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WMD and Saddam Hussein's Iraq; Back on the Stump After VP Debate; Massacre in Laos?

Aired October 06, 2004 - 14:00   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.


KYRA PHILLIPS, CNN ANCHOR: Weapons of mass destruction, they were the reason for war, but did they exist in Iraq? America's chief weapons inspector releases his final report.
MILES O'BRIEN, CNN ANCHOR: Mission accomplished, so says the man in charge of the battle to take a city held by Iraqi insurgents. He will join us live.

PHILLIPS: Attack and counterattack, but it was a fair fight? A fact check on the Cheney-Edwards debate.

O'BRIEN: And shock jock Howard Stern will soon be able to say whatever he wants on the radio. Keep the kids away from the radio. It will be a bigger audience.

From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. This hour of CNN's LIVE FROM starts right now.

We begin with the CIA on WMD and Saddam Hussein's Iraq. Bottom line, MIA. A nearly 1,500-page almost final report from the CIA's chief weapons sleuth concludes that Saddam had no contraband weapons stashed, nor any programs in place for making contraband weapons when the U.S. went to war in March of last year. At the bottom of the hour, the Senate Armed Services Committee will dissect the report and debrief the author.

We get the preview now from CNN national security correspondent David Ensor -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Kyra, as you say, this over a thousand-page document will land with a great thump in the political season here in the United States in about half an hour. We already do have parts of it that CNN has obtained. And in his opening remarks prepared for delivery, Duelfer says, "I still do not expect that militarily significant WMD stocks are to be found in Iraq."

Now, we also have an understanding from various officials as to what some of the major points in his report are. Point one is that there's no stockpile of illicit weapons. As I mentioned, that is the conclusion after, what is it, 16, 17 months of searching. There are no illicit weapons programs that were producing militarily-useful quantities of weapons of mass destruction, chemical, biological or nuclear. But on the better side, from the point of view from the White House, there is clear evidence that Saddam Hussein intended to restart his WMD program. And we are going to hear before the hour is over the names of companies that defied U.N. sanctions.

These companies, we are told, include French, Russian and Polish companies. There are also American companies, though those names are not going to be in the public version of the report that we should be receiving shortly. They will, however, be in another version of the report, and I suspect they'll be out in the news before you know it.

Finally, we heard from officials who have seen this report some of the reasons why Saddam Hussein intended to restart his WMD program. He says that he wanted to keep WMD because he believed, in the first case, that it was the fact that he had such weapons that stopped the United States from marching into Baghdad in 1991, and because he believes that the use of chemical weapons by Iraq prevented Iran from having a victory in the Iran-Iraq war.

Now, Duelfer is expected to tell the Senate Armed Services Committee that this is not the final report, although it is a very comprehensive document, because there's still some more work to do. The team has been given a large number of new documents, and we understand there are about 900 linguists in the nation of Qatar that are now going through these piles of documents. But we're also told that officials don't think anything that will change the picture, the big picture will be found -- Kyra.

PHILLIPS: All right. David Ensor, thanks so much -- Miles.

O'BRIEN: President Bush lashed out at John Kerry today in a blistering speech in Pennsylvania. Mr. Bush's speech in the coveted swing state an apparent effort to reestablish some momentum as we head into Friday's presidential debate. Not for the first time he called Kerry the Senate's number one liberal, and he accused Kerry of waffling over Iraq and having a basic shortage of toughness.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The senator would have America bend over backwards to satisfy a handful of governments with agendas different from our own. It's my opponent's alliance building strategy. Brush off your best friends, fawn over your critics. And that is no way to gain respect in the world.

(END VIDEO CLIP)

O'BRIEN: As for Senator Kerry, he's in Colorado today. No public events planned. Kerry arrived yesterday to complete his preparations for debate number two with President Bush, and that happens this Friday in St. Louis.

