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CIA & Pentagon -- Match Made in Heaven or Hell? Can CBS Fill Dan Rather's Place?

Aired November 23, 2004 - 13:30   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: Well, McDonald's CEO is resigning after just seven months on the job. Rhonda Schaffler joins us from the New York Stock Exchange with the details.
(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

PHILLIPS: "Now in the News," in Sharm el-Sheikh, Egypt, an international conference on Iraq ends up on an upbeat note about the country's future, with a statement of support as Iraq attempts to establish a democracy. The summit was aimed at generating aid and support for Iraq as it approaches national elections January 30th.

Help is on the way. Officials with the Iraqi Red Crescent Society plan to visit Falluja Wednesday to determine what the bombed- out city needs the most, as it coordinates relief activities. The group has been trying to deliver supplies to Falluja since the offensive began, but has not been successful in doing so because of ongoing security dangers.

Well, he'd rather scale back. Word just a short time ago the veteran CBS newsman Dan Rather is planning to leave the anchor desk on March 9. A network spokesperson says that doesn't mean he's quitting the news biz cold turkey. Rather plans to remain a part of both editions of CBS'"60 Minutes."

As we heard at the top of the hour, senior Pentagon and administration officials tell CNN that President Bush has ordered a 90-day review of CIA paramilitary operations to see if it's feasible to hand covert ops over to the Pentagon. CNN military intelligence analyst Ken Robinson joins us now to discuss that idea.

And a number of thoughts you and I were talking about, first of all, setting up the scene of the CIA being in charge of paramilitary or the Pentagon being in charge. Why don't we just back up for a minute and talk about maybe one example of a time where it was successful and it wasn't successful when these two entities merged. First of all, I think of the Iran hostage crisis. That was a time it didn't work.

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: During the Iran hostage crisis, one of the special needs was to be able to determine precisely where the hostages were being held, to identify landing zones for the aircraft, to be able to get covert vehicles to be able to move the rescue team through Tehran. And the Central Intelligence Agency did not have paramilitary assets that they could employ. And the U.S., committing Delta Force for the first time in a tactical operation, needed to have certainty to know that they could be successful.

PHILLIPS: Well, what's interesting is -- and I've talked to so many men that were involved in that fight -- they said it was a communication issue. Not everybody was talking and understanding each other. It brings us back to pre-9/11, when the intelligence community -- those who have come forward and said nobody was talking to each other.

ROBINSON: There were multiple problems. One of them was operational procedures, different pieces of equipment, different types of frequency, different SOPs (ph), different services merging together. But the most important one is that U.S. commanders want to have U.S.-trained eyes and ears on a target before they commit U.S. forces. And that's the main rub of the discussion of whether they should be at the DOD or whether they should be CIA paramilitary.

Because many of the -- if you look at the CIA today, 40 percent of the CIA today came into their employment of the Central Intelligence Agency just five years ago. It takes five years just to train a spy.

PHILLIPS: Right. So you're talking about -- it's a big financial investment, too. All right, let's look at a success story. Now, this is when you were involved in Special Forces command we won't mention, and the seizure and ultimately the death of Pablo Escobar and the drug cartel in Colombia. Now, this was an example where CIA and Pentagon worked well together, paramilitary and other resources. Why?

ROBINSON: Because when it does work well, it's great. Because you have synergy, you have sharing of intelligence, (UNINTELLIGIBLE) of information, and that each entity is able to work toward its strength. Remember that the Department of Defense has Special Forces personnel who have those paramilitary skills. If the Central Intelligence Agency has to go out and recruit those, it's incredibly expensive to take someone, unless they hire someone who may have retired from the Special Forces community.

And in Colombia, what worked well there was, there was a national effort, there was a strategic unity of effort on the part of all the inter-agency to stop the flow of drugs and it had the backing of the president. All those ingredients came together, and so it worked very well.

