Return to Transcripts main page
Lou Dobbs Tonight
Martha Stewarts Gets Five Months in Prison; Wildfires Force People to Evacuate
Aired July 16, 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.
KITTY PILGRIM, GUEST HOST: Tonight, a judge sentences Martha Stewart to five months in prison for lying about a stock sale. Martha Stewart says a small personal matter has been blown out of all proportion.
(BEGIN VIDEO CLIP)
MARTHA STEWART: I will be back. Whatever I have to do in the next few months, I hope the months go by quickly.
(END VIDEO CLIP)
PILGRIM: CNN's Legal Analyst Jeffrey Toobin was in court for Martha Stewart's dramatic sentencing. Jeffrey Toobin is my guest tonight.
Wildfires forced hundreds of people to evacuate their homes in the West. We'll have reports from the worst affected areas in California and Nevada.
Federal agents try to stop weapons, drugs and illegal aliens crossing the border from Canada. But critics say terrorists can still enter this country.
(BEGIN VIDEO CLIP)
SEN. CARL LEVIN (D), MICHIGAN: Most of the containers that now enter this country are not inspected.
(END VIDEO CLIP)
PILGRIM: And in Heroes tonight, a battalion of Marines returns home after some of the heaviest fighting in Iraq. We will have a special report from Camp Pendleton, California.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, July 16. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening.
A judge today sentenced Martha Stewart to five months in prison and five months to home confinement for lying to federal investigators. Outside the courthouse, Stewart was confident and determined. Mary Snow reports from Lower Manhattan.
(BEGIN VIDEOTAPE)
STEWART: I'm not afraid. I'm not afraid whatsoever.
MARY SNOW, CNN CORRESPONDENT (voice-over): Her voice emotional and her silence broken, Martha Stewart called it a shameful day after being sentenced to five months in prison and five months home detention in her Bedford, New York, home where she'll have to wear an electronic bracelet. She's been put on two years' probation and fined $30,000.
STEWART: I'm just very, very sorry that it's come to this, that a small personal matter has been able to be blown out of all proportion.
SNOW: Inside court, Stewart's voice sounded near tears as she asked the judge to consider the good she has done and said, "My hopes that my life will not be completely destroyed lie entirely in your competent and experienced and merciful hands." Stewart's cold image softened as she kissed her daughter at one point inside the courtroom.
Judge Cederbaum in imposing a minimum sentence said she read more than 1,500 letters sent to her on Stewart's behalf, saying "I believe that you have suffered and will continue to suffer enough." The judge stayed Stewart's sentence pending an appeal.
WALTER DELLINGER, MARTHA STEWART'S APPEAL ATTORNEY: There are very significant issues to be brought before the Court of Appeals. There are at least five issues that we think -- there are at least five issues that we believe are worthy of serious consideration.
SNOW: Stewart's former stockbroker, Peter Bacanovic, received a similar sentence -- five months jail, five months home confinement with two years probation and a $4,000 fine. His sentence too has been stayed.
(END VIDEOTAPE)
SNOW: And while Stewart's attorneys have vowed to fight the convictions, in the instance where -- if she has to serve that prison sentence, they have requested that she serve it at a minimum women's facility in Danbury, Connecticut, and the judge did set terms for that home confinement, part of the sentence as well.
Some of those terms, besides the electronic bracelet, she also said that Stewart would not be able to leave her home for more than 48 hours a week, and that includes going to work and that she would have to stay in her home one day a week -- Kitty.
PILGRIM: All right. Thanks very much.
Mary Snow.
Martha Stewart won't be going to prison right away. As Mary Snow just reported, Judge Miriam Goldman Cederbaum allowed Stewart to remain free while she appeals her case. Now, once Stewart does begin her sentence, she will report to a minimum security facility in Danbury, Connecticut, near her home in Westport.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): Martha Stewart put on her bravest public face after learning she could go to jail.
STEWART: I will be back. Whatever I have to did in the next few months, I hope the months go by quickly. I'm used to all kinds of hard work, as you know.
PILGRIM: But, for someone accustomed to the luxury of Westport, Connecticut and the Hamptons, life at the Danbury Federal Correctional Institute would seem like a world away. Home to more than 1,200 inmates, it has an infamous alumni roster, including the so-called Queen of Mean, Leona Helmsley, who served time in the early '90s for mail fraud and tax evasion.
GREG WALLACE, KAYE SCHOLER: There's no such thing as a Club Fed, the so-called country camp. You lose total control of your life. You're in the hands of the guards. You're in an inmate population, which is not composed largely of white-collar offenders. Most of these prisoners -- it's mainly drug dealers.
PILGRIM: Like all inmates, Stewart would have to work seven-and- a-half hours a day cooking and serving food or cleaning and doing laundry. For her work, the multimillionaire would earn 12 to 40 cents an hour. She'd also have a very limited wardrobe -- khaki pants and tops. Decorating would not be an option.
JOYCE ELLWANGER, FORMER DANBURY INMATE: Well, when she sees all the sterile gray walls and realizes you can have no color, you can't post photographs or pictures, I think she's going to feel like I did, and she's going to feel diminished.
(END VIDEOTAPE)
PILGRIM: Although the judge recommended the minimum security facility in Danbury, the ultimate decision will be made by the U.S. Bureau of Prisons.
Well, one question that has been asked repeatedly about Martha Stewart's case is whether the government targeted her unfairly. Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): Is she just a scapegoat for the sins of others, or did she get what she deserves? Near Martha Stewart's Connecticut home, there was sympathy.
JOANNE LEOPOLD: I feel, you know, it's because of her name and her status in society that they're just going to set her up.
BARBARA WAGNER: I just think the whole thing has been exaggerated.
VILES: Others have also come to her defense. Senator Hillary Clinton did. "The Wall Street Journal" did.
And Stewart herself has long played the victim in this drama. She did so again on the courthouse steps.
STEWART: What was a small personal matter became, over the last two years, an almost fatal circus event of unprecedented proportions.
VILES: But was it really just a personal matter? Stewart is a public figure -- and not just because she's famous, but because she was an executive of a public company and a director of the New York Stock Exchange.
LAURIE LEVINSON, LOYOLA LAW SCHOOL: I don't really think there's such a thing as a small personal matter when you are a director of the stock exchange, you've made your name on the media, and now you're caught lying. That's not just a personal matter.
VILES: And was this really, as Stewart claims, unprecedented? Remember the same Justice Department put Arthur Andersen out of business and destroyed thousands of jobs for the same crime -- obstruction of justice -- and that was before Martha Stewart was indicted.
JAMES COMEY, U.S. ATTORNEY: Martha Stewart is being prosecuted not because of who she is, but because of what she did.
VILES And what of the sentence, only five months in prison? Some will argue that's too lenient. But remember, Stewart has been punished in other ways. She lost her job running her own company, she lost her spot on the NYSE board, only to gain a devastating line on her resume -- convicted felon.
Peter Viles, CNN.
(END VIDEOTAPE)
PILGRIM: Now our senior legal analyst Jeffrey Toobin was inside the courtroom when Stewart's sentence was handed down, and he joins me now in the studio.
Jeff, do you think this is a fair sentence?
JEFFREY TOOBIN, CNN LEGAL ANALYST: I do. You know, the federal sentencing guidelines exist to try to make similar crimes punished in similar ways, and the guidelines for her crime were 10 to 16 months, which means that 10 months was within the average or acceptable range, and splitting sentences, half home confinement, half prison, is one of the ways a sentence could be imposed. So, no, it's not like Judge Cederbaum threw the book at her, but this is perfectly in line with other sentences for similar crimes.
PILGRIM: So this issue of it being too lenient is not particularly appropriate because it does fall within this range?
TOOBIN: It is. This is very much -- the question is: Was she prosecuted when other people wouldn't be prosecuted at all? I don't particularly buy that either. But, certainly, when you're convicted of four serious felonies, as she was, a sentence of 10 months, half and half, is really within a normal range.
PILGRIM: The small personal matter. Is that just her viewpoint, do you think?
TOOBIN: You know, what was interesting about watching Martha all day is that it was all geared towards her business. She was trying to say to the stock market, to advertising directors thinking about advertising in her magazine, "I'm back. This case is history. It's no longer important."
Of course, it's not a small personal matter. It's a felony. It's four felonies. But her whole focus now, even more than on her family, she kept talking about her beloved company, how much she loves it. That's what she's thinking about now.
PILGRIM: This is the quintessential business woman. "I'll be back," she said, but she may not be going away quite so soon if the appeal process -- take us a little bit through this.
TOOBIN: See, this is one of the things that the stock market may be somewhat uncomfortable with because no one can know at this point how long the appeals process will take. The way things usually work is that her appeal will probably be argued fall, late fall of this year.
No one knows how long the decision could be. It could be a month, could be six months, could be eight months that the appeals court takes to decide it. But my guess is probably early 2005, but it could be mid 2005.
Frankly, I expect she'll lose her appeal. She'll go to jail sometime in 2005, but the beginning of the year, end of the year, very hard to tell.
PILGRIM: Does she gain or lose power in her case as the time elapses or not?
TOOBIN: I don't think it really makes much difference. The case is what the case is. You know, people say: Is she trying to appeal to the Court of Appeals' judges by saying one thing or another? I don't think she's focusing at that. She's focusing on reestablishing her business. That's what everything she says in public is about.
PILGRIM: And yet there is this sort of subtext of you may have suffered quite a bit already, with the decline in the stock, the sort of personal agony that she's been going through, which is quite apparent.
TOOBIN: And I don't think that's wrong for the judge to consider. That does matter. I mean, this is a woman who has a good company. This company is an honorable company. It's an excellent magazine. She created it out of nothing. That's an admirable thing. The problem is she threw it away out of stupidity and greed and jeopardized the business she worked so hard to build. PILGRIM: Well, let's talk about the facility where she may go, and, in fact, it's a very big may. She's a white-collar criminal. This is an aberration in this facility, is it not?
TOOBIN: It's -- what's interesting is that she's at a particular disadvantage in being a white-collar woman criminal because there are so few white-collar women criminals as opposed to white collar men, there are very few options that are really minimum security. If you're a male white-collar criminal, you can go to these work camps that are really not very prison-like.
But Danbury, like all women's prisons, is much more geared towards the higher security inmates. She's going to be mostly with narcotics offenders, drug dealers or drug smugglers, and that's a higher security group, less commodious accommodations.
PILGRIM: Thanks for putting it in perspective for us.
