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Jerusalem: Agreement Reached in Bethlehem

Aired May 08, 2002 - 20:00   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.
CATHERINE CALLAWAY, CNN ANCHOR: We do have a new development now in the situation at the Church of the Nativity in Bethlehem. Let's go right to Wolf Blitzer with the very latest -- Wolf.

WOLF BLITZER, CNN CORRESPONDENT: Catherine, as you can see, they are now beginning to walk out of the Church of the Nativity after more than five weeks, this standoff. With the exception of 13 individuals described by the Israelis as senior terrorists, it looks like the others are beginning to leave. This is the first batch walking out right now.

You're looking at these live pictures from Manger Square at the Church of the Nativity. A group of individuals with priests beginning to leave. It looks like the agreement is completed. We had spoken only a few minutes ago to a representative, a spokesman of the Israel defense forces who confirms to CNN that with the exception of those 13 individuals, all the others, the priests, the nuns, the monks, the civilians, the others accused by Israel of being terrorists who will be sent to the Gaza Strip, they will be leaving. The final arrangements worked out over the course of these past several days. What happens to those 13 so-called senior terrorists, they will remain apparently inside the Church of the Nativity for the time being, until a final destination for them could be worked out. There had been lots of speculation that they eventually would wind up in Italy, but the government there has decided at least for now not to accept them.

Once again, you're looking at these live pictures from Manger Square at the Church of the Nativity where the standoff appears to have been resolved. Our senior international correspondent Walter Rodgers has been there now for the past several days. He joins us live.

From your vantage point, Walter, tell our viewers what you're seeing, what you're hearing.

WALTER RODGERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, I'm not sure that the first people out are the Palestinians inside. What I'm looking at, and I have a pair of binoculars closely trained on it, I can see two Orthodox priests, a Roman Catholic priests, what appear to be the Palestinian negotiators. The reason I am skeptical that these are some of the people inside the church is because they have not passed through any metal detectors. Indeed, the group of people that we're looking at appear to be returning to the Palestinian Peace Center, which the Israelis have turned into their military command post here on the fringe of Manger Square. Again, I'm looking at those people. I see two Orthodox priests and one Roman Catholic Franciscan priest. The others I'm looking at are the Palestinian negotiators we've seen time after time.

So I think it's a bit premature to say that those who emerge from the church are Palestinians who had been inside the church. Again, they did not pass through any metal detectors. These were the Palestinian negotiators and the clergy who we've seen shuttling back and forth for days now. And again, they are standing outside the Israeli Military Command Center, now the Palestinian Peace Center, again on the fringe of Manger Square. But I do not believe those are the Palestinians or any of the people who had been inside the church and hostage - Wolf.

BLITZER: Walter, we do see some hugging, some kissing going on from these live pictures. We're showing our viewers around the world right now, the priests who have emerged, and as you say, presumably some of those who have been negotiating the freedom, the release of more than 100 individuals inside.

We have been told officially, Walter, by a spokesman for the IDF, the Israeli Defense Forces that the deal is done and the release of these people inside is imminent. Walk us through, Walter, while you can, what do you know about if in fact over the next few minutes the individuals inside are freed? What is the procedure to go through metal detectors and where will they be escorted to?

RODGERS: Well, through our camera lens, you should be looking at the Door of Humanity, which is the principal entrance to the Church of Nativity in Bethlehem's Manger Square. Now, that Door of Humility is so-called because it's been reduced in size over the years. It was a much larger door. The original door there was a crusader arch. The monks, through the middle ages, reduced the size of the door because the church had at so many times been under siege and they wanted to reduce the ability of the Muslims to get inside the church, that is the Muslim crusaders.

Now, what you're looking at now is a priest walking back and I believe that is -- it is a Franciscan. He is walking back into the church. You'll see three screens, privacy screens there. Those are actually shielding our visibility of the entrance. We know the Israelis put those privacy screens up.

When the people inside the church emerge, the 85 who are to be set free plus the 26 Palestinians who are to go to Gaza for confinement, they will pass behind those screens and then to the right of the camera. There's a long canyon of police barricades there immediately to the right. They will pass through a metal detector, the kind you and I would pass through if we were checking into an airplane flight. One metal detector and then a second. They'll walk the full length of that blue Israeli police barricade and then, as they come out, they would turn right to our left, and walk through another channel there where there would be buses waiting below on the street, which comes closest to Manger Square.

But again, the only people who have emerged from the church within the last five minutes are members of the clergy who have been negotiating as well as the Palestinian negotiators. There were half a dozen of them. You can see them talking on yell phones, but at this moment, all of the 123 people who remain inside the church, including the Palestinian hard core fighters to be deported, are still inside the church - Wolf.

BLITZER: We can see pictures, live pictures, Walter, of IDF soldiers, Israel Defense Force, personnel shaking hands with some of the priests who are outside. They clearly are awaiting the steps that will result in the departure of those inside, shaking hands, congratulating themselves, if you will, in these live pictures. You see one priest standing outside that door where the individuals will be emerging.

And as Walter Rodgers just reported, they'll be going through a series of metal detectors to make sure that individuals inside won't be coming out with weapons or anything else presumably that could endanger anyone outside of the Church of the Nativity. This standoff has been continuing now for some five weeks, the standoff that began with more individuals inside. Some have been released over the course of the past week or two, but of course, the big number still remain inside.

