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Iraq to Begin War Crimes Trials Next Week; Scott Peterson Destined for San Quentin; Fed Raises Interest Rates

Aired December 14, 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: Wall Street and the rest of America waiting word on interest rates. In a few moments, the Federal Reserve will announce its decision. We'll bring that to you.
MILES O'BRIEN, CNN ANCHOR: A jury recommends death for Scott Peterson. What would life on Death Row be like for him? We'll go in- depth.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Before I knew it, I was surrounded by police and they had taken my purse and my backpack because I had spent the night with some friends. And they -- that's when the nightmare started.

(END VIDEO CLIP)

PHILLIPS: A woman's quest for cheaper prescription drugs lands her in a Mexican jail.

O'BRIEN: And fighting for home. Some American veterans who served in Iraq and Afghanistan find themselves literally on the streets after their tour of duty is over. We'll talk with one of them about his plight shortly.

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 an announcement that's causing waves around the world. With Iraq's elections scheduled to take place next month, the country is also preparing to stage another high profile event: war crimes trials.

But many people doubt that they can get underway so soon.

CNN's Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): In his weekly address to the national assembly, Prime Minister Ayad Allawi stated that former regime elements would be put on trial as early as next week. He didn't name names. He didn't suggest, for example, that Saddam Hussein himself may be in the dock next week or which of other his cohorts may be the first to appear on trial.

But this date and the announcement did take a lot of people by surprise. Initially, the interim government had said that it thought that November or December would be the right time to start these trials.

But then, the time line was generally accepted to have slipped, because prosecutors had to be trained for what is going to be a very complicated trial that must meet the scrutiny of international law.

(on camera) Even those very close to the war crimes tribunal, said it would most likely be sometime into next year before those trials could go ahead.

(voice-over) But some analysts have suggested that Prime Minister Allawi's statement on these trials may have more to do with an announcement of his candidacy for the January 30 elections.

Prime Minister Allawi is expected tomorrow to say that he will be running for appointment to the national assembly, along with some other senior government figures expected to be on his list.

And political analysts are suggesting that this is a little bit of election campaigning.

In other developments in Baghdad in the course of the day, a second car bomb in as many days. A suicide car bomber detonated his explosives at the same point a car bomb exploded yesterday at one of the checkpoints entering the Green Zone, the center of the U.S. administration and the Iraqi government here in Baghdad.

Hospital sources say that two people were killed and 13 others were wounded in that attack.

Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

O'BRIEN: In Baghdad, a rare moment of relief from the war for U.S. troops. Hundreds of soldiers at Camp Liberty received some high profile visitors today.

General Richard Myers, chairman of the joint chiefs of staff, dropped by. And so did comedian Robin Williams and sportscaster and model Leeann Tweeden. It's part of an effort to boost troop morale during the holiday season. Kind of an interesting trio there.

From battered to battle ready. It's a transformation taking place around the country on equipment that must go back to Iraq.

CNN's Ed Lavandera visited one Army hub charged with making that metamorphosis.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Workers at the Red River Army Depot are transforming chunks of steel and metal back into war fighting machines.

This defense complex in northeast Texas is one of five depots nationwide responsible for what the Army calls resetting the force. That means turning bullet-riddled, war weary debris back into battle ready military trucks in less than 100 days.

DENNIS LEWIS, RED RIVER ARMY DEPOT: These are extreme cases of battlefield damage. Not all of these vehicles that are in this particular line can be repaired.

LAVANDERA: The demand intensified so much over the last year, that 600 new workers have been hired to keep up with the demand of a 24 hour a day, seven day a week production line.

Commanders forecast work on about 1,300 vehicles for 2005 fiscal year, but already that number is predicted to hit 5,000.

COL. MICHAEL CERVONE, COMMANDER, RED RIVER ARMY DEPOT: I've told the work force to be prepared to have to hold this pace for another two, two and a half years.

LAVANDERA: But some soldiers can't wait for their gear to be repaired. With missions to complete, they must scrounge the Iraqi landscape and terrain for equipment to patch together the Army equipment they do have.

And some have paid the penalty. Darrell Birt and five other National Guard reservists face a military court-martial on charges of theft for doing in the field what the Army is doing warp speed in Texas.

In this case, scavenging two trailers and two tractors and stripping parts from a truck that had been abandoned in Kuwait by other units that they had already moved into Iraq. The equipment their unit needed to complete a fuel deliver mission.