Jeff Toobin.
TOOBIN: OK.
PILGRIM: Thank you.
And that bring us to the topic of tonight's poll question: What do you think of Martha Stewart's prison sentence? Is it too harsh, too lenient or just right? Cast your vote at cnn.com/lou. We'll bring you the results later in the show.
Now Martha Stewart will give her first and only live interview to CNN's Larry King. That's on Monday night right here on CNN.
More on Martha Stewart ahead. We'll have a report on what her jail sentence means for her multimillion dollar-media and merchandising empire.
Plus, firefighters struggle to contain wildfires in two western states. We'll have a report from Nevada and California.
And in Broken Borders, new concerns about security on our border with Canada. It is the world's longest undefended frontier.
(COMMERCIAL BREAK)
PILGRIM: Wildfires in two western states have forced hundreds of people to evacuate their homes. Fire officials say years of drought have made the fires dangerous and unpredictable. We begin our coverage in California with Miguel Marquez who is tracking a fire in the Angeles National Forest -- Miguel.
MIGUEL MARQUEZ, CNN CORRESPONDENT: Kitty, this is just one of about a dozen fires burning in Southern California at the time.
It's the pine fire, and we're sort of at the head of the fire right now. The winds have kind of kicked up here. There's a little canyon back in here. There's some homes in there. You can see that the firefighters so far have been able to save those homes, and they've been hitting this area very hard all afternoon with helicopters and the like.
They call this the asbestos range. It's been so long since it's burned, about 80 to 100 years. It's filled with brush, manzanita brush, and it's very oily and burns very hot and fast, and oak and conifer trees in the Lake Hughes area here.
About a thousand people have been evacuated so far. One person's been killed. A firefighter was killed in a traffic accident while leaving this fire. Three have been injured. Three homes have been destroyed, and about another 120 at this point are threatened.
But people who are living in this area are just so pleased with firefighters because they've saved so many. They were praising them today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Those firefighters are just awesome. I'm going to get all choked up. They were up along that ridge there at night, and you could just hear the fire popping. They were up there with saws and everything, just knocking down that fire so it didn't come over the hill.
(END VIDEO CLIP)
MARQUEZ: Now this fire has burned about 14,000 acres, is the last official number we have. Certainly, it's grown bigger today. That was at 6:00 Pacific Time. Their next update will be 6:00 p.m. Pacific Time today.
Yesterday, the scene was said to be 30 -- 50 percent contained. Today, it's down to 36 percent contained. The reason: those dry, windy conditions. The humidity is low. It's about 100 degrees right now.
This fire has jumped the fire line three times in three days. They've been digging a line with dozers for the most part out in front of it, trying to keep it in one place, but the fire -- because the wind is not cooperating and they feel if they can't get a hold of it tonight and the next couple of days, it could burn over these mountains and into the community of Lake Hughes.
PILGRIM: Miguel, how many firefighters are on the scene?
MARQUEZ: Eighteen hundred or so as of this morning. That number has probably grown. They have an enormous base camp just south -- or north and west of here. That's certainly probably over 2,000 at this point -- Kitty.
PILGRIM: All right. Thanks very much.
Miguel Marquez.
In Nevada, a fire with 100-foot flames that is threatening the outskirts of the state capital Carson City. At one point, the fire came within half a mile of the governor's mansion. Ted Rowlands reports from Carson City, Nevada.
(BEGIN VIDEOTAPE)
TED ROWLANDS, CNN CORRESPONDENT: As expected, the fire here in Carson City started to move away from threatened homes by mid morning over a ridge towards the Lake Tahoe area. Firefighters are using an aerial assault to try to stop the movement of this fire.
Overnight, they were able to save about 50 homes in a development area that was threatened. The hope was that the flames would lie down overnight, but they didn't. Firefighters had to actively fight the flames that were shooting as high as 100 feet, consuming more fuel. They were able to save those homes.
Fourteen homes, however, have been completely destroyed by this fire, which started on Wednesday, and, although the wind has shifted now, it is expected that the wind will shift again, and those same homes will again be threatened.
KURT FRONDICK, FIRE INTERAGENCY SPOKESMAN: This afternoon as the winds pick up and go to the southwest, it's going to go back towards those homes again. We're also protecting those homes, setting up strike teams and clearing out that brush as well.
ROWLANDS: It is expected that firefighters will use an air assault for the rest of the daylight hours here. Then overnight, it will be an all-night effort as well as they try to keep these homes safe. Up to now, 9,100 acres have been burned in this fire.
Ted Rowlands, CNN, Carson City, Nevada.
(END VIDEOTAPE)
PILGRIM: Now hundreds of millions of miles from earth, the Cassini spacecraft has captured a dramatic new image of Saturn. This image shows Saturn's rings partially covered by the planet's shadow. Cassini took the picture earlier this month when it was about 900,000 miles from Saturn.
Still to come, your thoughts on Martha Stewart's jail sentence. Our panel of newsmakers will also weigh in.
And we'll also have a report on the impact of today's judgment on Stewart's multimillion-dollar business empire.
Plus, Martha Stewart is just the latest in a growing list of white-collar criminals to face jail time. We'll have a special report.
And some Democrats are calling for the United Nations to monitor our presidential election. We'll tell you why next.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: The White House this week denied speculation that President Bush might replace Dick Cheney on the Republican ticket. Today, the vice president campaigned with the Republican most often mentioned as his possible successor, Senator John McCain. The two spoke at a rally in the battleground state of Michigan. McCain praised Cheney for his decades of public service.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: He's been an indispensable man for three presidents, chief of staff to President Ford, secretary of defense to the first President George Bush, and, of course, a partner to President George W. Bush and one of the most capable, experienced, intelligent and steady vice presidents this country has ever had.
(END VIDEO CLIP)
PILGRIM: In Washington, Democratic presidential candidate Senator John Kerry spoke to the American Federation of Teachers and won its endorsement. Senator Kerry also outlined his plan to reform the nation's intelligence gathering.
(BEGIN VIDEO CLIP)
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL CANDIDATE: As president, I will create a true director of national intelligence, a Cabinet- level position, with the authority to manage and to direct all the components of our intelligence community, to bring all those components together in the most creative and proactive way to protect our nation.
(END VIDEO CLIP)
PILGRIM: Senator Kerry also proposed doubling the number of undercover agents.
Well, President Bush began the day in Florida, the site of the election recount fiasco four years ago. Many Democrats are worried there will be more problems this year.
Ed Henry has the report.
(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want your vote.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Some Democrats still believe Republicans stole the 2000 election, and that bitterness boiled over Thursday on the House floor.
REP. CORRINE BROWN (D), FLORIDA: I come from Florida where you and others participated in what I call the United States coup d'etat. We need to make sure that it doesn't happen again. Over and over again after the election, when you stole the election, you came back here and said, "Get over it."
She said that you stole an election? I believe that those are not -- a coup d'etat.
UNIDENTIFIED MALE: (unintelligible) taken down. She said that you stole an election. I believe that those...
BROWN: In a coup d'etat, and it's a fact.
HENRY: The House did vote along party lines to strike Brown's words from the record. The dispute was sparked by demands from some Democrats that the United Nations monitor the legitimacy of this year's presidential election. But House Republicans passed an amendment blocking U.N. involvement in the American election.
REP. STEVE BUYER (R), INDIANA: For over 200 years, this nation has conducted elections fairly, impartially and ensuring that each person's vote counts. When problems have arisen over the years, by Constitution, authority was granted to Congress in the states to address them, and we have.
HENRY: But Democrat critics are not satisfied, as Florida grapples with questions about its new touch-screen voting machines and faces controversy over a list used to remove felons from the voting rolls.
Jesse Jackson has announced a new initiative to protect black voters in November.
JESSE JACKSON, RAINBOW/PUSH COALITION: A million African- American voters --- a million -- a million -- were disenfranchised -- a million in Year 2000 -- and that must not happen again.
HENRY: John Kerry also weighed in as he addressed the NAACP.
KERRY: We're not only going to make sure that every vote counts. We're going to make sure that every single vote is counted.
HENRY: NAACP officials continue to charge that black votes were stolen in 2000, but the president's education secretary believes the NAACP is trying to stoke the black vote for Democrats.
ROD PAIGE, EDUCATION SECRETARY: Any objective person who looks at this and listens at the rhetoric could draw the right conclusion.
HENRY (on camera): Republicans believe that the United Nations time would be better spent setting up a framework for free and fair elections in nations like Iraq rather than America, but 160 Democrats voted to give the U.N. some role in ensuring the validity of the American election in November. So there's obviously still a lot of concern on that side of the political aisle.
Ed Henry, CNN, Capitol Hill.
(END VIDEOTAPE) PILGRIM: Now back to tonight's top story. Before Martha Stewart was sentenced today, she asked the judge to remember all the good she has done. She built a catering company into a multimillion-dollar media and merchandise empire, but her damaged reputation has had a direct impact on her business.
Susan Lisovicz has that part of the story.
(BEGIN VIDEO CLIP)
STEWART: Perhaps all of you out there can continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines.
SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT (voice-over): Martha Stewart was a media star long before she became a convicted felon, and her first words to the media outside the courthouse were a desperate sales pitch for the company she founded.
BARBARA LIPPERT, ADWEEK: So is Martha Stewart living? Definitely. She got a light sentence if that's the worst of it, and I think the worst of her troubles are over.
LISOVICZ: But Martha Stewart Omnimedia has a lot of financial housekeeping to do.
Ad pages in "Martha Stewart Living" plummeted more than 40 percent the first half of this year, compared to the same period a year ago. Advertisers are notoriously sensitive to a celebrity's public image. A magazine can't exist without ad support.
And her TV show, which was the springboard for the magazine, is on hiatus. But Martha merchandise is more resilient, although the company will be getting smaller royalty payments from Kmart under a new contract.
JEFF SONNENFELD, YALE SCHOOL OF MANAGEMENT: I think the prospects are very strong. I've spoken with the CEOs of partners such as Sherwin Williams, Scotts, and, of course, we know the data on Kmart is very strong.
LISOVICZ: And some Kmart shoppers echoed that.
UNIDENTIFIED FEMALE: I think her jail sentence has nothing to do with the products that are on sale. I think those are two separate issues.
UNIDENTIFIED FEMALE: Well, I think her products are very quality and absolutely would continue to buy them.