The difference between the 13, Walter, that will be exiled, presumably, if they can find a location outside of Israel or the West Bank or Gaza, the Israelis say they are hard core members of the al Aqsa Brigade. We're seeing some more individuals walking out right now. They're described, Walter, as individuals who are hard-core terrorists by the Israelis, aren't they?

RODGERS: Wolf, that's the case. It now appears as though the priests may be bringing out one of the first people to emerge from the church who is not part of the negotiating team. We can't recognize him. There are 10 peace activists in there, who are not considered a threat by any stretch. The others whom you describe, the 13, are members of Hamas, the Islamic militant fundamentalist group here in the Palestinian areas, also members of the al Aqsa Brigade, also members of Islamic Jihad. These are people the Israelis call terrorists and they, according to the Israelis, are senior terrorists.

Again, I'm watching that individual coming out. No, he is not someone who's been inside the church and was considered suspect by the Israelis. He appears to have a cell phone in his hand. So it still appears that the people who have been trapped inside that church, some of them who, of course, were willingly there, the people inside the church remain there. The only ones coming out continue to be a few members of the clergy and the Palestinian negotiators.

By the way, members of the clergy, this are 26 priests inside the church and four nuns. Remember, the Church of the Nativity is shared in terms of its sovereignty and custody, three ways. The Roman Catholics own or have custody over a third. The Armenian and Greek Orthodox have the other two-thirds.

Again, it does not appear, at this point, as if any of the 123 inside are coming out. And we know, of course, as you've been pointing out that 13 will not be coming out at all, at least not until later in the day here. And remember, it is almost day here in Bethlehem. The reason being that no country has yet stated a willingness to accept them. The British, the American and the Israeli and Palestinian negotiators actually crafted an agreement by which they said that those inside the church, the 13 hard core Palestinians, who were to be deported would go to Italy. The problem was, of course, the Italians were not kept very closely in the loop. And they, when it was announced that the 13 Palestinians would be going to Italy, were more than a little disjointed. Indeed, they were quite furious that the Americans and the British did not include them in the negotiations. The Italians, Prime Minister Silvio Berlusconi, complained that he did not know the details of the confinement by which these Palestinian deportees would be sent to Italy. He didn't know, for example, if they were to go to prison. He did not know if they were to be set free. He -- one of the Palestinian - one of the Italian diplomats said, in fact, that there was a possibility they might even be sent to a convent, although I think he was being facetious at that point. So the Italians, again, suffering from pique said, no, we're not sure we want these people and certainly not all of them.

Now, we know that the U.S. Secretary of State Colin Powell made two calls, two telephone calls to Prime Minister Berlusconi and I think implored him to take these Palestinian deportees. Again, the Italians resisted or at least resisted taking all of them.

The Spanish were brought into the loop and into the negotiations. Recall the Spaniards are holding the resolving presidency this year of the European Union. The Spanish were willing participants, but they have not agreed to take any of the remaining 13 yet, although there remains the possibility that the Spanish will take some of the 13. That way the total onus might be off of the Italians. The Spanish might take some, but again, none of that is a done deal. That's why 13 of the hard core Palestinians are staying inside the church. Israel wants them out, but they have no place to go at this point - Wolf.

BLITZER: Walter Rodgers, stand by. You're in Bethlehem. We're showing our viewers around the world these live pictures from just outside the Church of the Nativity. We're told by a spokesman for the Israel Defense Forces, as well as a priest inside the Church of the Nativity, that a deal has been worked out. The individuals inside, with the exception of 13 Palestinians, accused by Israel of being senior terrorists, they will be leaving shortly to go on their way -- some 20-odd Palestinians will be exiled to Gaza, if you will. They'll be forced to go to Gaza. Thirteen others will remain in the church for the time being.

We're going to continue to monitor this situation and we're going to take a quick break. When we come back, more on the standoff at Church of the Nativity. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our breaking news coverage of what's happening at the Church of the Nativity in Bethlehem, Manger Square. A deal has been worked out that will allow all but 13 of those individuals inside the Church of the Nativity -- they've been in there for more than five weeks -- to emerge. We're expecting that deal to be implemented shortly.

We've spoken to a spokesman for the IDF, the Israel Defense Forces, as well as one of the priests, one of the Christian priests inside the church where this deal has been resolved only a few moments ago. We saw live here, on CNN, pictures of priests walking out, congratulating themselves, shaking hands with Israeli soldiers, clearly smiling, pleased by what appears to be developing right now. Our Walter Rodgers is once again on the scene in Manger Square near the Church of the Nativity in Bethlehem.

Walter, give our viewers in the United States and around the world an update.

RODGERS: Wolf, right now, we're looking into Manger Square, which is very, very quiet. As you said, in the past 20 minutes or so, Palestinian negotiators emerged from the church with both Roman Catholic and Greek Orthodox priests. They came out. They shook hands with the Israeli soldiers. Obviously, everyone's feeling a considerable sense of relief because the end is now in sight of this more than five-week siege.

Israeli armored personnel carriers remain in the Square, in Manger Square, but the large Merkava (ph) three tank, with its 320- millimeter gun, was removed several hours ago. That was not the sort of picture that the Israelis wanted to convey, a tank with its main gun pointed at the Church of the Nativity, the traditional site of Jesus' birth.

