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Multiple Olympic Gymnastics Controversies; Kerry Accuses Bush Campaign of Fear & Smear Tactics

Aired August 24, 2004 - 13:31   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: Now in the news, health officials looking at a contaminated water problem as a possible cause of the illness that's making so many people sick in Ohio. Nearly 900 reported intestinal illness after visiting an island resort on Lake Erie. Officials hope to have a preliminary report on possible causes a little later this week.
An alleged driver and bodyguard for Osama bin Laden hears the charges against him in a military court in Guantanamo Bay, Cuba. The suspect is from Yemen and is charged with conspiring to attack and murder civilians. He's the first Gitmo detainee to be arraigned.

And in Canada, even the holy grail gets bumped. Hockey's Stanley Cup, the coolest trophy in all of sports, was missing after an Air Canada flight from Vancouver to Ft. John, British Columbia, it turns out agents in Vancouver pulled it from the plane because of weight restrictions on the packed flight. I guess that was a prudent call. The 35-pound cup is now safe and sound and back in the hands of whoever keeps the cup.

KYRA PHILLIPS, CNN ANCHOR: In Athens, Greece, controversy and anger escalate over scoring in men's gymnastics. CNN's Michael Holmes joins us with us that. And of course the excitement of Iraq's soccer team that's continuing its quest for the gold.

But let's start with the drama on the floor last night, Michael. I'll tell you what, I couldn't go to sleep.

MICHAEL HOLMES, CNN CORRESPONDENT: Oh, poor Kyra. I could. But anyway. Yes, it was very controversial. And Paul Hamm, the poor guy, all he does is do his best, gets a Gold Medal, and then there's all kinds of controversy erupting around him. What essentially happened was that the South Korean gymnast, his team claimed that he wasn't given enough points of difficulty for his routine.

Turns out, he was right, too. And three judges got into all kinds of trouble over that. In fact, they were suspended. Now what happened then was the South Koreans were requesting that they get a Gold Medal as well as Paul Hamm. The Americans said, well, we don't mind if you try to do that.

Well, it has gone through all the bureaucracy. I won't go into all the details, but it turns out that they lodged their protest, their formal protest, too late and now there's really nothing that can be done unless Paul Hamm decides to give up his medal and really that ain't going to happen. So the South Koreans are stuck with that. But there was another controversy on the floor, and this involving a Russian by the name of Alexei Nemov. Now he performed a brilliant routine on the high bar. And a really wonderful routine, everyone concedes that. But he got some pretty low score. He wasn't happy. Then the crowd starts booing. This went on for several minutes.

A Malaysian judge ended up adjusting his score. But in the end it wasn't enough anyway, and Nemov ended up out of the medals anyway. And in fact, Paul Hamm got a silver in that.

Now moving on, your favorite story, now let's touch on Merlene Ottey. We talked about her last week in the 100 meters. She didn't make the final there but she has another chance. Merlene Ottey, 44 year old, her first Olympics were in Moscow, and she's a sprinter. Imagine that. I mean, she's at the age where she should be getting social security from the sprinters federation.

She has made the semifinals of the women's 200 meters. That's going to happen in a couple hours from now. And if she gets into the final, well, anything can happen.

Now to your favorite story, the Iraqi soccer team. They're about to play in their semifinal match, it starts in just under half an hour. And everybody has been looking forward to this. If they win, they get to play for a Gold Medal. Even if they lose that match, they'll still get a Silver and it will be their country's second ever medal. They haven't won one since 1960.

I can tell you who they'll play if they get to that game, Argentina just defeated Italy 3-nil. They've gone through to that Gold Medal match. Even if the Iraqis lose, they'll still get to play for a Bronze against Italy. But let's hope they get through because Italy is not going to be an easy beat, and we'd love to see them get a medal -- Kyra.

PHILLIPS: Well, you mentioned Nemov, the Russian gymnast. The guy was pretty classy, Michael, you have to admit. Coming out on the floor, I mean, even the broadcasters were saying this was just unprecedented, this scoring problem, the athlete had to come out and ask everyone to calm down and be respectful to the next gymnast.