PHILLIPS: After last night's vice presidential debate, the two running mates headed to Florida. Senator John Edwards appeared early this afternoon in West Palm Beach, where he responded to President Bush's speech attacking Senator Kerry. (BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: Earlier today, President Bush gave what they describe as a major address on the economy and on terrorism. The problem is, of course, when you've got the same old tired ideas, the same old false attacks, the same old tired rhetoric, there are no new ideas. There are no new plans. This president is completely out of touch with reality, and it showed again in his speech today.

(END VIDEO CLIP)

PHILLIPS: For his part, Vice President Cheney flew to Tallahassee. That's where we find CNN's Dana Bash.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Kyra.

Well, Tallahassee was the first of three stops for the vice president here in Florida. And, of course, Florida is a very important state, we don't need to tell our viewers that. But it's also a state the candidates haven't done a lot of traditional campaigning in because of the four hurricanes that have hit the state. So Mr. Cheney said he was quite happy to be here today.

And you remember the vice president last night was chiding John Edwards for the fact that he said he had been quite absent from the Senate during this campaign year, and reminded him that Mr. Cheney is the president of the Senate and he goes there frequently, and said that they never met. Well, it turns out that they did meet.

They met twice, first at a prayer breakfast in 2001. So Mrs. Cheney warmed up the crowd in a town hall here by finding a coy way to correct her husband.

(BEGIN VIDEO CLIP)

LYNNE CHENEY, VICE PRESIDENT CHENEY'S WIFE: The Edwards people have been scrambling around ever since trying to come up with places where the Cheneys and Edwards might have crossed paths. They have.

They say we met at a prayer breakfast nearly four years ago. Now, I know all of us will agree it is a really good thing to go to prayer breakfasts. But don't you think the senator ought to go to the Senate once in a while?

(END VIDEO CLIP)

BASH: Now, Mr. Cheney did reprise some of his zingers from last night, some of what his wife called greatest hits. He said that he thinks that John Edwards and John Kerry, their records prove that they are not ready to handle the big issue of terrorism and confronting terrorism.

And, you know, for all the talking a heart beat away from the presidency after last night's debate, Mr. Cheney was asked about his health by one of the supporters at a town hall here. He said it's very good, and that he gets checkups regularly.

Now, Kyra, no one expects or few expect the vice presidential debate to be decisive in the end on November 2, but certainly the Bush team, they were hoping that Cheney's performance last night would reenergize some rank-and-file Republicans who were disappointed by the president's performance last week. Now, we talked to some supporters at Mr. Cheney's town hall who said that they were unhappy about the president but felt much better after watching the vice president last night -- Kyra.

PHILLIPS: Dana Bash, live from Tallahassee, Florida. Thanks -- Miles.

O'BRIEN: Well, did the vice presidential candidates cross a line in last night's debate, or were they stretching the truth? Let's get a fact check from senior political analyst Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Dick Cheney said Edwards was wrong when he claimed that 90 percent of the coalition casualties in Iraq have been Americans. Cheney said the correct figure is closer to 50 percent.

But according to the Pentagon and the Central Command, 88.5 percent of the coalition military coalition fatalities in Iraq since the war began have been Americans. Cheney was changing the base to include losses by Iraqi security forces. Edwards was referring to the coalition forces that invaded Iraq to remove Saddam Hussein.

Another point, Edwards said the U.S. has spent $200 billion and counting on the Iraq war. The Office of Management and Budget says the costs through September 2004 has actually been $120 billion. The $200 billion figure includes money allocated for the coming fiscal year, some of which is actually earmarked for Afghanistan. So the claim that the United States is spending 90 percent of the costs in Iraq appears to have been a bit of an exaggeration by Mr. Edwards.

And finally this. Dick Cheney said 900,000 small businesses that create new jobs will be hit by Kerry's tax increase. Listen to what the vice president said.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: A great many of our small businesses pay taxes under the personal income taxes rather than the corporate rate. And about 900,000 small businesses will be hit if you do, in fact, do what they want to do with the top bracket. That's not smart, because seven out of 10 new jobs in America are created by small businesses.