DARRELL BIRT, COURT-MARTIALED SOLDIER: This is not for Darrell Birt to have his own personal vehicle to cruise around in Iraq and see the country side. This is to put the 656 in the fight and sustain us in the fight. And we did our job.

LAVANDERA: The six men have been dishonorably discharged and themselves stripped of all military benefits. Some have also lost civilian jobs.

Meanwhile, at the Red River Army depot, some of the most crucial work is underway in this warehouse. Workers are putting the final touches on armor kits for Humvees that will be used in Iraq. Orders for thousands have been made for this year.

UNIDENTIFIED MALE: This kit can get to the theater in as quick as nine days. So in 10-14 days, this kit could be on a truck. LAVANDERA: Every day the lots here fill with more broken down, battered military vehicles. The names of soldiers still etched in the glass, a reminder this isn't a story about scraps of metal and steel.

It's about the soldiers that depend on the metal and sometimes stealing to get the mission done.

Ed Lavandera, CNN, Texarkana, Texas.

(END VIDEOTAPE)

O'BRIEN: News around the world now.

At least 27 people are dead, dozens injured, after a head-on crash between two passenger trains in northern India. A railroad official says it appears two stations didn't communicate, allowing both to travel toward each other on the same track.

Driving through the sky. A roadway bridge hailed as the world's highest is about to open in southern France. Those who fear heights might want to consider another route.

President Jacques Chirac today inaugurated the bridge, 891 feet above the ground. One of the pillars reaches more than 1,100 feet, which makes it taller than the Eiffel Tower.

And a U.S. soldier is the winner of Afghanistan's first marathon. First Lieutenant Mike Baskin of California crossed the finish line in three hours, 12 minutes and 15 seconds. About 200 troops and civilian employees took part.

PHILLIPS: Jurors in the Scott Peterson case are saying the evidence and Peterson's courtroom demeanor helped convince them he was a murderer who deserved the death penalty.

Yesterday the jury in Redwood City, California, recommended the death sentence for Peterson for the killings of his pregnant wife and unborn son.

Some jurors say the prosecution's case was compelling and Peterson lacked credibility and emotion.

(BEGIN VIDEO CLIP)

STEVE CARDOSI, PETERSON JURY FOREMAN: I understand why he didn't testify and I think really looking back and thinking about the question, I was asked the same question yesterday is you know, given his past and his level of honesty, it probably would have done him more harm than good to talk to us. Because I don't believe we would have believed him even if he was being honest, and if he wasn't being honest, obviously that would be bad, too.

(END VIDEO CLIP)

PHILLIPS: The judge is expected to follow the jury's recommendation February 25th at Peterson's formal sentencing and send Peterson to Death Row at San Quentin Prison. The foreman and some other members of the jury in the Scott Peterson case will be Larry King's guests tonight at 9 Eastern on CNN.

Now, if the state of California puts Scott Peterson to death, it will not be for a very long time. CNN national correspondent Gary Tuchman reports.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): San Quentin State Prison, the home of California's Death Row for men. Scott Peterson has joined the nation's largest contingent of people waiting to be executed: 641 inmates are on Death Row in California. The state's form of execution: lethal injection.

But actually getting executed is another story. Since the resumption of the death penalty nearly three decades ago, California has executed a far lower percentage of Death Row inmates than the state that is well ahead of all the others, Texas.

Since California re-implemented the death penalty in 1978, ten people have been executed. In Texas the number is at 336 since it resumed the death penalty.

Peterson likely has many years of life still ahead of him. California has waited an average of more than 16 years to carry out each execution. The last inmate to be put to death was murderer Steven Wayne Anderson in 2002.

UNIDENTIFIED MALE: The insertion of the fluids began at 12:17. And death was pronounced at 12:32.

TUCHMAN: And he waited more than 20 years to be put to death.

San Quentin has a segregation unit for the worst of the condemned, but most inmates get the right to have care packages of food sent to them.

UNIDENTIFIED MALE: Honey is not allowed, because they can make wine with the sugar content of the honey.

TUCHMAN: Scott Peterson will now be living a life where the constant thought is death.

Gary Tuchman, CNN, Atlanta.

(END VIDEOTAPE)

PHILLIPS: A decision expected soon that could affect everything from your credit card rate to how much you earn on your savings. We'll bring you the Federal Reserve announcement on interest rates when it happens.

Also ahead, Kofi Annan's son, Kojo, at the center of the United Nations oil-for-food scandal. He speaks out exclusively to CNN just ahead. And later, will an Internet search engine make your public library obsolete? An announcement today may have some readers tossing their cards and picking up their mouse.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

O'BRIEN: We're watching the Federal Reserve. Any minute now, the Federal Reserve expected to announce its decision on interest rates. Will they continue their upward trend?