HOLMES: Yes, that was terrific, actually. I should have mentioned that. He actually came out and -- when the crowd was booing and asked them to calm down. And they did, as well. The Russians followed up with a letter of protest to the Gymnastics Federation, also the IOC. Not a formal protest, they're not going to try to get any medals changed or anything like that.

But they're complaining about the judging in general. They claim that one of their girls didn't get a medal because of some bad scores, too. So, yes, pretty controversial end to the gymnastics, but Paul Hamm gets his medals.

All right. You mentioned the girl, come on now, Michael, it's a woman. Let me talk about this investigative report now that you did in Chania. You want to tell us about this.

HOLMES: Well, it was -- everybody was saying there were no -- there was no one at the games last week, the seats were empty and not even the Greeks were turning up. Well, you know, August is a traditional month of vacation for the Greeks. And I don't know, I thought that it was important that we investigate this fully and carry out a very thorough investigation.

And that involved going to the Crete town of Chania. And we spent a day there and found out where all the Greeks go. And a lot of them go to Chania. And as you can see, it's a pretty awful place, isn't it? We had a tough time doing that story.

(LAUGHTER)

HOLMES: I'm kidding, obviously. It's a beautiful place. And it's interesting that there are more Greek tourists there than foreign tourists. And it was a tough assignment, but somebody had to do it.

PHILLIPS: Yes, it looks pretty beautiful, I'm jealous. Hey Michael, real quickly, about the Iraqi soccer team, you know, I've been a big advocate here, saying hey, we have got to watch these Iraqis, we hope that they win. But what's the deal with this one player coming forward, saying if I weren't playing soccer, I'd be joining the resistance. Has there been talk about that over there?

HOLMES: Oh yes, there has been a lot of talk about it. This is the subissue, if you like. You know, it's terrific that the Iraqis are here, just making it here, given the uphill battle in terms of not being able to play in their own country and all of that.

It's a wonderful success story. But they're getting a bit annoyed, particularly being brought up in election campaigns in the United States and things like that. When they hear people say that they're playing as a free Iraq, well, a lot of these guys see it from their point of view, they come from towns like Fallujah and Najaf and Sadr City.

They have family there, right now, while the fighting continues around them, and they're saying, well, hang on, we don't feel very free at the moment, we're still under occupation. There is still all this fighting going on. Our families' lives are at risk.

And they do object -- they're a little bit better about being used in a U.S. election campaign. That's -- there's no doubt about that. In fact, the coach is even a little bit angry about it, and saying, well, stop it, to the Bush campaign, don't use us as part of your election campaign.

And when you see it from the very human point of view, perhaps people can see where they're coming from. If your mother and father are in Najaf at the moment, you're not feeling all that free, I guess. So you can debate this one way or the other. But these guy come from a rough neighborhood -- Kyra.

Michael Holmes, LIVE FROM Athens, thanks so much. We look forward to your next investigative report, sailing the Greek isles.

Thanks, Michael.

HOLMES: OK.

(LAUGHTER)

PHILLIPS: All right, legendary women gymnastics coach Bela Karolyi will be our guest on LIVE FROM. That's right, he's going to talk about the Olympic scoring squabble and America's new Golden Girl, Carly Patterson. That's tomorrow, 3:00 p.m. Eastern, noon Pacific.

O'BRIEN: Hey, Kyra, did you just say golden girl?

PHILLIPS: Golden girl.

O'BRIEN: Girl, huh?

PHILLIPS: OK, all right, golden woman. Here I was giving Michael Holmes a hard time.

O'BRIEN: You're going to give Michael a hard time, you better stick with the program then.

PHILLIPS: It's a phrase "golden girls," come on, like the show. They were all older, but you know.

O'BRIEN: OK, thanks, girl, appreciate it.

PHILLIPS: You bet, boy.

O'BRIEN: All right, you win a medal, you get to wear the medal. You also have to wear that funky wreath thing. It's a look folks either love or hate. Jeanne Moos investigates all this a little bit later.

And everybody says they hate 'em, so why do they keep making them? The ads from those 527 groups are next, as LIVE FROM gets political.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

O'BRIEN: Taking a break from the campaign trail. George Bush is spending another day at his ranch in Crawford, Texas. He'll hit the road Thursday for a swing through eight states, leading up to the GOP convention in New York City.