SCHNEIDER: Now, the Tax Policy Center tells us that only 471,000 small businesses would actually face a tax increase from the Kerry plan, and those that file tax returns as individuals include a lot of so-called sideline businesses, such as occasional rentals of yachts and condos. Most of those who pay higher taxes under Kerry's plan are individuals who are not primarily business owners, and a lot of them, a huge number, they say, have no employees at all. (END VIDEOTAPE)

O'BRIEN: Bill Schneider.

More post-debate political analysis still ahead from the "CROSSFIRE" crew. Tucker Carlson, Paul Begala, will be along later this hour. You don't want to miss, it, right, Kyra?

PHILLIPS: Absolutely not if it involves you.

Well, a shutout for Martha Stewart. A greeting from the women of Camp Cupcake. Find out why they will figure prominently in Ms. Stewart's future.

Freedom be foul. Radio personality Howard Stern gets ready to be rid of the FCC.

Feeling the pinch? Why you'll be shelling out even more cool cash to stay warm this winter.

(COMMERCIAL BREAK)

PHILLIPS: News around the world now.

Turkey is one step closer to being part of the European Union. The European commission today recommended that EU membership talks begin with the Muslim nation, but the recommendation is contingent on Turkey staying the course of its human rights reforms.

After a two-day visit to Brazil, U.S. Secretary of State Colin Powell visited Grenada. Powell wanted to see the devastation left by Hurricane Ivan. That hurricane killed at least 37 people, damaged or destroyed 90 percent of the structures on the island.

A former Taliban execution site was the site of a political rally today. Afghanistan's interim president, Hamid Karzai, is on the campaign trail in Kabul. He told voters that gathered in the stadium that Saturday's election will be a turning point for that nation. Meantime, Karzai's running mate escaped unharmed from a roadside explosion that hit its convoy.

O'BRIEN: The United States is being asked to investigate charges the government of Laos might be responsible for a massacre. The alleged attack was on the Hmong people, a mountain tribe which forged a relationship with America during the Vietnam War era. A Laotian refugee living in the U.S. provided video of the dead.

Now, we warn our viewers, some of the images you are about to see are disturbing. Aneesh Raman has our story.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT (voice-over): Va Char Yang is one of Laos' most wanted man. A Lao adopted by Hmong family, he recently fled the country, risking death, he says, all to get a videotape out to the world. Va Char claims that these images from the jungles of Laos were taken in May of this year and show the gruesome aftermath of an attack by Laos soldiers against the country's largest ethnic minority known as the Hmong.

The victims were all teenagers. The human rights group Amnesty International calls the incident a possible war crime. The Lao government says the tape is a fabrication, an attempt by unspecified western interests to discredit their country. But behind these images is a decades-old struggle.

In the late 1960s, as the United States battled in southeast Asia, the Central Intelligence Agency developed a secret relationship in Laos with the Hmong. But by 1975, U.S. forces were out of southeast Asia. Soon after, a communist government came into power in Laos, a government that saw the Hmong as American soldiers still on their soil.

(on camera): After the war, many Hmong were able to escape to neighboring countries, like here in Thailand. This is Tambkrabof (ph), a refugee camp north of Bangkok. And for nearly 30 years some 15,000 Hmong have lived here as refugees.

UNIDENTIFIED MALE: So this is when we first walked into the camp.

RAMAN: But not al Hmong got out. Many were said to remain in the rugged mountain jungles of Laos.

A reporter for "TIME" Magazine, Andrew Perrin, trekked into the mountain jungles in search of the Hmong last year. What he saw was a people living in the most basic existence, each day searching for food defined by survival of the fittest.

ANDREW PERRIN, "TIME": They're humans in the mist. So absolutely zero concept of the outside world. I was literally an alien walking into what to me was their alien world.

RAMAN: The Hmong today are the children and grandchildren of those that helped American forces. Because of that, they say, the Lao military constantly seeks them out. And because of that, they feel America is responsible for their future.