It should be pointed out, however, this church has been fought over through the centuries. It was built in 333 by the Emperor Constantine. And it was destroyed under the Emperor Justinian in the year 530, in the Samaritan Revolt. Now, even after it was rebuilt, in 530 and some of what you're looking at goes back to 530 C.E. or 530 A.D. depending on which calendar you count by, some of that Church has been since the Justinian reconstruction of the church. But throughout the Middle Ages, there have been of course Muslim invasions, particularly the Persian invasions of the holy land. And this church has been fought over in those times later by the crusaders trying to wrest control of the traditional site of Jesus' birth from the Persians.

We've talked considerably about the Door of Humility, that small entrance to the Church of the Nativity, which by the way is the main entrance. It is small, but that is not the original door. The original door was a crusader's arch about four or five times higher. However, the monks, the Christian monks, inside that church in the Middle Ages realized that the church would become much more defensible if indeed they bricked up the large entrance. And they used, of course, the limestone blocks so traditional in this part of the world, to make a much smaller entrance and consequently, the reduced entrance, that small Door of Humanity, became much more defensible, both against the Muslim invaders at the time and also defensible against looters. There's one fascinating story -- inside the Church of the Nativity, there are old frescoes there. One of those frescoes that existed in the Middle Ages -- they're very faded these days -- but one of those frescoes pictured three wise men. The three wise men referred to in Matthew and Luke, who came to the church to worship, came to the area where Jesus was born to worship the infant Christ child. The crusaders -- excuse me, the Persian invaders, that is, the Muslims, who had sacked so much of the holy land and destroyed so many churches took one look at that fresco inside and said, those fellows with the beards are just like us and thus, they did not destroy the church. Consequently, the church did survive in its -- more or less in its present form since 530 - Wolf.

BLITZER: All right, Walter Rodgers in Bethlehem, stand by. We're going to continue to monitor this situation in Bethlehem. We're awaiting the departure of more than 100 individuals inside the Church of the Nativity. We're told that a deal has completed. All but 13 of those inside -- they've been inside for more than five weeks -- will be leaving shortly. Once they do, of course, we'll be bringing that to our viewers in the United States and around the world.

It's approaching 3:30 in the morning in Jerusalem as well as in Bethlehem. Beyond what's been going on in Bethlehem, it's been a day of dramatic involvements throughout the Middle East. This crisis in the Middle East has seen important developments. Let's take a look at some of them, of course, that resulted from that suicide bombing just south of Tel Aviv only yesterday.

The bombing caused the Israeli Prime Minister Ariel Sharon to rush home for an emergency cabinet meeting. That session ended about an hour ago. The cabinet authorizing the prime minister and the defense minister of Israel to take whatever steps are necessary soon to fight terror. The Israelis are not the only ones who are weighing their response to the suicide bombing. Also, the Palestinian Authority President Yasser Arafat has issued what many are calling a surprisingly strong reaction.

During a televised speech in which he spoke in Arabic, Arafat said he is ordering his security forces to confront and prevent any terror attack against Israeli civilians from any Palestinian side. President Bush called Arafat's statement - quote -- "an incredibly positive sign." Those words of praise delivered at the start of a White House meeting with Jordan's King Abdullah. Mr. Bush also says he's sending the CIA director, George Tenet, back to the Middle East as early as next week to help the Israelis and the Palestinians resume security negotiations.

As we said, Israeli leaders are continuing -- have been continuing to consider what their next steps would be. All of this as a result of that suicide bombing in Rishon Letzion, just south of Tel Aviv only yesterday. Fifteen people were killed in that blast, nearly 60 others injured, many of them severely. But as our Carol Lin reports, those numbers do not tell the story of the sorrow.

(BEGIN VIDEOTAPE) CAROL LIN, CNN CORRESPONDENT (voice-over): The explosion took only seconds, 15 dead, 60 wounded. The numbers don't really reveal what's lost.

Dalia Mussad (ph) was only 46. A chef at a local boarding school was killed at the pool hall. She did more than cook for her students, who face their first meal without her.

HEZI YOSEF, COLLEGE PRINCIPAL: She was everything to the children, friend, mother, and if one of them needed something, Dalia (ph) was there.

LIN: She probably died instantly in the blast that happened in an unlikely place, a gambling hall on the third floor of this building. This suicide bomber chose to strike high above the ground level.

(on-camera): According to witnesses, this is the path he took once he got to the third story. He went past these billiard tables here. You can see a lot of the damage and debris from the explosion itself. He walked past the people who were playing at these pool tables here. He stood in this very spot right here. Apparently, he had in his hand a suitcase. When he opened up the suitcase, that's what triggered the explosion.

And take a look around. We're going to show you the massive destruction here. You can see some of the slot machines. They were originally turned over. Investigators put them back up on their feet. The charred remains of the pool hall there, the ceiling tiles hanging down. There were bodies everywhere.

(voice-over): There was no security guard, because customers knew each other by face, leading investigators to believe the bomber had to be a regular client. Yes, people in Rishon Letzion heard that the Palestinian Authority condemned this attack. That makes no difference to the mayor.

MAYOR MEIR NITZAN, RISHON LETZION: I am very sorry to say, I heard it so many times from President Arafat, from Chairman Arafat, that I don't believe it. He's a liar. He is lying all the time, to all the public, to all the world and we know him very, very well. He's lying.

LIN: And for Dalia Mussad's (ph) family and friends, there is only fear...

DANNIELLE GWADO, STUDENT: But now, it's close. It's near and it's like our eyes are open now much better than it was before. And now, we're like we have to go through every day knowing that one of us can be next.