Just blocks from where that convention is to be held, John Kerry today accused the Bush campaign and its allies of fear-and-smear tactics. He says the Bush camp was trying to avoid talking about the issues. John Kerry has been struggling recently against attacks on his war record, as you well know by now. They come from a group called the Swift Boat Veterans for Truth. The controversy has reignited the debate over so-called 527s, or outside political organizations.

CNN's national correspondent Kelly Wallace with our story.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN NATL. CORRESPONDENT (voice-over): Another salvo in the swift boat controversy. The president calling for an end to attack ads by all independent groups.

(BEGIN VIDEO CLIP)

QUESTION: When you say that you want to stop all, that means...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That means that ad, every other ad.

Absolutely. I don't think we ought to have 527s. I can't be more plain about it.

(END VIDEO CLIP)

WALLACE: Sure you can, said the Democratic vice presidential candidate.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: George Bush faced his moment of truth, and he failed; he failed to condemn the specific attacks on John Kerry's military record.

WALLACE: Attack ads by independent groups are not new.

(BEGIN VIDEO CLIP)

ANNOUNCER: Now, this man is running for president. President?

(END VIDEO CLIP)

WALLACE: Remember 1988, the infamous Willie Horton ad by a GOP group, targeting Democrat Michael Dukakis.

But never have these groups, called 527s, based on the section of the tax code that created them, been so powerful.

(on camera): Why? because they are not bound by the 2002 campaign finance law, which bans political parties from accepting unlimited contributions, known as soft money.

LARRY NOBLE, CTR. FOR RESPONSIVE POLITICS: So, really what you have is the McCain-Feingold law set up a barrier to soft money, and the Federal Election Commission has immediately blown loopholes in the barrier, loopholes that, frankly, you can drive swift boats through.

WALLACE (voice-over): The groups have raised a staggering $260 million in this race, with Democratic 527s far outracing Republicans 527s in fund-raising, spending more than $60 million since March on attack ads critical of President Bush.

(BEGIN VIDEO CLIP)

ANNOUNCER: The second man sailed to the top of list on his father's name, was trained as a pilot, but failed to show up for a required physical.

(END VIDEO CLIP)

WALLACE: Legally, the groups can't coordinate with either presidential campaign, but they can certainly help.

STU ROTHENBERG, POL. ANALYST: It's nice for the candidates to have somebody else doing dirty work, to have outside group launching the attacks, so that whether it's Senator Kerry or President Bush, they can say, hey, it's not my doing. I don't control these 527s.

WALLACE: They are free to raise and spend millions, and could end up playing a decisive role in this year's election.

Kelly Wallace, CNN, New York.

(END VIDEOTAPE)

O'BRIEN: And of course you can get all the political news this afternoon, as always, on Judy Woodruff's "INSIDE POLITICS." It airs at 3:30 Eastern, 12:30 Pacific, right here on CNN.

Coming up, a Jeanne Moos investigation into those wreaths of victory. I know you're dying to know. Fashion faux paus that's gracing the head's of the world's finest athletes. Do they hurt? We examine. You decide. You see that later on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Well, there's a lot to look forward to. Parents and teenager, not really seeing eye to eye on a lot of issues, especially money.

O'BRIEN: Well, you know, I told my kids this summer to get a job. But at 11 and 10, they said no. And I don't know why. I said, you know, get out there, flip some burgers...

PHILLIPS: Paper route.

O'BRIEN: ... paper route, mow a few lawns, you know, college lies ahead, kids. Rhonda?

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: Is that really realistic? The kids actually get a bad rap. People are always giving teenagers a bad rap when you think about it, Miles and Kyra. But apparently, these teenagers are ready to step up to the plate and help deal with some of these rising college costs.

A new survey shows, surprisingly, many university-bound kids feel a strong obligation to help parents pay for the education. A survey from Fidelity Investments says almost all teenagers feel they should shoulder some of the tuition burden. And three quarters think their parents should only pay for half or less.

The majority say they would feel badly if their parents paid for all their tuition. Many parents, of course, meantime wish they could do more to help their children. They don't want to burden with huge debts after graduation.