LISOVICZ: But perhaps the most dramatic sign of support came from Wall Street where Martha Stewart Omnimedia shares soared 37 percent and was the biggest percentage gainer of the day at the New York Stock Exchange.
(END VIDEOTAPE)
LISOVICZ: The company said in a statement that it sees the sentencing as an important step toward closure for MSO. It also said it continues to manage the company for the long-term with a commitment to preserving its many assets -- Kitty.
PILGRIM: Susan, her stock went up today. She personally benefits quite a bit.
LISOVICZ: Well, that's right. It's more than her name on that stock. She is the biggest shareholder, which is why she'll continue to wield a lot of influence behind the scenes. She netted an estimated $90 million from that rally today. Her total estimated stake now about $354 million.
PILGRIM: All right. Thanks very much.
Susan Lisovicz.
Well, the case against Martha Stewart centered around her sale of less than 4,000 shares of ImClone systems. Now Stewart sold her shares one day before the stock plummeted, and, ironically, shares of ImClone are significantly higher today than when she sold them in December of 2001.
ImClone today closed at $77 a share. That would have put her holdings at more than $300,000, but Stewart sold her stock at about $58 a share for a total of $228,000. So, if she never sold, she would be about $75,000 richer.
Martha Stewart's wealth and fame put her into a very different category of convicted criminals. She's now one of a growing list of infamous felons.
Jen Rodgers has that report.
(BEGIN VIDEOTAPE)
JEN RODGERS, CNN CORRESPONDENT (voice-over): They were rich, they were smart, and they got caught. Hard-charging, driven business leaders, masters of the universe one day, inmates the next.
There's Michael Milken, the former junk bond king, who served nearly two years for securities law violations.
MICHAEL DOUGLAS, ACTOR: Greed, for lack of a better word, is good.
RODGERS: The inspiration for that famous line from the movie "Wall Street" was Ivan Boesky, who also traded in pinstripes for prison stripes for his role in the insider trading scandal.
And Charles Keating, a name synonymous with the savings and loan scandal, served time for convictions that were eventually overturned. He later pled guilty to a bankruptcy charge and was sentenced to time served. After the excesses of the go-go '80s, the next decade delivered its own batch of bad boys as well. Rogue trader Nick Leeson blamed for the collapse of Britain's oldest bank did time in a Singapore prison. He was released early for good behavior.
Steve Madden is up for an early exit as well. The shoe designer is currently serving a 41-month sentence for securities fraud.
More recently, Alfred Taubman, the former Sotheby's chairman was behind bars for his role in a price-fixing conspiracy.
And Sam Waksal, Imclone founder and Martha Stewart friend, went from the penthouse to the big house last summer for insider trading.
UNIDENTIFIED MALE: I've made some terrible mistakes. And I deeply regret what has happened. I was wrong.
ROGERS: High-profile business women have also found themselves on the wrong side of the law.
UNIDENTIFIED FEMALE: If I were a man, they'd say I'm a good executive.
ROGERS: The queen of mean herself, Leona Helmsley was convicted for tax evasion.
UNIDENTIFIED FEMALE: Getting caught is my biggest regret, you know it, come on.
ROGERS: Even the oldest profession in the world has its own CEO star. The Hollywood madam Heidi Fleiss. She went to prison, too.
(END VIDEOTAPE)
ROGERS: Now if Stewart ends up serving time she'll join the ranks of the more than 2 million inmates currently incarcerated in the United States. But of course she'll also become an elite member of this group of criminals from corporate America -- Kitty.
PILGRIM: Jen, Martha Stewart today talked about the media circus surrounding this trial. Have any other high-profile cases attracted this much attention, can you recall?
ROGERS: Well, now that we're in this one it certainly feels unprecedented and everyone is focusing on it. But Michael Milken, Ivan Boesky, and of course Leona Helmsley all really did have the same level of circus if not more around them as well.
PILGRIM: Thinking back, that's exactly right. Thanks very much, Jen Rogers.
Joining me now for more on Martha Stewart's sentence and a lot more are this week's newsmakers. And Simon Crittle has been covering this Stewart case as a correspondent for "TIME" magazine. Steve Shepard is editor-in-chief of "Businessweek" and Richard Wolfe is the Washington correspondent for "Newsweek" magazine and he joins us from our Washington bureau tonight. And thanks very much for joining us, gentlemen.
Simon, let me start with you. It's the dominant story of the day. We've been mesmerized by it. Not just today but for weeks. And this seems to be like a pivotal moment. You were sitting right there in the courtroom. You've also been covering this quite extensively. Tell us your insights into what went on today and why you think it's interesting.
SIMON CRITTLE, "TIME" MAGAZINE: I thought it was really interesting that we saw a slightly different Martha Stewart in court today. When I covered the trial, for six weeks we saw a very defiant woman, a very confident woman, a woman who didn't really think that she needed to be in that courtroom. But today, she was more resigned to her fate. She looked to me like someone who was in pain, who was upset. And when she walked into that courtroom and all those eyes were straight on her, it was really a very awkward moment for her.
PILGRIM: The woman that we saw today, if she had come in initially like that, do you think that the outcome of the trial would have been significantly different? That's very hypothetical but...
CRITTLE: There's an argument to be made if she'd shown some remorse, perhaps it would have lessened the sentence. But she showed absolutely none today. She said that it was a small personal matter. This small personal matter was her line to the government. Selling shares that she got after an inside tip. So it would have been nice to see remorse today.
PILGRIM: And yet the courthouse steps, we did see the strength of the woman who was the entrepreneur who built this business. And Jeff Toobin said, she talked about business on those courthouse steps.
CRITTLE: She certainly did. That was Martha doing what she does best. She's a professional communicator. She got out there and she started talking about what she does. Her business. How she's going to come back from this. So I think we'll see her again, of course. But she's got a painful time ahead of her in the meantime.
PILGRIM: Let me ask Richard Wolf a little bit about the political climate. This case is not just an isolated bubble. It does exist in a political climate where certainly there were some accusations that's being soft on corporate crime, are now well past us when we see Ken Lay in handcuffs, and Martha Stewart today. We see a couple of big fish being paraded out. Perhaps being targeted purposely for -- you tell us what you think, how this plays into the political scene.
RICHARD WOLFE, "NEWSWEEK": Well, John Kerry has already tried to gain some political points here. Not on Martha Stewart so much but on Ken Lay for sure. Saying that the Bush administration has taken way too long to press this case and basically saying a Kerry administration would do it much quicker.
You know, I guess it's a cheap shot but it does get to something that does underlie all of the public attention. It takes a very long time to bring these cases to fruition. Not just the big names, but the little names as well. And in the meantime, small investors lose their money almost immediately. So there is some political importance there. Martha Stewart, less so. I think it cuts both ways. Public sympathy for her. On the other hand, she was a member of the board of the New York Stock Exchange. But, yes, there's political room here for targeting the prosecutors and the Bush administration.
PILGRIM: Steve, what's your thought?
STEVE SHEPARD, "BUSINESSWEEK": This was hardly the most serious of the corporate crimes that we've seen. It was in some sense trivial. But it surely was the stupidest crime. She didn't have to lie to federal investigators in the beginning. If she hadn't, she wouldn't be in this mess she's in. I think more or less justice was done. Some prison sentence, not a lot of time. But I think it was necessary to show everybody that we don't let famous people off. She has only herself to blame.
PILGRIM: Let's broaden out the political discussion now and talk about the political week. Edwards out on his own on the campaign trail. How do you think that worked?
SHEPARD: I think he's doing very well. I think it's an asset to the Kerry campaign for sure. He brings a lot of energy, a lot of charisma, a lot of campaigning skill. He makes John Kerry, when they're together, I think he brings out John Kerry a little bit more, too. It will be interesting to see whether some of the Kerry gravitas transfers to Edwards on the campaign.
PILGRIM: Maybe there's a reverse transfer. Let's talk to Richard about this. In fact, the sunshine boys is kind of your new beat, isn't it?
WOLFE: Right. They were loving each other, kissing, hugging and everything. It kind of made us all feel a bit queasy watching them. But it's true. John Kerry looked much more human last week with the Edwards family there, with his own family. And Edwards, he's a kind of great teacher in how to campaign. It's not that John Kerry can't do this stuff. He can. But it's mixed. And Edwards has these great tricks for connecting with a crowd.
On the other hand his message can be pretty trite. It's about the wonderful opportunities in America all of which is true but it's not a great platform for winning an election at a time of national security crisis and war in Iraq. But they work well together. And they've certainly opened up a new avenue in terms of targeting the Bush-Cheney campaign because of Dick Cheney's problems.
PILGRIM: We would hope that the campaign would be a little bit more grounded than talk about hair-dos after this. It was unbelievably light start to the campaign season. How do you see this progressing? Do you think that they will get into substantive issues and the sort of background of the candidates more, such as Edwards' trial lawyer background and things like this.
WOLFE: Absolutely. They are already into those territories. And remember, one of the strong selling points for John Edwards was to talk about the economy in a way that reaches middle class voters in particular. On trade, on industrial, on the industrial economy, manufacturing jobs. Those are really substantive things that Edwards thinks he can speak to. And on the other side the Bush campaign thinks it clearly is a kind of weakness, given the upturn, limited upturn albeit, in some of the manufacturing sectors.
So there is going to be real debate there on the economic heartland. Those are the swing states. The industrial battleground states. We're going to get into that. Trial lawyer I think plays in certain regions. Much more in the southeast than other parts of the country. But for sure, this debate about the state of the economy and who can protect jobs and who can protect the manufacturing sector. We're going to look at that a lot in the fall.
PILGRIM: So these substantive issues will put the two parties quite at loggerheads. Where do you see this playing out?
SHEPARD: Well, I think a lot depends on where the economy goes from here. The recovery looked very strong in March, April, May. Then we encountered a slow-down in June. There's no question about it, the job creation was much smaller, retail sales plunged, gasoline prices were high, auto sales went down. If that was just a blip, and the economy picks back up again, it obviously helps Bush. If it turns into a more extended slow-down, then Kerry and Edwards can make hay with it. We just don't know yet. It's a little bit puzzling why we have this slow-down.
PILGRIM: So hairstyles aside, it's the economy?
SHEPARD: And Iraq.
PILGRIM: And Iraq. All right. Thanks very much. We're out of time. Steve Shepard, Simon Crittle, and Richard Wolfe, thanks very much for joining us.
A reminder now to vote in tonight's poll question. "What do you think of Martha Stewart's prison sentence? Too harsh, too lenient or just right?" Cast your vote at CNN.com/lou. And we'll bring you the result a little bit later in this show.
