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Iraqi Oil Exec. Killed; 9/11 Panel Finds No 9/11-Saddam Connection

Aired June 16, 2004 - 12:59   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.


MILES O'BRIEN, CNN ANCHOR: 9/11 Commission hearings continue in Washington, that's taped, they're taking a break right now. The focus, chilling new details about al Qaeda terror plans and a lack of evidence of a connection between al Qaeda and Iraq.
(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He does not deserve this and he was just doing his job. And please, just bring him home.

(END VIDEO CLIP)

KYRA PHILLIPS, CNN ANCHOR: CNN exclusive, the family of an American held hostage by terrorists speaks out.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: By fighting the terrorists in distant lands you are making sure your fellow citizens do not face them here at home.

(END VIDEO CLIP)

O'BRIEN: A Central Command performance for the president, even as an American base is attacked in Iraq.

PHILLIPS: Moon shot, Mars and beyond. Will corporate America take the next leaps into the space race?

From the CNN Center in Atlanta, I'm Kyra Phillips.

O'BRIEN: And I'm Miles O'Brien. CNN's LIVE FROM.... starts right now.

And we begin this hour, two weeks and counting until sovereignty returns to Iraq. President Bush rallied U.S. troops via satellite today, vowing never to yield despite the prospects of more attacks as the handover looms. Sure enough two GIs were killed soon after in a rocket attack. While experts scramble to undue the sabotage that's brought Iraqi oil exports, ostensibly the lifeblood of reconstruction, to zero. We get the latest on all of this from CNN Baghdad bureau chief Jane Arraf.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: Those two American soldiers killed when a rocket slammed into their base near Balad, north of Baghdad. More than 20 other people, U.S. soldiers, and Iraqis, were wounded. And attacks in the north and south have devastated Iraq's oil industry, stopping exports, Iraq's lifeline, Iraq's life blood.

They're losing ten of millions of dollar a day, as those pipeline explosions have stopped oil flowing through one of the main pipelines in the south that goes to the oil terminals in the Gulf. And in the north, sabotage as well that has cut exports there. Worse, the head of security for the North Oil Company, Ghazi Talabani, was gunned down as he went to work this morning.

And in another disturbing story, Miles, coalition officials say that they have detained six members of the Iraqi civil defense forces in connection with a roadside bombing. That bombing near Ramadi, west of Baghdad. At least six Iraqis were killed -- Miles.

(END VIDEOTAPE)

O'BRIEN: CNN's Jane Arraf in Baghdad, thank you very much -- Kyra.

PHILLIPS: A lead on al-Zarqawi. A high-ranking source at the Pentagon tells CNN the suspected, in some cases, admitted, terror instigator, full name, Abu Musab al-Zarqawi, may well be hiding in the troubled Sunni stronghold of Fallujah. CNN's Barbara Starr has more -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kyra, indeed, with just about two weeks to go before the U.S. military coalition hands sovereignty back to that new interim Iraqi government. There is new, fresh intelligence, U.S. officials say that Abu Musab al-Zarqawi may, indeed, be hiding in Fallujah along with some of his operatives.

Now this according to a senior Pentagon official. The official would not specify the intelligence indicators, but said while there have been reports of Zarqawi in that area in the past, this is new intelligence, very fresh. He characterized it as being within the last several days.

There is particular concern of course, because there is concern that Zarqawi and his operatives may launch additional violent new attacks against U.S. forces, Iraqi forces, and the coalition, as that June 30 handover date approaches.

Of course, Abu Musab al-Zarqawi, affiliated with the terrorist group Ansar al-Islam and al Qaeda. He has claimed responsibility, credible responsibility, for many attacks in the past. They are keeping a very close eye on this situation.

But what they do say is the specific intelligence about him being in Fallujah, unfortunately, at this point, they say is not specific enough that they can actually launch a military operation into the city to try and go get him -- Kyra.

PHILLIPS: Well, you talk about the attacks -- let's talk about the attacks with regard to the oil industry, also the chief oil administrator in Iraq. And what are the concerns there at the Pentagon?