PHILLIPS: So what would the criticisms of this move be? Hey, come on, we're the CIA, we want to have our own entity, we want to do covert operations without having to deal with the Pentagon. Because there have been a number of successful missions that CIA paramilitary has carried out without the Pentagon, right?

ROBINSON: Yes. There are dozens of those that will just stay never reported...

PHILLIPS: Sure, because they're covert. ROBINSON: ... as they should be.

PHILLIPS: So what are the criticisms, then?

ROBINSON: Well, the -- there was a great success with the Northern Alliance, the ability of the Central Intelligence paramilitaries to able to help route and train the Northern Alliance and then be able to fight the Taliban. It was almost war by proxy, being able to use the Taliban force, using command and control from the Central Intelligence paramilitaries, and some use of some Special Forces, which were mixed in there together. But really, the CIA gets a lot of credit for that also.

The challenge is always going to be -- on any covert mission, is not could we, but should we. Should we do something. And if we do do that, can it stand up to the light of day if it becomes out in the open by the press later? And so, having Department of Defense soldiers involved in intelligence activities is a very slippery slope. And so the Department of Defense has military forces capable to take care of its needs and the CIA also needs those capabilities.

I don't think it's a good idea to merge the two. When they do have to work together, there are provisions in place that work very well and they will, once they get a finding from the president of the United States or a direction. So I think that it's dangerous to try to take the capability from each and shake it into one big bag.

PHILLIPS: Interesting. We'll see what happens, see what the fallout is. Thanks so much. Ken Robinson.

ROBINSON: Thank you.

PHILLIPS: Well, a bail hearing is scheduled today for the man accused of gunning down six deer hunters and wounding two others. The suspect, Chai Vang, still has not been charged in those shootings. Our Keith Oppenheim is following developments in Sawyer County, Wisconsin -- Keith.

KEITH OPPENHEIM, CNN CORRESPONDENT: Kyra, when this incident happened on Sunday, police said the suspect in the case wandered on to private land. And I'm going to set the scene for you a little bit here and show you where it is. The crime scene's about half a mile away from here. And there, police say, the suspect occupied a deer blind and when he was confronted by hunters who told him he was trespassing, police say he fired on that group. And when other hunters came to help, he fired on them as well, according to police. In the end, two injured, six dead.

The suspect's name is Chai Vang. He's 36 years old, truck driver from Saint Paul. Police said after the shootings, he got lost in the woods and then got help from other hunters, who eventually realized that Vang was a wanted man and they were able to turn him over to authorities without any problems.

Most of the victims came from Rice Lake. It's a town of about 8,000 people or so, about an hour from here, very close-knit community. People there are grieving, in part because many of the victims were very involved in town affairs. So it's quite a loss there.

Among the dead is a father and son, Robert Crotteau and his 20- year-old son Joey. Also, a woman died, 27-year-old Jessica Willers. She was engaged and supposed to be married next summer. And last night, there was the sixth fatality, that of 55-year-old Denny Drew. He died in a regional hospital.

Now, Kyra, also, the brother of the suspect visited him in the Sawyer County jail and he said this -- this is the brother of Chai Vang. He said the family is devastated. I still don't believe it. He is one of the nicest persons. Maybe he -- maybe something provoked him. He is a reasonable person. So obviously, some shocked people. Not only in this community, but in the family of Chai Vang as well -- Kyra.

PHILLIPS: Keith Oppenheim, thanks so much.

Well, straight ahead, Dan Rather, he's stepping down. We're going to talk about this big media move right after a quick break.

(COMMERCIAL BREAK)

PHILLIPS: More now on that big media move. Although Dan Rather has implied that he would be moving off the anchor desk, and CBS has floated the names of Scott Pelley and John Roberts as likely contenders for the job, the announcement that a date has been set for him to leave the "CBS Evening News" still comes as something of a surprise today.