LIN: She and her classmates don't hear the political uproar over this latest attack only the silence of losing a dear friend.

Carol Lin, CNN, Rishon Letzion.

(END VIDEOTAPE)

BLITZER: And one day after the Rishon Letzion blast, there was another blast in northern Israel, but this one obviously not nearly as destructive. It occurred near a bus station in the town of Afula, just southeast of Haifa in northern Israel. Police say the bomber was badly hurt, but he failed to inflict serious injuries on anyone else. The explosives may have gone off prematurely according to Israeli police.

Fearing the injured man might have more explosives; an Israeli bomb squad used a robotic arm to drag him across the highway before police approached. He is now in an Israeli hospital.

Meanwhile, in Bethlehem we're continuing to watch the pictures from Manger Square at the Church of the Nativity. We're told that a deal has been struck and perhaps very, very soon, more than 100 individuals will be leaving that church for freedom. Thirteen Palestinians, described by Israelis as senior terrorists, will remain at least for the time being inside the Church of the Nativity.

When we come back, we'll go to the White House where President Bush has been following all of these developments very, very closely. Our John King will join us live. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: But first, time for your opinion. Do you think fresh military action would be justified after the latest suicide bombing? To take the quick vote, head to CNN.com. The AOL keyword is CNN.

BLITZER: Welcome back to our continuing coverage of the standoff at the Church of the Nativity in Bethlehem where we're told a deal has been struck. More than 100 individuals will be leaving that church shortly.

We just spoke, in fact, to one of the Palestinians who will be transferred to Gaza. He says they've been told to prepare themselves, to get ready. They're hugging each other. They're kissing each other. They're saying it's time to leave. All but 13 will be leaving. Those 13, the Israeli government, the Palestinians, others involved including the United States, looking for some country where they can be exiled. Apparently, that has not been done yet.

Officials at the White House are watching all of this very, very carefully. Our senior White House correspondent John King has been following all of these developments and more - John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Wolf, obviously a resolution of this standoff at the Church of the Nativity would be welcomed here at the White House. But the president also know there are much bigger issues before him as he tries to keep his recent diplomatic push going in the aftermath of yesterday's suicide bombing. Officials here at the White House hoping it does not set them back too much.

King Abdullah of Jordan here tonight. He met in the Oval Office with President Bush. He also had dinner with him here at the White House.

U.S. officials say the next few days should be very telling, as the administration tries to determine whether this latest suicide violence and the angry response by the Israeli prime minister, causes just a temporary setback or a total collapse of the president's recent diplomatic push.

(BEGIN VIDEOTAPE)

KING: The president had rare words of praise for Palestinian leader, Yasser Arafat.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I was pleased to read the transcripts of his call against terror in Arabic. I was most pleased that he did that. I thought that was an incredibly positive sign.

As you know, I've been one who he has disappointed in the past. And therefore, I hope that his actions now match his words.

KING: Suicide bombing cannot be allowed to derail diplomacy and both know Israel's response is the next big question.

BUSH: Whatever response Israel decides to take, my hope of course is that the prime minister keeps his vision of peace in mind.

KING: King Abdullah says the suicide bombers win if diplomatic efforts collapse.

ABDULLAH: We'll discuss the views this evening and maybe see if we can find a roadmap to have America's support to the Israelis and Palestinians the peace that they deserve.

KING: But the Bush team is skeptical it can find consensus on such a roadmap. Prime Minister Sharon returned home angry, says any talk of negotiating a Palestinian state is premature, any talk of direct Israeli negotiations with Mr. Arafat out of the question.

Yet Arab leaders, like King Abdullah, say Mr. Arafat must be involved and that there is no reason for talks unless the top priority is an independent Palestinian state.

(END VIDEOTAPE)

KING (on camera): And because of that impasse, senior Bush Administration officials telling CNN tonight plans for that early summer conference on the Middle East now in doubt, hinging perhaps on what Prime Minister Sharon and Chairman Arafat say and do over the next several days. Wolf.

BLITZER: John King at the White House, thank you very much. Let's recap a developing story, a breaking story out of Bethlehem, where we're awaiting the departure of more than 100 individuals, priests, monks, other civilians inside, including some 26 Palestinians who will be heading towards Gaza. Thirteen Palestinians described by Israelis as senior terrorists will remain inside the Church of the Nativity, at least for the time being, until they can find a home exiled outside of this area at some point down the road.

We'll continue to monitor that situation. We'll bring you the news as soon as it materials. I'm Wolf Blitzer in Jerusalem. LIVE FROM BOSTON with Miles O'Brien begins right now.

ANNOUNCER: Boston's Cardinal Bernard Law under fire, and now under oath.

(BEGIN VIDEO CLIP)

UNIDENTIFIED CORRESPONDENT: I hope he's honest. I hope he isn't evasive. I hope he can give us straightforward answers and come clean.

(END VIDEO CLIP)

ANNOUNCER: The latest questions, how church leaders handled sex abuse allegations against priests, and what the church may have to do to pay for its mistakes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you think the cardinal, if he wants to, can sell individual church parishes to make money for the settlements?

CHUCK COLBERT, NATIONAL CATHOLIC REPORTER: I think he would think about consolidating some parishes.

(END VIDEO CLIP)

ANNOUNCER: Plus, what's being done to restore confidence in the clergy?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The participants watched videos featuring actors portraying sexual abuse victims and are told in no uncertain language to encourage their parishioners not to be shy about their concern.