College tuition rates, we know, have soared during the past couple of years. And that doesn't even include the cost for room, board, books, pizza, and everything else -- Miles, Kyra.

O'BRIEN: I really think this whole education thing is overrated, don't you? I mean...

PHILLIPS: Of course. No, some people do need those degrees.

O'BRIEN: Yes, I guess so. All right...

PHILLIPS: ... big anchor people like we are.

O'BRIEN: Oh, that's right. That's right. You've got to go to college first. Yes, for this I went to college.

All right, let's talk about books at Barnes & Noble. It is a political season, and some books are drawing fire, as we should say, right?

SCHAFFLER: Apparently -- and hard to find, we're learning, too, because Barnes & Noble's sold out of "Unfelt for Command." That's the book that takes aim at Democratic Presidential Candidate John Kerry's war record.

And the chain is getting thousand of complaints. Kerry's critics say the stores are intentionally keeping the books off the shelves. But Barnes & Noble says the publisher halved its original order. The book, by the way, is the top seller on Barnes and Noble online.

Meantime, here on Wall Street, not a lot of big sellers or buyers today. Stocks mixed in a tight range: the Dow is up, though, by 38 points; Nasdaq, little changed.

That's the latest from here on Wall Street. Still ahead, as Cingular swallows up AT&T Wireless, customers may be a little confused about who is AT&T and who is not. A new deal clears things up a bit, though. I'll have that in the next hour. In the meantime, Miles, Kyra, back to you.

O'BRIEN: All right. Thank you very much, Rhonda.

Coming up in the second hour of LIVE FROM, all the news of the day, of course. And then, there's this: Live pictures now from the Pentagon briefing room. We expect to hear from one of the commissions looking into the Abu Ghraib and Afghanistan prison scandal. We'll tell you about that. And of course, we'll bring it to you live as it happens. PHILLIPS: We're also talking about the littlest resistance fighters patrolling the streets in Najaf. Some hold the guns, you know, for the media; believe it or not, others actually pull the trigger.

LIVE FROM's hour of power begins right after this.

(COMMERCIAL BREAK)

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Aired August 24, 2004 - 13:31   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Now in the news, health officials looking at a contaminated water problem as a possible cause of the illness that's making so many people sick in Ohio. Nearly 900 reported intestinal illness after visiting an island resort on Lake Erie. Officials hope to have a preliminary report on possible causes a little later this week.
An alleged driver and bodyguard for Osama bin Laden hears the charges against him in a military court in Guantanamo Bay, Cuba. The suspect is from Yemen and is charged with conspiring to attack and murder civilians. He's the first Gitmo detainee to be arraigned.

And in Canada, even the holy grail gets bumped. Hockey's Stanley Cup, the coolest trophy in all of sports, was missing after an Air Canada flight from Vancouver to Ft. John, British Columbia, it turns out agents in Vancouver pulled it from the plane because of weight restrictions on the packed flight. I guess that was a prudent call. The 35-pound cup is now safe and sound and back in the hands of whoever keeps the cup.

KYRA PHILLIPS, CNN ANCHOR: In Athens, Greece, controversy and anger escalate over scoring in men's gymnastics. CNN's Michael Holmes joins us with us that. And of course the excitement of Iraq's soccer team that's continuing its quest for the gold.

But let's start with the drama on the floor last night, Michael. I'll tell you what, I couldn't go to sleep.

MICHAEL HOLMES, CNN CORRESPONDENT: Oh, poor Kyra. I could. But anyway. Yes, it was very controversial. And Paul Hamm, the poor guy, all he does is do his best, gets a Gold Medal, and then there's all kinds of controversy erupting around him. What essentially happened was that the South Korean gymnast, his team claimed that he wasn't given enough points of difficulty for his routine.

Turns out, he was right, too. And three judges got into all kinds of trouble over that. In fact, they were suspended. Now what happened then was the South Koreans were requesting that they get a Gold Medal as well as Paul Hamm. The Americans said, well, we don't mind if you try to do that.