Allan Chernoff, CNN financial news, in New York to tell us, probably, "You bet." Right, Allan?

ALLAN CHERNOFF, CNN CORRESPONDENT: You bet, Miles and just about everybody on Wall Street is betting the same way. It's virtually universally believed that the Federal Reserve is going to raise interest rates yet again up to 2.25 percent for the overnight bank lending rate known as fed funds.

This would be the fifth rate increase that we've seen from the Federal Reserve. And what the Fed is trying to do here is basically make sure that inflation does not pick up too much as the economy is expanding.

So the Fed is watching very closely measures of inflation just to make sure that it can keep things under control. That's really the intent here, Miles.

O'BRIEN: Implications, Allan. What are the implications for consumers and all this, as these rates continue to rise?

CHERNOFF: Well, consumers certainly already have begun seeing the impact.

You'd first of all see it on an adjustable rate mortgages. These are the most sensitive mortgages, one year adjustable rate mortgages, in fact, that's where you would see the impact.

If you had taken out a one-year adjustable rate mortgage one year ago, you would have taken that loan out at just under four percent. And today, if it were being adjusted by the lender, you'd actually be paying about 5.33 percent. So a big increase over there.

You'd also be seeing it on home equity loans. They are also on the rise. In fact, back in June, they were at 4.66 percent. Right now, they're at 5.50 percent. So that's exactly where you're feeling it.

In addition, credit cards. That's where the impact also is being felt. Because credit card rates are very much tied to the prime rate, and the prime rate is connected very much to the fed funds rate.

So anybody with lots of debt out there on their credit card, they'd certainly want to try to pay it down, because those rates are going to keep on moving higher.

O'BRIEN: But those credit card rates are already so high. If you read the fine print, I mean, it's well above 20 percent in many cases. They still will jack it up a little more, huh?

CHERNOFF: Yes. And Miles, we do have word that in fact the Fed has done exactly what we did expect, up by .25 percent on that fed funds overnight bank lending rate. So the rate now stands at 2.25 percent.

And economists are expecting the Fed to continue raising the interest rate, that overnight bank lending rate. Next year, lots of folks predicting the rate will go over three percent.

So in terms of the consumer impact, certainly look for those higher rates for short-term rates, including the credit card rates.

Longer term rates, it hasn't had that much of an impact, because those longer term 30-year mortgage rates, that's really affected by the market, by the bond market, not so much by the Federal Reserve -- Miles.

O'BRIEN: All right. I assume that the market already responding? Probably already going up on Wall Street, huh?

CHERNOFF: Yes, well this is pretty much expected on Wall Street. No big surprise at all. So as you can see, not a dramatic impact at all on Wall Street right now. Market was higher before the announcement. And this has pretty much already been baked into the cake on Wall Street.

O'BRIEN: Baked into the cake. All right, Allan Chernoff, our chef of economic news today doing the baking for us out of New York. We appreciate it.

News as it happens right here on CNN -- Kyra.

PHILLIPS: Well, now the still simmering scandal over the U.N.'s oil-for-food program with Iraq.

While U.N. Secretary-General Kofi Annan has been criticized, it is his son, Kojo Annan, who's drawn most of the criticism and scrutiny. Kojo Annan has not personally commented about the investigation until now.

From Lagos, Nigeria, CNN's Jeff Koinange has this exclusive report.

(BEGIN VIDEOTAPE)

JEFF KOINANGE, CNN CORRESPONDENT (voice-over): Kojo Annan is the 31-year-old son of United Nations Secretary-General Kofi Annan from Anna's first marriage.

The younger Annan lives in a townhouse here in Lagos, the bustling commercial capital of Nigeria. He is a businessman and a bachelor, who enjoys traveling and whose financial interests stretch from Lagos to London.

But it's Kojo Annan's work for the Swiss multinational Cotecna that's haunting him. Cotecna profited from the oil-for-food program, hired in 1998 to authenticate approved humanitarian goods shipments to Iraq.

U.N. critics suspect the firm might have won the contract because of Kojo's U.N. connections. Cotecna says that was not a factor and that it had been originally chosen to work for the U.N. in 1992.

CNN has tried repeatedly to get Kojo Annan to speak to us on camera, but he has refused. Instead, issuing this statement to CNN, saying he is cooperating with investigators: "I feel the whole issue has been a witch hunt from day one as part of a broader Republican political agenda."