(END VIDEO CLIP)

ANNOUNCER: LIVE FROM BOSTON, CRISIS IN THE PRIESTHOOD, now CNN's Miles O'Brien.

MILES O'BRIEN, CNN CORRESPONDENT: Good evening from Boston from the Cardinal's residence where it was an extraordinary day. A prince of the Roman Catholic Church, Bernard Francis Law, strode into a courtroom here in Boston, raised his right hand and swore to God he would tell the truth about a burgeoning priest sex abuse scandal.

The question is what did the cardinal know? When did he know it? The lawyer who requested the deposition today said the cardinal seemed sad and quiet. Whatever his mood is tonight, this deposition, some 140 pages is not being combed over with a fine tooth comb all around this heavily Catholic city, and one of the people who's been looking at it for us is CNN's Jason Carroll.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT (voice over): Boston's embattled Cardinal Bernard Law left Suffolk Superior Court, after being questioned for the first time under oath about what he knew about defrocked priest John Geoghan and when he knew it.

Mitchell Garabedian, the attorney representing 86 plaintiffs in a civil suit filed against the archdiocese said Law suffered from a case of selective amnesia during his deposition.

MITCHELL GARABEDIAN, ATTORNEY FOR GEOGHAN'S VICTIMS: He's not going to admit anything that he thinks may hurt him, even if it's the truth.

CARROLL: Garabedian showed Law a copy of a letter sent to him in 1984 by a woman who claimed her nephews were molested by Geoghan. Law had initialed the letter and wrote a note to his bishop saying: "Urgent, please follow through." Law could not recall receiving the letter, but he later admitted when he knew about Geoghan's troubled past.

Question: As of September of 1984, were you aware that Father Geoghan had a history of homosexual involvement with young boys?

Answer: I was aware that there was involvement because, because of the, of having removed him out of one parish and putting him between assignments before sending him back to another.

Geoghan was moved to several parishes over the years, even though there were allegations he was sexually abusing children. Law defended his actions, saying Geoghan received psychological treatment.

Answer: I was relying upon those assisting me to handle this adequately, and I was relying on their discretion in terms of the medical expertise.

Question: Did you have any system in place to make sure that the right medical experts were involved?

Answer: No.

Geoghan was convicted earlier this year of molesting a young boy, but he's accused of abusing scores of children. One of his alleged victims was allowed to attend the deposition. Mark Keane said he felt Law was dishonest under questioning.

MARK KEANE, ALLEGED ABUSE VICTIM: I was a little intimidated at first. He came on very soft spoken. He is a very good talker. Not to compare him with Father Geoghan, but I experienced soft-spoken good talkers before and look where it got me.

CARROLL: Why was Law giving such a deposition? A judge ordered it after the archdiocese backed out of a multi-billion dollar settlement with the same 86 plaintiffs.

(END VIDEOTAPE)

CARROLL (on camera): And the Archdiocese of Boston released a statement after the deposition, saying that Cardinal Law fully answered all the questions that were asked of him and that he would continue to participate in future depositions, and that he was looking forward to resolving this in a fair and equitable manner. The next deposition, Miles, is scheduled for Friday.

O'BRIEN: Jason, let me ask you about one question, which kind of struck me in the course of this deposition. The cardinal was asked if he was also, in addition to being a citizen of the United States, a citizen or subject of the Vatican, to which he applied affirmatively and that was an interesting question. Give us a sense of what the attorneys might be interested in, in asking that question.

CARROLL: Very interesting indeed. During the deposition, Cardinal Law said that he had just learned within the past week or so that he was, in fact, a citizen of the Vatican State and the judge who is hearing the civil case had raised concerns about this last Friday.

She had said that she felt as though it might be better to depose Cardinal Law sooner rather than later simply because at any time, the Pope could call him back to the Vatican and then it would be very difficult to depose him in this matter. Miles.

O'BRIEN: So it's possible there could be diplomatic immunity in this case?

CARROLL: Absolutely, without question. I mean at that point, it would become a matter of international law and you can imagine at that point, how difficult it would be for an attorney to try to get him deposed. But I should point out that the Archdiocese of Boston has indicated all along that Cardinal Law would be available any time he was asked to answer questions under oath. Miles.

O'BRIEN: CNN's Jason Carroll at Suffolk Superior Court, just a few miles from where I sit. In addition to the deposition, which we've been telling you about, we've been tracking some other legal dockets in and around the Boston area today.

In Haverhill, Massachusetts, about 35 miles from where I sit right now, another case was the focus of attention, the arraignment for ex-priest Ronald Paquin. He pleaded not guilty to allegations he allegedly abused a teenage boy as many as 50 times in the early '90s.

The incidents occurred in a Haverhill cemetery, many of them. Paquin had befriended the family and was viewed as a father figure. Paquin also figures in a lawsuit filed by parents of a teenager in a 1981 car accident in which Paquin was driving.

Now at the time of his arrest, there was a moving van outside his home, concerns about fleeing in that case. He's being held on $100,000 bond. Another former priest due back in court tomorrow to ask that his bail reduced, that courtroom in Newton, Massachusetts. The judge set bail for Paul Shanley, you'll recall, at three quarters of a million dollars, after he was extradited from San Diego, California. Shanley has pleaded not guilty to the alleged rape of a boy in the 1980s here in the Boston Archdiocese. Attorneys say church officials also moved Shanley from parish to parish to cover up the series of sex abuse candles as in the Geoghan case.

