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Martha Stewart Working; Dispute Over Shooting; Hunt for al- Zarqawi

Aired March 07, 2005 - 13:59   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
DAN QUAYLE, FMR. VICE PRESIDENT OF THE UNITED STATES: I accept your nomination for vice president of the United States of America.

KYRA PHILLIPS, CNN ANCHOR (voice-over): Dan Quayle burst onto the national scene in 1988, when the young senator from Indiana was named George Bush's running mate. The TV sound bite was never quite the same.

QUAYLE: There is nothing that a good defense cannot be a better offense.

PHILLIPS: So famous for his verbal missteps, even now there are entire Web sites devoted to Quayle's quotes. Some Quaylisms became legendary, including his criticism of TV character Murphy Brown's single motherhood and Quayle's unique way of spelling "potato."

QUAYLE: That one little "E" on the end.

PHILLIPS: In 1992, Quayle and President Bush were voted out of office, changing the young vice president's life.

QUAYLE: That night I said, "Well, now I've got to figure out what I'm going to do."

PHILLIPS: Quayle has written three books and gone on the speaking circuit. But when he failed to capture the Republican presidential nomination in 2000, he left public life for good.

QUAYLE: Do I miss politics? Of course, I do. But that's behind me. I had a good run at it.

PHILLIPS: Quayle is now chairman for Cerberus Global Investments and spends much of his time traveling. With his three children now grown, Quayle and his wife, Marilyn, make their home in Arizona.

(END VIDEOTAPE)

MILES O'BRIEN, CNN ANCHOR: Mourning a hero. The Italian agent who lost his life saving a hostage in Iraq, questions persist about just why American forces opened fire.

PHILLIPS: Crash tests. Does your small car have the right stuff in a big smash-up? We're going to have the results of a new round of tests. O'BRIEN: She's back. A warm welcome from an appreciative audience for the business mogul, Martha Stewart. Will it heat up her company's bottom line?

PHILLIPS: "Fat Actress" Kirstie Alley hopes for a big comeback as she gets ready to take on Hollywood's stereotypes in her new show.

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

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

PHILLIPS: Up first this hour, Martha Stewart working, or at least visiting. She's at the Manhattan headquarters of Martha Stewart Living Omnimedia, the empire she built and used to run until her run- in with the feds over her dumping of another company stock.

CNN's Allan Chernoff taking stock of today's festivities.

Quite a welcome, Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: No question about that, Kyra. Certainly not a surprise at all.

Martha Stewart meeting with her staff for the first time in more than five months. And the mood inside of the building was certainly akin to a rock concert.

Martha Stewart certainly did get the greeting of a rock star, a full minute standing ovation from her staff. Lots of yelling, cheering. It was thrilling, certainly, for Martha Stewart. And you could see the expression on her face, a little bit tearful as all of this was happening.

Also very noteworthy, Martha Stewart was wearing a skirt, and you could see she was not wearing the ankle bracelet yet that she will have to wear as part of her home confinement. That will be for five months, and she will be restricted to only 48 hours a week outside of the home.

But that hasn't occurred just yet. She'll have to make those final arrangements with her probation officer.

In terms of what Martha Stewart said inside, she thanked her staff, really gave thanks to the more than 600 people at the company and said, "All of you really are Martha Stewart." She also said that the mission of the company is to make connections to the family, and she said that the company, from now on, will, indeed, wrap itself in family values.

(BEGIN VIDEO CLIP)

MARTHA STEWART, MARTHA STEWART LIVING OMNIMEDIA: I think that most of you know that I've always felt that life should be add an adventure, that every day should be important. There can be no doubt that the last three years have certainly been an adventure for me and for all of you. But though it was stressful, very stressful, I can say that I don't regret everything.

I've had profound life experiences. I've met extraordinary people. I felt deeply loved by my family, led by my gorgeous daughter, Alexis, who visited me more often than she wishes to recount. And I felt deeply loved by my friends, and I have surely learned what all of you have meant to me.