VA CHAR YANG, LAO REFUGEE (through translator): If America do not acknowledge them, they should ask that the American government send a bomb and drop into the jungle and kill them all.

RAMAN: With respect to the latest tape, America's position, says the State Department, remains the same.

ADAM ERELI, STATE DEPT. DEPUTY SPOKESMAN: We take the allegations very seriously. We have consistently called for the Lao government to respect the rights of its ethnic minorities and to press the government of Laos to resolve -- to resolve this problem in a humanitarian and a peaceful way.

PERRIN: Unless I think, you know, the international community steps in, it will just continue to go on and on until all the Hmong are dead.

RAMAN: Va Char fears that could become a reality. He remains a fugitive from Laos. The government there says he is a criminal. And now as a refugee living in the U.S., Va Char says he will continue to fight to shed light on a mountain people untouched by time, living remnants of the Vietnam War.

Aneesh Raman, CNN, Bangkok.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: Well, at least -- at least some of the prisoners seem sympathetic to Martha Stewart, two days before she's set to arrive to serve her five-month sentence. Inmates at the federal prison in Alderson, West Virginia, were shouting, "Save Martha," and waving to the camera.

"The New York Post" was reporting Martha may not enjoy inmate life, even though the place is known as Camp Cupcake. The paper says she'll be subject to a strip search on arrival and other things which -- just check it out in the paper, you really don't want to know the full details right here, right now, right, Kyra?

PHILLIPS: I think I'm just going to leave that one alone.

Well, a surprise from shock jock Howard Stern. Actually, Howard Stern would probably talk about Martha Stewart and a strip search. Stern says that he's given up broadcast radio and switching over to satellite distbultion for his controversial show. We get the details now from CNN's Chris Huntington. He's in New York.

Hi, Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Hi, Kyra. Well, I imagine the Martha prison show will probably be Howard's first show on Sirius Radio.

Well, Howard Stern, he's lewd, crude and, according to the FCC, even socially unacceptable at times. But he is the biggest single draw in radio, and that's why Sirius Satellite Radio, the struggling subscriber-based satellite system for car radio that's lost more than $1 billion in the last four years, is betting the farm.

Sirius will pay $500 million over five years for Stern and his merry band of pranksters. Earlier today, the shock jock was, shall we say, typically modest about the significance of his move to satellite radio.

(BEGIN VIDEO CLIP)

HOWARD STERN, RADIO TALK SHOW HOST: This marks the death of AM and FM radio, I guarantee it. I put my money where my mouth is.

I have one of the largest radio shows in the world. Whenever I go on my radio show, if I have to sell a book, sell a movie, do anything like that, I can instantly go on and reach millions of people.

(END VIDEO CLIP)

HUNTINGTON: Now, Stern's blend of sexual banter and taunting tirades have made hundreds of millions for the stations that carry him, especially from Viacom's Infinity Broadcasting unit, which syndicates the Stern program. But Stern's contract with Infinity ends in December of next year. And ever since Stern's biggest fan and his boss at Viacom, Mel Karmazin, announced a few months ago that he was leaving, it has been widely expected that Stern would leave as well.

Stern holds the somewhat unofficial record for FCC fines. Radio stations have paid more than $2 million to cover up for Stern's indiscretions since 1990. Clear Channel Communication, the nation's biggest chain of radio stations, dropped Stern from its stations in February.

Sirius says it will need to pick up an additional one million customers to cover the cost of hiring Stern, and that would more than double Sirius' current number of subscribers. But given that Stern has an estimated 11 million loyal listeners right now, the word on Wall Street is that he will not have a problem and Sirius should not have problem pulling off these kinds of numbers increase.

Sirius stock right now is up about 15 percent. Shares of the competitor, XM Satellite Radio, are down about 3 percent -- Kyra.

PHILLIPS: Chris, I don't think he'll have a problem with any more controversy, too. That's -- I'm sure that's sure to be straight ahead. All right. Chris Huntington, thanks so much.