STARR: It's a very significant concern here at the Pentagon because, of course, keeping the Iraqi oil flowing is a strong economic indicator of security and stability in Iraq. And now oil exports virtually shut down. The pipelines on land, the security for them is a combination of coalition military forces and the Iraqi security forces.

But one of the continuing concerns, of course, are those offshore oil terminals out in the middle of the northern end of the Persian Gulf. The Iraqis have two key oil terminals there. The U.S. military has beefed up security in recent days, following some previous boat attacks, beefed up security around those terminals quite significantly.

There are now armed U.S. military personnel on those offshore oil platforms. And they have basically established a no-drive zone, if you will, no shipping, other than approved shipping, close to those terminals.

The newest information is that there is a 2000-meter perimeter around the oil platforms. No unauthorized shipping inside. Basically, we are told by a military official, the right of innocent passage has been terminated until the security situation improves -- Kyra.

PHILLIPS: Barbara Starr, LIVE FROM... the Pentagon, thank you.

O'BRIEN: Al Qaeda, pre-9/11, have long been asserted by the Bush administration, and were asserted again this very week by Vice President Cheney in Florida. But the independent 9/11 Commission says otherwise. Six weeks before the extended deadline for the panel's final report, commissioners are holding one last public hearing on the 9/11 plot and national crisis management. And once again, they're sharing some partial conclusions. Among them, no apparent ties or conspiracies between Saddam Hussein and al Qaeda.

CNN's Sean Callebs is following the story for us in Washington -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Good evening, Miles. Reports coming out of this morning's session already detailed new information. Osama bin Laden apparently approached Iraq about weapons and trading, but it ended there. And there is no direct link between the 9/11 attacks and Saddam Hussein. Also, it appears al Qaeda's fingerprints are on the 1996 bombing of the Khobar Towers in Saudi Arabia that killed 19 Americans. During testimony today, a CIA operative who goes by the name Dr. K., warned al Qaeda may be weakened, but by no means defeated.

(BEGIN VIDEO CLIP)

DR. K, CIA: Al Qaeda, to be sure, is the vanguard of the global Sunni jihadist struggle against the United States. It has by no means been defeated. And though weakened it continue to patiently plan its next attack. It may strike next week, next month, or next year, but it will strike.

CALLEBS: Here are some of the key points coming out of the testimony. The plot cost an estimated $400,000 to $500,000, that money primarily coming to al Qaeda through fundraising, not Osama bin Laden's personal fortune. Planning and training began back in 1999. The report says the attack plan was actually hatched in '96, five years before the planes hit the World Trade Center and the Pentagon.

Investigators say Khalid Shaikh Mohammed gave the idea to bin Laden. The original plan also called for 10 planes to target both East and West Coast cities. And another key point, the report says lead hijacker Mohammad Atta never met with an Iraqi intelligence officer.

And Miles, this is significant, because it is alleged that Atta met with Iraqi intelligence officers in Prague. Thus, the link between al Qaeda and Iraq, however, the report says, Atta's phone records and bank information indicate he was in the U.S. at the time of that alleged meeting.

O'BRIEN: Sean, let's talk as best we can about how those hijackers spent all that money. We know they paid for some flying lessons and their living expenses and some airfare. What else were they spending money on?

CALLEBS: That takes up a lion's share of it, that they also had to pay for rent. They went in and out of the country on various occasions. There was some cost to the visa information as well. They also talk about the hijackers that were considered the muscle. And this is ironic because they also point out that these were very slight men, 13 or so men, about five feet eight inches tall on the average and very slight build.

O'BRIEN: Interesting, Sean Callebs in Washington, thanks much -- Kyra.

PHILLIPS: Straight ahead, President Bush has a message for American troops with just days to go until the coalition hands over sovereignty to Iraq. A live report on what he had to say coming up.

And reports of a big payout by Michael Jackson regarding those molestation allegations.

And getting corporate America into outer space, we'll talk with the chairman of the Moon to Mars Commission about what's next for NASA.