I tried to represent the values of dignity and grace that I cherish so deeply, even when it was really difficult. I hope I succeeded.

(END VIDEO CLIP)

CHERNOFF: Martha Stewart's company, of course, is hoping that this very public display will help burnish her image, bring her back to be the queen of domestic housekeeping in the arts and crafts, and cooking as well, of course. And they're hoping this will lure advertisers back to the company's magazines and the planned television programs as well -- Kyra.

PHILLIPS: Well, Allan, as you may have seen on live television, we did have the shot showing no ankle bracelet yet. Any word on when she'll be receiving that or if she's met with her probation officer?

CHERNOFF: Well, the way it works is that Martha Stewart had to contact her probation officer within three days after her release from prison. So those three days, actually, ended last night.

So she's clearly made the contact to the probation department, but they refused to tell us exactly when that will occur, when she'll get the ankle bracelet. It could happen at the office of the probation department in White Plains, New York. That's not too far from Martha Stewart's home. Or, it actually could happen at her home.

And keep in mind, not only will there be a bracelet attached to Martha Stewart's ankle, but also there will be a receiver connected to her telephone line so that the probation department can keep track of exactly when Martha Stewart steps out the door.

PHILLIPS: All right. Allan Chernoff, we'll be tracking it. Thank you -- Miles.

O'BRIEN: So to speak.

How much is just enough? The U.S. Senate is grappling with two proposals to raise the lowest wage U.S. employers can legally pay their workers.

Now, right now that is $5.15 an hour, and it's been there since '97. The Democratic plan would raise it to $7.25 over two years. The Republican plan would raise it to $6.25 over 18 months, but throw in tax breaks for small businesses.

Both plans would piggyback on a bankruptcy measure that's long been a GOP priority. But the smart money says both are nonetheless doomed. That's because GOP leaders in the House don't plan to take up either one.

PHILLIPS: The word "minimum" doesn't enter into reports of gas prices, that's for sure, unless it's how much money you have left after you fill up. Here's (ph) it's no act of Congress, just supply and demand that's fueled a 7-cent spike in the average cost of self- serve regular over the past two weeks. Now, analysts point to a corresponding jump in oil prices tied to speculation that springtime will mean more road trips.

We recommend a trip to Charleston, South Carolina, where gas is the nation's cheapest right now. On average, $1.76 a gallon. Honolulu, the highest, $2.32.

O'BRIEN: Italians are mourning a national hero killed by U.S. forces in Iraq. A state funeral today in Rome honored 50-year-old intelligence agent Nicola Calipari. He died using his body to shield journalist Giuliana Sgrena Friday when U.S. forces near Baghdad fired on the car taking the former hostage to safety.

The U.S. military says its troops fired on the vehicle when it didn't slow down approaching a checkpoint. Sgrena tells a different story. CNN Rome bureau chief Alessio Vinci reports.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN ROME BUREAU CHIEF (voice-over): Giuliana Sgrena calls her account (SPEAKING ITALIAN). In English, "My truth." It is her initial description of what happened in Baghdad on Friday, published in the Sunday edition of "Il Manifesto," the communist newspaper for which she filed dozens of reports before being kidnapped in early February. Most of her articles highly critical of the U.S. military invasion of Iraq.

In her account of what happened, she writes that she was traveling to the Baghdad airport. With her, two Italian intelligence agents. One is driving, the other is Nicola Calipari, the officer who negotiated her release and who paid the ultimate price to save her life.

UNIDENTIFIED FEMALE: "Nicola Calipari" sat next to me. The driver twice informed the embassy and in Italy that we were heading towards the airport, which I knew was heavily patrolled by U.S. troops. They told me that we were less than a kilometer away when I only remember fire. At that point, a rain of fire and bullets hit us."

VINCI: The U.S. has said that the car was speeding towards the checkpoint, ignoring warnings to stop. But Sgrena writes the car was not speeding, and calls the shooting unjustified.

UNIDENTIFIED FEMALE: "The driver started yelling that we were Italians. 'We're Italians! We're Italians!' Nicola Calipari threw himself on me to protect me, and immediately -- I repeat, immediately -- I heard his last breath as he was dying on me."

