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Texas Oilman Charged in Oil-for-Food Scandal; Bush Addresses Newspaper Editors

Aired April 14, 2005 - 13:00   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.


MILES O'BRIEN, CO-HOST: Live this hour, President Bush speaks to newspaper editors, takes third questions. We'll bring that to you when it happens.
KYRA PHILLIPS, CO-HOST: Kickback scheme involving Saddam Hussein's government. A Texas businessman arrest for allegedly giving him millions of dollar in the U.N. oil-for-food program.

Ecstasy turns to agony. National Guardsmen accused of smuggling thousand of illegal pills aboard an Air Force jet.

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

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

O'BRIEN: Up first this hour, rounding up the usual suspects. Probably some unusual suspects, as well. Ten thousand, 340 bail jumpers, jail breakers, and other fugitives netted in a week-long sweep dubbed Operation Falcon for federal and local cops organized nationally.

We expect to hear more from in a Justice Department news conference at the top of the next hour. In the meantime, we get facts and figures from CNN justice correspondent Kelli Arena, joining us from Washington -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Miles, according to a lot of law enforcement officials in the field, this was truly an extraordinary effort. It took place over a week's period, from April 4 to April 10. And as you said, more than 10,000 fugitives were captured.

Let's take a being at some of those numbers. One hundred sixty- two individuals that have been accused or convicted of murder. Sixty hundred thirty-eight wanted for armed robbery; 553 wanted for rape or sexual assault.

All of those details and more, as you said, coming out of the Justice Department later on today. But basically, what one law enforcement told us earlier, Miles, that anybody with a badge and a pair of handcuffs was asked to help out. There were 25 federal agencies, along with state and local partners that assisted in this effort.

It was all in honor of Victims Protection Week, and it was led by the U.S. marshals. And a little point you may not know, the U.S. marshals capture more fugitives each year than all of the federal law enforcement agencies combined.

And several of those marshals out in the field are hoping that the attention given to this effort will convince lawmakers and those in charge of the purse strings to keep giving them the resources and manpower they need to get their job done.

O'BRIEN: So it -- was it a publicity stunt then?

ARENA: Well, no, I think it was -- it was truly a coordinated effort to show, hey, this is what we can do, you know, with the right focus. Obviously, good intention, they wanted to take a look at, you know, victims' protection. We can say, look, this is what -- let's do what they can for those victims.

And for example, Miles, you've got -- priorities have to be put in place here. You've got so many men, so many hours -- and women, don't want to leave them out. And so many hours in a day to go after the fugitives in your area.

Let's say you've got a murderer versus a carjacker. Priorities dictate you're going to go after the murderer, perhaps, instead of the carjacker. Well, this -- having more resources and money allows them to go after everyone down the line, you know. A victim of a crime is a victim of a crime. They don't care, you know, the extent of it. It's victimization, and they want justice.

O'BRIEN: Kelli Arena, Washington, thank you very much.

ARENA: You're welcome.

O'BRIEN: Again, stay with CNN for the latest on Operation Falcon. Attorney General Alberto Gonzales will announce details of the bust in a live news conference at the top of the hour. We'll bring you that when it happens, of course.

PHILLIPS: Greasing the wheels in oil-for-food, filling the coffers of a soon to be toppled dictator. Explosive new allegations today amid the shambles of a U.N. program design to sustain Iraqi during prewar sanctions against its government.

If you've been watching CNN, you saw U.S. prosecutors unveil corruption charges against a Texas oil man, two of his overseas associates and the company they work for, called Bayoil.

We get the details now from CNN senior U.N. correspondent Richard Roth. Interesting developments, Richard.

RICHARD ROTH, CNN CORRESPONDENT: Kyra, remember the rock group Ten Years After? Well, even if you don't, 10 years ago today, the U.N. Security Council passed a resolution, in effect, approving the oil-for-food program.

But one item not really focused on at the time. They gave Saddam Hussein the right to choose which companies he would be dealing with, which vendors, as part of the buying of oil and then, in exchange, for distribution and receipt of humanitarian goods. It was always then known in recent years as the cash cow for Saddam Hussein.

So today an -- indictment unveiled. First time an American businessman, an American company, David Chalmers, head of Bayoil, charged with three felonies, including breaking the economic embargo against Iraq, wire fraud and financial transactions with a government, a state sponsor of terrorism.