Kojo Annan went to work for Cotecna fresh out of a British university in 1995. He and the firm insist his job was limited to the firm's activities in West Africa, working in the Nigeria office for four years.

Kojo Annan says he was never involved in the firm's activities in Iraq, saying, "I have never participated directly or indirectly in any business related to the United Nations."

But even after Kojo Annan resigned from Cotecna, the firm kept him on its payroll until this February in a non-compete agreement, preventing him from disclosing any confidential company information or working for the competition. For this, Cotecna paid him a total of $125,000 over four years.

The elder Annan has said he was unaware of the continuing payments and is disappointed they create a perception of conflict of interest.

KOFI ANNAN, SECRETARY-GENERAL, UNITED NATIONS: He's a grown man and I don't get involved with his activities and he doesn't get involved in mine.

KOINANGE: Kofi Annan says he's been in touch with his son and that Kojo is cooperating with investigators.

FRED ECKHARD, U.N. SPOKESMAN: We're not aware that anything Kojo Annan did for Cotecna was illegal or improper. That's our perception.

KOINANGE: Meanwhile, Kojo Annan says the investigations, especially in Washington, aren't about him but a deliberate attempt to bring down his father.

"The rest of the world has shown their unwavering support for my father. What will the U.S. senators have to say if there is, as many over here in the rest of the world suspect, no substance to the allegations against my father and me?"

(on camera) Kojo Annan tells me he feels sorry for all the distress he's brought on his father and the rest of his family. As for the ongoing investigation, he says he's already spent countless hours being questioned and feels confidence that in the end, he'll be found innocent of any wrongdoing.

Jeff Koinange, CNN, Lagos.

(END VIDEOTAPE)

O'BRIEN: Holiday shoppers stretching their euros by buying American. Ahead, why international bargain hunters are finding such great deals in the United States.

RHONDA SCHAFFLER, CNN CORRESPONDENT: I'm Rhonda Schaffler in New York. I'll have more about a big deal in the wireless business. Also, we'll follow the market's reaction to that Fed rate hike.

Stay tuned. LIVE FROM is coming right back.

(COMMERCIAL BREAK)

O'BRIEN: Dollar for dollar, Americans are getting the shaft this holiday shopping season. But it's a bonanza for Europeans who are heading overseas to shop, shop, shop.

I was in New York the past few days. The whole streets just filled with Europeans.

CNN's Maggie Lake tags along with the bargain brigade there in Manhattan.

(BEGIN VIDEOTAPE)

MAGGIE LAKE, CNN CORRESPONDENT (voice-over): New York's Fifth Avenue may be dressed in red and white for the holidays, but it is the green that European travelers are most excited about.

UNIDENTIFIED MALE: Well, we hope we will get a good rate.

UNIDENTIFIED FEMALE: Bad news for you, but it's good news for us.

LAKE: Good news, indeed. A 10 percent drop in the dollar's value in the last six months means that British travelers are getting almost $2 for every pound. Euro zone residents get around $1.40 for every euro.

(on camera) As we head closer to the holidays, stores are already holding Christmas sale. Add to that the currency benefit, and you're talking about some serious bargains.

How is the fact that it's almost two to one, how is that factoring into your shopping?

UNIDENTIFIED FEMALE: You don't think twice. You don't think twice. You just buy.

UNIDENTIFIED FEMALE: Went crazy with the iPods. The mini iPods at the moment.

LAKE: That's what you're going to get.

UNIDENTIFIED FEMALE: The price that they're quoting is amazing.

LAKE (voice-over): The iPods, which are one of the most sought after purchases, retail in London for around 195 pounds. In New York, the mini runs 124 pounds after the currency conversion.

Another popular item for European shoppers, Nike trainers. A pair that sells for 110 pounds in London are only 60 pounds in the U.S.

Those kind of bargains are making the U.S. a popular destination. Industry watchers say 6.7 million people have traveled from western Europe in the first eight months of this year, a 17 percent jump from last year.

Those numbers will dip slightly as we wind down 2004 but should stay in the double digits.

Some of those heading over will opt to use their strong currencies to enjoy some fun in the sun, but New York City remains the most popular destination for Europeans.

For those intent on shopping till you drop, some advice from the locals: bring a warm coat and an extra suitcase.

Maggie Lake, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: Well, the Federal Reserve just hiked interest rates by a quarter point. For Wall Street's reaction, Rhonda Schaffler, live from the New York Stock Exchange.