(COMMERCIAL BREAK)

PHILLIPS: Threats, demands, and heartache. Four days after Lockheed Martin engineer Paul M. Johnson was kidnapped in Saudi Arabia, his captors are threatening to kill him before the weekend. Back in New Jersey, Martin's family, including the grandson he has never met, keeps an agonizing vigil, one they shared today in an interview you may have seen live with our Deborah Feyerick. She joins us now with an update -- Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Kyra, it is an excruciating time for family. Paul Johnson's sister saying that she has watched other American captives like Daniel Pearl and Nick Berg, watched the agony that those families suffered through, never believing that one day she would be in the same position.

(BEGIN VIDEO CLIP)

DONNA MAYEUX, KIDNAP VICTIM'S SISTER: It's disbelief. It's -- I guess it's something that you never think is going to hit home to your own family. We kind of feel numb.

FEYERICK: The U.S. government, the Saudi government, says that their policy is not to negotiate with terrorists. What do you say to the governments?

PAUL JOHNSON III, KIDNAP VICTIM'S SON: The governments -- you know, we know what they want, and my father, I know he's an innocent victim in this whole matter. And I plead with the Saudi government and the group of men that are holding my father to please let him return home safely. He will leave your country. You will never see him again. I just plead with them to get him home safely.

(END VIDEO CLIP)

FEYERICK: The son, Paul Johnson III, sent a message to the kidnappers pleading with them to let his father go. He sent a message to his dad, even introducing his 3-year-old son who his father has never met before. The family says that right now they remain optimistic -- Kyra.

PHILLIPS: And Deb, is that an assignment that Paul Johnson decided to take on his own? Did work send him there? What's his personal story of why he was there in the first place?

FEYERICK: The son tells us that Paul Johnson wanted to travel, wanted to see the world, and so he took this job with Lockheed Martin to work on helicopters and that he really enjoyed living in Saudi Arabia, that he never felt threatened, that even in recent weeks, he didn't fear for his security.

PHILLIPS: Deb Feyerick, that exclusive report, time with the family, thank you so much.

Other news across America now. Court TV reports that Michael Jackson paid more than $20 million to settle allegations he molested a boy in 1993. Jackson never admitted any wrongdoing. Attempts by CNN to reach Jackson's people have gone unanswered. Jackson is now charged with molesting another boy.

More police testimony in the Scott Peterson murder case. Expected on the stand is an officer who headed the search for Laci Peterson. Another investigator says he thought something was amiss when he saw a rumpled rug in the Peterson home. Remembering Ray Charles, fans will be able to pay their respects to the music at a public memorial tomorrow in Los Angeles. Charles died last week at age 73. Stevie Wonder, B.B. King, and Willie Nelson are among the many stars expected at a private funeral.

O'BRIEN: NASA is going to have to become more leaner and more entrepreneurial if the space agency is going to make it back to the moon and press on to Mars. Just one of the ideas from a blue ribbon panel created to follow up on President Bush's space initiative rolled out five months ago. The panel released its 60-page report last hour. The man in charge of the panel, former secretary the Air Force and aerospace executive Pete Aldridge, joins us live now from Washington.

Mr. Aldridge, good to have you with us.

PETE ALDRIDGE, CHMN., MOON TO MARS COMMISSION: Good afternoon.

O'BRIEN: All right. Let's talk about a few of the points first of all. The theme of the private enterprise comes up time and again in your report. I guess it should come as no surprise, given your background and the background of some the people on the panel. My sense in covering NASA over the years is that there's a lot of private enterprise involved, a lot of the aerospace companies that you are affiliated with are already there. How is this idea really different?

ALDRIDGE: Well, this idea is really to expand the role of the private sector in helping NASA. NASA is going to have a lot on their plate as they strive now for this brand-new vision for space exploration. It's going to be a very difficult, risky process. And we believe that NASA's focus ought to be on that exploration initiative and allow some of the more operational, less-risky functions that are being performed by the government, be transferred exclusively to the private sectors, such as launching cargo into low Earth orbit, or even looking at telecommunication systems, and lunar mapping ideas.

We believe that there's a stronger role of the private sector in performing the services as opposed to just performing -- providing satellites to NASA under federal contract. And we believe, also, that this can be expanded to include more entrepreneurial activities for exploration, getting smaller businesses involved, as well as the larger companies that are traditionally involved with NASA.