Joining us to talk about what's behind the news, former ABC reporter and chairman of the journalism school at Boston University, Bob Zelnick, and "New York" magazine columnist Michael Wolf. Good to have you both. I guess I want to ask you both the same question in that, are you surprised, Bob?

BOB ZELNICK, BOSTON UNIVERSITY: Well, I'm not surprised at all. It was kind of like the 800-pound gorilla in the room, the mistakes that were made on the "60 Minutes" broadcast, the Thornburgh report, which is due to be released any day. I think it was a move to preempt at least some of the bad publicity from that and appear as though Rather was in control of his own destiny, but I think we all knew what was happening.

PHILLIPS: Michael, what do you think?

MICHAEL WOLF: Well, I should point out first that I'm not with "New York" magazine, I'm with "Vanity Fair."

PHILLIPS: That is a tremendous mistake. I completely apologize for that.

WOLF: That's all right. I think this is one of these situations where the writing was clearly on the wall but nevertheless, I think everybody is still extraordinarily surprised and they're surprised because -- because there's really no replacement for Dan Rather or -- actually, for any of the three network news anchors.

These are men who are really the last of their generation, the last of their time. There will never be anyone -- because they come out of a world in which network news had a monopoly on television viewers -- there will never be people who are as famous, who have the kind of recognition and the kind of stature of these three guys.

PHILLIPS: You bring up an interesting point, Michael. Bob, I should get you to respond to that, too. Because there was this time -- and I think that is sort of dying out -- where you tuned in for the personality. You tuned in for a Peter Jennings, or a Dan Rather, or a Tom Brokaw.

And now, there are so many people, and there's the competition of cable news. I mean, I could say my mom tunes in to see me every afternoon, but you know, it's not like people are rushing to watch somebody on a 24/7 network.

ZELNICK: I think -- I tend to agree with Michael on this. The strength of the networks was not the anchors. The anchors were the visible leaders of this, but the strength of the networks were the vast number of people -- they commanded at one time 70, 75 percent of the viewing audience. They've lost 59 percent of their viewing audience since their heyday 25 years ago.

PHILLIPS: So, Bob, is it wrong then, for Dan to step down? Is it more of an internal thing?

ZELNICK: No, I don't think it's wrong for him to step down. I think it was essential for him to step down and he wanted to do it before the report came down. But I agree that it doesn't matter how talented his replacement will eventually be, just like it doesn't matter how talented Brian Williams is in stepping in for Tom Brokaw. They will not carry the same clout because they don't carry the same numbers. That era is dead.

I still think there's a useful role for the network news. They still reach 30 million people an evening. And they're still the flagship shows of the news divisions. But they're not what they used to be and they never will be.

WOLF: I think you might...

PHILLIPS: Yes, Michael, what do you think about the (UNINTELLIGIBLE)?

WOLF: Well, I think actually you -- we should probably take this a step further and that further step is that the networks themselves really are ambivalent about whether they want to be in the network news business anymore. So the idea of not being able to replace Dan Rather has an upside for the networks. And the upside is it hastens the day when they can get out of this business that, frankly, they don't really want to be in.

PHILLIPS: Bob what about...

ZELNICK: I'm not sure...

PHILLIPS: Go ahead.

ZELNICK: I'm not sure about that. Because I think they still are profit centers and make a good deal of money for...

WOLF: Well, actually, that's not true. Some of the news divisions -- aspects of the news divisions still produce a profit. And actually at NBC, they've taken...

ZELNICK: The evening news...

WOLF: Not the news, they call it "nonfiction programming" now. But clearly, ABC has all but said they'd like to get out of the business. And I think that there is -- you know, the competition is -- they just cannot face this kind of competition from the cable stations any more.

PHILLIPS: So, Bob, it might be reality TV that reigns on the networks.

ZELNICK: I hope not.

WOLF: Well, it will inevitably be reality TV.

PHILLIPS: Interesting. So Bob's going to be teaching a class about no more reality TV and Michael, you're going to be writing for "Vanity Fair" -- let me repeat, "Vanity Fair"...