Now the stage was set for today's dramatic deposition on Friday, when Cardinal Law's finance committee, his financial advisers told him to pull out of a proposed $30 million settlement with the 86 plaintiffs. The financial committee told the cardinal the church simply could not afford to pay it out because of the possibility that there might be other claims.

Now the Roman Catholic Church, as you well know, is a very wealthy institution. The problem is it has a bit of a liquidity problem, and that is leading the men of the cloth to consider some very drastic actions here. We get more on this story from CNN's Gary Tuchman.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice over): It's an impressive piece of land, 44 acres in the Boston neighborhood of Brighton. On the grounds, magnificent buildings where Boston's Catholic leader Cardinal Bernard Law lives and works.

CHOBEE HOY, REALTOR: If it were on the market today, that would be really an exceptional offering because of the amount of the land in the location where it is.

TUCHMAN: The Boston church says it's considering selling or mortgaging some of this property to raise money for financial settlements with sexual abuse victims. The church says it owns 16 of the 44 acres. The other 28 acres it claims it can not touch because it's controlled by a seminary.

GARABEDIAN: I really don't think they're coming clean. I have absolutely no reason to think they're coming clean at this point in time.

TUCHMAN: Mitchell Garabedian is the attorney who represents 86 people who say they were victims of convicted molester John Geoghan, a defrocked Boston priest, and he believes the church controls more assets than it's letting on.

For example, the parishes and the real estate they sit on. This is the St. Paul Church in Cambridge. It sits on valuable real estate in Harvard Square. It's monsignor says he only knows this property is worth many millions of dollars, and the legal papers for the church are in the name of the Archdiocese of Boston.

Do you think the cardinal, if he wants to, could sell individual church parishes to make money for the settlements?

COLBERT: I think he would think about consolidating some parishes. There has been some talk of that already. TUCHMAN: But church leaders who did not want to go on camera for this story, say they can not do that. Under church law, they say, parish property falls under the parish. It can not be sold by the archdiocese for such a purpose.

In the archdiocese, the latest figures indicate there are 901 priests. Those priests have 362 parishes. There are also 126 parochial schools and 11 Catholic hospitals, the archdiocese says are also controlled by local parishes, and therefore can't be touched.

This mansion on Cape Cod has links to the archdiocese. The church says it's owned by a clergy retirement disability trust, and the cardinal is a trustee, but as a trust, it is not considered an asset and therefore the church says it has no right to sell it.

The church says it does own some other properties free an clear, but as of yet, won't say what or where they are. The church does have another type of asset, insurance and credit.

GARABEDIAN: They have a lot of insurance here, a lot of liability insurance for the supervisors, millions of dollars. Secondly, they have a $20 million line of credit with Fleet Bank that's in existence right now. It's a $20 million credit card. If they wanted to do the right thing, they would do the right thing and use that money to pay the claims.

TUCHMAN: The archdiocese says the credit line is nowhere near $20 million, and that the liability insurance has been earmarked for claims.

TUCHMAN (on camera): But the church may ultimately need more money, and that could open up a legal can of worms when it comes to the very complicated holdings that, at the very least, are linked to the Boston church. Gary Tuchman, CNN, Boston.

(END VIDEOTAPE)

O'BRIEN: Complicated and secret, the Catholic Church in general is not an institution which is very open to the public or to the laity. "Business Week" magazine has looked into this and they have given us a sense of what this is all about. We have an actual lead story or a cover story from "Business Week" magazine from two weeks ago, where an exhaustive study was completed about this particular issue.

Bill Symonds is the Boston Bureau Chief for "Business Week." He joins us now to talk a little bit about this. Bill, we don't - thank you for being with us first of all.

BILL SYMONDS, BOSTON BUREAU CHIEF, "BUSINESS WEEK": Thank you.

O'BRIEN: We don't want to overstate it, but give us a sense, and I know you've had to really read the tea leaves, if you will, to get a sense of the financial dealings of the church, but if you could give us a sense of how much financial trouble the church is facing right now. SYMONDS: Well, it's facing financial trouble on two fronts, Miles. On one front, it's facing a growing wrath of legal claims, which attorneys say already amount to a billion dollars the church has paid out.

The other problem is that angry Catholics are beginning to withhold contributions from the church and those contributions are actually the very life blood of the church.

O'BRIEN: All right, let's talk first of all about the possible payouts on some of these settlements. One estimate in this article, which you edited and wrote, indicates that there might have been a billion dollars in payouts and legal fees already on cases going back to 1985. How much lies ahead? I know that's asking you to predict the future, but give us a sense of how big a claim it could be.

SYMONDS: It could be massive. Some attorneys in Boston think there could be several billion dollars in additional claims, and frankly the church doesn't have that much money.

O'BRIEN: All right, when you say the church doesn't have much money, it's the largest landholder in the world, as I'm told, or certainly up there. It's a liquidity issue. I mean -

SYMONDS: That's right.

O'BRIEN: What we're sitting in front of could be sold for many, many millions of dollars, right?

SYMONDS: That's right. It's a liquidity problem. The problem is that the church has vast real estate holdings. It also has probably the world's best art collection. The problem is that a lot of that stuff can't be sold. In terms of actual financial resources, those are very limited.

O'BRIEN: And it's very (UNINTELLIGIBLE). In other words, each archdiocese is separate. You can't bring a claim against the church as a whole, can you?