O'BRIEN: Next point, creating a Presidential Space Council. Last time we saw one of those was the first Bush administration, Dan Quayle headed that up. The idea faded during the Clinton years. Why is that such a good idea? Does that just add another layer of bureaucracy?

ALDRIDGE: No it doesn't, because this is really not a NASA mission. This is a national mission. And there are resources that exist across multiple government agencies that can help achieve this particular vision. We have a large amount of research going on in space-related technology, the Department of Defense, the Department of Energy, and the National Science Foundation, all can contribute to this particular mission. And we believe we ought to tap those resources. NASA doesn't have to do it all themselves, nor do they have to pay for it all themselves. A lot of work going on in the Department of Defense has direct application to the mission of NASA and this space exploration vision and we ought to make sure we use them.

O'BRIEN: Now people familiar with NASA know there's one center, Jet Propulsion Lab, it's a little different, it's actually run by a university, California Institute of Technology. You're suggesting that some of the nine other NASA centers adopt a similar kind of model, partnering with universities, much as the Department of Energy National Labs do. What's the advantage of doing that?

ALDRIDGE: Well, we're suggesting that they convert themselves to federally funded research and development centers. Federally funded research and development centers, which you call FFRDCs, can pay competitive salaries with private industry, have the same kind of personnel practices that private industry has, and can acquire the talent and skill misses according to the needs versus time.

This will provide the centers with a much more flexible, innovative capability to support the future of NASA missions that they currently have. We believe that that model of JPL works very well. And it can be -- these centers could be affiliated with universities, for-profit companies, or nonprofit companies, that can meet their future needs. And we believe this flexibility that exists in the FFRDCs is what NASA is going to need for their center operations in the future.

O'BRIEN: A final point that caught my eye is this notion of NASA giving cash prizes to people willing to push the envelope if you will. It really hearkens back to the early days of aviation. Charles Lindbergh flew to Paris for a $25,000 prize. That's how a lot of early aviation milestones were set. Today, we have the X Prize, the effort we're about to see unfold in the Mohave Desert. Do you really think that this is a way to spur innovation these days?

ALDRIDGE: Absolutely. In fact, we are very strong that the program that NASA has adapted, called Centennial Challenge, is the right way to go. We were noting that In the X Prize, there's a $10 million prize for getting the launch up to 62 miles. But we understand that all of the teams participating in it, in trying to win that prize, have spent over $400 million in technology development.

That's a 40 to one return on this prize. And so technology has got to benefit from this kind of stimulation. We think it ought to be expanded. In fact, one of our commissioners has suggested a much larger prize to be considered for much more ambitious technology advancement.

O'BRIEN: Pete Aldridge is chairman of the President's Commission on Moon, Mars, and beyond. Thanks very much for being with us.

ALDRIDGE: Thanks, Miles, appreciate it.

O'BRIEN: All right -- Kyra. PHILLIPS: America in the battle of the bulge. Are the supplements we're using to fight it safe? We'll look into that, later on LIVE FROM...

World champion cyclist Lance Armstrong speaking out against accusations concerning high performance drugs.

(COMMERCIAL BREAK)

PHILLIPS: A bold move by the man at the center of the BALCO steroid scandal. "The Washington Post" reports the founder of the Bay Area lab has sent a letter to President Bush, promising to name names, in exchange for the president's help in his plea bargain negotiations. Victor Conte is accused of providing steroids to dozens of U.S. athlete. He says he wants to come clean to ensure that the athletes attending the upcoming Olympics are drug free.

Sprinter Marion Jones, one of the athletes under investigation, is planning a major announcement at 2 p.m. Eastern, no word yet if it's related to that probe.

Biking extraordinaire Lance Armstrong is again denying reports that used performance enhancing drugs. The five-time Tour de France champ is feuding claims in a book that he asked a former staffer to dispose of used syringes and he asked to borrow makeup to conceal needle marks.

(BEGIN VIDEO CLIP)

LANCE ARMSTRONG, TOUR DE FRANCE CHAMPION: We sort of reached a point where we really can't tolerate it any more, and we're sick and tired of these allegations and we're going to do everything we can to fight them. They're absolutely untrue. We filed action in England, we filed action in France, against everybody involved. And enough is enough.