VINCI: The autopsy reveals he was hit by a bullet to his head. Sgrena, who is currently recovering from her wounds in an Italian hospital, also remembers something one of her captors said moments before releasing her.

UNIDENTIFIED FEMALE: "'Don't give any signals of your presence with us, otherwise the Americans could intervene.' It was the confirmation that I didn't want to hear. It was altogether the most happy and most dangerous moment."

"If we bumped into someone, meaning American military, there would be an exchange of fire. My captors were ready, and they would have responded."

VINCI: By the time Sgrena's car reached the American checkpoint, her captors were no longer with her. Moments before coming under fire she writes, "The mood in the car was joyful."

UNIDENTIFIED FEMALE: "The car kept on the road, going under an underpass full of puddles and almost losing control to avoid them. We all incredibly laughed. It was liberating. Losing control of the car in a street full of water in Baghdad and maybe wind up in a bad car accident, after all I had been through, would really be a tale I would not be able to tell."

VINCI: Instead, her tale is of a harrowing experience, a day of joy turned to tragedy. Italian media suggests a ransom of several million dollars was paid for her release. Government officials are not commenting. But Calipari was an experienced negotiator who previously secured the release of other Italian hostages in Baghdad.

On Sunday, his body lay in state at the Tomb of the Unknown Soldier in Rome. Thousands came to pay their last respects.

Alessio Vinci, CNN, Rome.

(END VIDEOTAPE)

O'BRIEN: Now, the White House says it is absurd to suggest that U.S. troops targeted Giuliana Sgrena's car. A Bush administration official calls the shooting an accident in a war zone. President Bush has sent Italy's prime minister his regrets and pledged a full investigation.

PHILLIPS: Guerrillas launched a series of attacks in Iraq today. Five Iraqis were killed, more than two dozen were wounded when a suicide car bomb detonated in Balad. Most of the victims were students heading to school. Thirteen Iraqis, including two Iraqi police officers, were killed in other violence across the country.

In Baghdad, a third Iraqi police official targeted by insurgents resigned after they kidnapped his son. There's been no word on the boy's whereabouts.

O'BRIEN: The mastermind behind many of those insurgent attacks is believed to be Abu Musab al-Zarqawi. Capturing the Jordanian-born militant is a top priority for the U.S. military, and they believe his days are numbered. Our Pentagon correspondent, Barbara Starr, with more on that.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): New pictures of the man the U.S. says is terrorist leader Abu Musab al- Zarqawi. But are there any new leads? It's unclear when the photos were taken. Senior U.S. military and Pentagon officials now tell CNN that U.S. forces have come very physically close to getting the most wanted terrorist in Iraq. One senior official said it was within the last month that forces came close to him.

Officials at the most senior levels caution against making predictions when he will be caught. But clearly, they believe the dragnet is closing.

GENERAL JOHN ABIZAID, U.S. CENTRAL COMMAND: We have been successful against his network because of Iraqi intelligence sources, because of treason within his own organization, because people are getting tired of what he's doing, which is killing innocent Iraqi people for no reason whatsoever. And his days in Iraq are numbered.

STARR: Another military official told CNN the recent capture of Zarqawi's driver and scheduler in Iraq has given them valuable intelligence. But concerns are growing about Zarqawi's links to Osama bin Laden. U.S. counterterrorism officials say Zarqawi recently responded to a message from bin Laden asking for help staging attacks outside of Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We are -- spend every day gathering information to locate Osama bin Laden and Zawahiri, obviously people like Zarqawi.

STARR: Already being discussed, what to do with Zarqawi if and when he is caught. Would he be an enemy combatant, a foreign fighter in the war on terrorism, and therefore held by the U.S. probably outside Iraq? U.S. military officials are already saying they do not want to have to turn him over to the Iraqis.

(on camera): All of these comments may serve another purpose: pressuring Zarqawi to go on the run, making it easier for the U.S. to catch him.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

O'BRIEN: Taking on the family of Michael Jackson's accuser.