SYMONDS: That's right. That's one of the things that people don't understand about the Catholic Church. Here in this country, there are 64 million Catholics. There's actually 194 different diocese and each of those is separate. Also, right across the street from where we're sitting is Boston College. That is also separate from the archdiocese, so someone who has been abused by a priest can not sue Boston College and collect damages from them.

O'BRIEN: Speaking of Boston College, it's possible they might buy this very property here and that would generate many millions of dollars, well into the eight figures, perhaps even more. Would that be a solution for this particular archdiocese, which might possibly face bankruptcy?

SYMONDS: That would be an excellent solution for this archdiocese. As a matter of fact, Boston College has already said they'd be interested in buying this land because they're too cramped on their existing campus.

O'BRIEN: Give us a sense then of the possibilities. Are we likely to see archdiocese across this country filing for bankruptcy as these claims continue?

SYMONDS: Well, you know, there are many possibilities at this point, Miles. It depends on how it plays out in the court system. I think one thing that goes beyond dispute though is that the church is going to have to cut back on its activities.

Here in Boston, Catholic Charities, which is the largest charity in the state, has already had to lay off 15 percent of its people because of falling contributions and government aid.

O'BRIEN: And just briefly, do you think they'll become more - will they come clean? Will they offer some more information to the public about their financial dealings?

SYMONDS: I think eventually they're going to be forced to do that. They're going to have to become more like other charities and other organizations to deal with the public.

O'BRIEN: Bill Symonds, who is the Boston Bureau Chief for "Business Week." This is the cover story that came out April 15th. He was ahead of the curve on this story. Thank you very much. It's an exhaustive look at the financial dealings of the Roman Catholic Church in the U.S. Thanks for being with us, we appreciate it.

SYMONDS: Thank you.

O'BRIEN: Coming up after a short break, another cardinal, another archdiocese, another suit, but it's a very similar story nevertheless. Stay with us for more of LIVE FROM BOSTON.

(COMMERCIAL BREAK)

ANNOUNCER: The Archdiocese of Los Angeles is the largest Catholic diocese in the United States. It's home to some five million parishioners.

O'BRIEN: Across the country, one of Cardinal Law's brethren, another prince of the church is facing a similar challenge, and in this case there's a good deal of irony, irony because Cardinal Roger Mahoney has repeatedly said he's had a zero tolerance policy for sexual abuse among priests, and also some irony because of who is topping the list of plaintiffs. CNN's Thelma Gutierrez has the story of the prelate, the priest, and the police officer.

(BEGIN VIDEOTAPE)

MANUEL VEGA, FORMER ALTAR SERVER: Serving mass was a very prestigious thing.

JOSE LUIS CISNEROS, FORMER ALTAR SERVER: How closer can you be to God than serving on the altar?

TRANQUILINO GOMEZ, FORMER ALTAR SERVER: You were only like a few chosen ones only.

THELMA GUTIERREZ, CNN CORRESPONDENT (voice over): Oxnard, California 1979, the Guadalupe Altar Boys Club was the pride of the neighborhood. For the faithful, Our Lady of Guadalupe parish was the spiritual center of their world.

GOMEZ: A home away from home.

GUTIERREZ: Behind these doors, eight former altar boys now say sinister things happened to them at the hands of this man, Father Fidencio Silva.

SILVA: It's what I wonder, why are they saying this?

VEGA: He asked if he could take pictures of my penis because he was doing a sex education class.

GOMEZ: And he got his finger and he actually touched me right below my testicles.

CISNEROS: He has sex with me just about everything.

GUTIERREZ: His accusers who include two police officers and a public defender say the abuse went on for years. The allegations surfaced in a civil lawsuit filed against the priest, his religious order, the Archdiocese of Los Angeles and Cardinal Roger Mahoney.

VEGA: For me to come out and say that I'm a victim, it's been real difficult.

GUTIERREZ: Difficult because Manny Vega, the former altar boy, is now a police officer. He's spearheading what he calls a quest for justice.

VEGA: We looked at Fidencio as a brother, you know, as a big brother, an older brother and he took advantage of that.

GUTIERREZ: Is it hard to look at these photographs?

VEGA: Yes, it's very hard.

GUTIERREZ: Manny Vega and Tranquilino Gomez say the LA Archdiocese is partly responsible for the alleged abuse, but a spokesman for the archdiocese said: "In regards to Father Silva while he was at Our Lady of Guadalupe Church, no allegations were made at the time that he did anything wrong at all."

As for the lawsuit, they say they will not comment on pending litigation. Vega, Gomez and Jose Luis Cisneros acknowledge it took more than 20 years to break their silence.

GOMEZ: When you have to tell somebody, you know, that supposedly one of God's powers, you know, abused you, you know and especially coming from a Latino family, it's real hard. It's real hard.

GUTIERREZ: Church officials in Father Silva's religious order admit Silva was investigated years later in 1995, accused of sexual misconduct with adults. They say Silva was relieved of his duties and sent south to Mexico. That's where investigative reporter Joel Grover of CNN affiliate KCBF confronted him.

JOEL GROVER, KCBF REPORTER: These boys say you touched them when they were naked on retreats. These boys said you had sex with them, oral sex.

REVEREND FIDENCIO SILVA, PRIEST: No.

GROVER: Anal sex.

SILVA: No. No.

GROVER: You swear to God?

SILVA: I swear to God that is a lie.

GROVER: What did you do with these boys?

SILVA: Nothing.