WOLF: Thank you very much.

PHILLIPS: ... about how you don't want -- I promise you everybody in our group will be getting the magazine now. Michael Wolf with "Vanity Fair," Bob Zelnick, Boston University J-school chairman. Gentlemen, thank you so much. You actually took us in couple different areas I wasn't expecting. Interesting stuff. Thanks so much.

Well, straight ahead, remember that Virgin Mary grilled cheese sandwich that was for sale on eBay? Well, it's got a new owner and you're not going to believe how much it's going to cost 'em.

(COMMERCIAL BREAK)

PHILLIPS: There it is, Lynne Cheney, placed the star, with a little help there, of course, atop the National Christmas Tree today. The vice president's wife rode a hydraulic lift to reach the top of the 40-foot tree. The tree-lighting ceremony will take place a week from Thursday.

Well, now an update on the story we've been following on LIVE FROM. The 10-year-old, partially eaten grilled cheese sandwich that supposedly bears the image of the Virgin Mary. Take a close look now. Guess what? It's been sold to the highest bidder on eBay. The Golden Palace Online Casino paid $28,000 for this sandwich. The casino says it will be used -- or they'll use the sandwich, rather, to raise money for charity. It's already selling Virgin Mary grilled cheese t- shirts. Oh, boy.

Well, for the first time in four years, U2 has released a new album, and to promote it, the band staged a free concert under New York's Brooklyn Bridge.

(MUSIC)

All right. What a deal. Well, Chinese workers have score a victory in dealing with Wal-Mart. Rhonda Schaffler joins us now live from the New York Stock Exchange with that story, with a little U2 music. I don't know how to make that segue, but I tried -- Rhonda.

(STOCK MARKET REPORT)

PHILLIPS: Rhonda, see you next hour, thanks. Also coming up in the second hour of LIVE FROM, a live Pentagon briefing from Secretary of Defense Donald Rumsfeld. Expect intelligence reform to be among the topics. LIVE FROM'S "Hour of Power" begins after this.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired November 23, 2004 - 13:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, McDonald's CEO is resigning after just seven months on the job. Rhonda Schaffler joins us from the New York Stock Exchange with the details.
(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

PHILLIPS: "Now in the News," in Sharm el-Sheikh, Egypt, an international conference on Iraq ends up on an upbeat note about the country's future, with a statement of support as Iraq attempts to establish a democracy. The summit was aimed at generating aid and support for Iraq as it approaches national elections January 30th.

Help is on the way. Officials with the Iraqi Red Crescent Society plan to visit Falluja Wednesday to determine what the bombed- out city needs the most, as it coordinates relief activities. The group has been trying to deliver supplies to Falluja since the offensive began, but has not been successful in doing so because of ongoing security dangers.

Well, he'd rather scale back. Word just a short time ago the veteran CBS newsman Dan Rather is planning to leave the anchor desk on March 9. A network spokesperson says that doesn't mean he's quitting the news biz cold turkey. Rather plans to remain a part of both editions of CBS'"60 Minutes."

As we heard at the top of the hour, senior Pentagon and administration officials tell CNN that President Bush has ordered a 90-day review of CIA paramilitary operations to see if it's feasible to hand covert ops over to the Pentagon. CNN military intelligence analyst Ken Robinson joins us now to discuss that idea.

And a number of thoughts you and I were talking about, first of all, setting up the scene of the CIA being in charge of paramilitary or the Pentagon being in charge. Why don't we just back up for a minute and talk about maybe one example of a time where it was successful and it wasn't successful when these two entities merged. First of all, I think of the Iran hostage crisis. That was a time it didn't work.

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: During the Iran hostage crisis, one of the special needs was to be able to determine precisely where the hostages were being held, to identify landing zones for the aircraft, to be able to get covert vehicles to be able to move the rescue team through Tehran. And the Central Intelligence Agency did not have paramilitary assets that they could employ. And the U.S., committing Delta Force for the first time in a tactical operation, needed to have certainty to know that they could be successful.