Now tonight's thought is on crime and punishment. And here it is. "Let the punishment match the offense." And those words from Roman statesman Marcus Cicero.
Still ahead here tonight, "Broken Borders." It's thousands of miles long and a tremendous challenge for federal agents. We'll have a special report on the U.S. border with Canada.
Plus, stopping human trafficking. President Bush unveils a new plan.
And "Heroes," Camp Pendleton. Camp Pendleton welcomes home the 1st Battalion 5th Marine Regiment from Iraq and they're returning from one of Iraq's most chaotic cities. There's that and a great deal more ahead. Stay with us. (COMMERCIAL BREAK)
PILGRIM: President Bush today called for tough new laws to stop human trafficking. Hundreds of thousands of illegal aliens enter the United States every year. And some of those illegal aliens are forced to come to this country to work in slavery-like conditions. Elaine Quijano is traveling with the president and reports from Beckley, West Virginia.
(BEGIN VIDEOTAPE)
ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): President Bush began his day in Tampa, Florida. Florida, the site of the election 2000 showdown, of course where the president was declared the winner by only 537 votes over Al Gore. And this year around, the race shaping up to be a tight one as well. With the recent poll giving John Kerry the slight edge.
But this morning, President Bush spoke to a conference on human trafficking, on modern-day slavery, a problem that the president says victimizes hundreds of thousands of people worldwide each year. The president highlighting the plight of victims which includes forced prostitution and involuntary servitude in a number of countries, including the United States.
Now this issue is of particular concern to elements of the president's base, including some Christian groups. But as he spoke in Tampa, the president also reached out to the sizable Cuban exile population in Miami by mentioning Fidel Castro.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The regime in Havana, already one of the worst violators of human rights in the world, is adding to its crimes. The dictator welcomes sex tourism. My administration is working toward a comprehensive solution to this problem. The rapid, peaceful transition to democracy in Cuba.
QUIJANO: The president continued his day with a campaign stop in Beckley, West Virginia. Rallying supporters here, he reiterated to the crowds some familiar themes. His justification for the war in Iraq and his efforts to boost the economy, including tax relief. But the president also launched some new attacks against his opponent John Kerry, saying that Mr. Kerry voted against funds to support U.S. troops.
And in this part of the country, where hunting is a big sport, the president also reaffirmed his commitment to gun ownership. Now the president by the way won here in West Virginia back in 2000 over Al Gore. Elaine Quijano, CNN, West Virginia.
(END VIDEOTAPE)
PILGRIM: The longest undefended border in the world is between between the United States and Canada. After the September 11 attacks the federal government stepped up border security. But critics say it's not nearly enough and security must be increased dramatically to stop terrorists from entering this country. Bill Tucker reports from the U.S./Canada border in upstate New York.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Every day the Coast Guard patrols the waters of the Great Lakes and the St. Lawrence River. Chief Alden (ph) and the 28 sailors under his command are responsible for a 100-mile stretch of the St. Lawrence.
UNIDENTIFIED MALE: Our authority allows us to stop any boat up here that is in U.S. waters.
TUCKER: That includes hundreds of recreational boats as well as a handful of commercial ships each day. A daunting task, according to a congressional study of border security.
RICHARD STANA, GOVT. ACCOUNTABILITY OFFICE: This isn't an easy job because bad guys don't tap you on the shoulder and say, I intend to do this or I'm going to do that.
TUCKER: Since 9/11 along the northern border, the number of border patrol agents has tripled to more than 1,000 agents. Five new reconnaissance planes have been added. The Coast Guard has been given new, faster boats with better technology. And there are video phones so that people can voluntarily check in at the border.
The northern border presents a number of unique security challenges. Its sheer size, the number of vast, rural areas and in the winter, the St. Lawrence River can sometimes freeze so solidly, that people can walk across it.
Those charged with guarding the borders are not just relying on new equipment and technology. They've also improved coordination.
CHIEF FURMAN ALDEN, U.S. COAST GUARD: What I've done is I've reached out to the patrol agent in charge (UNINTELLIGIBLE) and I have offered four of my people to help crew his boats which is a force multiplier for him. Now his marine patrol has grown by four.
TUCKER: Arrests along the 4,000-mile border are running about even with last year except in the Swanton sector where arrests are running slightly ahead of last year. Commendable, say the critics, but more needs to be done.
SEN. CARL LEVIN (D), MICHIGAN: Most of the containers that now enter this country are not inspected. We don't have a technology yet which can identify explosive devices at a distance.
TUCKER: Such technology would help secure the borders and assure that the $1 billion a day in commerce between the United States and Canada continues uninterrupted. Bill Tucker, CNN, Mussina, New York.
(END VIDEOTAPE)
PILGRIM: Still ahead tonight, "Heroes." Tonight we pay tribute to 600 marines returning home from one of the fiercest battlegrounds in Iraq. That's next. Then, creating a fair fight for the U.S. aerospace companies in the global marketplace. One U.S. senator has an ambitious plan. We'll have a special report.
(COMMERCIAL BREAK)
PILGRIM: In "Heroes" tonight, a homecoming for 600 marines just returning from Fallujah. They have now been reunited with their families after some of the most deadly fighting at the war in Iraq. Casey Wian has the story from Camp Pendleton, California.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): In the hot sun, they wait for husbands, fathers, and sons returning from Iraq.
UNIDENTIFIED FEMALE: He's Corporal Jeff Starr (ph). He was promoted on the battlefield.
WIAN: They've been waiting since December when Camp Pendleton's 1st Battalion 5th Marine Regiment deployed to Fallujah, Iraq's post- war hotspot.
10-day-old Sean Tate Jr. has never been seen by his father. Rachel and Sean Sr. married just before he left.
UNIDENTIFIED FEMALE: We got married, two weeks later I found out I was pregnant one week later he left, now he's coming back.
WIAN: The wait stretches into its sixth hour. Then in the distance, families hear them coming.
The Marine Corps says this battalion was involved in some of the most intense firefights in around Fallujah.
UNIDENTIFIED MALE: Company dismissed!
WIAN: Amy Springer struggles for several agonizing minutes to find her husband, Lance Corporal Brett Springer. They, too, were married just before deployment and never had time for a honeymoon. Finally, the wait's over.
UNIDENTIFIED FEMALE: Undescribable.
WIAN: Some relatives literally jumped for joy, others simply smiled. Another young mother, another marine seeing his son for the first time.
UNIDENTIFIED MALE: It was hard.
WIAN: How'd she do, you think?
UNIDENTIFIED MALE: She did good.
WIAN: And how did you do?
UNIDENTIFIED MALE: I held up.
WIAN: As did the entire battalion. Many of these Marines were on their second tour of duty in Iraq.
UNIDENTIFIED MALE: We went into it differently. Kind of got into a little situation with Fallujah. But did our job.
WIAN (on camera): While these families celebrate the return of their marines, several others remain in mourning. At least ten members of this battalion were killed while on duty in Iraq. Casey Wian, CNN, Camp Pendleton, California.
(END VIDEOTAPE)
PILGRIM: Welcome home everybody. Still ahead, your e-mails. Plus, thousands of American aerospace jobs are at risk, because of government subsidies to Europe's biggest airplane maker. We'll have a report.
It may be the world's largest rabbit. And we'll tell you why it will not make the Guinness Book of Records. The tale of this giant bunny when we come back.
(COMMERCIAL BREAK)
PILGRIM: Here's a quick update on a story we brought you last night. The House of Representatives said companies that relocate overseas should not be entitled to the same loan guarantees and subsidies as U.S. companies. Lawmakers approved the resolution by an overwhelming 270 votes to 132.
Subsidies in the aerospace industry are at the center of a growing dispute between the United States and Europe. A leading senator says the United States should withdraw from an aerospace agreement with the European Union, because Air Bus Receives massive government subsidies. The American aerospace industry has lost 756,000 jobs since 1989. Philippa Holland reports.
(BEGIN VIDEOTAPE)
PHILIPPA HOLLAND, CNN CORRESPONDENT: Washington Senator Patty Murray is trying to change the way the aerospace industry competes. She says the American aerospace industry is threatened by billions of dollars in European subsidies.
SEN. PATTY MURRAY, (D) WASHINGTON: I think it's time we withdraw from the 1992 aerospace agreement. That will give us a year for Europe to decide whether or not they're going to take this seriously and us to determine what the next steps are.
HOLLAND: NAM agrees.
FRANK VARGO, NATL. ASSOC. OF MANUFACTURERS: Our technology is the best in the world. But you can't compete when your hands are tied behind your back by the fact that somebody else is getting a handout. That's not right HOLLAND: The delegation of the European Commission in Washington responded to Murray's proposal of the U.S. withdrawal from the trade agreement staying quote, "this is a question for the U.S. administration. We have not received any request to renegotiate the agreement, which is not about marketshare, it is about the amount of public support the companies on both sides can receive."
The U.S. Congress just repealed the Extra-territorial Exclusion Act to avoid paying $4 billion in tariffs. But lawmakers have taken no action to address the billions of dollars in subsidies the European aerospace industry receives. Phillipa Holland reporting for LOU DOBBS TONIGHT.
(END VIDEOTAPE)
PILGRIM: Well, the government has nothing to do with our next story. It's a story about a giant rabbit. The huge rabbit weighs in at nearly 30 pounds and it's three and a half feet long. And its owner Annette Edwards says the rabbit is the biggest in the world. But the Guinness Book of Records cannot verify that claim and it says it no longer hands out the biggest animal titles, because that might encourage people to overfeed their pets.
Let's take a look at your thoughts. And many of you wrote about Martha Stewart and the sentencing. And Robert Pounders of Astoria, Oregon writes, "if you're rich and powerful you can get away with white collar crimes. Five months is an insult to all good hard- working Americans who don't break the law."
William McBride of Loveland, Colorado writes, "they were out to get Martha Stewart and they got her. They wanted to make an example out of her because she is a woman and rich. She was convicted of lying about something she was never convicted of, insider trading."
We love hearing from you. Email us, loudobbs@cnn.com.
Still ahead, the results of tonight's poll question.
(COMMERCIAL BREAK)
Now the results of tonight's poll. More than half of you think Martha Stewart's prison sentence is too harsh.
Thanks for joining us tonight. Please join us on Monday. We begin a series of special reports: "Mission Critical" on the future of America's space program.
