected Clarence Darrow from the dead, you wouldn't have had any better or any different result. This guy is cooked.

WHITFIELD: All right. Avery Friedman, Richard Herman, thanks, so much gentlemen. Always good to see you.

HERMAN: Fred, have a great Memorial Day.

FRIEDMAN: Nice to see you. Take care. Have a wonderful holiday.

WHITFIELD: I will. You guys enjoy the holiday as well. Thanks so much.

HERMAN: Thanks.

FRIEDMAN: Thanks a lot.

WHITFIELD: Well, he was a friend, a hero, a brother, and fallen Marine. Up next, remembering Justin Hunt (ph), one of many service members whose story CNN is presenting this Memorial Day weekend.

(COMMERCIAL BREAK)

WHITFIELD: Every Memorial Day, America honors the fighting men and women who died in the service of their country. This weekend, we're remembering some of the fallen heroes, one of them Justin Hunt. Here's his story as told by his family.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: My son, Justin, he loved people. He loved helping people. Even when he was a little boy, I was kind of looking back through some papers and things. He talked about, you know, being a policeman or fireman or -- and he even mentioned the army. He loved his sports. When he was in high school, when he was in elementary he did baseball and soccer. He just loved being a part of a team.

UNIDENTIFIED MALE: We used to just butt heads all the time, and somewhere around age 16 or 17, we just became the best of friends. The older we got, the better friends we became.

UNIDENTIFIED FEMALE: He went and talked to Army and Navy recruiters, and they told Justin that you're overweight. Come back when you lose the weight. He had talked to a Marine recruiter, and the Marine said, you know, we'll work with you. And he ran with him, he worked out with him, encouraged him. So when Justin entered boot camp, he was two pounds under their maximum weight.

UNIDENTIFIED MALE: He never really expressed his fears. He expressed his excitement as far as he gets to go. And he was talking about going the whole time. I always used to tell him, you know, maybe you won't have to go. Hopefully you won't have to go. He wanted to go.

UNIDENTIFIED FEMALE: I've relived it a million times. I had taken my granddaughter and my younger children, we had gone to Disneyland. My husband was home. So when we got home, he knew. So he told us that we had lost Justin. And at first it just didn't register. You know, I just thought, you know, maybe they lost contact with him or something. It just -- and then he proceed to say that we lost him.

UNIDENTIFIED MALE: Obviously, it hurts all of us. We miss him. But we know deep down the reason that he died was for us, his country. So we know his sacrifice wasn't in vain, which helps.

Go put some flowers on.

UNIDENTIFIED FEMALE: Justin, even though he only lived a little over 22 years, he did a lot in his 22 years when it comes to living and loving life that I think a lot of people haven't done after, you know, 60, 70 years of life. He made the best of everything that he was doing. We miss you.

UNIDENTIFIED MALE: His ultimate sacrifice being his life, what really hurt me as far as, you know, my daughter is not going to have an uncle, but she will know who he is, you know. My twin, my only twin I'll ever have, you know. He's not around anymore. That's the hardest.

(END VIDEOTAPE)

WHITFIELD:: Well, coming up next, "CNN PRESENTS: A CALL TO COURAGE," an in-depth look at veterans and D-Day.

And I'll be back at 4:00 p.m. Eastern with a closer look at the death of Corporal Pat Tillman. Senior Pentagon correspondent Jamie McIntyre has combed through thousands of documents. What he found includes accusations of negligence and deceit. That and more coming up later on CNN LIVE SATURDAY AT 4:00 p.m. Eastern.

A check of the day's headlines is next and then "CNN PRESENTS."

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