PHILLIPS: Well, what's interesting is -- and I've talked to so many men that were involved in that fight -- they said it was a communication issue. Not everybody was talking and understanding each other. It brings us back to pre-9/11, when the intelligence community -- those who have come forward and said nobody was talking to each other.

ROBINSON: There were multiple problems. One of them was operational procedures, different pieces of equipment, different types of frequency, different SOPs (ph), different services merging together. But the most important one is that U.S. commanders want to have U.S.-trained eyes and ears on a target before they commit U.S. forces. And that's the main rub of the discussion of whether they should be at the DOD or whether they should be CIA paramilitary.

Because many of the -- if you look at the CIA today, 40 percent of the CIA today came into their employment of the Central Intelligence Agency just five years ago. It takes five years just to train a spy.

PHILLIPS: Right. So you're talking about -- it's a big financial investment, too. All right, let's look at a success story. Now, this is when you were involved in Special Forces command we won't mention, and the seizure and ultimately the death of Pablo Escobar and the drug cartel in Colombia. Now, this was an example where CIA and Pentagon worked well together, paramilitary and other resources. Why?

ROBINSON: Because when it does work well, it's great. Because you have synergy, you have sharing of intelligence, (UNINTELLIGIBLE) of information, and that each entity is able to work toward its strength. Remember that the Department of Defense has Special Forces personnel who have those paramilitary skills. If the Central Intelligence Agency has to go out and recruit those, it's incredibly expensive to take someone, unless they hire someone who may have retired from the Special Forces community.

And in Colombia, what worked well there was, there was a national effort, there was a strategic unity of effort on the part of all the inter-agency to stop the flow of drugs and it had the backing of the president. All those ingredients came together, and so it worked very well.

PHILLIPS: So what would the criticisms of this move be? Hey, come on, we're the CIA, we want to have our own entity, we want to do covert operations without having to deal with the Pentagon. Because there have been a number of successful missions that CIA paramilitary has carried out without the Pentagon, right?

ROBINSON: Yes. There are dozens of those that will just stay never reported...

PHILLIPS: Sure, because they're covert. ROBINSON: ... as they should be.

PHILLIPS: So what are the criticisms, then?

ROBINSON: Well, the -- there was a great success with the Northern Alliance, the ability of the Central Intelligence paramilitaries to able to help route and train the Northern Alliance and then be able to fight the Taliban. It was almost war by proxy, being able to use the Taliban force, using command and control from the Central Intelligence paramilitaries, and some use of some Special Forces, which were mixed in there together. But really, the CIA gets a lot of credit for that also.

The challenge is always going to be -- on any covert mission, is not could we, but should we. Should we do something. And if we do do that, can it stand up to the light of day if it becomes out in the open by the press later? And so, having Department of Defense soldiers involved in intelligence activities is a very slippery slope. And so the Department of Defense has military forces capable to take care of its needs and the CIA also needs those capabilities.

I don't think it's a good idea to merge the two. When they do have to work together, there are provisions in place that work very well and they will, once they get a finding from the president of the United States or a direction. So I think that it's dangerous to try to take the capability from each and shake it into one big bag.

PHILLIPS: Interesting. We'll see what happens, see what the fallout is. Thanks so much. Ken Robinson.

ROBINSON: Thank you.

PHILLIPS: Well, a bail hearing is scheduled today for the man accused of gunning down six deer hunters and wounding two others. The suspect, Chai Vang, still has not been charged in those shootings. Our Keith Oppenheim is following developments in Sawyer County, Wisconsin -- Keith.

KEITH OPPENHEIM, CNN CORRESPONDENT: Kyra, when this incident happened on Sunday, police said the suspect in the case wandered on to private land. And I'm going to set the scene for you a little bit here and show you where it is. The crime scene's about half a mile away from here. And there, police say, the suspect occupied a deer blind and when he was confronted by hunters who told him he was trespassing, police say he fired on that group. And when other hunters came to help, he fired on them as well, according to police. In the end, two injured, six dead.