The U.S. attorney described the heart of the scheme.

(BEGIN VIDEO CLIP)

DAVID KELLEY, U.S. ATTORNEY: What they did was they worked with the pricing. So they were taking money essentially off the top that would have gone into the escrow account. So they did it in a couple ways.

First, you're taking money off the top. In order to make that work without anybody seeing it, they're cutting the price of the oil down. Had they done what was an appropriate price of the oil and not taken the money off the top, for their surcharge, the illegal surcharge, logic tells you that more money would have gone where it was supposed to be going.

(END VIDEO CLIP)

ROTH: That escrow account that is where all of the -- the money was supposed to legally go, which was monitored by the U.N. through a French bank, but that's not exactly what happened. Saddam Hussein and so-called middleman and other businesses still being investigated, worked out these schemes for both sides to profit -- Kyra.

PHILLIPS: It will be interesting to see if there are other businesses involved.

Meanwhile, what happens to David Chalmers and his business? Is it going out of -- out of business, and are we going to hear from him?

ROTH: Well, U.S. attorney Kelley said he didn't think there was much left of Bayoil. In an hour or so, Chalmers makes his first court appearance in Houston. And then he's going to be formally arraigned in New York Monday morning.

PHILLIPS: All right. Richard Roth, thanks so much.

Well, Al Qaeda in Iraq supposedly in the thick of this morning's twin suicide bombings in downtown Baghdad. Those targeting police and a separate attack on police in Kirkuk killed a minimum of 14 people, all while a 25-member task force works to free a kidnapped American.

We get the latest on all of this from CNN's Aneesh Raman. He's in the capital -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Kyra, good afternoon.

Violence defining this day in Iraq. Two near simultaneous suicide car bombs, detonating early this morning, outside the ministry of interior, in south central Baghdad. The target, apparently an Iraqi police convoy. Police officials say that at least 11 Iraqis were killed. Upward of 40 of them wounded. The majority of casualties, Kyra, we know to be civilians.

Now, north of the capital city, in the town of Kirkuk, gunmen opened fire on a police station there. Three Iraqi police officers killed, four Iraqis wounded.

And also, late word coming to us that in Hillah this evening, a suicide bomber has detonated at a marketplace. Four Iraqi policemen there were killed; six others were wounded.

Now, all of this violence, underscoring the need for Iraq's transitional government to take shape and deal with security. A key figure in that government will be Ayad Allawi, the interim prime minister, now set to rise as a key opposition force.

I spoke to him today. He has been deliberately quiet in all these past weeks of negotiation. And he spoke really to any notion of American troop reduction and withdrawal. Jalal Talabani, the Iraqi president, told Wolf Blitzer that that could take place, a withdrawal, within two years. I asked Ayad Allawi about that timeline.

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER: I think, as -- if we expedite institutions, security institutions, and if there are no disruptions now, in this coming government, and if the next government will go on with whatever had been achieved, maybe we can do it in four years (ph).

(END VIDEO CLIP)

RAMAN: Now, Allawi is the country's perhaps best known secular politician. He said that he is worried that political Islam, as he calls it, could rise with the new government led by Ibrahim al-Jafari and the Shia United Iraqi Alliance. So Allawi set to rise in the opposition, Kyra, and perhaps return to the top spot next year under the new constitution.

PHILLIPS: Meanwhile, we can't stop thinking about Jeffrey Ake, the kidnapped American. What's the status on that, Aneesh?

RAMAN: We spoke to embassy officials here today. They tell us that, as is procedure, a working group has been established just to deal with this situation. Some 25 people part of that. It's an interagency group, trying as best as they can to secure his release.

This comes a day after that video with masked men at his side, guns pointing at head. Mr. Ake did call upon both the American government to engage the insurgents in dialogue and for U.S. troops to withdraw.

Everyone just waiting in terms of any information. The secretary of state saying the United States does not and will not negotiate with terrorists. So the efforts continue here in the capital city. PHILLIPS: Aneesh Raman, thank you so much -- Miles.

O'BRIEN: Ecstasy on the Galaxy. Two U.S. Air National Guard troops face the prospect of years in prison if they're convicted of smuggling Ecstasy pills aboard their C-5 cargo plane, known as the Galaxy.