Rhonda, what are you seeing?

(STOCK REPORT)

(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 December 14, 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: Wall Street and the rest of America waiting word on interest rates. In a few moments, the Federal Reserve will announce its decision. We'll bring that to you.
MILES O'BRIEN, CNN ANCHOR: A jury recommends death for Scott Peterson. What would life on Death Row be like for him? We'll go in- depth.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Before I knew it, I was surrounded by police and they had taken my purse and my backpack because I had spent the night with some friends. And they -- that's when the nightmare started.

(END VIDEO CLIP)

PHILLIPS: A woman's quest for cheaper prescription drugs lands her in a Mexican jail.

O'BRIEN: And fighting for home. Some American veterans who served in Iraq and Afghanistan find themselves literally on the streets after their tour of duty is over. We'll talk with one of them about his plight shortly.

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 an announcement that's causing waves around the world. With Iraq's elections scheduled to take place next month, the country is also preparing to stage another high profile event: war crimes trials.

But many people doubt that they can get underway so soon.

CNN's Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): In his weekly address to the national assembly, Prime Minister Ayad Allawi stated that former regime elements would be put on trial as early as next week. He didn't name names. He didn't suggest, for example, that Saddam Hussein himself may be in the dock next week or which of other his cohorts may be the first to appear on trial.

But this date and the announcement did take a lot of people by surprise. Initially, the interim government had said that it thought that November or December would be the right time to start these trials.

But then, the time line was generally accepted to have slipped, because prosecutors had to be trained for what is going to be a very complicated trial that must meet the scrutiny of international law.

(on camera) Even those very close to the war crimes tribunal, said it would most likely be sometime into next year before those trials could go ahead.

(voice-over) But some analysts have suggested that Prime Minister Allawi's statement on these trials may have more to do with an announcement of his candidacy for the January 30 elections.

Prime Minister Allawi is expected tomorrow to say that he will be running for appointment to the national assembly, along with some other senior government figures expected to be on his list.

And political analysts are suggesting that this is a little bit of election campaigning.

In other developments in Baghdad in the course of the day, a second car bomb in as many days. A suicide car bomber detonated his explosives at the same point a car bomb exploded yesterday at one of the checkpoints entering the Green Zone, the center of the U.S. administration and the Iraqi government here in Baghdad.

Hospital sources say that two people were killed and 13 others were wounded in that attack.

Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

O'BRIEN: In Baghdad, a rare moment of relief from the war for U.S. troops. Hundreds of soldiers at Camp Liberty received some high profile visitors today.

General Richard Myers, chairman of the joint chiefs of staff, dropped by. And so did comedian Robin Williams and sportscaster and model Leeann Tweeden. It's part of an effort to boost troop morale during the holiday season. Kind of an interesting trio there.

From battered to battle ready. It's a transformation taking place around the country on equipment that must go back to Iraq.

CNN's Ed Lavandera visited one Army hub charged with making that metamorphosis.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Workers at the Red River Army Depot are transforming chunks of steel and metal back into war fighting machines.

This defense complex in northeast Texas is one of five depots nationwide responsible for what the Army calls resetting the force. That means turning bullet-riddled, war weary debris back into battle ready military trucks in less than 100 days.

DENNIS LEWIS, RED RIVER ARMY DEPOT: These are extreme cases of battlefield damage. Not all of these vehicles that are in this particular line can be repaired.

LAVANDERA: The demand intensified so much over the last year, that 600 new workers have been hired to keep up with the demand of a 24 hour a day, seven day a week production line.

Commanders forecast work on about 1,300 vehicles for 2005 fiscal year, but already that number is predicted to hit 5,000.

COL. MICHAEL CERVONE, COMMANDER, RED RIVER ARMY DEPOT: I've told the work force to be prepared to have to hold this pace for another two, two and a half years.

LAVANDERA: But some soldiers can't wait for their gear to be repaired. With missions to complete, they must scrounge the Iraqi landscape and terrain for equipment to patch together the Army equipment they do have.

And some have paid the penalty. Darrell Birt and five other National Guard reservists face a military court-martial on charges of theft for doing in the field what the Army is doing warp speed in Texas.

In this case, scavenging two trailers and two tractors and stripping parts from a truck that had been abandoned in Kuwait by other units that they had already moved into Iraq. The equipment their unit needed to complete a fuel deliver mission.

DARRELL BIRT, COURT-MARTIALED SOLDIER: This is not for Darrell Birt to have his own personal vehicle to cruise around in Iraq and see the country side. This is to put the 656 in the fight and sustain us in the fight. And we did our job.