For all of us here, good night from New York. Have a great weekend. "ANDERSON COOPER 360" is next.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired July 16, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, GUEST HOST: Tonight, a judge sentences Martha Stewart to five months in prison for lying about a stock sale. Martha Stewart says a small personal matter has been blown out of all proportion.
(BEGIN VIDEO CLIP)
MARTHA STEWART: I will be back. Whatever I have to do in the next few months, I hope the months go by quickly.
(END VIDEO CLIP)
PILGRIM: CNN's Legal Analyst Jeffrey Toobin was in court for Martha Stewart's dramatic sentencing. Jeffrey Toobin is my guest tonight.
Wildfires forced hundreds of people to evacuate their homes in the West. We'll have reports from the worst affected areas in California and Nevada.
Federal agents try to stop weapons, drugs and illegal aliens crossing the border from Canada. But critics say terrorists can still enter this country.
(BEGIN VIDEO CLIP)
SEN. CARL LEVIN (D), MICHIGAN: Most of the containers that now enter this country are not inspected.
(END VIDEO CLIP)
PILGRIM: And in Heroes tonight, a battalion of Marines returns home after some of the heaviest fighting in Iraq. We will have a special report from Camp Pendleton, California.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, July 16. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening.
A judge today sentenced Martha Stewart to five months in prison and five months to home confinement for lying to federal investigators. Outside the courthouse, Stewart was confident and determined. Mary Snow reports from Lower Manhattan.
(BEGIN VIDEOTAPE)
STEWART: I'm not afraid. I'm not afraid whatsoever.
MARY SNOW, CNN CORRESPONDENT (voice-over): Her voice emotional and her silence broken, Martha Stewart called it a shameful day after being sentenced to five months in prison and five months home detention in her Bedford, New York, home where she'll have to wear an electronic bracelet. She's been put on two years' probation and fined $30,000.
STEWART: I'm just very, very sorry that it's come to this, that a small personal matter has been able to be blown out of all proportion.
SNOW: Inside court, Stewart's voice sounded near tears as she asked the judge to consider the good she has done and said, "My hopes that my life will not be completely destroyed lie entirely in your competent and experienced and merciful hands." Stewart's cold image softened as she kissed her daughter at one point inside the courtroom.
Judge Cederbaum in imposing a minimum sentence said she read more than 1,500 letters sent to her on Stewart's behalf, saying "I believe that you have suffered and will continue to suffer enough." The judge stayed Stewart's sentence pending an appeal.
WALTER DELLINGER, MARTHA STEWART'S APPEAL ATTORNEY: There are very significant issues to be brought before the Court of Appeals. There are at least five issues that we think -- there are at least five issues that we believe are worthy of serious consideration.
SNOW: Stewart's former stockbroker, Peter Bacanovic, received a similar sentence -- five months jail, five months home confinement with two years probation and a $4,000 fine. His sentence too has been stayed.
(END VIDEOTAPE)
SNOW: And while Stewart's attorneys have vowed to fight the convictions, in the instance where -- if she has to serve that prison sentence, they have requested that she serve it at a minimum women's facility in Danbury, Connecticut, and the judge did set terms for that home confinement, part of the sentence as well.
Some of those terms, besides the electronic bracelet, she also said that Stewart would not be able to leave her home for more than 48 hours a week, and that includes going to work and that she would have to stay in her home one day a week -- Kitty.
PILGRIM: All right. Thanks very much.
Mary Snow.
Martha Stewart won't be going to prison right away. As Mary Snow just reported, Judge Miriam Goldman Cederbaum allowed Stewart to remain free while she appeals her case. Now, once Stewart does begin her sentence, she will report to a minimum security facility in Danbury, Connecticut, near her home in Westport.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): Martha Stewart put on her bravest public face after learning she could go to jail.
STEWART: I will be back. Whatever I have to did in the next few months, I hope the months go by quickly. I'm used to all kinds of hard work, as you know.
PILGRIM: But, for someone accustomed to the luxury of Westport, Connecticut and the Hamptons, life at the Danbury Federal Correctional Institute would seem like a world away. Home to more than 1,200 inmates, it has an infamous alumni roster, including the so-called Queen of Mean, Leona Helmsley, who served time in the early '90s for mail fraud and tax evasion.
GREG WALLACE, KAYE SCHOLER: There's no such thing as a Club Fed, the so-called country camp. You lose total control of your life. You're in the hands of the guards. You're in an inmate population, which is not composed largely of white-collar offenders. Most of these prisoners -- it's mainly drug dealers.
PILGRIM: Like all inmates, Stewart would have to work seven-and- a-half hours a day cooking and serving food or cleaning and doing laundry. For her work, the multimillionaire would earn 12 to 40 cents an hour. She'd also have a very limited wardrobe -- khaki pants and tops. Decorating would not be an option.
JOYCE ELLWANGER, FORMER DANBURY INMATE: Well, when she sees all the sterile gray walls and realizes you can have no color, you can't post photographs or pictures, I think she's going to feel like I did, and she's going to feel diminished.
(END VIDEOTAPE)
PILGRIM: Although the judge recommended the minimum security facility in Danbury, the ultimate decision will be made by the U.S. Bureau of Prisons.
Well, one question that has been asked repeatedly about Martha Stewart's case is whether the government targeted her unfairly. Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): Is she just a scapegoat for the sins of others, or did she get what she deserves? Near Martha Stewart's Connecticut home, there was sympathy.
JOANNE LEOPOLD: I feel, you know, it's because of her name and her status in society that they're just going to set her up.
BARBARA WAGNER: I just think the whole thing has been exaggerated.
VILES: Others have also come to her defense. Senator Hillary Clinton did. "The Wall Street Journal" did.
And Stewart herself has long played the victim in this drama. She did so again on the courthouse steps.
STEWART: What was a small personal matter became, over the last two years, an almost fatal circus event of unprecedented proportions.
VILES: But was it really just a personal matter? Stewart is a public figure -- and not just because she's famous, but because she was an executive of a public company and a director of the New York Stock Exchange.
LAURIE LEVINSON, LOYOLA LAW SCHOOL: I don't really think there's such a thing as a small personal matter when you are a director of the stock exchange, you've made your name on the media, and now you're caught lying. That's not just a personal matter.
VILES: And was this really, as Stewart claims, unprecedented? Remember the same Justice Department put Arthur Andersen out of business and destroyed thousands of jobs for the same crime -- obstruction of justice -- and that was before Martha Stewart was indicted.
JAMES COMEY, U.S. ATTORNEY: Martha Stewart is being prosecuted not because of who she is, but because of what she did.
VILES And what of the sentence, only five months in prison? Some will argue that's too lenient. But remember, Stewart has been punished in other ways. She lost her job running her own company, she lost her spot on the NYSE board, only to gain a devastating line on her resume -- convicted felon.
Peter Viles, CNN.
(END VIDEOTAPE)
PILGRIM: Now our senior legal analyst Jeffrey Toobin was inside the courtroom when Stewart's sentence was handed down, and he joins me now in the studio.
Jeff, do you think this is a fair sentence?
JEFFREY TOOBIN, CNN LEGAL ANALYST: I do. You know, the federal sentencing guidelines exist to try to make similar crimes punished in similar ways, and the guidelines for her crime were 10 to 16 months, which means that 10 months was within the average or acceptable range, and splitting sentences, half home confinement, half prison, is one of the ways a sentence could be imposed. So, no, it's not like Judge Cederbaum threw the book at her, but this is perfectly in line with other sentences for similar crimes.
PILGRIM: So this issue of it being too lenient is not particularly appropriate because it does fall within this range?
TOOBIN: It is. This is very much -- the question is: Was she prosecuted when other people wouldn't be prosecuted at all? I don't particularly buy that either. But, certainly, when you're convicted of four serious felonies, as she was, a sentence of 10 months, half and half, is really within a normal range.
PILGRIM: The small personal matter. Is that just her viewpoint, do you think?
TOOBIN: You know, what was interesting about watching Martha all day is that it was all geared towards her business. She was trying to say to the stock market, to advertising directors thinking about advertising in her magazine, "I'm back. This case is history. It's no longer important."
Of course, it's not a small personal matter. It's a felony. It's four felonies. But her whole focus now, even more than on her family, she kept talking about her beloved company, how much she loves it. That's what she's thinking about now.
PILGRIM: This is the quintessential business woman. "I'll be back," she said, but she may not be going away quite so soon if the appeal process -- take us a little bit through this.
TOOBIN: See, this is one of the things that the stock market may be somewhat uncomfortable with because no one can know at this point how long the appeals process will take. The way things usually work is that her appeal will probably be argued fall, late fall of this year.
No one knows how long the decision could be. It could be a month, could be six months, could be eight months that the appeals court takes to decide it. But my guess is probably early 2005, but it could be mid 2005.
Frankly, I expect she'll lose her appeal. She'll go to jail sometime in 2005, but the beginning of the year, end of the year, very hard to tell.
PILGRIM: Does she gain or lose power in her case as the time elapses or not?
TOOBIN: I don't think it really makes much difference. The case is what the case is. You know, people say: Is she trying to appeal to the Court of Appeals' judges by saying one thing or another? I don't think she's focusing at that. She's focusing on reestablishing her business. That's what everything she says in public is about.
PILGRIM: And yet there is this sort of subtext of you may have suffered quite a bit already, with the decline in the stock, the sort of personal agony that she's been going through, which is quite apparent.
TOOBIN: And I don't think that's wrong for the judge to consider. That does matter. I mean, this is a woman who has a good company. This company is an honorable company. It's an excellent magazine. She created it out of nothing. That's an admirable thing. The problem is she threw it away out of stupidity and greed and jeopardized the business she worked so hard to build. PILGRIM: Well, let's talk about the facility where she may go, and, in fact, it's a very big may. She's a white-collar criminal. This is an aberration in this facility, is it not?
TOOBIN: It's -- what's interesting is that she's at a particular disadvantage in being a white-collar woman criminal because there are so few white-collar women criminals as opposed to white collar men, there are very few options that are really minimum security. If you're a male white-collar criminal, you can go to these work camps that are really not very prison-like.
But Danbury, like all women's prisons, is much more geared towards the higher security inmates. She's going to be mostly with narcotics offenders, drug dealers or drug smugglers, and that's a higher security group, less commodious accommodations.
PILGRIM: Thanks for putting it in perspective for us.
Jeff Toobin.
TOOBIN: OK.
PILGRIM: Thank you.