CNN's Kathleen Koch is tracking the story at the Pentagon for us -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Miles, this was a massive amount of the drug Ecstasy, with a street value of more than $11 million. And now under arrest and charged last night with conspiracy to import and distribute it are an Air National Guard pilot and the load master of his plane.

Now according to the U.S. attorney's office for the southern district of New York, 28 large bags holding some 290,000 pills were found in the luggage of Captain Franklin Rodriguez and Master Sergeant John Fong, after they returned to the U.S. from an official mission aboard an Air Force cargo plane.

Authorities alleged that what happened was that on April 8, the two men flew from Stewart Air National Guard Base in Newburgh, New York, to Germany, and then on to the public of Georgia to deliver supplies. The U.S. attorney's office says that during their return stop in Germany, the men went to a hotel room and loaded the packages of Ecstasy into their personal luggage.

The men were then arrested Tuesday as they unloaded those bags from the plane and into the pilot's car.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They were carrying these drugs with them. They were apprehended by members of our strike force, as well as the Department of Defense.

CAPT. KEVIN KERLEY, NEW YORK POLICE: The investigation is continuing. We believe that there's no other military personnel involved in this ring. The investigation is continuing in Europe and in the continental U.S. at this time.

(END VIDEO CLIP)

KOCH: Officials here at the Pentagon are stunned by these developments. Spokesman Bryan Whitman saying, quote, "We have a zero tolerance policy when it come to drugs, and they will be dealt with very seriously."

Apparently, this was not the first time. According to court papers, the two Air National Guardsmen told law enforcement officials that they had made a similar trip at least three times before. The master sergeant saying that he had been paid $10,000 for each of those previous trips. Now, Miles if these two men are convicted of both of the charges they face, they could go to prison for 40 years each and face $2 million in fines.

O'BRIEN: And Kathleen would that be a military court or civilian court?

KOCH: Apparently, civilian court because as Air National Guardsmen, they are not full-time military. They have other jobs in the civilian sector, so at this point, tried in the civilian court, yes.

O'BRIEN: Kathleen Koch at the Pentagon, thank you.

PHILLIPS: And an active missing child media alert just in to CNN. This is what we can tell you, that the state of Alabama has issued this emergency missing child media alert for a young lady by the name of Jade Sophia Padgett.

The Cherokee County Sheriff's Department and the Alabama Department of Public Safety are asking for your help to locate Jade Sophia Padgett. White female, 16 years old, 5'6", 115 pounds, dark hair, dark brown eyes.

She was last seen yesterday about 3 p.m. at Sand Rock School in Cherokee County. She is believed to be in danger. Jade was wearing a long sleeved white T-shirt, faded blue jeans and tennis shoes.

Police say it's believed that she may be with an unknown older white male, possibly in his 30s, whom she met on the Internet. Once again, Jade Sophia Padgett is the name. Sixteen years old. If you have any information regarding this missing teen, you're asked to contact the Cherokee County Sheriff's Department or the Alabama Department of Public Safety. We'll continue to follow up more. Jade Sophia Padgett.

Elsewhere across America, another day on the witness stand for the mother of the teenager who says Michael Jackson molested him. The woman says that she was sad, confused, and basically acting when she praised Jackson in a videotaped rebuttal to an inflammatory BBC documentary. Yesterday she described Jackson's alleged plot to keep her family under wraps at Neverland and beyond. Cross-examination is still to come.

If you're headed for the airport, leave the Zippo at home. Today's the day a long-expected ban takes effect on cigarette lighters in airplanes, passengers cabins or cargo holds. You can still take matches in your carry-ons, but can't smoke.

After years or trying, banks and credit card companies are poised to hit the jackpot on bankruptcy legislation. The House of Representatives is almost sure to pass a Senate-passed bill, forcing many bankruptcy flyers -- filers, rather, to pay what they owe. Many Democrats say the changes are an outrage.

O'BRIEN: President Bush just a few minutes away from making some remarks to newspaper editors gathered in Washington. We will bring you some of that when he speaks, of course.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Right now!

(END VIDEO CLIP)

O'BRIEN: Tracking down fugitives. We'll take you, along with the federal marshals, hot on the trail, ahead on LIVE FROM.

And keeping secrets at the Vatican. In an age of cell phones and satellites and listening devices, how will the process of selecting the next pope stay private?