Well, oil trading at a record high yet again. And the U.S. government warns that you're going to feel those affects. Rhonda Schaffler joins us live from the New York Stock Exchange with that story.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

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Aired October 6, 2004 - 14:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Weapons of mass destruction, they were the reason for war, but did they exist in Iraq? America's chief weapons inspector releases his final report.
MILES O'BRIEN, CNN ANCHOR: Mission accomplished, so says the man in charge of the battle to take a city held by Iraqi insurgents. He will join us live.

PHILLIPS: Attack and counterattack, but it was a fair fight? A fact check on the Cheney-Edwards debate.

O'BRIEN: And shock jock Howard Stern will soon be able to say whatever he wants on the radio. Keep the kids away from the radio. It will be a bigger audience.

From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. This hour of CNN's LIVE FROM starts right now.

We begin with the CIA on WMD and Saddam Hussein's Iraq. Bottom line, MIA. A nearly 1,500-page almost final report from the CIA's chief weapons sleuth concludes that Saddam had no contraband weapons stashed, nor any programs in place for making contraband weapons when the U.S. went to war in March of last year. At the bottom of the hour, the Senate Armed Services Committee will dissect the report and debrief the author.

We get the preview now from CNN national security correspondent David Ensor -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Kyra, as you say, this over a thousand-page document will land with a great thump in the political season here in the United States in about half an hour. We already do have parts of it that CNN has obtained. And in his opening remarks prepared for delivery, Duelfer says, "I still do not expect that militarily significant WMD stocks are to be found in Iraq."

Now, we also have an understanding from various officials as to what some of the major points in his report are. Point one is that there's no stockpile of illicit weapons. As I mentioned, that is the conclusion after, what is it, 16, 17 months of searching. There are no illicit weapons programs that were producing militarily-useful quantities of weapons of mass destruction, chemical, biological or nuclear. But on the better side, from the point of view from the White House, there is clear evidence that Saddam Hussein intended to restart his WMD program. And we are going to hear before the hour is over the names of companies that defied U.N. sanctions.

These companies, we are told, include French, Russian and Polish companies. There are also American companies, though those names are not going to be in the public version of the report that we should be receiving shortly. They will, however, be in another version of the report, and I suspect they'll be out in the news before you know it.

Finally, we heard from officials who have seen this report some of the reasons why Saddam Hussein intended to restart his WMD program. He says that he wanted to keep WMD because he believed, in the first case, that it was the fact that he had such weapons that stopped the United States from marching into Baghdad in 1991, and because he believes that the use of chemical weapons by Iraq prevented Iran from having a victory in the Iran-Iraq war.

Now, Duelfer is expected to tell the Senate Armed Services Committee that this is not the final report, although it is a very comprehensive document, because there's still some more work to do. The team has been given a large number of new documents, and we understand there are about 900 linguists in the nation of Qatar that are now going through these piles of documents. But we're also told that officials don't think anything that will change the picture, the big picture will be found -- Kyra.

PHILLIPS: All right. David Ensor, thanks so much -- Miles.

O'BRIEN: President Bush lashed out at John Kerry today in a blistering speech in Pennsylvania. Mr. Bush's speech in the coveted swing state an apparent effort to reestablish some momentum as we head into Friday's presidential debate. Not for the first time he called Kerry the Senate's number one liberal, and he accused Kerry of waffling over Iraq and having a basic shortage of toughness.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The senator would have America bend over backwards to satisfy a handful of governments with agendas different from our own. It's my opponent's alliance building strategy. Brush off your best friends, fawn over your critics. And that is no way to gain respect in the world.

(END VIDEO CLIP)

O'BRIEN: As for Senator Kerry, he's in Colorado today. No public events planned. Kerry arrived yesterday to complete his preparations for debate number two with President Bush, and that happens this Friday in St. Louis.

PHILLIPS: After last night's vice presidential debate, the two running mates headed to Florida. Senator John Edwards appeared early this afternoon in West Palm Beach, where he responded to President Bush's speech attacking Senator Kerry. (BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: Earlier today, President Bush gave what they describe as a major address on the economy and on terrorism. The problem is, of course, when you've got the same old tired ideas, the same old false attacks, the same old tired rhetoric, there are no new ideas. There are no new plans. This president is completely out of touch with reality, and it showed again in his speech today.