(END VIDEO CLIP)

PHILLIPS: Armstrong says that he's never failed a drug test.

(MARKET REPORT)

(COMMERCIAL BREAK)

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Aired June 16, 2004 - 12:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: 9/11 Commission hearings continue in Washington, that's taped, they're taking a break right now. The focus, chilling new details about al Qaeda terror plans and a lack of evidence of a connection between al Qaeda and Iraq.
(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He does not deserve this and he was just doing his job. And please, just bring him home.

(END VIDEO CLIP)

KYRA PHILLIPS, CNN ANCHOR: CNN exclusive, the family of an American held hostage by terrorists speaks out.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: By fighting the terrorists in distant lands you are making sure your fellow citizens do not face them here at home.

(END VIDEO CLIP)

O'BRIEN: A Central Command performance for the president, even as an American base is attacked in Iraq.

PHILLIPS: Moon shot, Mars and beyond. Will corporate America take the next leaps into the space race?

From the CNN Center in Atlanta, I'm Kyra Phillips.

O'BRIEN: And I'm Miles O'Brien. CNN's LIVE FROM.... starts right now.

And we begin this hour, two weeks and counting until sovereignty returns to Iraq. President Bush rallied U.S. troops via satellite today, vowing never to yield despite the prospects of more attacks as the handover looms. Sure enough two GIs were killed soon after in a rocket attack. While experts scramble to undue the sabotage that's brought Iraqi oil exports, ostensibly the lifeblood of reconstruction, to zero. We get the latest on all of this from CNN Baghdad bureau chief Jane Arraf.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: Those two American soldiers killed when a rocket slammed into their base near Balad, north of Baghdad. More than 20 other people, U.S. soldiers, and Iraqis, were wounded. And attacks in the north and south have devastated Iraq's oil industry, stopping exports, Iraq's lifeline, Iraq's life blood.

They're losing ten of millions of dollar a day, as those pipeline explosions have stopped oil flowing through one of the main pipelines in the south that goes to the oil terminals in the Gulf. And in the north, sabotage as well that has cut exports there. Worse, the head of security for the North Oil Company, Ghazi Talabani, was gunned down as he went to work this morning.

And in another disturbing story, Miles, coalition officials say that they have detained six members of the Iraqi civil defense forces in connection with a roadside bombing. That bombing near Ramadi, west of Baghdad. At least six Iraqis were killed -- Miles.

(END VIDEOTAPE)

O'BRIEN: CNN's Jane Arraf in Baghdad, thank you very much -- Kyra.

PHILLIPS: A lead on al-Zarqawi. A high-ranking source at the Pentagon tells CNN the suspected, in some cases, admitted, terror instigator, full name, Abu Musab al-Zarqawi, may well be hiding in the troubled Sunni stronghold of Fallujah. CNN's Barbara Starr has more -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kyra, indeed, with just about two weeks to go before the U.S. military coalition hands sovereignty back to that new interim Iraqi government. There is new, fresh intelligence, U.S. officials say that Abu Musab al-Zarqawi may, indeed, be hiding in Fallujah along with some of his operatives.

Now this according to a senior Pentagon official. The official would not specify the intelligence indicators, but said while there have been reports of Zarqawi in that area in the past, this is new intelligence, very fresh. He characterized it as being within the last several days.

There is particular concern of course, because there is concern that Zarqawi and his operatives may launch additional violent new attacks against U.S. forces, Iraqi forces, and the coalition, as that June 30 handover date approaches.

Of course, Abu Musab al-Zarqawi, affiliated with the terrorist group Ansar al-Islam and al Qaeda. He has claimed responsibility, credible responsibility, for many attacks in the past. They are keeping a very close eye on this situation.

But what they do say is the specific intelligence about him being in Fallujah, unfortunately, at this point, they say is not specific enough that they can actually launch a military operation into the city to try and go get him -- Kyra.

PHILLIPS: Well, you talk about the attacks -- let's talk about the attacks with regard to the oil industry, also the chief oil administrator in Iraq. And what are the concerns there at the Pentagon?