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

(COMMERCIAL BREAK)

O'BRIEN: In just four days, the College of Cardinals begins its tradition-rich process of selecting a new pope. In 1900 years of papal elections, the Catholic Church has never, until now, had to deal with one threat in particular: high-tech spying on the secret conclave.

CNN's Chris Burns explains how it could happen.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): At the Vatican, as the leaders of the church prepare to choose a new pontiff, the saints watch over the secrets of the inner sanctum. So do the Vatican police, trying to stay one step ahead of spying technology.

Security experts say the sky's the limit, from monitoring cell phone conversations to eavesdropping from high above. Look how close satellites can peek.

ANDREA MARGELLETTI, CENTER FOR INTERNATIONAL STUDIES: Surely, many intelligence agencies in the world are trying to penetrate inside the Holy See. Will do it with special aircraft, for example, spy planes, with -- drop things, or lasers.

BURNS: Lasers that could be pointed at windows of the Sistine Chapel to pick up conversations where the cardinals will cast their votes. Or the windows of the Vatican Santa Marta Hotel, where the cardinals are staying.

Vatican experts say the church's security force is expected to sweep the grounds for bugs and other gadgets during the conclave.

MIRIAM TOMPONZI, PRIVATE DETECTIVE: There is a microspy, a microphone.

BURNS: Private detective Miriam Tomponzi displays some of the classic tricks: the lighter that's a camera. Another that converts into a bug. The pen that's a microphone.

TOMPONZI (through translator): There's absolutely no doubt we could spy on the Vatican and the conclave.

BURNS: But the security for this conclave has been years in the making.

(voice-over) Pope John Paul II himself issued counterintelligence orders for conclaves, banning cell phones, recorders, radios, television, electronic organizers, to protect the cardinals from, in his words, threats to their independent judgment.

(voice-over) More than that, experts say, a pope spied on for years under communist regimes in Poland, helped better sensitize the Vatican to espionage.

MARGELLETTI: I think for now we at the Holy See much less vulnerable than ever.

BURNS: Less vulnerable from outside spying, perhaps, but experts also say that won't make the Vatican free of internal intrigue, as rivals jockey for power in the shadows of the saints.

Chris Burns, CNN, Vatican City.

(END VIDEOTAPE)

PHILLIPS: Other news around the world now.

Homebound: after a diplomatic mission overseas, Defense Secretary Donald Rumsfeld wrapped up a tour of the Middle East and Asia today. It included stops in Iraq, Afghanistan and Pakistan and a final stop today in Kyrgyzstan.

Bidding farewell to Europe's longest-serving monarch. Mourners are paying their respects to Monaco's Prince Rainier today. The 81- year-old ruler died last week after suffering lung, heart and kidney problems. He's to be buried tomorrow alongside his wife, Grace Kelly.

Britain's highest profile newlyweds attended their first royal engagement as husband and wife today. Prince Charles and Camilla, a.k.a. the Duchess of Cornwall, greeted hundreds of well-wishers in stormy Scotland. Camilla later performed her first duty as a royal: she opened a playground.

Want to take you straight to President Bush as he speaks live now at a convention of newspaper editors. He's expected to take questions. Let's listen in.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... more than you know. I -- I miss my hometown newspaper. Austin was my hometown newspaper for quite a while. I miss reading it every morning, as it was thrown on the governor mansion's doorsteps, but not enough to want to stay here for four more years.

I appreciate your leadership, Rich. Two thoughts came to mind when I first saw Rich. One, he has to work with a guy named Ken Herman. Is Herman in the pool today?

UNIDENTIFIED MALE: Yes, sir, Mr. President!

BUSH: Yes, OK. Just trying to help you out. Kind of like you tried to help me out, if you know what I mean.

And, second, I know Rich is proud of his son, Rich Junior, who is in Baghdad. My daughter, Barbara, one of our daughters, went to Yale, and she brought a fellow over the other day. I said, "What are you doing?"

He said, "Well, I was in your daughter's class. I'm in Baghdad, and I'm working with the State Department to help shepherd the press corps."

I said, "Who are some of the characters you've run into there?" And he mentioned a guy named John Burns, who I'd known when my dad was liaison officer in China. And believe it or not, he mentioned Opple (ph). I said, I know the old man.

I know you're proud of him. I appreciate the service he's providing.