Well, it has gone through all the bureaucracy. I won't go into all the details, but it turns out that they lodged their protest, their formal protest, too late and now there's really nothing that can be done unless Paul Hamm decides to give up his medal and really that ain't going to happen. So the South Koreans are stuck with that. But there was another controversy on the floor, and this involving a Russian by the name of Alexei Nemov. Now he performed a brilliant routine on the high bar. And a really wonderful routine, everyone concedes that. But he got some pretty low score. He wasn't happy. Then the crowd starts booing. This went on for several minutes.

A Malaysian judge ended up adjusting his score. But in the end it wasn't enough anyway, and Nemov ended up out of the medals anyway. And in fact, Paul Hamm got a silver in that.

Now moving on, your favorite story, now let's touch on Merlene Ottey. We talked about her last week in the 100 meters. She didn't make the final there but she has another chance. Merlene Ottey, 44 year old, her first Olympics were in Moscow, and she's a sprinter. Imagine that. I mean, she's at the age where she should be getting social security from the sprinters federation.

She has made the semifinals of the women's 200 meters. That's going to happen in a couple hours from now. And if she gets into the final, well, anything can happen.

Now to your favorite story, the Iraqi soccer team. They're about to play in their semifinal match, it starts in just under half an hour. And everybody has been looking forward to this. If they win, they get to play for a Gold Medal. Even if they lose that match, they'll still get a Silver and it will be their country's second ever medal. They haven't won one since 1960.

I can tell you who they'll play if they get to that game, Argentina just defeated Italy 3-nil. They've gone through to that Gold Medal match. Even if the Iraqis lose, they'll still get to play for a Bronze against Italy. But let's hope they get through because Italy is not going to be an easy beat, and we'd love to see them get a medal -- Kyra.

PHILLIPS: Well, you mentioned Nemov, the Russian gymnast. The guy was pretty classy, Michael, you have to admit. Coming out on the floor, I mean, even the broadcasters were saying this was just unprecedented, this scoring problem, the athlete had to come out and ask everyone to calm down and be respectful to the next gymnast.

HOLMES: Yes, that was terrific, actually. I should have mentioned that. He actually came out and -- when the crowd was booing and asked them to calm down. And they did, as well. The Russians followed up with a letter of protest to the Gymnastics Federation, also the IOC. Not a formal protest, they're not going to try to get any medals changed or anything like that.

But they're complaining about the judging in general. They claim that one of their girls didn't get a medal because of some bad scores, too. So, yes, pretty controversial end to the gymnastics, but Paul Hamm gets his medals.

All right. You mentioned the girl, come on now, Michael, it's a woman. Let me talk about this investigative report now that you did in Chania. You want to tell us about this.

HOLMES: Well, it was -- everybody was saying there were no -- there was no one at the games last week, the seats were empty and not even the Greeks were turning up. Well, you know, August is a traditional month of vacation for the Greeks. And I don't know, I thought that it was important that we investigate this fully and carry out a very thorough investigation.

And that involved going to the Crete town of Chania. And we spent a day there and found out where all the Greeks go. And a lot of them go to Chania. And as you can see, it's a pretty awful place, isn't it? We had a tough time doing that story.

(LAUGHTER)

HOLMES: I'm kidding, obviously. It's a beautiful place. And it's interesting that there are more Greek tourists there than foreign tourists. And it was a tough assignment, but somebody had to do it.

PHILLIPS: Yes, it looks pretty beautiful, I'm jealous. Hey Michael, real quickly, about the Iraqi soccer team, you know, I've been a big advocate here, saying hey, we have got to watch these Iraqis, we hope that they win. But what's the deal with this one player coming forward, saying if I weren't playing soccer, I'd be joining the resistance. Has there been talk about that over there?

HOLMES: Oh yes, there has been a lot of talk about it. This is the subissue, if you like. You know, it's terrific that the Iraqis are here, just making it here, given the uphill battle in terms of not being able to play in their own country and all of that.

It's a wonderful success story. But they're getting a bit annoyed, particularly being brought up in election campaigns in the United States and things like that. When they hear people say that they're playing as a free Iraq, well, a lot of these guys see it from their point of view, they come from towns like Fallujah and Najaf and Sadr City.