The suspect's name is Chai Vang. He's 36 years old, truck driver from Saint Paul. Police said after the shootings, he got lost in the woods and then got help from other hunters, who eventually realized that Vang was a wanted man and they were able to turn him over to authorities without any problems.

Most of the victims came from Rice Lake. It's a town of about 8,000 people or so, about an hour from here, very close-knit community. People there are grieving, in part because many of the victims were very involved in town affairs. So it's quite a loss there.

Among the dead is a father and son, Robert Crotteau and his 20- year-old son Joey. Also, a woman died, 27-year-old Jessica Willers. She was engaged and supposed to be married next summer. And last night, there was the sixth fatality, that of 55-year-old Denny Drew. He died in a regional hospital.

Now, Kyra, also, the brother of the suspect visited him in the Sawyer County jail and he said this -- this is the brother of Chai Vang. He said the family is devastated. I still don't believe it. He is one of the nicest persons. Maybe he -- maybe something provoked him. He is a reasonable person. So obviously, some shocked people. Not only in this community, but in the family of Chai Vang as well -- Kyra.

PHILLIPS: Keith Oppenheim, thanks so much.

Well, straight ahead, Dan Rather, he's stepping down. We're going to talk about this big media move right after a quick break.

(COMMERCIAL BREAK)

PHILLIPS: More now on that big media move. Although Dan Rather has implied that he would be moving off the anchor desk, and CBS has floated the names of Scott Pelley and John Roberts as likely contenders for the job, the announcement that a date has been set for him to leave the "CBS Evening News" still comes as something of a surprise today.

Joining us to talk about what's behind the news, former ABC reporter and chairman of the journalism school at Boston University, Bob Zelnick, and "New York" magazine columnist Michael Wolf. Good to have you both. I guess I want to ask you both the same question in that, are you surprised, Bob?

BOB ZELNICK, BOSTON UNIVERSITY: Well, I'm not surprised at all. It was kind of like the 800-pound gorilla in the room, the mistakes that were made on the "60 Minutes" broadcast, the Thornburgh report, which is due to be released any day. I think it was a move to preempt at least some of the bad publicity from that and appear as though Rather was in control of his own destiny, but I think we all knew what was happening.

PHILLIPS: Michael, what do you think?

MICHAEL WOLF: Well, I should point out first that I'm not with "New York" magazine, I'm with "Vanity Fair."

PHILLIPS: That is a tremendous mistake. I completely apologize for that.

WOLF: That's all right. I think this is one of these situations where the writing was clearly on the wall but nevertheless, I think everybody is still extraordinarily surprised and they're surprised because -- because there's really no replacement for Dan Rather or -- actually, for any of the three network news anchors.

These are men who are really the last of their generation, the last of their time. There will never be anyone -- because they come out of a world in which network news had a monopoly on television viewers -- there will never be people who are as famous, who have the kind of recognition and the kind of stature of these three guys.

PHILLIPS: You bring up an interesting point, Michael. Bob, I should get you to respond to that, too. Because there was this time -- and I think that is sort of dying out -- where you tuned in for the personality. You tuned in for a Peter Jennings, or a Dan Rather, or a Tom Brokaw.

And now, there are so many people, and there's the competition of cable news. I mean, I could say my mom tunes in to see me every afternoon, but you know, it's not like people are rushing to watch somebody on a 24/7 network.

ZELNICK: I think -- I tend to agree with Michael on this. The strength of the networks was not the anchors. The anchors were the visible leaders of this, but the strength of the networks were the vast number of people -- they commanded at one time 70, 75 percent of the viewing audience. They've lost 59 percent of their viewing audience since their heyday 25 years ago.

PHILLIPS: So, Bob, is it wrong then, for Dan to step down? Is it more of an internal thing?