I want to thank Carla Garrett Harrison (ph), as well, from Clark County, Ohio. Happens to be one of my favorites.

Just a couple thoughts, and I'd be glad to answer some questions, if you have any.

Here's what Jefferson said. Jefferson said, "Our liberty depends on freedom of the press that cannot be limited without being lost." He also went on to say, "I've given up newspapers and I find myself much happier."

I haven't given up newspapers. I do find myself much happier than I've been in a long time in Washington. I'm enjoying myself. It's been a fascinating experience to be the president of the country. It's been a remarkable time in Washington.

You know, as Rich said, the last time I was here, we were talking about the EP-3. Seems like an eternity ago. A lot has happened.

I -- somebody said, "Well, how do you describe the presidency?"

I said, "It is a decision-making job. I make a lot of decisions."

At your next editorial board when you're dealing with the future president, you ought to say, how do you intend to make decisions? What is the process by which you will make large decisions and small decisions? How do you decide?

I've got a decision to make today. Do I go with a fast ball or a slider?

A couple of thoughts about this year and the agenda. And then questions.

First, we got a problem with energy. And it's a problem that didn't happen overnight. It's a problem that's been brewing for quite awhile, because the country has yet to implement a strategy that will make us less dependent on foreign sources of energy.

You know, I was at Fort Hood the other day and sitting, having lunch with some soldiers. And the second question the fellow asked me was, "Why don't you lower gasoline prices?"

I said, "I'd like to." I said, "The problem is the supplies are out of balance with demand when it comes to the major feed stock of gasoline, which is crude oil."

We've got to think long term in this country. And Congress needs to pass the bill that I suggested in 2001, to begin the process of changing how we consume energy in America.

We need to be better when it come to conservation. Need to continue spending money on research and development, to find ways to make corn economic, ethanol, biodiesel. We have to continue exploring way to make sure we can burn coal in environmentally-friendly ways.

I know we need to continue to explore for natural gas in our own hemisphere in environmentally-friendly ways.

But Congress needs to get off the dime. I'm looking forward to working with them. So one of the initiatives that I will push again is to get an energy bill out.

I will tell you with $55 oil, we don't need incentives to oil and gas companies to explore. There's plenty of incentive. What we need is to put a strategy in place that will help this country over time become less dependent. It's really important. It's an important part of our economic security and it's an important part of our national security.

I'm also talking about retirement security. I'm talking about it a lot. Frankly, I'm not a really popular fellow on Capitol Hill for talking about it. I recognize that. One of these issues that I think people would rather avoid than take on. There's -- written about this, I'm confident, though, the old third rail of American politics. If you touch it, you know, you don't do so well politically.

I think Rich would attest to this, that when I was governor, I felt like it was important to take on big issues. And I tried to convince the legislature to work with me on the school funding issue before it became adjudged by the courts to be unconstitutional or property taxes got so high that it created a real problem. Well, I tried. And worked hard. Now they're dealing with it, I think.

I feel the same way about Social Security. It's -- we got a serious problem. I don't care what your party is or what your political philosophy is. You can't -- you can't ignore the math.

And the math really is this. Baby Boomers like me are ready to retire in four years. I'll be 62 in four years. That's -- actually, a fairly convenient date for me. And we're living longer.

And people ran for office saying, "Vote for me. I promise you more benefits."

So you've got a lot of people like me, getting ready to retire, living longer, and we've been promised greater benefits than previous generations. And yet there's fewer people to pay the bill.

And so what ends up happening is that a pay as you go system goes in the red in a relatively short period of time. And every year it's in the red, it gets worse and worse and worse. And the fundamental question confronting Congress is, are they willing to take on this issue now, before it's too late? Before by waiting, the cost becomes more and more severe?

And so I'm going to spend a lot of time on Social Security. I enjoy it. I enjoy taking on the issue. I guess it's the mother in me. You know, I appreciate calling people to action. I like doing it. And the more resistance I find for people to protect the status quo, the more determined I am to continue building the case that there is a problem and assuring seniors that they're going to get their check.

And we just started the process. It may seem like a long time to you. But realistically, we've really just started. If you ask questions about it, I'll be glad to expand on what I mean by that. But there's -- I've got a lot more time to tell people there is a problem.