(END VIDEO CLIP)

PHILLIPS: For his part, Vice President Cheney flew to Tallahassee. That's where we find CNN's Dana Bash.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Kyra.

Well, Tallahassee was the first of three stops for the vice president here in Florida. And, of course, Florida is a very important state, we don't need to tell our viewers that. But it's also a state the candidates haven't done a lot of traditional campaigning in because of the four hurricanes that have hit the state. So Mr. Cheney said he was quite happy to be here today.

And you remember the vice president last night was chiding John Edwards for the fact that he said he had been quite absent from the Senate during this campaign year, and reminded him that Mr. Cheney is the president of the Senate and he goes there frequently, and said that they never met. Well, it turns out that they did meet.

They met twice, first at a prayer breakfast in 2001. So Mrs. Cheney warmed up the crowd in a town hall here by finding a coy way to correct her husband.

(BEGIN VIDEO CLIP)

LYNNE CHENEY, VICE PRESIDENT CHENEY'S WIFE: The Edwards people have been scrambling around ever since trying to come up with places where the Cheneys and Edwards might have crossed paths. They have.

They say we met at a prayer breakfast nearly four years ago. Now, I know all of us will agree it is a really good thing to go to prayer breakfasts. But don't you think the senator ought to go to the Senate once in a while?

(END VIDEO CLIP)

BASH: Now, Mr. Cheney did reprise some of his zingers from last night, some of what his wife called greatest hits. He said that he thinks that John Edwards and John Kerry, their records prove that they are not ready to handle the big issue of terrorism and confronting terrorism.

And, you know, for all the talking a heart beat away from the presidency after last night's debate, Mr. Cheney was asked about his health by one of the supporters at a town hall here. He said it's very good, and that he gets checkups regularly.

Now, Kyra, no one expects or few expect the vice presidential debate to be decisive in the end on November 2, but certainly the Bush team, they were hoping that Cheney's performance last night would reenergize some rank-and-file Republicans who were disappointed by the president's performance last week. Now, we talked to some supporters at Mr. Cheney's town hall who said that they were unhappy about the president but felt much better after watching the vice president last night -- Kyra.

PHILLIPS: Dana Bash, live from Tallahassee, Florida. Thanks -- Miles.

O'BRIEN: Well, did the vice presidential candidates cross a line in last night's debate, or were they stretching the truth? Let's get a fact check from senior political analyst Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Dick Cheney said Edwards was wrong when he claimed that 90 percent of the coalition casualties in Iraq have been Americans. Cheney said the correct figure is closer to 50 percent.

But according to the Pentagon and the Central Command, 88.5 percent of the coalition military coalition fatalities in Iraq since the war began have been Americans. Cheney was changing the base to include losses by Iraqi security forces. Edwards was referring to the coalition forces that invaded Iraq to remove Saddam Hussein.

Another point, Edwards said the U.S. has spent $200 billion and counting on the Iraq war. The Office of Management and Budget says the costs through September 2004 has actually been $120 billion. The $200 billion figure includes money allocated for the coming fiscal year, some of which is actually earmarked for Afghanistan. So the claim that the United States is spending 90 percent of the costs in Iraq appears to have been a bit of an exaggeration by Mr. Edwards.

And finally this. Dick Cheney said 900,000 small businesses that create new jobs will be hit by Kerry's tax increase. Listen to what the vice president said.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: A great many of our small businesses pay taxes under the personal income taxes rather than the corporate rate. And about 900,000 small businesses will be hit if you do, in fact, do what they want to do with the top bracket. That's not smart, because seven out of 10 new jobs in America are created by small businesses.