ZELNICK: No, I don't think it's wrong for him to step down. I think it was essential for him to step down and he wanted to do it before the report came down. But I agree that it doesn't matter how talented his replacement will eventually be, just like it doesn't matter how talented Brian Williams is in stepping in for Tom Brokaw. They will not carry the same clout because they don't carry the same numbers. That era is dead.

I still think there's a useful role for the network news. They still reach 30 million people an evening. And they're still the flagship shows of the news divisions. But they're not what they used to be and they never will be.

WOLF: I think you might...

PHILLIPS: Yes, Michael, what do you think about the (UNINTELLIGIBLE)?

WOLF: Well, I think actually you -- we should probably take this a step further and that further step is that the networks themselves really are ambivalent about whether they want to be in the network news business anymore. So the idea of not being able to replace Dan Rather has an upside for the networks. And the upside is it hastens the day when they can get out of this business that, frankly, they don't really want to be in.

PHILLIPS: Bob what about...

ZELNICK: I'm not sure...

PHILLIPS: Go ahead.

ZELNICK: I'm not sure about that. Because I think they still are profit centers and make a good deal of money for...

WOLF: Well, actually, that's not true. Some of the news divisions -- aspects of the news divisions still produce a profit. And actually at NBC, they've taken...

ZELNICK: The evening news...

WOLF: Not the news, they call it "nonfiction programming" now. But clearly, ABC has all but said they'd like to get out of the business. And I think that there is -- you know, the competition is -- they just cannot face this kind of competition from the cable stations any more.

PHILLIPS: So, Bob, it might be reality TV that reigns on the networks.

ZELNICK: I hope not.

WOLF: Well, it will inevitably be reality TV.

PHILLIPS: Interesting. So Bob's going to be teaching a class about no more reality TV and Michael, you're going to be writing for "Vanity Fair" -- let me repeat, "Vanity Fair"...

WOLF: Thank you very much.

PHILLIPS: ... about how you don't want -- I promise you everybody in our group will be getting the magazine now. Michael Wolf with "Vanity Fair," Bob Zelnick, Boston University J-school chairman. Gentlemen, thank you so much. You actually took us in couple different areas I wasn't expecting. Interesting stuff. Thanks so much.

Well, straight ahead, remember that Virgin Mary grilled cheese sandwich that was for sale on eBay? Well, it's got a new owner and you're not going to believe how much it's going to cost 'em.

(COMMERCIAL BREAK)

PHILLIPS: There it is, Lynne Cheney, placed the star, with a little help there, of course, atop the National Christmas Tree today. The vice president's wife rode a hydraulic lift to reach the top of the 40-foot tree. The tree-lighting ceremony will take place a week from Thursday.

Well, now an update on the story we've been following on LIVE FROM. The 10-year-old, partially eaten grilled cheese sandwich that supposedly bears the image of the Virgin Mary. Take a close look now. Guess what? It's been sold to the highest bidder on eBay. The Golden Palace Online Casino paid $28,000 for this sandwich. The casino says it will be used -- or they'll use the sandwich, rather, to raise money for charity. It's already selling Virgin Mary grilled cheese t- shirts. Oh, boy.

Well, for the first time in four years, U2 has released a new album, and to promote it, the band staged a free concert under New York's Brooklyn Bridge.

(MUSIC)

All right. What a deal. Well, Chinese workers have score a victory in dealing with Wal-Mart. Rhonda Schaffler joins us now live from the New York Stock Exchange with that story, with a little U2 music. I don't know how to make that segue, but I tried -- Rhonda.

(STOCK MARKET REPORT)

PHILLIPS: Rhonda, see you next hour, thanks. Also coming up in the second hour of LIVE FROM, a live Pentagon briefing from Secretary of Defense Donald Rumsfeld. Expect intelligence reform to be among the topics. LIVE FROM'S "Hour of Power" begins after this.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com