See, I think the American people are beginning to realize it, but they've got to understand the significance of the problem. And then seniors have got to realize they're fine when it comes to the check. Because once I make that case, then the issue becomes a generational issue. Grandparents are going to have to start the question, "What are you going to do about my grandkids?"

Now, in my State of the Union address I did lay out options. And I think I have a responsibility to lay out options. I bet I'm the first president ever to talk about a variety of options that ought to be on the table that people ought to come forth and discuss.

And so I'm looking forward to working with Congress. I'm look forward to continuing to remind people we've got a problem. I'm absolutely convinced that when it's all said and done, inaction will create a political problem for people. The third rail of politics will be failure to solve the problem.

And so just to give you a head's up, I'll be coming to your communities, continuing to talk about this issue a lot. I'm going to Cleveland tomorrow to talk about the issue.

Overseas, there's a lot going on. And it's -- I believe our actions have helped make the world a more peaceful place.

Rich was right, obviously, times changed dramatically on September 11, 2001, and we're still at war with terrorists. There are still people there who would like to create harm to America. The only way to deal with him in my opinion is to keep them on the run, is to keep enormous pressure, pressure on their finances, pressure on their safe havens, pressure on the people who are willing to accommodate their philosophy, and we're doing that. And not only doing it alone, we're doing it in a lot of other countries.

We've got a lot of folks who understand the stakes in dealing with al Qaeda. We got a lot of people around the world who are more than willing to share intelligence and to help follow leads and to bring people to justice.

Today, I was with the Indian foreign minister and we were talking about the neighborhood. And I reminded him that I was appreciative of the efforts of President Musharraf and his efforts in fighting Al Qaeda. I thought it was in the best interest of the United States and India that President Musharraf be tough when it comes to running down people in caves that are trying to do harm to free people. After all, India's a free country. It makes sense to encourage a leader like President Musharraf.

We're getting help in Saudi Arabia. The terrorists made a tactical mistake in my judgment by attacking the kingdom of Saudi Arabia. They now understand the stakes. And so we've got an ally in chasing down Al Qaeda. And we'll continue to do so. It's just -- you've got to know, we're going to be relentless and unyielding. And we'll do everything we can to bring people to justice.

In the long-term, to solve the problem, however, of a radical ideology is to defeat it with freedom, is to encourage societies to become open, free, transparent societies, based upon rule of law, with respect for minority rights, honoring each human being. Oh, I know some people said that's not possible in certain societies. I don't believe that. I just don't believe it. I believe everybody longs to be free. I believe deep within everybody's soul is a desire to live in a free world. People of Afghanistan prove that theory, right, poor people were subjugated with incredible brutalism, brutality from the Taliban, and yet when given a chance to vote, millions voted.

Same in Iraq. Over eight million people voted, in spite of the fact they were threatened, cajoled, some killed as they tried to exercise something that they believed was their right, God-given right to do, which is express yourself freely in a society. Lebanon, there's movement in Lebanon now to be free, to have a democracy that works. We're working with France and other countries to enable Lebanon's democracy to flourish by insisting that, first and foremost, Syria get completely out of the country. I don't mean halfway out. I don't mean 80 percent out. I mean 100 percent out. Not only Syrian military, but the secret police and secret service and intelligence officers that are embedded in the Syrian -- in the Lebanese government.

I met with Prime Minister Sharon this weekend. I am hopeful that there will be a Palestinian state living side by side with Israel in peace. I believe in order for that to work, however, we need to work, the free world needs to work, with the Palestinians to develop the institutions necessary for democracy to survive, and that's going to take work.

I felt Prime Minister Sharon's decision to withdraw from the Gaza was bold and necessary. He came to Washington on I think it was April 14th, last year, and informed me that he was going to do this, and I thought it was a really interesting decision. I admire strong, courageous decision-making. It created -- his decision created an opportunity now for America, the E.U., Russia, the United Nations, to work with the Abbas government, to set up a democratic state in the Gaza.

And today I announced that Jim Wolfensohn, the former head of the World Bank, is going to be the director of our operation with Abbas, to help him build a government, to help him try to pull out of this ash heap of what used to exist. A government that will function and meet the will of the people. And I think it's possible. I wouldn't be expanding U.S. capital if I didn't. And I know it's necessary if you want to see peace in that part of the world.