They have family there, right now, while the fighting continues around them, and they're saying, well, hang on, we don't feel very free at the moment, we're still under occupation. There is still all this fighting going on. Our families' lives are at risk.

And they do object -- they're a little bit better about being used in a U.S. election campaign. That's -- there's no doubt about that. In fact, the coach is even a little bit angry about it, and saying, well, stop it, to the Bush campaign, don't use us as part of your election campaign.

And when you see it from the very human point of view, perhaps people can see where they're coming from. If your mother and father are in Najaf at the moment, you're not feeling all that free, I guess. So you can debate this one way or the other. But these guy come from a rough neighborhood -- Kyra.

Michael Holmes, LIVE FROM Athens, thanks so much. We look forward to your next investigative report, sailing the Greek isles.

Thanks, Michael.

HOLMES: OK.

(LAUGHTER)

PHILLIPS: All right, legendary women gymnastics coach Bela Karolyi will be our guest on LIVE FROM. That's right, he's going to talk about the Olympic scoring squabble and America's new Golden Girl, Carly Patterson. That's tomorrow, 3:00 p.m. Eastern, noon Pacific.

O'BRIEN: Hey, Kyra, did you just say golden girl?

PHILLIPS: Golden girl.

O'BRIEN: Girl, huh?

PHILLIPS: OK, all right, golden woman. Here I was giving Michael Holmes a hard time.

O'BRIEN: You're going to give Michael a hard time, you better stick with the program then.

PHILLIPS: It's a phrase "golden girls," come on, like the show. They were all older, but you know.

O'BRIEN: OK, thanks, girl, appreciate it.

PHILLIPS: You bet, boy.

O'BRIEN: All right, you win a medal, you get to wear the medal. You also have to wear that funky wreath thing. It's a look folks either love or hate. Jeanne Moos investigates all this a little bit later.

And everybody says they hate 'em, so why do they keep making them? The ads from those 527 groups are next, as LIVE FROM gets political.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

O'BRIEN: Taking a break from the campaign trail. George Bush is spending another day at his ranch in Crawford, Texas. He'll hit the road Thursday for a swing through eight states, leading up to the GOP convention in New York City.

Just blocks from where that convention is to be held, John Kerry today accused the Bush campaign and its allies of fear-and-smear tactics. He says the Bush camp was trying to avoid talking about the issues. John Kerry has been struggling recently against attacks on his war record, as you well know by now. They come from a group called the Swift Boat Veterans for Truth. The controversy has reignited the debate over so-called 527s, or outside political organizations.

CNN's national correspondent Kelly Wallace with our story.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN NATL. CORRESPONDENT (voice-over): Another salvo in the swift boat controversy. The president calling for an end to attack ads by all independent groups.

(BEGIN VIDEO CLIP)

QUESTION: When you say that you want to stop all, that means...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That means that ad, every other ad.

Absolutely. I don't think we ought to have 527s. I can't be more plain about it.

(END VIDEO CLIP)

WALLACE: Sure you can, said the Democratic vice presidential candidate.

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: George Bush faced his moment of truth, and he failed; he failed to condemn the specific attacks on John Kerry's military record.

WALLACE: Attack ads by independent groups are not new.

(BEGIN VIDEO CLIP)

ANNOUNCER: Now, this man is running for president. President?

(END VIDEO CLIP)

WALLACE: Remember 1988, the infamous Willie Horton ad by a GOP group, targeting Democrat Michael Dukakis.

But never have these groups, called 527s, based on the section of the tax code that created them, been so powerful.

(on camera): Why? because they are not bound by the 2002 campaign finance law, which bans political parties from accepting unlimited contributions, known as soft money.

LARRY NOBLE, CTR. FOR RESPONSIVE POLITICS: So, really what you have is the McCain-Feingold law set up a barrier to soft money, and the Federal Election Commission has immediately blown loopholes in the barrier, loopholes that, frankly, you can drive swift boats through.

WALLACE (voice-over): The groups have raised a staggering $260 million in this race, with Democratic 527s far outracing Republicans 527s in fund-raising, spending more than $60 million since March on attack ads critical of President Bush.