LAVANDERA: The six men have been dishonorably discharged and themselves stripped of all military benefits. Some have also lost civilian jobs.

Meanwhile, at the Red River Army depot, some of the most crucial work is underway in this warehouse. Workers are putting the final touches on armor kits for Humvees that will be used in Iraq. Orders for thousands have been made for this year.

UNIDENTIFIED MALE: This kit can get to the theater in as quick as nine days. So in 10-14 days, this kit could be on a truck. LAVANDERA: Every day the lots here fill with more broken down, battered military vehicles. The names of soldiers still etched in the glass, a reminder this isn't a story about scraps of metal and steel.

It's about the soldiers that depend on the metal and sometimes stealing to get the mission done.

Ed Lavandera, CNN, Texarkana, Texas.

(END VIDEOTAPE)

O'BRIEN: News around the world now.

At least 27 people are dead, dozens injured, after a head-on crash between two passenger trains in northern India. A railroad official says it appears two stations didn't communicate, allowing both to travel toward each other on the same track.

Driving through the sky. A roadway bridge hailed as the world's highest is about to open in southern France. Those who fear heights might want to consider another route.

President Jacques Chirac today inaugurated the bridge, 891 feet above the ground. One of the pillars reaches more than 1,100 feet, which makes it taller than the Eiffel Tower.

And a U.S. soldier is the winner of Afghanistan's first marathon. First Lieutenant Mike Baskin of California crossed the finish line in three hours, 12 minutes and 15 seconds. About 200 troops and civilian employees took part.

PHILLIPS: Jurors in the Scott Peterson case are saying the evidence and Peterson's courtroom demeanor helped convince them he was a murderer who deserved the death penalty.

Yesterday the jury in Redwood City, California, recommended the death sentence for Peterson for the killings of his pregnant wife and unborn son.

Some jurors say the prosecution's case was compelling and Peterson lacked credibility and emotion.

(BEGIN VIDEO CLIP)

STEVE CARDOSI, PETERSON JURY FOREMAN: I understand why he didn't testify and I think really looking back and thinking about the question, I was asked the same question yesterday is you know, given his past and his level of honesty, it probably would have done him more harm than good to talk to us. Because I don't believe we would have believed him even if he was being honest, and if he wasn't being honest, obviously that would be bad, too.

(END VIDEO CLIP)

PHILLIPS: The judge is expected to follow the jury's recommendation February 25th at Peterson's formal sentencing and send Peterson to Death Row at San Quentin Prison. The foreman and some other members of the jury in the Scott Peterson case will be Larry King's guests tonight at 9 Eastern on CNN.

Now, if the state of California puts Scott Peterson to death, it will not be for a very long time. CNN national correspondent Gary Tuchman reports.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): San Quentin State Prison, the home of California's Death Row for men. Scott Peterson has joined the nation's largest contingent of people waiting to be executed: 641 inmates are on Death Row in California. The state's form of execution: lethal injection.

But actually getting executed is another story. Since the resumption of the death penalty nearly three decades ago, California has executed a far lower percentage of Death Row inmates than the state that is well ahead of all the others, Texas.

Since California re-implemented the death penalty in 1978, ten people have been executed. In Texas the number is at 336 since it resumed the death penalty.

Peterson likely has many years of life still ahead of him. California has waited an average of more than 16 years to carry out each execution. The last inmate to be put to death was murderer Steven Wayne Anderson in 2002.

UNIDENTIFIED MALE: The insertion of the fluids began at 12:17. And death was pronounced at 12:32.

TUCHMAN: And he waited more than 20 years to be put to death.

San Quentin has a segregation unit for the worst of the condemned, but most inmates get the right to have care packages of food sent to them.

UNIDENTIFIED MALE: Honey is not allowed, because they can make wine with the sugar content of the honey.

TUCHMAN: Scott Peterson will now be living a life where the constant thought is death.

Gary Tuchman, CNN, Atlanta.

(END VIDEOTAPE)

PHILLIPS: A decision expected soon that could affect everything from your credit card rate to how much you earn on your savings. We'll bring you the Federal Reserve announcement on interest rates when it happens.

Also ahead, Kofi Annan's son, Kojo, at the center of the United Nations oil-for-food scandal. He speaks out exclusively to CNN just ahead. And later, will an Internet search engine make your public library obsolete? An announcement today may have some readers tossing their cards and picking up their mouse.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

O'BRIEN: We're watching the Federal Reserve. Any minute now, the Federal Reserve expected to announce its decision on interest rates. Will they continue their upward trend?