And that bring us to the topic of tonight's poll question: What do you think of Martha Stewart's prison sentence? Is it too harsh, too lenient or just right? Cast your vote at cnn.com/lou. We'll bring you the results later in the show.
Now Martha Stewart will give her first and only live interview to CNN's Larry King. That's on Monday night right here on CNN.
More on Martha Stewart ahead. We'll have a report on what her jail sentence means for her multimillion dollar-media and merchandising empire.
Plus, firefighters struggle to contain wildfires in two western states. We'll have a report from Nevada and California.
And in Broken Borders, new concerns about security on our border with Canada. It is the world's longest undefended frontier.
(COMMERCIAL BREAK)
PILGRIM: Wildfires in two western states have forced hundreds of people to evacuate their homes. Fire officials say years of drought have made the fires dangerous and unpredictable. We begin our coverage in California with Miguel Marquez who is tracking a fire in the Angeles National Forest -- Miguel.
MIGUEL MARQUEZ, CNN CORRESPONDENT: Kitty, this is just one of about a dozen fires burning in Southern California at the time.
It's the pine fire, and we're sort of at the head of the fire right now. The winds have kind of kicked up here. There's a little canyon back in here. There's some homes in there. You can see that the firefighters so far have been able to save those homes, and they've been hitting this area very hard all afternoon with helicopters and the like.
They call this the asbestos range. It's been so long since it's burned, about 80 to 100 years. It's filled with brush, manzanita brush, and it's very oily and burns very hot and fast, and oak and conifer trees in the Lake Hughes area here.
About a thousand people have been evacuated so far. One person's been killed. A firefighter was killed in a traffic accident while leaving this fire. Three have been injured. Three homes have been destroyed, and about another 120 at this point are threatened.
But people who are living in this area are just so pleased with firefighters because they've saved so many. They were praising them today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Those firefighters are just awesome. I'm going to get all choked up. They were up along that ridge there at night, and you could just hear the fire popping. They were up there with saws and everything, just knocking down that fire so it didn't come over the hill.
(END VIDEO CLIP)
MARQUEZ: Now this fire has burned about 14,000 acres, is the last official number we have. Certainly, it's grown bigger today. That was at 6:00 Pacific Time. Their next update will be 6:00 p.m. Pacific Time today.
Yesterday, the scene was said to be 30 -- 50 percent contained. Today, it's down to 36 percent contained. The reason: those dry, windy conditions. The humidity is low. It's about 100 degrees right now.
This fire has jumped the fire line three times in three days. They've been digging a line with dozers for the most part out in front of it, trying to keep it in one place, but the fire -- because the wind is not cooperating and they feel if they can't get a hold of it tonight and the next couple of days, it could burn over these mountains and into the community of Lake Hughes.
PILGRIM: Miguel, how many firefighters are on the scene?
MARQUEZ: Eighteen hundred or so as of this morning. That number has probably grown. They have an enormous base camp just south -- or north and west of here. That's certainly probably over 2,000 at this point -- Kitty.
PILGRIM: All right. Thanks very much.
Miguel Marquez.
In Nevada, a fire with 100-foot flames that is threatening the outskirts of the state capital Carson City. At one point, the fire came within half a mile of the governor's mansion. Ted Rowlands reports from Carson City, Nevada.
(BEGIN VIDEOTAPE)
TED ROWLANDS, CNN CORRESPONDENT: As expected, the fire here in Carson City started to move away from threatened homes by mid morning over a ridge towards the Lake Tahoe area. Firefighters are using an aerial assault to try to stop the movement of this fire.
Overnight, they were able to save about 50 homes in a development area that was threatened. The hope was that the flames would lie down overnight, but they didn't. Firefighters had to actively fight the flames that were shooting as high as 100 feet, consuming more fuel. They were able to save those homes.
Fourteen homes, however, have been completely destroyed by this fire, which started on Wednesday, and, although the wind has shifted now, it is expected that the wind will shift again, and those same homes will again be threatened.
KURT FRONDICK, FIRE INTERAGENCY SPOKESMAN: This afternoon as the winds pick up and go to the southwest, it's going to go back towards those homes again. We're also protecting those homes, setting up strike teams and clearing out that brush as well.
ROWLANDS: It is expected that firefighters will use an air assault for the rest of the daylight hours here. Then overnight, it will be an all-night effort as well as they try to keep these homes safe. Up to now, 9,100 acres have been burned in this fire.
Ted Rowlands, CNN, Carson City, Nevada.
(END VIDEOTAPE)
PILGRIM: Now hundreds of millions of miles from earth, the Cassini spacecraft has captured a dramatic new image of Saturn. This image shows Saturn's rings partially covered by the planet's shadow. Cassini took the picture earlier this month when it was about 900,000 miles from Saturn.
Still to come, your thoughts on Martha Stewart's jail sentence. Our panel of newsmakers will also weigh in.
And we'll also have a report on the impact of today's judgment on Stewart's multimillion-dollar business empire.
Plus, Martha Stewart is just the latest in a growing list of white-collar criminals to face jail time. We'll have a special report.
And some Democrats are calling for the United Nations to monitor our presidential election. We'll tell you why next.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: The White House this week denied speculation that President Bush might replace Dick Cheney on the Republican ticket. Today, the vice president campaigned with the Republican most often mentioned as his possible successor, Senator John McCain. The two spoke at a rally in the battleground state of Michigan. McCain praised Cheney for his decades of public service.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: He's been an indispensable man for three presidents, chief of staff to President Ford, secretary of defense to the first President George Bush, and, of course, a partner to President George W. Bush and one of the most capable, experienced, intelligent and steady vice presidents this country has ever had.
(END VIDEO CLIP)
PILGRIM: In Washington, Democratic presidential candidate Senator John Kerry spoke to the American Federation of Teachers and won its endorsement. Senator Kerry also outlined his plan to reform the nation's intelligence gathering.
(BEGIN VIDEO CLIP)
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL CANDIDATE: As president, I will create a true director of national intelligence, a Cabinet- level position, with the authority to manage and to direct all the components of our intelligence community, to bring all those components together in the most creative and proactive way to protect our nation.
(END VIDEO CLIP)
PILGRIM: Senator Kerry also proposed doubling the number of undercover agents.
Well, President Bush began the day in Florida, the site of the election recount fiasco four years ago. Many Democrats are worried there will be more problems this year.
Ed Henry has the report.
(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want your vote.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Some Democrats still believe Republicans stole the 2000 election, and that bitterness boiled over Thursday on the House floor.
REP. CORRINE BROWN (D), FLORIDA: I come from Florida where you and others participated in what I call the United States coup d'etat. We need to make sure that it doesn't happen again. Over and over again after the election, when you stole the election, you came back here and said, "Get over it."
She said that you stole an election? I believe that those are not -- a coup d'etat.
UNIDENTIFIED MALE: (unintelligible) taken down. She said that you stole an election. I believe that those...
BROWN: In a coup d'etat, and it's a fact.
HENRY: The House did vote along party lines to strike Brown's words from the record. The dispute was sparked by demands from some Democrats that the United Nations monitor the legitimacy of this year's presidential election. But House Republicans passed an amendment blocking U.N. involvement in the American election.
REP. STEVE BUYER (R), INDIANA: For over 200 years, this nation has conducted elections fairly, impartially and ensuring that each person's vote counts. When problems have arisen over the years, by Constitution, authority was granted to Congress in the states to address them, and we have.
HENRY: But Democrat critics are not satisfied, as Florida grapples with questions about its new touch-screen voting machines and faces controversy over a list used to remove felons from the voting rolls.
Jesse Jackson has announced a new initiative to protect black voters in November.
JESSE JACKSON, RAINBOW/PUSH COALITION: A million African- American voters --- a million -- a million -- were disenfranchised -- a million in Year 2000 -- and that must not happen again.
HENRY: John Kerry also weighed in as he addressed the NAACP.
KERRY: We're not only going to make sure that every vote counts. We're going to make sure that every single vote is counted.
HENRY: NAACP officials continue to charge that black votes were stolen in 2000, but the president's education secretary believes the NAACP is trying to stoke the black vote for Democrats.
ROD PAIGE, EDUCATION SECRETARY: Any objective person who looks at this and listens at the rhetoric could draw the right conclusion.
HENRY (on camera): Republicans believe that the United Nations time would be better spent setting up a framework for free and fair elections in nations like Iraq rather than America, but 160 Democrats voted to give the U.N. some role in ensuring the validity of the American election in November. So there's obviously still a lot of concern on that side of the political aisle.
Ed Henry, CNN, Capitol Hill.
(END VIDEOTAPE) PILGRIM: Now back to tonight's top story. Before Martha Stewart was sentenced today, she asked the judge to remember all the good she has done. She built a catering company into a multimillion-dollar media and merchandise empire, but her damaged reputation has had a direct impact on her business.
Susan Lisovicz has that part of the story.
(BEGIN VIDEO CLIP)
STEWART: Perhaps all of you out there can continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines.
SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT (voice-over): Martha Stewart was a media star long before she became a convicted felon, and her first words to the media outside the courthouse were a desperate sales pitch for the company she founded.
BARBARA LIPPERT, ADWEEK: So is Martha Stewart living? Definitely. She got a light sentence if that's the worst of it, and I think the worst of her troubles are over.
LISOVICZ: But Martha Stewart Omnimedia has a lot of financial housekeeping to do.
Ad pages in "Martha Stewart Living" plummeted more than 40 percent the first half of this year, compared to the same period a year ago. Advertisers are notoriously sensitive to a celebrity's public image. A magazine can't exist without ad support.
And her TV show, which was the springboard for the magazine, is on hiatus. But Martha merchandise is more resilient, although the company will be getting smaller royalty payments from Kmart under a new contract.
JEFF SONNENFELD, YALE SCHOOL OF MANAGEMENT: I think the prospects are very strong. I've spoken with the CEOs of partners such as Sherwin Williams, Scotts, and, of course, we know the data on Kmart is very strong.
LISOVICZ: And some Kmart shoppers echoed that.
UNIDENTIFIED FEMALE: I think her jail sentence has nothing to do with the products that are on sale. I think those are two separate issues.
UNIDENTIFIED FEMALE: Well, I think her products are very quality and absolutely would continue to buy them.
LISOVICZ: But perhaps the most dramatic sign of support came from Wall Street where Martha Stewart Omnimedia shares soared 37 percent and was the biggest percentage gainer of the day at the New York Stock Exchange.