SCHNEIDER: Now, the Tax Policy Center tells us that only 471,000 small businesses would actually face a tax increase from the Kerry plan, and those that file tax returns as individuals include a lot of so-called sideline businesses, such as occasional rentals of yachts and condos. Most of those who pay higher taxes under Kerry's plan are individuals who are not primarily business owners, and a lot of them, a huge number, they say, have no employees at all. (END VIDEOTAPE)

O'BRIEN: Bill Schneider.

More post-debate political analysis still ahead from the "CROSSFIRE" crew. Tucker Carlson, Paul Begala, will be along later this hour. You don't want to miss, it, right, Kyra?

PHILLIPS: Absolutely not if it involves you.

Well, a shutout for Martha Stewart. A greeting from the women of Camp Cupcake. Find out why they will figure prominently in Ms. Stewart's future.

Freedom be foul. Radio personality Howard Stern gets ready to be rid of the FCC.

Feeling the pinch? Why you'll be shelling out even more cool cash to stay warm this winter.

(COMMERCIAL BREAK)

PHILLIPS: News around the world now.

Turkey is one step closer to being part of the European Union. The European commission today recommended that EU membership talks begin with the Muslim nation, but the recommendation is contingent on Turkey staying the course of its human rights reforms.

After a two-day visit to Brazil, U.S. Secretary of State Colin Powell visited Grenada. Powell wanted to see the devastation left by Hurricane Ivan. That hurricane killed at least 37 people, damaged or destroyed 90 percent of the structures on the island.

A former Taliban execution site was the site of a political rally today. Afghanistan's interim president, Hamid Karzai, is on the campaign trail in Kabul. He told voters that gathered in the stadium that Saturday's election will be a turning point for that nation. Meantime, Karzai's running mate escaped unharmed from a roadside explosion that hit its convoy.

O'BRIEN: The United States is being asked to investigate charges the government of Laos might be responsible for a massacre. The alleged attack was on the Hmong people, a mountain tribe which forged a relationship with America during the Vietnam War era. A Laotian refugee living in the U.S. provided video of the dead.

Now, we warn our viewers, some of the images you are about to see are disturbing. Aneesh Raman has our story.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT (voice-over): Va Char Yang is one of Laos' most wanted man. A Lao adopted by Hmong family, he recently fled the country, risking death, he says, all to get a videotape out to the world. Va Char claims that these images from the jungles of Laos were taken in May of this year and show the gruesome aftermath of an attack by Laos soldiers against the country's largest ethnic minority known as the Hmong.

The victims were all teenagers. The human rights group Amnesty International calls the incident a possible war crime. The Lao government says the tape is a fabrication, an attempt by unspecified western interests to discredit their country. But behind these images is a decades-old struggle.

In the late 1960s, as the United States battled in southeast Asia, the Central Intelligence Agency developed a secret relationship in Laos with the Hmong. But by 1975, U.S. forces were out of southeast Asia. Soon after, a communist government came into power in Laos, a government that saw the Hmong as American soldiers still on their soil.

(on camera): After the war, many Hmong were able to escape to neighboring countries, like here in Thailand. This is Tambkrabof (ph), a refugee camp north of Bangkok. And for nearly 30 years some 15,000 Hmong have lived here as refugees.

UNIDENTIFIED MALE: So this is when we first walked into the camp.

RAMAN: But not al Hmong got out. Many were said to remain in the rugged mountain jungles of Laos.

A reporter for "TIME" Magazine, Andrew Perrin, trekked into the mountain jungles in search of the Hmong last year. What he saw was a people living in the most basic existence, each day searching for food defined by survival of the fittest.

ANDREW PERRIN, "TIME": They're humans in the mist. So absolutely zero concept of the outside world. I was literally an alien walking into what to me was their alien world.

RAMAN: The Hmong today are the children and grandchildren of those that helped American forces. Because of that, they say, the Lao military constantly seeks them out. And because of that, they feel America is responsible for their future.

VA CHAR YANG, LAO REFUGEE (through translator): If America do not acknowledge them, they should ask that the American government send a bomb and drop into the jungle and kill them all.