Allan Chernoff, CNN financial news, in New York to tell us, probably, "You bet." Right, Allan?

ALLAN CHERNOFF, CNN CORRESPONDENT: You bet, Miles and just about everybody on Wall Street is betting the same way. It's virtually universally believed that the Federal Reserve is going to raise interest rates yet again up to 2.25 percent for the overnight bank lending rate known as fed funds.

This would be the fifth rate increase that we've seen from the Federal Reserve. And what the Fed is trying to do here is basically make sure that inflation does not pick up too much as the economy is expanding.

So the Fed is watching very closely measures of inflation just to make sure that it can keep things under control. That's really the intent here, Miles.

O'BRIEN: Implications, Allan. What are the implications for consumers and all this, as these rates continue to rise?

CHERNOFF: Well, consumers certainly already have begun seeing the impact.

You'd first of all see it on an adjustable rate mortgages. These are the most sensitive mortgages, one year adjustable rate mortgages, in fact, that's where you would see the impact.

If you had taken out a one-year adjustable rate mortgage one year ago, you would have taken that loan out at just under four percent. And today, if it were being adjusted by the lender, you'd actually be paying about 5.33 percent. So a big increase over there.

You'd also be seeing it on home equity loans. They are also on the rise. In fact, back in June, they were at 4.66 percent. Right now, they're at 5.50 percent. So that's exactly where you're feeling it.

In addition, credit cards. That's where the impact also is being felt. Because credit card rates are very much tied to the prime rate, and the prime rate is connected very much to the fed funds rate.

So anybody with lots of debt out there on their credit card, they'd certainly want to try to pay it down, because those rates are going to keep on moving higher.

O'BRIEN: But those credit card rates are already so high. If you read the fine print, I mean, it's well above 20 percent in many cases. They still will jack it up a little more, huh?

CHERNOFF: Yes. And Miles, we do have word that in fact the Fed has done exactly what we did expect, up by .25 percent on that fed funds overnight bank lending rate. So the rate now stands at 2.25 percent.

And economists are expecting the Fed to continue raising the interest rate, that overnight bank lending rate. Next year, lots of folks predicting the rate will go over three percent.

So in terms of the consumer impact, certainly look for those higher rates for short-term rates, including the credit card rates.

Longer term rates, it hasn't had that much of an impact, because those longer term 30-year mortgage rates, that's really affected by the market, by the bond market, not so much by the Federal Reserve -- Miles.

O'BRIEN: All right. I assume that the market already responding? Probably already going up on Wall Street, huh?

CHERNOFF: Yes, well this is pretty much expected on Wall Street. No big surprise at all. So as you can see, not a dramatic impact at all on Wall Street right now. Market was higher before the announcement. And this has pretty much already been baked into the cake on Wall Street.

O'BRIEN: Baked into the cake. All right, Allan Chernoff, our chef of economic news today doing the baking for us out of New York. We appreciate it.

News as it happens right here on CNN -- Kyra.

PHILLIPS: Well, now the still simmering scandal over the U.N.'s oil-for-food program with Iraq.

While U.N. Secretary-General Kofi Annan has been criticized, it is his son, Kojo Annan, who's drawn most of the criticism and scrutiny. Kojo Annan has not personally commented about the investigation until now.

From Lagos, Nigeria, CNN's Jeff Koinange has this exclusive report.

(BEGIN VIDEOTAPE)

JEFF KOINANGE, CNN CORRESPONDENT (voice-over): Kojo Annan is the 31-year-old son of United Nations Secretary-General Kofi Annan from Anna's first marriage.

The younger Annan lives in a townhouse here in Lagos, the bustling commercial capital of Nigeria. He is a businessman and a bachelor, who enjoys traveling and whose financial interests stretch from Lagos to London.

But it's Kojo Annan's work for the Swiss multinational Cotecna that's haunting him. Cotecna profited from the oil-for-food program, hired in 1998 to authenticate approved humanitarian goods shipments to Iraq.

U.N. critics suspect the firm might have won the contract because of Kojo's U.N. connections. Cotecna says that was not a factor and that it had been originally chosen to work for the U.N. in 1992.

CNN has tried repeatedly to get Kojo Annan to speak to us on camera, but he has refused. Instead, issuing this statement to CNN, saying he is cooperating with investigators: "I feel the whole issue has been a witch hunt from day one as part of a broader Republican political agenda."