(BEGIN VIDEO CLIP)

ANNOUNCER: The second man sailed to the top of list on his father's name, was trained as a pilot, but failed to show up for a required physical.

(END VIDEO CLIP)

WALLACE: Legally, the groups can't coordinate with either presidential campaign, but they can certainly help.

STU ROTHENBERG, POL. ANALYST: It's nice for the candidates to have somebody else doing dirty work, to have outside group launching the attacks, so that whether it's Senator Kerry or President Bush, they can say, hey, it's not my doing. I don't control these 527s.

WALLACE: They are free to raise and spend millions, and could end up playing a decisive role in this year's election.

Kelly Wallace, CNN, New York.

(END VIDEOTAPE)

O'BRIEN: And of course you can get all the political news this afternoon, as always, on Judy Woodruff's "INSIDE POLITICS." It airs at 3:30 Eastern, 12:30 Pacific, right here on CNN.

Coming up, a Jeanne Moos investigation into those wreaths of victory. I know you're dying to know. Fashion faux paus that's gracing the head's of the world's finest athletes. Do they hurt? We examine. You decide. You see that later on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Well, there's a lot to look forward to. Parents and teenager, not really seeing eye to eye on a lot of issues, especially money.

O'BRIEN: Well, you know, I told my kids this summer to get a job. But at 11 and 10, they said no. And I don't know why. I said, you know, get out there, flip some burgers...

PHILLIPS: Paper route.

O'BRIEN: ... paper route, mow a few lawns, you know, college lies ahead, kids. Rhonda?

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: Is that really realistic? The kids actually get a bad rap. People are always giving teenagers a bad rap when you think about it, Miles and Kyra. But apparently, these teenagers are ready to step up to the plate and help deal with some of these rising college costs.

A new survey shows, surprisingly, many university-bound kids feel a strong obligation to help parents pay for the education. A survey from Fidelity Investments says almost all teenagers feel they should shoulder some of the tuition burden. And three quarters think their parents should only pay for half or less.

The majority say they would feel badly if their parents paid for all their tuition. Many parents, of course, meantime wish they could do more to help their children. They don't want to burden with huge debts after graduation.

College tuition rates, we know, have soared during the past couple of years. And that doesn't even include the cost for room, board, books, pizza, and everything else -- Miles, Kyra.

O'BRIEN: I really think this whole education thing is overrated, don't you? I mean...

PHILLIPS: Of course. No, some people do need those degrees.

O'BRIEN: Yes, I guess so. All right...

PHILLIPS: ... big anchor people like we are.

O'BRIEN: Oh, that's right. That's right. You've got to go to college first. Yes, for this I went to college.

All right, let's talk about books at Barnes & Noble. It is a political season, and some books are drawing fire, as we should say, right?

SCHAFFLER: Apparently -- and hard to find, we're learning, too, because Barnes & Noble's sold out of "Unfelt for Command." That's the book that takes aim at Democratic Presidential Candidate John Kerry's war record.

And the chain is getting thousand of complaints. Kerry's critics say the stores are intentionally keeping the books off the shelves. But Barnes & Noble says the publisher halved its original order. The book, by the way, is the top seller on Barnes and Noble online.

Meantime, here on Wall Street, not a lot of big sellers or buyers today. Stocks mixed in a tight range: the Dow is up, though, by 38 points; Nasdaq, little changed.

That's the latest from here on Wall Street. Still ahead, as Cingular swallows up AT&T Wireless, customers may be a little confused about who is AT&T and who is not. A new deal clears things up a bit, though. I'll have that in the next hour. In the meantime, Miles, Kyra, back to you.

O'BRIEN: All right. Thank you very much, Rhonda.

Coming up in the second hour of LIVE FROM, all the news of the day, of course. And then, there's this: Live pictures now from the Pentagon briefing room. We expect to hear from one of the commissions looking into the Abu Ghraib and Afghanistan prison scandal. We'll tell you about that. And of course, we'll bring it to you live as it happens. PHILLIPS: We're also talking about the littlest resistance fighters patrolling the streets in Najaf. Some hold the guns, you know, for the media; believe it or not, others actually pull the trigger.

LIVE FROM's hour of power begins right after this.

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