PHILLIPS: Just ahead on LIVE FROM, the younger brother of Jackson's accuser takes the stand. We're live from the courthouse with the latest.

O'BRIEN: And the University of Colorado president resigns amid a football recruiting scandal and an uproar over a professor who compared 9/11 victims to Nazis. We have details straight ahead.

(COMMERCIAL BREAK)

(ALREADY IN PROGRESS)

MIGUEL MARQUEZ, CNN CORRESPONDENT: ... the accuser's sister, Mr. Jackson got up, informed the bailiff something, the bailiff went over and talked to the judge. And the judge then came back to Mr. Jackson's attorney and said Mr. Jackson has to use the bathroom. All of that for that.

And Mr. Jackson then left, pointed at Jermaine as he walked out. And they sort of both rushed out of the -- out of the building, out of the courtroom, followed by a security guard. And then Mr. Mesereau had to leave a few minutes later to go check on things, I guess, and then they all came back in and things got back down to it.

Right now on the stand is the brother of Mr. Jackson's accuser. He has testified that Mr. Jackson, on one of their very first nights at Neverland Ranch, while they were in Mr. Jackson's bedroom, that he and his brother, at Mr. Jackson's suggestion, looked at Internet porn, surfed porn on the Internet with Vinny Tyson (ph) at the keyboard. Mr. Tyson (ph) is one of the unindicted co-conspirators.

He -- this young man testified that when they came across a picture of a woman with her shirt up above her breasts, Mr. Jackson said "Got milk," making it a joke apparently. He also testified that he and his brother had codes both to Michael Jackson's bedroom, a little coded keypad to get in, and codes to all the doors to get through any door in Neverland Ranch.

Before his sister got off the stand, they did listen to the Brad Miller interview tape. It was a taped interview, an audiotape-only interview of the family right after the Martin Bashir documentary aired. And again, they were effusive in their praise for Jackson, calling him a father, a daddy-like figure.

And she also, in cross-examination, was caught in a couple more lies today, one about whether or not she had seen the wine cellar at Neverland Ranch only once. She has apparently described it to the sheriff's office many times before. And also about a former civil suit that she was part of she now says -- last week she said she didn't know anything about it. Today she said that she sat next to her brother during a deposition for that -- for that lawsuit. So it would be difficult to imagine that she didn't know anything about it.

We expect to have testimony from the rest of the day from the brother of Michael Jackson's accuser. And cross-examination possibly tomorrow or Wednesday.

Back to you.

PHILLIPS: All right. Miguel Marquez live from Santa Maria. Thank you -- Miles.

O'BRIEN: Well, who says thin is in? Certainly Kyra doesn't. PHILLIPS: Oh!

O'BRIEN: And neither does Kirstie Alley. The larger-than-life actress sets out to show Hollywood that fat is where it's at, baby.

And the surf's up. And these guys definitely have the board to take on a big wave. We're hanging 470 later, dudes.

PHILLIPS: They're not fat.

SUSAN LISOVICZ, CNN CORRESPONDENT: And I'm Susan Lisovicz, hanging ten on the balcony of the New York Stock Exchange. Japanese icon Sony is breaking with tradition. I'll tell you about its historical move coming up on LIVE FROM. So stay tuned.

(COMMERCIAL BREAK)

PHILLIPS: You with us?

O'BRIEN: I am so with you. I am big-time catching up on the 400 unread e-mails in my box.

PHILLIPS: It's that instant messenger that kills him every time.

O'BRIEN: You know, it's that darn blogging thing. But...

PHILLIPS: He's talking about Sony, actually.

O'BRIEN: Yes.

PHILLIPS: The Japanese icon has...

O'BRIEN: Were it not for that...

PHILLIPS: ... appointed a new chief and it's raising eyebrows. He's not Japanese and doesn't even speak Japanese.

O'BRIEN: But he likes sushi. So why not? He can do the job. Susan Lisovicz joining us now from the New York Stock Exchange.