Kojo Annan went to work for Cotecna fresh out of a British university in 1995. He and the firm insist his job was limited to the firm's activities in West Africa, working in the Nigeria office for four years.

Kojo Annan says he was never involved in the firm's activities in Iraq, saying, "I have never participated directly or indirectly in any business related to the United Nations."

But even after Kojo Annan resigned from Cotecna, the firm kept him on its payroll until this February in a non-compete agreement, preventing him from disclosing any confidential company information or working for the competition. For this, Cotecna paid him a total of $125,000 over four years.

The elder Annan has said he was unaware of the continuing payments and is disappointed they create a perception of conflict of interest.

KOFI ANNAN, SECRETARY-GENERAL, UNITED NATIONS: He's a grown man and I don't get involved with his activities and he doesn't get involved in mine.

KOINANGE: Kofi Annan says he's been in touch with his son and that Kojo is cooperating with investigators.

FRED ECKHARD, U.N. SPOKESMAN: We're not aware that anything Kojo Annan did for Cotecna was illegal or improper. That's our perception.

KOINANGE: Meanwhile, Kojo Annan says the investigations, especially in Washington, aren't about him but a deliberate attempt to bring down his father.

"The rest of the world has shown their unwavering support for my father. What will the U.S. senators have to say if there is, as many over here in the rest of the world suspect, no substance to the allegations against my father and me?"

(on camera) Kojo Annan tells me he feels sorry for all the distress he's brought on his father and the rest of his family. As for the ongoing investigation, he says he's already spent countless hours being questioned and feels confidence that in the end, he'll be found innocent of any wrongdoing.

Jeff Koinange, CNN, Lagos.

(END VIDEOTAPE)

O'BRIEN: Holiday shoppers stretching their euros by buying American. Ahead, why international bargain hunters are finding such great deals in the United States.

RHONDA SCHAFFLER, CNN CORRESPONDENT: I'm Rhonda Schaffler in New York. I'll have more about a big deal in the wireless business. Also, we'll follow the market's reaction to that Fed rate hike.

Stay tuned. LIVE FROM is coming right back.

(COMMERCIAL BREAK)

O'BRIEN: Dollar for dollar, Americans are getting the shaft this holiday shopping season. But it's a bonanza for Europeans who are heading overseas to shop, shop, shop.

I was in New York the past few days. The whole streets just filled with Europeans.

CNN's Maggie Lake tags along with the bargain brigade there in Manhattan.

(BEGIN VIDEOTAPE)

MAGGIE LAKE, CNN CORRESPONDENT (voice-over): New York's Fifth Avenue may be dressed in red and white for the holidays, but it is the green that European travelers are most excited about.

UNIDENTIFIED MALE: Well, we hope we will get a good rate.

UNIDENTIFIED FEMALE: Bad news for you, but it's good news for us.

LAKE: Good news, indeed. A 10 percent drop in the dollar's value in the last six months means that British travelers are getting almost $2 for every pound. Euro zone residents get around $1.40 for every euro.

(on camera) As we head closer to the holidays, stores are already holding Christmas sale. Add to that the currency benefit, and you're talking about some serious bargains.

How is the fact that it's almost two to one, how is that factoring into your shopping?

UNIDENTIFIED FEMALE: You don't think twice. You don't think twice. You just buy.

UNIDENTIFIED FEMALE: Went crazy with the iPods. The mini iPods at the moment.

LAKE: That's what you're going to get.

UNIDENTIFIED FEMALE: The price that they're quoting is amazing.

LAKE (voice-over): The iPods, which are one of the most sought after purchases, retail in London for around 195 pounds. In New York, the mini runs 124 pounds after the currency conversion.

Another popular item for European shoppers, Nike trainers. A pair that sells for 110 pounds in London are only 60 pounds in the U.S.

Those kind of bargains are making the U.S. a popular destination. Industry watchers say 6.7 million people have traveled from western Europe in the first eight months of this year, a 17 percent jump from last year.

Those numbers will dip slightly as we wind down 2004 but should stay in the double digits.

Some of those heading over will opt to use their strong currencies to enjoy some fun in the sun, but New York City remains the most popular destination for Europeans.

For those intent on shopping till you drop, some advice from the locals: bring a warm coat and an extra suitcase.

Maggie Lake, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: Well, the Federal Reserve just hiked interest rates by a quarter point. For Wall Street's reaction, Rhonda Schaffler, live from the New York Stock Exchange.

Rhonda, what are you seeing?

(STOCK REPORT)

(COMMERCIAL BREAK)

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