So lots going on worldwide based upon a fundamental premise that freedom is a necessary part of achieving a peaceful world. And so I'm looking forward to the next four years, working on this agenda, working with friends and allies to continue the spread of freedom, defying the cynics and the critics who believe the free only belong to a certain type of religion or certain type of person. My hope is of course is when it's all said and done, to look back and say, this world is a more peaceful place after eight year of my administration.

So, Rich, thanks for having me. Looking forward to taking a few questions. You've got the floor.

(APPLAUSE)

UNIDENTIFIED MALE: President Bush has graciously agreed to take questions as time allows. (INAUDIBLE) members are invited to come to the microphones in the audience. Please tell us your name and newspaper.

And I'm going to take the opportunity, Mr. President, to ask the first question. I thought at one time you had a hard time with the political crowd here in D.C., the voters and the entrenched, and I see that -- I picked up a baseball hat for this new team you got here. I see they named it after you. It's got a big 'W' on it. You going to the game tonight?

BUSH: Yes, I thought you were going to ask about FOI.

UNIDENTIFIED MALE: That's to come.

BUSH: Go ahead. You want to ask the first question.

UNIDENTIFIED MALE: No, there'll be questions out here, think.

BUSH: OK, I'll ask them myself then. Yes, sir?

QUESTION: Mr. President, Clarence Pennington, retired, Ohio editor. We remember -- I remember, you saying that you're not going to give up all your eyes ideas for a while, until you find out what opposition is saying about Social Security. When I heard that I thought it was a good idea. Well, it's been a while. Is there anybody talking yet? What are they saying?

BUSH: Yes. I don't remember putting it that way. I thought what I said was I welcomed all ideas on the table, and that if you're a Democrat or Republican, please bring your ideas forward, and I'll do my best to make sure you don't get ridiculed, punished, whatever word you want to use, for being bold enough to come up and discuss ways to solve the problem.

But it's interesting, you say we've been here a while. We have been talking about it for a while, but it's going to take a while more to make it clear to people in Congress that we've got a problem, see? They're not going to respond until the people say clearly there's a problem and what are you going to do to fix it? And it takes a while because, frankly, this is a heavy lift for some in Congress. Why deal with an issue if you don't have to? And so I'm going to spend a lot more time talking about the problem, making it clear to people.

There's dialogue going on quietly up there. People are slowly, but surely, beginning to share ideas, and we spent a lot of time on Capitol Hill, we -- my staff in particular -- working with members, trying to listen to their ideas, trying to begin to fashion a long- term, permanent solution to the Social Security issue.

QUESTION: Just between us what is being said? Any of them saying anything?

BUSH: Are they saying anything?

QUESTION: Well, yes about there -- nobody from the opposition is hash had a new idea for you?

BUSH: Oh, they may have, but they're not willing to put it on the table yet publicly. It's going to take a while. This a process. I unfortunately don't get to write the legislation. I propose, Congress disposes. But yes, we've got some good ideas. Remember a lot of the interesting ideas I quoted in the State of the Union were ideas from people like Bill Clinton or Senator Daniel Patrick Moynihan. These citizens who have stepped forward and talked about way to permanently fix Social Security. I keep emphasizing permanently, because in 1983, President Reagan and Tip O'Neill came together and said, let's fix -- put a 75-year fix out there for Social Security. And here we are, 22 years later, worrying about permanently fixing it again. So now's the time to do it forever.

And -- but I'm pleased with the progress. I'm also understanding that this is just the beginning stages of what is a difficult debate for some.

Remember, some in Congress would rather not discuss this issue at all. They would rather say, well, please don't jeopardize -- put me in jeopardy. Please don't cause me to have to take a tough vote. And, you know, I just got a different perspective. I think now is the time to fix the problem. The longer you wait, every year you wait, it costs a future generation $600 billion, and so I'll continue talking about the issue a lot. But I -- beginning a little movement up there, people are talking. (INAUDIBLE)

OK, yes?

QUESTION: Mr. President, George Condon (ph) with Copley News Service. A month ago, you stood in Crawford with the leaders of Mexico and Canada and talked about the importance of balancing security, but maintaining the free flow of trade and people across the borders. But this month, your Department of Homeland Security has said they're going to be requiring passports for tourists coming across the border. As somebody who is familiar with the long lines at today's border, do you -- what's your reaction to the protests from the business and tourism community and do you support the requirement of passports?