PHILLIPS: I don't thinks he speaks Japanese.

O'BRIEN: But she likes sushi. So it's OK. All right.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

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Aired March 7, 2005 - 13:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
DAN QUAYLE, FMR. VICE PRESIDENT OF THE UNITED STATES: I accept your nomination for vice president of the United States of America.

KYRA PHILLIPS, CNN ANCHOR (voice-over): Dan Quayle burst onto the national scene in 1988, when the young senator from Indiana was named George Bush's running mate. The TV sound bite was never quite the same.

QUAYLE: There is nothing that a good defense cannot be a better offense.

PHILLIPS: So famous for his verbal missteps, even now there are entire Web sites devoted to Quayle's quotes. Some Quaylisms became legendary, including his criticism of TV character Murphy Brown's single motherhood and Quayle's unique way of spelling "potato."

QUAYLE: That one little "E" on the end.

PHILLIPS: In 1992, Quayle and President Bush were voted out of office, changing the young vice president's life.

QUAYLE: That night I said, "Well, now I've got to figure out what I'm going to do."

PHILLIPS: Quayle has written three books and gone on the speaking circuit. But when he failed to capture the Republican presidential nomination in 2000, he left public life for good.

QUAYLE: Do I miss politics? Of course, I do. But that's behind me. I had a good run at it.

PHILLIPS: Quayle is now chairman for Cerberus Global Investments and spends much of his time traveling. With his three children now grown, Quayle and his wife, Marilyn, make their home in Arizona.

(END VIDEOTAPE)

MILES O'BRIEN, CNN ANCHOR: Mourning a hero. The Italian agent who lost his life saving a hostage in Iraq, questions persist about just why American forces opened fire.

PHILLIPS: Crash tests. Does your small car have the right stuff in a big smash-up? We're going to have the results of a new round of tests. O'BRIEN: She's back. A warm welcome from an appreciative audience for the business mogul, Martha Stewart. Will it heat up her company's bottom line?

PHILLIPS: "Fat Actress" Kirstie Alley hopes for a big comeback as she gets ready to take on Hollywood's stereotypes in her new show.

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

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

PHILLIPS: Up first this hour, Martha Stewart working, or at least visiting. She's at the Manhattan headquarters of Martha Stewart Living Omnimedia, the empire she built and used to run until her run- in with the feds over her dumping of another company stock.

CNN's Allan Chernoff taking stock of today's festivities.

Quite a welcome, Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: No question about that, Kyra. Certainly not a surprise at all.

Martha Stewart meeting with her staff for the first time in more than five months. And the mood inside of the building was certainly akin to a rock concert.

Martha Stewart certainly did get the greeting of a rock star, a full minute standing ovation from her staff. Lots of yelling, cheering. It was thrilling, certainly, for Martha Stewart. And you could see the expression on her face, a little bit tearful as all of this was happening.

Also very noteworthy, Martha Stewart was wearing a skirt, and you could see she was not wearing the ankle bracelet yet that she will have to wear as part of her home confinement. That will be for five months, and she will be restricted to only 48 hours a week outside of the home.

But that hasn't occurred just yet. She'll have to make those final arrangements with her probation officer.

In terms of what Martha Stewart said inside, she thanked her staff, really gave thanks to the more than 600 people at the company and said, "All of you really are Martha Stewart." She also said that the mission of the company is to make connections to the family, and she said that the company, from now on, will, indeed, wrap itself in family values.

(BEGIN VIDEO CLIP)

MARTHA STEWART, MARTHA STEWART LIVING OMNIMEDIA: I think that most of you know that I've always felt that life should be add an adventure, that every day should be important. There can be no doubt that the last three years have certainly been an adventure for me and for all of you. But though it was stressful, very stressful, I can say that I don't regret everything.

I've had profound life experiences. I've met extraordinary people. I felt deeply loved by my family, led by my gorgeous daughter, Alexis, who visited me more often than she wishes to recount. And I felt deeply loved by my friends, and I have surely learned what all of you have meant to me.