STARR: It's a very significant concern here at the Pentagon because, of course, keeping the Iraqi oil flowing is a strong economic indicator of security and stability in Iraq. And now oil exports virtually shut down. The pipelines on land, the security for them is a combination of coalition military forces and the Iraqi security forces.

But one of the continuing concerns, of course, are those offshore oil terminals out in the middle of the northern end of the Persian Gulf. The Iraqis have two key oil terminals there. The U.S. military has beefed up security in recent days, following some previous boat attacks, beefed up security around those terminals quite significantly.

There are now armed U.S. military personnel on those offshore oil platforms. And they have basically established a no-drive zone, if you will, no shipping, other than approved shipping, close to those terminals.

The newest information is that there is a 2000-meter perimeter around the oil platforms. No unauthorized shipping inside. Basically, we are told by a military official, the right of innocent passage has been terminated until the security situation improves -- Kyra.

PHILLIPS: Barbara Starr, LIVE FROM... the Pentagon, thank you.

O'BRIEN: Al Qaeda, pre-9/11, have long been asserted by the Bush administration, and were asserted again this very week by Vice President Cheney in Florida. But the independent 9/11 Commission says otherwise. Six weeks before the extended deadline for the panel's final report, commissioners are holding one last public hearing on the 9/11 plot and national crisis management. And once again, they're sharing some partial conclusions. Among them, no apparent ties or conspiracies between Saddam Hussein and al Qaeda.

CNN's Sean Callebs is following the story for us in Washington -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Good evening, Miles. Reports coming out of this morning's session already detailed new information. Osama bin Laden apparently approached Iraq about weapons and trading, but it ended there. And there is no direct link between the 9/11 attacks and Saddam Hussein. Also, it appears al Qaeda's fingerprints are on the 1996 bombing of the Khobar Towers in Saudi Arabia that killed 19 Americans. During testimony today, a CIA operative who goes by the name Dr. K., warned al Qaeda may be weakened, but by no means defeated.

(BEGIN VIDEO CLIP)

DR. K, CIA: Al Qaeda, to be sure, is the vanguard of the global Sunni jihadist struggle against the United States. It has by no means been defeated. And though weakened it continue to patiently plan its next attack. It may strike next week, next month, or next year, but it will strike.

CALLEBS: Here are some of the key points coming out of the testimony. The plot cost an estimated $400,000 to $500,000, that money primarily coming to al Qaeda through fundraising, not Osama bin Laden's personal fortune. Planning and training began back in 1999. The report says the attack plan was actually hatched in '96, five years before the planes hit the World Trade Center and the Pentagon.

Investigators say Khalid Shaikh Mohammed gave the idea to bin Laden. The original plan also called for 10 planes to target both East and West Coast cities. And another key point, the report says lead hijacker Mohammad Atta never met with an Iraqi intelligence officer.

And Miles, this is significant, because it is alleged that Atta met with Iraqi intelligence officers in Prague. Thus, the link between al Qaeda and Iraq, however, the report says, Atta's phone records and bank information indicate he was in the U.S. at the time of that alleged meeting.

O'BRIEN: Sean, let's talk as best we can about how those hijackers spent all that money. We know they paid for some flying lessons and their living expenses and some airfare. What else were they spending money on?

CALLEBS: That takes up a lion's share of it, that they also had to pay for rent. They went in and out of the country on various occasions. There was some cost to the visa information as well. They also talk about the hijackers that were considered the muscle. And this is ironic because they also point out that these were very slight men, 13 or so men, about five feet eight inches tall on the average and very slight build.

O'BRIEN: Interesting, Sean Callebs in Washington, thanks much -- Kyra.

PHILLIPS: Straight ahead, President Bush has a message for American troops with just days to go until the coalition hands over sovereignty to Iraq. A live report on what he had to say coming up.

And reports of a big payout by Michael Jackson regarding those molestation allegations.

And getting corporate America into outer space, we'll talk with the chairman of the Moon to Mars Commission about what's next for NASA.