(END VIDEOTAPE)
LISOVICZ: The company said in a statement that it sees the sentencing as an important step toward closure for MSO. It also said it continues to manage the company for the long-term with a commitment to preserving its many assets -- Kitty.
PILGRIM: Susan, her stock went up today. She personally benefits quite a bit.
LISOVICZ: Well, that's right. It's more than her name on that stock. She is the biggest shareholder, which is why she'll continue to wield a lot of influence behind the scenes. She netted an estimated $90 million from that rally today. Her total estimated stake now about $354 million.
PILGRIM: All right. Thanks very much.
Susan Lisovicz.
Well, the case against Martha Stewart centered around her sale of less than 4,000 shares of ImClone systems. Now Stewart sold her shares one day before the stock plummeted, and, ironically, shares of ImClone are significantly higher today than when she sold them in December of 2001.
ImClone today closed at $77 a share. That would have put her holdings at more than $300,000, but Stewart sold her stock at about $58 a share for a total of $228,000. So, if she never sold, she would be about $75,000 richer.
Martha Stewart's wealth and fame put her into a very different category of convicted criminals. She's now one of a growing list of infamous felons.
Jen Rodgers has that report.
(BEGIN VIDEOTAPE)
JEN RODGERS, CNN CORRESPONDENT (voice-over): They were rich, they were smart, and they got caught. Hard-charging, driven business leaders, masters of the universe one day, inmates the next.
There's Michael Milken, the former junk bond king, who served nearly two years for securities law violations.
MICHAEL DOUGLAS, ACTOR: Greed, for lack of a better word, is good.
RODGERS: The inspiration for that famous line from the movie "Wall Street" was Ivan Boesky, who also traded in pinstripes for prison stripes for his role in the insider trading scandal.
And Charles Keating, a name synonymous with the savings and loan scandal, served time for convictions that were eventually overturned. He later pled guilty to a bankruptcy charge and was sentenced to time served. After the excesses of the go-go '80s, the next decade delivered its own batch of bad boys as well. Rogue trader Nick Leeson blamed for the collapse of Britain's oldest bank did time in a Singapore prison. He was released early for good behavior.
Steve Madden is up for an early exit as well. The shoe designer is currently serving a 41-month sentence for securities fraud.
More recently, Alfred Taubman, the former Sotheby's chairman was behind bars for his role in a price-fixing conspiracy.
And Sam Waksal, Imclone founder and Martha Stewart friend, went from the penthouse to the big house last summer for insider trading.
UNIDENTIFIED MALE: I've made some terrible mistakes. And I deeply regret what has happened. I was wrong.
ROGERS: High-profile business women have also found themselves on the wrong side of the law.
UNIDENTIFIED FEMALE: If I were a man, they'd say I'm a good executive.
ROGERS: The queen of mean herself, Leona Helmsley was convicted for tax evasion.
UNIDENTIFIED FEMALE: Getting caught is my biggest regret, you know it, come on.
ROGERS: Even the oldest profession in the world has its own CEO star. The Hollywood madam Heidi Fleiss. She went to prison, too.
(END VIDEOTAPE)
ROGERS: Now if Stewart ends up serving time she'll join the ranks of the more than 2 million inmates currently incarcerated in the United States. But of course she'll also become an elite member of this group of criminals from corporate America -- Kitty.
PILGRIM: Jen, Martha Stewart today talked about the media circus surrounding this trial. Have any other high-profile cases attracted this much attention, can you recall?
ROGERS: Well, now that we're in this one it certainly feels unprecedented and everyone is focusing on it. But Michael Milken, Ivan Boesky, and of course Leona Helmsley all really did have the same level of circus if not more around them as well.
PILGRIM: Thinking back, that's exactly right. Thanks very much, Jen Rogers.
Joining me now for more on Martha Stewart's sentence and a lot more are this week's newsmakers. And Simon Crittle has been covering this Stewart case as a correspondent for "TIME" magazine. Steve Shepard is editor-in-chief of "Businessweek" and Richard Wolfe is the Washington correspondent for "Newsweek" magazine and he joins us from our Washington bureau tonight. And thanks very much for joining us, gentlemen.
Simon, let me start with you. It's the dominant story of the day. We've been mesmerized by it. Not just today but for weeks. And this seems to be like a pivotal moment. You were sitting right there in the courtroom. You've also been covering this quite extensively. Tell us your insights into what went on today and why you think it's interesting.
SIMON CRITTLE, "TIME" MAGAZINE: I thought it was really interesting that we saw a slightly different Martha Stewart in court today. When I covered the trial, for six weeks we saw a very defiant woman, a very confident woman, a woman who didn't really think that she needed to be in that courtroom. But today, she was more resigned to her fate. She looked to me like someone who was in pain, who was upset. And when she walked into that courtroom and all those eyes were straight on her, it was really a very awkward moment for her.
PILGRIM: The woman that we saw today, if she had come in initially like that, do you think that the outcome of the trial would have been significantly different? That's very hypothetical but...
CRITTLE: There's an argument to be made if she'd shown some remorse, perhaps it would have lessened the sentence. But she showed absolutely none today. She said that it was a small personal matter. This small personal matter was her line to the government. Selling shares that she got after an inside tip. So it would have been nice to see remorse today.
PILGRIM: And yet the courthouse steps, we did see the strength of the woman who was the entrepreneur who built this business. And Jeff Toobin said, she talked about business on those courthouse steps.
CRITTLE: She certainly did. That was Martha doing what she does best. She's a professional communicator. She got out there and she started talking about what she does. Her business. How she's going to come back from this. So I think we'll see her again, of course. But she's got a painful time ahead of her in the meantime.
PILGRIM: Let me ask Richard Wolf a little bit about the political climate. This case is not just an isolated bubble. It does exist in a political climate where certainly there were some accusations that's being soft on corporate crime, are now well past us when we see Ken Lay in handcuffs, and Martha Stewart today. We see a couple of big fish being paraded out. Perhaps being targeted purposely for -- you tell us what you think, how this plays into the political scene.
RICHARD WOLFE, "NEWSWEEK": Well, John Kerry has already tried to gain some political points here. Not on Martha Stewart so much but on Ken Lay for sure. Saying that the Bush administration has taken way too long to press this case and basically saying a Kerry administration would do it much quicker.
You know, I guess it's a cheap shot but it does get to something that does underlie all of the public attention. It takes a very long time to bring these cases to fruition. Not just the big names, but the little names as well. And in the meantime, small investors lose their money almost immediately. So there is some political importance there. Martha Stewart, less so. I think it cuts both ways. Public sympathy for her. On the other hand, she was a member of the board of the New York Stock Exchange. But, yes, there's political room here for targeting the prosecutors and the Bush administration.
PILGRIM: Steve, what's your thought?
STEVE SHEPARD, "BUSINESSWEEK": This was hardly the most serious of the corporate crimes that we've seen. It was in some sense trivial. But it surely was the stupidest crime. She didn't have to lie to federal investigators in the beginning. If she hadn't, she wouldn't be in this mess she's in. I think more or less justice was done. Some prison sentence, not a lot of time. But I think it was necessary to show everybody that we don't let famous people off. She has only herself to blame.
PILGRIM: Let's broaden out the political discussion now and talk about the political week. Edwards out on his own on the campaign trail. How do you think that worked?
SHEPARD: I think he's doing very well. I think it's an asset to the Kerry campaign for sure. He brings a lot of energy, a lot of charisma, a lot of campaigning skill. He makes John Kerry, when they're together, I think he brings out John Kerry a little bit more, too. It will be interesting to see whether some of the Kerry gravitas transfers to Edwards on the campaign.
PILGRIM: Maybe there's a reverse transfer. Let's talk to Richard about this. In fact, the sunshine boys is kind of your new beat, isn't it?
WOLFE: Right. They were loving each other, kissing, hugging and everything. It kind of made us all feel a bit queasy watching them. But it's true. John Kerry looked much more human last week with the Edwards family there, with his own family. And Edwards, he's a kind of great teacher in how to campaign. It's not that John Kerry can't do this stuff. He can. But it's mixed. And Edwards has these great tricks for connecting with a crowd.
On the other hand his message can be pretty trite. It's about the wonderful opportunities in America all of which is true but it's not a great platform for winning an election at a time of national security crisis and war in Iraq. But they work well together. And they've certainly opened up a new avenue in terms of targeting the Bush-Cheney campaign because of Dick Cheney's problems.
PILGRIM: We would hope that the campaign would be a little bit more grounded than talk about hair-dos after this. It was unbelievably light start to the campaign season. How do you see this progressing? Do you think that they will get into substantive issues and the sort of background of the candidates more, such as Edwards' trial lawyer background and things like this.
WOLFE: Absolutely. They are already into those territories. And remember, one of the strong selling points for John Edwards was to talk about the economy in a way that reaches middle class voters in particular. On trade, on industrial, on the industrial economy, manufacturing jobs. Those are really substantive things that Edwards thinks he can speak to. And on the other side the Bush campaign thinks it clearly is a kind of weakness, given the upturn, limited upturn albeit, in some of the manufacturing sectors.
So there is going to be real debate there on the economic heartland. Those are the swing states. The industrial battleground states. We're going to get into that. Trial lawyer I think plays in certain regions. Much more in the southeast than other parts of the country. But for sure, this debate about the state of the economy and who can protect jobs and who can protect the manufacturing sector. We're going to look at that a lot in the fall.
PILGRIM: So these substantive issues will put the two parties quite at loggerheads. Where do you see this playing out?
SHEPARD: Well, I think a lot depends on where the economy goes from here. The recovery looked very strong in March, April, May. Then we encountered a slow-down in June. There's no question about it, the job creation was much smaller, retail sales plunged, gasoline prices were high, auto sales went down. If that was just a blip, and the economy picks back up again, it obviously helps Bush. If it turns into a more extended slow-down, then Kerry and Edwards can make hay with it. We just don't know yet. It's a little bit puzzling why we have this slow-down.
PILGRIM: So hairstyles aside, it's the economy?
SHEPARD: And Iraq.
PILGRIM: And Iraq. All right. Thanks very much. We're out of time. Steve Shepard, Simon Crittle, and Richard Wolfe, thanks very much for joining us.
A reminder now to vote in tonight's poll question. "What do you think of Martha Stewart's prison sentence? Too harsh, too lenient or just right?" Cast your vote at CNN.com/lou. And we'll bring you the result a little bit later in this show.