I tried to represent the values of dignity and grace that I cherish so deeply, even when it was really difficult. I hope I succeeded.

(END VIDEO CLIP)

CHERNOFF: Martha Stewart's company, of course, is hoping that this very public display will help burnish her image, bring her back to be the queen of domestic housekeeping in the arts and crafts, and cooking as well, of course. And they're hoping this will lure advertisers back to the company's magazines and the planned television programs as well -- Kyra.

PHILLIPS: Well, Allan, as you may have seen on live television, we did have the shot showing no ankle bracelet yet. Any word on when she'll be receiving that or if she's met with her probation officer?

CHERNOFF: Well, the way it works is that Martha Stewart had to contact her probation officer within three days after her release from prison. So those three days, actually, ended last night.

So she's clearly made the contact to the probation department, but they refused to tell us exactly when that will occur, when she'll get the ankle bracelet. It could happen at the office of the probation department in White Plains, New York. That's not too far from Martha Stewart's home. Or, it actually could happen at her home.

And keep in mind, not only will there be a bracelet attached to Martha Stewart's ankle, but also there will be a receiver connected to her telephone line so that the probation department can keep track of exactly when Martha Stewart steps out the door.

PHILLIPS: All right. Allan Chernoff, we'll be tracking it. Thank you -- Miles.

O'BRIEN: So to speak.

How much is just enough? The U.S. Senate is grappling with two proposals to raise the lowest wage U.S. employers can legally pay their workers.

Now, right now that is $5.15 an hour, and it's been there since '97. The Democratic plan would raise it to $7.25 over two years. The Republican plan would raise it to $6.25 over 18 months, but throw in tax breaks for small businesses.

Both plans would piggyback on a bankruptcy measure that's long been a GOP priority. But the smart money says both are nonetheless doomed. That's because GOP leaders in the House don't plan to take up either one.

PHILLIPS: The word "minimum" doesn't enter into reports of gas prices, that's for sure, unless it's how much money you have left after you fill up. Here's (ph) it's no act of Congress, just supply and demand that's fueled a 7-cent spike in the average cost of self- serve regular over the past two weeks. Now, analysts point to a corresponding jump in oil prices tied to speculation that springtime will mean more road trips.

We recommend a trip to Charleston, South Carolina, where gas is the nation's cheapest right now. On average, $1.76 a gallon. Honolulu, the highest, $2.32.

O'BRIEN: Italians are mourning a national hero killed by U.S. forces in Iraq. A state funeral today in Rome honored 50-year-old intelligence agent Nicola Calipari. He died using his body to shield journalist Giuliana Sgrena Friday when U.S. forces near Baghdad fired on the car taking the former hostage to safety.

The U.S. military says its troops fired on the vehicle when it didn't slow down approaching a checkpoint. Sgrena tells a different story. CNN Rome bureau chief Alessio Vinci reports.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN ROME BUREAU CHIEF (voice-over): Giuliana Sgrena calls her account (SPEAKING ITALIAN). In English, "My truth." It is her initial description of what happened in Baghdad on Friday, published in the Sunday edition of "Il Manifesto," the communist newspaper for which she filed dozens of reports before being kidnapped in early February. Most of her articles highly critical of the U.S. military invasion of Iraq.

In her account of what happened, she writes that she was traveling to the Baghdad airport. With her, two Italian intelligence agents. One is driving, the other is Nicola Calipari, the officer who negotiated her release and who paid the ultimate price to save her life.

UNIDENTIFIED FEMALE: "Nicola Calipari" sat next to me. The driver twice informed the embassy and in Italy that we were heading towards the airport, which I knew was heavily patrolled by U.S. troops. They told me that we were less than a kilometer away when I only remember fire. At that point, a rain of fire and bullets hit us."

VINCI: The U.S. has said that the car was speeding towards the checkpoint, ignoring warnings to stop. But Sgrena writes the car was not speeding, and calls the shooting unjustified.

UNIDENTIFIED FEMALE: "The driver started yelling that we were Italians. 'We're Italians! We're Italians!' Nicola Calipari threw himself on me to protect me, and immediately -- I repeat, immediately -- I heard his last breath as he was dying on me."