(COMMERCIAL BREAK)

PHILLIPS: Threats, demands, and heartache. Four days after Lockheed Martin engineer Paul M. Johnson was kidnapped in Saudi Arabia, his captors are threatening to kill him before the weekend. Back in New Jersey, Martin's family, including the grandson he has never met, keeps an agonizing vigil, one they shared today in an interview you may have seen live with our Deborah Feyerick. She joins us now with an update -- Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Kyra, it is an excruciating time for family. Paul Johnson's sister saying that she has watched other American captives like Daniel Pearl and Nick Berg, watched the agony that those families suffered through, never believing that one day she would be in the same position.

(BEGIN VIDEO CLIP)

DONNA MAYEUX, KIDNAP VICTIM'S SISTER: It's disbelief. It's -- I guess it's something that you never think is going to hit home to your own family. We kind of feel numb.

FEYERICK: The U.S. government, the Saudi government, says that their policy is not to negotiate with terrorists. What do you say to the governments?

PAUL JOHNSON III, KIDNAP VICTIM'S SON: The governments -- you know, we know what they want, and my father, I know he's an innocent victim in this whole matter. And I plead with the Saudi government and the group of men that are holding my father to please let him return home safely. He will leave your country. You will never see him again. I just plead with them to get him home safely.

(END VIDEO CLIP)

FEYERICK: The son, Paul Johnson III, sent a message to the kidnappers pleading with them to let his father go. He sent a message to his dad, even introducing his 3-year-old son who his father has never met before. The family says that right now they remain optimistic -- Kyra.

PHILLIPS: And Deb, is that an assignment that Paul Johnson decided to take on his own? Did work send him there? What's his personal story of why he was there in the first place?

FEYERICK: The son tells us that Paul Johnson wanted to travel, wanted to see the world, and so he took this job with Lockheed Martin to work on helicopters and that he really enjoyed living in Saudi Arabia, that he never felt threatened, that even in recent weeks, he didn't fear for his security.

PHILLIPS: Deb Feyerick, that exclusive report, time with the family, thank you so much.

Other news across America now. Court TV reports that Michael Jackson paid more than $20 million to settle allegations he molested a boy in 1993. Jackson never admitted any wrongdoing. Attempts by CNN to reach Jackson's people have gone unanswered. Jackson is now charged with molesting another boy.

More police testimony in the Scott Peterson murder case. Expected on the stand is an officer who headed the search for Laci Peterson. Another investigator says he thought something was amiss when he saw a rumpled rug in the Peterson home. Remembering Ray Charles, fans will be able to pay their respects to the music at a public memorial tomorrow in Los Angeles. Charles died last week at age 73. Stevie Wonder, B.B. King, and Willie Nelson are among the many stars expected at a private funeral.

O'BRIEN: NASA is going to have to become more leaner and more entrepreneurial if the space agency is going to make it back to the moon and press on to Mars. Just one of the ideas from a blue ribbon panel created to follow up on President Bush's space initiative rolled out five months ago. The panel released its 60-page report last hour. The man in charge of the panel, former secretary the Air Force and aerospace executive Pete Aldridge, joins us live now from Washington.

Mr. Aldridge, good to have you with us.

PETE ALDRIDGE, CHMN., MOON TO MARS COMMISSION: Good afternoon.

O'BRIEN: All right. Let's talk about a few of the points first of all. The theme of the private enterprise comes up time and again in your report. I guess it should come as no surprise, given your background and the background of some the people on the panel. My sense in covering NASA over the years is that there's a lot of private enterprise involved, a lot of the aerospace companies that you are affiliated with are already there. How is this idea really different?

ALDRIDGE: Well, this idea is really to expand the role of the private sector in helping NASA. NASA is going to have a lot on their plate as they strive now for this brand-new vision for space exploration. It's going to be a very difficult, risky process. And we believe that NASA's focus ought to be on that exploration initiative and allow some of the more operational, less-risky functions that are being performed by the government, be transferred exclusively to the private sectors, such as launching cargo into low Earth orbit, or even looking at telecommunication systems, and lunar mapping ideas.

We believe that there's a stronger role of the private sector in performing the services as opposed to just performing -- providing satellites to NASA under federal contract. And we believe, also, that this can be expanded to include more entrepreneurial activities for exploration, getting smaller businesses involved, as well as the larger companies that are traditionally involved with NASA.