Now tonight's thought is on crime and punishment. And here it is. "Let the punishment match the offense." And those words from Roman statesman Marcus Cicero.
Still ahead here tonight, "Broken Borders." It's thousands of miles long and a tremendous challenge for federal agents. We'll have a special report on the U.S. border with Canada.
Plus, stopping human trafficking. President Bush unveils a new plan.
And "Heroes," Camp Pendleton. Camp Pendleton welcomes home the 1st Battalion 5th Marine Regiment from Iraq and they're returning from one of Iraq's most chaotic cities. There's that and a great deal more ahead. Stay with us. (COMMERCIAL BREAK)
PILGRIM: President Bush today called for tough new laws to stop human trafficking. Hundreds of thousands of illegal aliens enter the United States every year. And some of those illegal aliens are forced to come to this country to work in slavery-like conditions. Elaine Quijano is traveling with the president and reports from Beckley, West Virginia.
(BEGIN VIDEOTAPE)
ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): President Bush began his day in Tampa, Florida. Florida, the site of the election 2000 showdown, of course where the president was declared the winner by only 537 votes over Al Gore. And this year around, the race shaping up to be a tight one as well. With the recent poll giving John Kerry the slight edge.
But this morning, President Bush spoke to a conference on human trafficking, on modern-day slavery, a problem that the president says victimizes hundreds of thousands of people worldwide each year. The president highlighting the plight of victims which includes forced prostitution and involuntary servitude in a number of countries, including the United States.
Now this issue is of particular concern to elements of the president's base, including some Christian groups. But as he spoke in Tampa, the president also reached out to the sizable Cuban exile population in Miami by mentioning Fidel Castro.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The regime in Havana, already one of the worst violators of human rights in the world, is adding to its crimes. The dictator welcomes sex tourism. My administration is working toward a comprehensive solution to this problem. The rapid, peaceful transition to democracy in Cuba.
QUIJANO: The president continued his day with a campaign stop in Beckley, West Virginia. Rallying supporters here, he reiterated to the crowds some familiar themes. His justification for the war in Iraq and his efforts to boost the economy, including tax relief. But the president also launched some new attacks against his opponent John Kerry, saying that Mr. Kerry voted against funds to support U.S. troops.
And in this part of the country, where hunting is a big sport, the president also reaffirmed his commitment to gun ownership. Now the president by the way won here in West Virginia back in 2000 over Al Gore. Elaine Quijano, CNN, West Virginia.
(END VIDEOTAPE)
PILGRIM: The longest undefended border in the world is between between the United States and Canada. After the September 11 attacks the federal government stepped up border security. But critics say it's not nearly enough and security must be increased dramatically to stop terrorists from entering this country. Bill Tucker reports from the U.S./Canada border in upstate New York.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Every day the Coast Guard patrols the waters of the Great Lakes and the St. Lawrence River. Chief Alden (ph) and the 28 sailors under his command are responsible for a 100-mile stretch of the St. Lawrence.
UNIDENTIFIED MALE: Our authority allows us to stop any boat up here that is in U.S. waters.
TUCKER: That includes hundreds of recreational boats as well as a handful of commercial ships each day. A daunting task, according to a congressional study of border security.
RICHARD STANA, GOVT. ACCOUNTABILITY OFFICE: This isn't an easy job because bad guys don't tap you on the shoulder and say, I intend to do this or I'm going to do that.
TUCKER: Since 9/11 along the northern border, the number of border patrol agents has tripled to more than 1,000 agents. Five new reconnaissance planes have been added. The Coast Guard has been given new, faster boats with better technology. And there are video phones so that people can voluntarily check in at the border.
The northern border presents a number of unique security challenges. Its sheer size, the number of vast, rural areas and in the winter, the St. Lawrence River can sometimes freeze so solidly, that people can walk across it.
Those charged with guarding the borders are not just relying on new equipment and technology. They've also improved coordination.
CHIEF FURMAN ALDEN, U.S. COAST GUARD: What I've done is I've reached out to the patrol agent in charge (UNINTELLIGIBLE) and I have offered four of my people to help crew his boats which is a force multiplier for him. Now his marine patrol has grown by four.
TUCKER: Arrests along the 4,000-mile border are running about even with last year except in the Swanton sector where arrests are running slightly ahead of last year. Commendable, say the critics, but more needs to be done.
SEN. CARL LEVIN (D), MICHIGAN: Most of the containers that now enter this country are not inspected. We don't have a technology yet which can identify explosive devices at a distance.
TUCKER: Such technology would help secure the borders and assure that the $1 billion a day in commerce between the United States and Canada continues uninterrupted. Bill Tucker, CNN, Mussina, New York.
(END VIDEOTAPE)
PILGRIM: Still ahead tonight, "Heroes." Tonight we pay tribute to 600 marines returning home from one of the fiercest battlegrounds in Iraq. That's next. Then, creating a fair fight for the U.S. aerospace companies in the global marketplace. One U.S. senator has an ambitious plan. We'll have a special report.
(COMMERCIAL BREAK)
PILGRIM: In "Heroes" tonight, a homecoming for 600 marines just returning from Fallujah. They have now been reunited with their families after some of the most deadly fighting at the war in Iraq. Casey Wian has the story from Camp Pendleton, California.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): In the hot sun, they wait for husbands, fathers, and sons returning from Iraq.
UNIDENTIFIED FEMALE: He's Corporal Jeff Starr (ph). He was promoted on the battlefield.
WIAN: They've been waiting since December when Camp Pendleton's 1st Battalion 5th Marine Regiment deployed to Fallujah, Iraq's post- war hotspot.
10-day-old Sean Tate Jr. has never been seen by his father. Rachel and Sean Sr. married just before he left.
UNIDENTIFIED FEMALE: We got married, two weeks later I found out I was pregnant one week later he left, now he's coming back.
WIAN: The wait stretches into its sixth hour. Then in the distance, families hear them coming.
The Marine Corps says this battalion was involved in some of the most intense firefights in around Fallujah.
UNIDENTIFIED MALE: Company dismissed!
WIAN: Amy Springer struggles for several agonizing minutes to find her husband, Lance Corporal Brett Springer. They, too, were married just before deployment and never had time for a honeymoon. Finally, the wait's over.
UNIDENTIFIED FEMALE: Undescribable.
WIAN: Some relatives literally jumped for joy, others simply smiled. Another young mother, another marine seeing his son for the first time.
UNIDENTIFIED MALE: It was hard.
WIAN: How'd she do, you think?
UNIDENTIFIED MALE: She did good.
WIAN: And how did you do?
UNIDENTIFIED MALE: I held up.
WIAN: As did the entire battalion. Many of these Marines were on their second tour of duty in Iraq.
UNIDENTIFIED MALE: We went into it differently. Kind of got into a little situation with Fallujah. But did our job.
WIAN (on camera): While these families celebrate the return of their marines, several others remain in mourning. At least ten members of this battalion were killed while on duty in Iraq. Casey Wian, CNN, Camp Pendleton, California.
(END VIDEOTAPE)
PILGRIM: Welcome home everybody. Still ahead, your e-mails. Plus, thousands of American aerospace jobs are at risk, because of government subsidies to Europe's biggest airplane maker. We'll have a report.
It may be the world's largest rabbit. And we'll tell you why it will not make the Guinness Book of Records. The tale of this giant bunny when we come back.
(COMMERCIAL BREAK)
PILGRIM: Here's a quick update on a story we brought you last night. The House of Representatives said companies that relocate overseas should not be entitled to the same loan guarantees and subsidies as U.S. companies. Lawmakers approved the resolution by an overwhelming 270 votes to 132.
Subsidies in the aerospace industry are at the center of a growing dispute between the United States and Europe. A leading senator says the United States should withdraw from an aerospace agreement with the European Union, because Air Bus Receives massive government subsidies. The American aerospace industry has lost 756,000 jobs since 1989. Philippa Holland reports.
(BEGIN VIDEOTAPE)
PHILIPPA HOLLAND, CNN CORRESPONDENT: Washington Senator Patty Murray is trying to change the way the aerospace industry competes. She says the American aerospace industry is threatened by billions of dollars in European subsidies.
SEN. PATTY MURRAY, (D) WASHINGTON: I think it's time we withdraw from the 1992 aerospace agreement. That will give us a year for Europe to decide whether or not they're going to take this seriously and us to determine what the next steps are.
HOLLAND: NAM agrees.
FRANK VARGO, NATL. ASSOC. OF MANUFACTURERS: Our technology is the best in the world. But you can't compete when your hands are tied behind your back by the fact that somebody else is getting a handout. That's not right HOLLAND: The delegation of the European Commission in Washington responded to Murray's proposal of the U.S. withdrawal from the trade agreement staying quote, "this is a question for the U.S. administration. We have not received any request to renegotiate the agreement, which is not about marketshare, it is about the amount of public support the companies on both sides can receive."
The U.S. Congress just repealed the Extra-territorial Exclusion Act to avoid paying $4 billion in tariffs. But lawmakers have taken no action to address the billions of dollars in subsidies the European aerospace industry receives. Phillipa Holland reporting for LOU DOBBS TONIGHT.
(END VIDEOTAPE)
PILGRIM: Well, the government has nothing to do with our next story. It's a story about a giant rabbit. The huge rabbit weighs in at nearly 30 pounds and it's three and a half feet long. And its owner Annette Edwards says the rabbit is the biggest in the world. But the Guinness Book of Records cannot verify that claim and it says it no longer hands out the biggest animal titles, because that might encourage people to overfeed their pets.
Let's take a look at your thoughts. And many of you wrote about Martha Stewart and the sentencing. And Robert Pounders of Astoria, Oregon writes, "if you're rich and powerful you can get away with white collar crimes. Five months is an insult to all good hard- working Americans who don't break the law."
William McBride of Loveland, Colorado writes, "they were out to get Martha Stewart and they got her. They wanted to make an example out of her because she is a woman and rich. She was convicted of lying about something she was never convicted of, insider trading."
We love hearing from you. Email us, loudobbs@cnn.com.
Still ahead, the results of tonight's poll question.
(COMMERCIAL BREAK)
Now the results of tonight's poll. More than half of you think Martha Stewart's prison sentence is too harsh.
Thanks for joining us tonight. Please join us on Monday. We begin a series of special reports: "Mission Critical" on the future of America's space program.
For all of us here, good night from New York. Have a great weekend. "ANDERSON COOPER 360" is next.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