VINCI: The autopsy reveals he was hit by a bullet to his head. Sgrena, who is currently recovering from her wounds in an Italian hospital, also remembers something one of her captors said moments before releasing her.

UNIDENTIFIED FEMALE: "'Don't give any signals of your presence with us, otherwise the Americans could intervene.' It was the confirmation that I didn't want to hear. It was altogether the most happy and most dangerous moment."

"If we bumped into someone, meaning American military, there would be an exchange of fire. My captors were ready, and they would have responded."

VINCI: By the time Sgrena's car reached the American checkpoint, her captors were no longer with her. Moments before coming under fire she writes, "The mood in the car was joyful."

UNIDENTIFIED FEMALE: "The car kept on the road, going under an underpass full of puddles and almost losing control to avoid them. We all incredibly laughed. It was liberating. Losing control of the car in a street full of water in Baghdad and maybe wind up in a bad car accident, after all I had been through, would really be a tale I would not be able to tell."

VINCI: Instead, her tale is of a harrowing experience, a day of joy turned to tragedy. Italian media suggests a ransom of several million dollars was paid for her release. Government officials are not commenting. But Calipari was an experienced negotiator who previously secured the release of other Italian hostages in Baghdad.

On Sunday, his body lay in state at the Tomb of the Unknown Soldier in Rome. Thousands came to pay their last respects.

Alessio Vinci, CNN, Rome.

(END VIDEOTAPE)

O'BRIEN: Now, the White House says it is absurd to suggest that U.S. troops targeted Giuliana Sgrena's car. A Bush administration official calls the shooting an accident in a war zone. President Bush has sent Italy's prime minister his regrets and pledged a full investigation.

PHILLIPS: Guerrillas launched a series of attacks in Iraq today. Five Iraqis were killed, more than two dozen were wounded when a suicide car bomb detonated in Balad. Most of the victims were students heading to school. Thirteen Iraqis, including two Iraqi police officers, were killed in other violence across the country.

In Baghdad, a third Iraqi police official targeted by insurgents resigned after they kidnapped his son. There's been no word on the boy's whereabouts.

O'BRIEN: The mastermind behind many of those insurgent attacks is believed to be Abu Musab al-Zarqawi. Capturing the Jordanian-born militant is a top priority for the U.S. military, and they believe his days are numbered. Our Pentagon correspondent, Barbara Starr, with more on that.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): New pictures of the man the U.S. says is terrorist leader Abu Musab al- Zarqawi. But are there any new leads? It's unclear when the photos were taken. Senior U.S. military and Pentagon officials now tell CNN that U.S. forces have come very physically close to getting the most wanted terrorist in Iraq. One senior official said it was within the last month that forces came close to him.

Officials at the most senior levels caution against making predictions when he will be caught. But clearly, they believe the dragnet is closing.

GENERAL JOHN ABIZAID, U.S. CENTRAL COMMAND: We have been successful against his network because of Iraqi intelligence sources, because of treason within his own organization, because people are getting tired of what he's doing, which is killing innocent Iraqi people for no reason whatsoever. And his days in Iraq are numbered.

STARR: Another military official told CNN the recent capture of Zarqawi's driver and scheduler in Iraq has given them valuable intelligence. But concerns are growing about Zarqawi's links to Osama bin Laden. U.S. counterterrorism officials say Zarqawi recently responded to a message from bin Laden asking for help staging attacks outside of Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We are -- spend every day gathering information to locate Osama bin Laden and Zawahiri, obviously people like Zarqawi.

STARR: Already being discussed, what to do with Zarqawi if and when he is caught. Would he be an enemy combatant, a foreign fighter in the war on terrorism, and therefore held by the U.S. probably outside Iraq? U.S. military officials are already saying they do not want to have to turn him over to the Iraqis.

(on camera): All of these comments may serve another purpose: pressuring Zarqawi to go on the run, making it easier for the U.S. to catch him.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

O'BRIEN: Taking on the family of Michael Jackson's accuser.