O'BRIEN: Next point, creating a Presidential Space Council. Last time we saw one of those was the first Bush administration, Dan Quayle headed that up. The idea faded during the Clinton years. Why is that such a good idea? Does that just add another layer of bureaucracy?

ALDRIDGE: No it doesn't, because this is really not a NASA mission. This is a national mission. And there are resources that exist across multiple government agencies that can help achieve this particular vision. We have a large amount of research going on in space-related technology, the Department of Defense, the Department of Energy, and the National Science Foundation, all can contribute to this particular mission. And we believe we ought to tap those resources. NASA doesn't have to do it all themselves, nor do they have to pay for it all themselves. A lot of work going on in the Department of Defense has direct application to the mission of NASA and this space exploration vision and we ought to make sure we use them.

O'BRIEN: Now people familiar with NASA know there's one center, Jet Propulsion Lab, it's a little different, it's actually run by a university, California Institute of Technology. You're suggesting that some of the nine other NASA centers adopt a similar kind of model, partnering with universities, much as the Department of Energy National Labs do. What's the advantage of doing that?

ALDRIDGE: Well, we're suggesting that they convert themselves to federally funded research and development centers. Federally funded research and development centers, which you call FFRDCs, can pay competitive salaries with private industry, have the same kind of personnel practices that private industry has, and can acquire the talent and skill misses according to the needs versus time.

This will provide the centers with a much more flexible, innovative capability to support the future of NASA missions that they currently have. We believe that that model of JPL works very well. And it can be -- these centers could be affiliated with universities, for-profit companies, or nonprofit companies, that can meet their future needs. And we believe this flexibility that exists in the FFRDCs is what NASA is going to need for their center operations in the future.

O'BRIEN: A final point that caught my eye is this notion of NASA giving cash prizes to people willing to push the envelope if you will. It really hearkens back to the early days of aviation. Charles Lindbergh flew to Paris for a $25,000 prize. That's how a lot of early aviation milestones were set. Today, we have the X Prize, the effort we're about to see unfold in the Mohave Desert. Do you really think that this is a way to spur innovation these days?

ALDRIDGE: Absolutely. In fact, we are very strong that the program that NASA has adapted, called Centennial Challenge, is the right way to go. We were noting that In the X Prize, there's a $10 million prize for getting the launch up to 62 miles. But we understand that all of the teams participating in it, in trying to win that prize, have spent over $400 million in technology development.

That's a 40 to one return on this prize. And so technology has got to benefit from this kind of stimulation. We think it ought to be expanded. In fact, one of our commissioners has suggested a much larger prize to be considered for much more ambitious technology advancement.

O'BRIEN: Pete Aldridge is chairman of the President's Commission on Moon, Mars, and beyond. Thanks very much for being with us.

ALDRIDGE: Thanks, Miles, appreciate it.

O'BRIEN: All right -- Kyra. PHILLIPS: America in the battle of the bulge. Are the supplements we're using to fight it safe? We'll look into that, later on LIVE FROM...

World champion cyclist Lance Armstrong speaking out against accusations concerning high performance drugs.

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PHILLIPS: A bold move by the man at the center of the BALCO steroid scandal. "The Washington Post" reports the founder of the Bay Area lab has sent a letter to President Bush, promising to name names, in exchange for the president's help in his plea bargain negotiations. Victor Conte is accused of providing steroids to dozens of U.S. athlete. He says he wants to come clean to ensure that the athletes attending the upcoming Olympics are drug free.

Sprinter Marion Jones, one of the athletes under investigation, is planning a major announcement at 2 p.m. Eastern, no word yet if it's related to that probe.

Biking extraordinaire Lance Armstrong is again denying reports that used performance enhancing drugs. The five-time Tour de France champ is feuding claims in a book that he asked a former staffer to dispose of used syringes and he asked to borrow makeup to conceal needle marks.

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LANCE ARMSTRONG, TOUR DE FRANCE CHAMPION: We sort of reached a point where we really can't tolerate it any more, and we're sick and tired of these allegations and we're going to do everything we can to fight them. They're absolutely untrue. We filed action in England, we filed action in France, against everybody involved. And enough is enough.

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PHILLIPS: Armstrong says that he's never failed a drug test.

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