RAMAN: With respect to the latest tape, America's position, says the State Department, remains the same.

ADAM ERELI, STATE DEPT. DEPUTY SPOKESMAN: We take the allegations very seriously. We have consistently called for the Lao government to respect the rights of its ethnic minorities and to press the government of Laos to resolve -- to resolve this problem in a humanitarian and a peaceful way.

PERRIN: Unless I think, you know, the international community steps in, it will just continue to go on and on until all the Hmong are dead.

RAMAN: Va Char fears that could become a reality. He remains a fugitive from Laos. The government there says he is a criminal. And now as a refugee living in the U.S., Va Char says he will continue to fight to shed light on a mountain people untouched by time, living remnants of the Vietnam War.

Aneesh Raman, CNN, Bangkok.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: Well, at least -- at least some of the prisoners seem sympathetic to Martha Stewart, two days before she's set to arrive to serve her five-month sentence. Inmates at the federal prison in Alderson, West Virginia, were shouting, "Save Martha," and waving to the camera.

"The New York Post" was reporting Martha may not enjoy inmate life, even though the place is known as Camp Cupcake. The paper says she'll be subject to a strip search on arrival and other things which -- just check it out in the paper, you really don't want to know the full details right here, right now, right, Kyra?

PHILLIPS: I think I'm just going to leave that one alone.

Well, a surprise from shock jock Howard Stern. Actually, Howard Stern would probably talk about Martha Stewart and a strip search. Stern says that he's given up broadcast radio and switching over to satellite distbultion for his controversial show. We get the details now from CNN's Chris Huntington. He's in New York.

Hi, Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Hi, Kyra. Well, I imagine the Martha prison show will probably be Howard's first show on Sirius Radio.

Well, Howard Stern, he's lewd, crude and, according to the FCC, even socially unacceptable at times. But he is the biggest single draw in radio, and that's why Sirius Satellite Radio, the struggling subscriber-based satellite system for car radio that's lost more than $1 billion in the last four years, is betting the farm.

Sirius will pay $500 million over five years for Stern and his merry band of pranksters. Earlier today, the shock jock was, shall we say, typically modest about the significance of his move to satellite radio.

(BEGIN VIDEO CLIP)

HOWARD STERN, RADIO TALK SHOW HOST: This marks the death of AM and FM radio, I guarantee it. I put my money where my mouth is.

I have one of the largest radio shows in the world. Whenever I go on my radio show, if I have to sell a book, sell a movie, do anything like that, I can instantly go on and reach millions of people.

(END VIDEO CLIP)

HUNTINGTON: Now, Stern's blend of sexual banter and taunting tirades have made hundreds of millions for the stations that carry him, especially from Viacom's Infinity Broadcasting unit, which syndicates the Stern program. But Stern's contract with Infinity ends in December of next year. And ever since Stern's biggest fan and his boss at Viacom, Mel Karmazin, announced a few months ago that he was leaving, it has been widely expected that Stern would leave as well.

Stern holds the somewhat unofficial record for FCC fines. Radio stations have paid more than $2 million to cover up for Stern's indiscretions since 1990. Clear Channel Communication, the nation's biggest chain of radio stations, dropped Stern from its stations in February.

Sirius says it will need to pick up an additional one million customers to cover the cost of hiring Stern, and that would more than double Sirius' current number of subscribers. But given that Stern has an estimated 11 million loyal listeners right now, the word on Wall Street is that he will not have a problem and Sirius should not have problem pulling off these kinds of numbers increase.

Sirius stock right now is up about 15 percent. Shares of the competitor, XM Satellite Radio, are down about 3 percent -- Kyra.

PHILLIPS: Chris, I don't think he'll have a problem with any more controversy, too. That's -- I'm sure that's sure to be straight ahead. All right. Chris Huntington, thanks so much.

Well, oil trading at a record high yet again. And the U.S. government warns that you're going to feel those affects. Rhonda Schaffler joins us live from the New York Stock Exchange with that story.

(STOCK MARKET REPORT)

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