GUTIERREZ: He flatly denies it and says that it's not true.

VEGA: No, it is true. It is true.

GUTIERREZ: The men, now married with children of their own, say what's most painful is how this has hurt their parents.

UNIDENTIFIED FEMALE: It's sad to find out that the (UNINTELLIGIBLE) is doing that to your family.

GUTIERREZ: Like Vega, Antonia Gomez says she feels betrayed. They all say Father Silva took their son's innocence as children and now, years later, their faith. Thelma Gutierrez, CNN, Oxnard, California.

(END VIDEOTAPE)

O'BRIEN: Up next, stopping problems before they start. When we return, we'll show you how the faithful are trying to insure their churches get good shepherds.

ANNOUNCER: For more on the sex abuse scandal in the church, head to cnn.com. While there, check out our interactive special report, "Crisis in the Priesthood." The AOL keyword is CNN.

(COMMERCIAL BREAK)

O'BRIEN; Catholic churches all around the country are, of course, still functioning as they always have been in many ways, but the rhythms of the church and the customs and the actions of the men on the altar are now being viewed in a much harsher light, and that is why priests are quite literally being taught the difference between good touch and bad touch. Our National Correspondent, CNN's Gary Tuchman, returns with that story. (BEGIN VIDEOTAPE)

FATHER PETER DUMONT, DIOCESE OF MANCHESTER: Good morning, how are you this morning? That's good. Good morning.

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice over): Father Peter Dumont is preparing these children for their first Holy Communion.

DUMONT: If I'm really, really, really happy, which happens once in a while, I might say "oh man, you did a good job. I'm so happy." OK?

TUCHMAN: The New Hampshire priests says he doesn't want to let these difficult times for the church change the way he does his job.

DUMONT: You worry just about Jesus that day and what's happening. That's what we do. I'm not going to be defensive about that. I hug children appropriately. They hug me appropriately, and I intent to continue that.

That's my button from New Hampshire Catholic Charities, OK?

TUCHMAN: But he does want to know more about how to protect children from unscrupulous adults.

REVEREND EDWARD ARSENAULT, DIOCESE OF MANCHESTER: People hold us to the highest standard in New York.

TUCHMAN: So that's why he's one of hundreds of priests, nuns, and other church employees who are attending a first of its kind workshop called Protecting God's Children. This one is sponsored by the Diocese of Manchester, New Hampshire.

ARSENAULT: One, (UNINTELLIGIBLE) accusation of sexual misconduct with a minor means that you may not ever (UNINTELLIGIBLE). We (UNINTELLIGIBLE).

TUCHMAN: The participants watched videos with abused children and abusers talking about their experiences. They are also told in no uncertain language to encourage the parishioners not to be shy about concerns. If parishioners in the church are suspicious of somebody, should they say something?

ARSENAULT: If anyone is suspicious of anyone who ministers in the church, they should report that immediately to their pastor or in New Hampshire they may report that directly to me as the bishop's delegate.

TUCHMAN: This pilot program with the videotapes made by a church- owned insurance company, is also taking place in New Jersey, Missouri, and Texas. It will soon be made available in many other parts of the U.S.

TUCHMAN (on camera): It's no secret that diocese after diocese in the United States have kept secrets when it comes to sexual abuse allegations, but participants of the seminar are being told that philosophy was a mistake and should not be repeated.

DUMONT: It's going to be a great day. You're going to enjoy it.

TUCHMAN (voice over): A one-day program inspired Father Dumont to come up with a new idea for a sermon.

DUMONT: For instance, I'll say, you know "Jesus says feed my lambs, feed my sheep." Well, you know, for instance in this scandal in the church you got to be careful parents. You're the shepherd of your little children, your little flock. You got to be careful what you feed them, you know. Talk to them about sexual matters. Make sure they know what's appropriate. Make sure they know what's inappropriate.

You've been to your classes. We've done some First Communion stuff together. We meet with Jesus.

TUCHMAN: Father Dumont says some priests may find such a sermon inappropriate, but he says it's just one more thing he can do to help protect the children.

DUMONT: We belong to Him.

TUCHMAN: Gary Tuchman, CNN, Concord, New Hampshire.

(END VIDEOTAPE)

O'BRIEN: The sad truth is, children were not protected here for many years by the very institution which people trusted the most. Restoring that trust, as the church is now learning, will require the patience of Job. LIVE FROM BOSTON, I'm Miles O'Brien. Let's return now to CNN's Wolf Blitzer who has the latest on an unfolding situation in Israel. Wolf.

BLITZER: Miles, for the past hour, we've been telling our viewers in the United States and around the world that there has been a deal reached that will allow all but 13 of the Palestinians and others inside the Church of the Nativity in Bethlehem to leave the church.

That deal is being implemented shortly. We're told by multiple sources now that the Palestinians and the others, the monks, the priests, the nuns, the so-called peace activists who were inside have been told to get ready, prepare to leave the church shortly. The deal has been worked out. They will be leaving, going through metal detectors, going on their way. Some 26 of them will be transferred to Gaza, 13 will remain inside, people the Israelis call hardcore senior Palestinian terrorists. They'll be staying inside, at least for the time being, awaiting word where they will be exiled to.

A major development we'll be continuing to follow what's going on in Manger Square at the Church of the Nativity throughout the night. For now though, I'm Wolf Blitzer reporting live from Jerusalem. "LARRY KING LIVE" begins right now.

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