PHILLIPS: Just ahead on LIVE FROM, the younger brother of Jackson's accuser takes the stand. We're live from the courthouse with the latest.

O'BRIEN: And the University of Colorado president resigns amid a football recruiting scandal and an uproar over a professor who compared 9/11 victims to Nazis. We have details straight ahead.

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MIGUEL MARQUEZ, CNN CORRESPONDENT: ... the accuser's sister, Mr. Jackson got up, informed the bailiff something, the bailiff went over and talked to the judge. And the judge then came back to Mr. Jackson's attorney and said Mr. Jackson has to use the bathroom. All of that for that.

And Mr. Jackson then left, pointed at Jermaine as he walked out. And they sort of both rushed out of the -- out of the building, out of the courtroom, followed by a security guard. And then Mr. Mesereau had to leave a few minutes later to go check on things, I guess, and then they all came back in and things got back down to it.

Right now on the stand is the brother of Mr. Jackson's accuser. He has testified that Mr. Jackson, on one of their very first nights at Neverland Ranch, while they were in Mr. Jackson's bedroom, that he and his brother, at Mr. Jackson's suggestion, looked at Internet porn, surfed porn on the Internet with Vinny Tyson (ph) at the keyboard. Mr. Tyson (ph) is one of the unindicted co-conspirators.

He -- this young man testified that when they came across a picture of a woman with her shirt up above her breasts, Mr. Jackson said "Got milk," making it a joke apparently. He also testified that he and his brother had codes both to Michael Jackson's bedroom, a little coded keypad to get in, and codes to all the doors to get through any door in Neverland Ranch.

Before his sister got off the stand, they did listen to the Brad Miller interview tape. It was a taped interview, an audiotape-only interview of the family right after the Martin Bashir documentary aired. And again, they were effusive in their praise for Jackson, calling him a father, a daddy-like figure.

And she also, in cross-examination, was caught in a couple more lies today, one about whether or not she had seen the wine cellar at Neverland Ranch only once. She has apparently described it to the sheriff's office many times before. And also about a former civil suit that she was part of she now says -- last week she said she didn't know anything about it. Today she said that she sat next to her brother during a deposition for that -- for that lawsuit. So it would be difficult to imagine that she didn't know anything about it.

We expect to have testimony from the rest of the day from the brother of Michael Jackson's accuser. And cross-examination possibly tomorrow or Wednesday.

Back to you.

PHILLIPS: All right. Miguel Marquez live from Santa Maria. Thank you -- Miles.

O'BRIEN: Well, who says thin is in? Certainly Kyra doesn't. PHILLIPS: Oh!

O'BRIEN: And neither does Kirstie Alley. The larger-than-life actress sets out to show Hollywood that fat is where it's at, baby.

And the surf's up. And these guys definitely have the board to take on a big wave. We're hanging 470 later, dudes.

PHILLIPS: They're not fat.

SUSAN LISOVICZ, CNN CORRESPONDENT: And I'm Susan Lisovicz, hanging ten on the balcony of the New York Stock Exchange. Japanese icon Sony is breaking with tradition. I'll tell you about its historical move coming up on LIVE FROM. So stay tuned.

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PHILLIPS: You with us?

O'BRIEN: I am so with you. I am big-time catching up on the 400 unread e-mails in my box.

PHILLIPS: It's that instant messenger that kills him every time.

O'BRIEN: You know, it's that darn blogging thing. But...

PHILLIPS: He's talking about Sony, actually.

O'BRIEN: Yes.

PHILLIPS: The Japanese icon has...

O'BRIEN: Were it not for that...

PHILLIPS: ... appointed a new chief and it's raising eyebrows. He's not Japanese and doesn't even speak Japanese.

O'BRIEN: But he likes sushi. So why not? He can do the job. Susan Lisovicz joining us now from the New York Stock Exchange.

PHILLIPS: I don't thinks he speaks Japanese.

O'BRIEN: But she likes sushi. So it's OK. All right.

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