BUSH: Yes, the -- I'm aware of the issue, obviously. When I first read that in the newspaper, about the need to have passports, particularly the day crossings that take place, about a million, for example, in the state of Texas, I said, what's going on here? I thought there was a better way to do -- to expedite legal flow of traffic and people. Evidently, this has been mandated in law, and so I've talked to Condi about -- and Homeland -- the Homeland Security people, about making -- seeing if there's some flexibility in the law that would allow for, example, finger imaging to serve as the so- called passport for daily traffic.

But you're right, it's going -- I mean, if people have to have a passport, it's going to disrupt honest flow of traffic. I think there's some flexibility in the law and that's what we're checking out right now. On the larger scale, look, we've got a lot to do to enforce the border. For those of you in Arizona, you now know Arizona has got more illegal immigrants coming across the border than I guess any other state right now.

My view is Congress needs to work with us to pass an immigration reform -- one, got to enforce the border better. We've increased border spending by 34 percent since, I think, 2001. But it doesn't make any sense to me to have a system that kind of forces an industry to develop, an industry that smuggles people, an industry that forges documents, an industry that really doesn't represent the best of America.

It seems like to me what we ought to do is be as open about it, and say, look if you're a willing worker and willing employee and you can't find an American, here's a legal way to work. Here's a document which enables you to be here legally, so that if you decide to go home for a little bit, you can. And there would be a time limit on the document, time limit on the right to be here to work.

To me, it's a more humane way than a system which encourages employers who are looking for workers to break the law, to accept, you know, unknowingly accept illegal documentation, for example. And so I -- and this is' tough issue. Look, I understand. The danger with the immigration issue is that it can be -- it can lead to nativism and encourage behavior which is really not how Americans should view the world.

The long-term solution, by the way, to -- for example, immigration issues with Mexico, is for Mexico to grow a middle class. That's why I'm such a big believer in NAFTA. It's in our interest that, you know, wealth be spread out to the hemisphere. The best way to spread wealth is through trade, so that Mexico can grow and become a vibrant place so people are more likely to be able to find a job closer to home. But the reality is, if you make 50 cents in the interior of Mexico and $5 in Texas, you're going to do $5, if you can make it.

And so now's the time for legal -- reforming of the immigration system. I don't believe in blanket amnesty. I think it would be a mistake. I think that wouldn't -- it would -- all that would do is create another incentive for 8 million people, or whatever the number is, to come. And so I think if somebody wants to be a citizen, they ought to get in line like everybody else who's gotten in line to become a citizen of the United States.

And so my vision is one that's work-related. And, you know, hopefully we can get Congress to move on it. There's some bipartisan movement on this issue as well, but I'm under no illusions, it's a tough issue for people. And it's a hard one. But the system's not working right now.

And when you talk about border security, George, it's a -- you know, it would be better if our border patrol agents were chasing down, you know, drugs and guns, than trying to chase down people. By that, I mean it would be much more efficient use of taxpayer's money if the system were legal, the worker system was legal, so that the border patrol could focus on other issues. In other words, if it were legal, people wouldn't have to get in the back of an 18-wheeler. If it were legal to come here and work, you wouldn't have to walk miles across a hot desert. And it would make it easier to protect our border with the immigration system that worked on legalizing work.

Yes, sir.

QUESTION: Thank you, Mr. President. Brian Monroe (ph) from Knight Ridder. We'll all aware of the past issues with Armstrong Williams and the video news releases and using government funds to promote true media in journalists, a position that you feel you need to get out. Is that consistent with your values and your first amendment beliefs and do you think that's deceptive to the American people?

BUSH: Yes, it's deceptive to the American people if it's not disclosed. And I -- first of all, in reviewing this issue, have been told this has gone on for quite a while. It doesn't excuse behavior here, but nevertheless, it has been, in that it's illegal -- it's illegal to use these video news clips, but it's incumbent upon people who use them to say this news clip was produced by the federal government. Armstrong Williams -- it was wrong what happened there, in the Education Department.

But no, I think there needs to be full disclosure about the sourcing of the video news clip in order to make sure that people don't think their taxpayers' money is being used to -- in wrong fashion. Thank you.

QUESTION: Mr. President, Wendy Zompherelli (ph) of "The Roanake Times" in Virginia. In the aftermath of the terribly distressing national debate over the case of Terri Schiavo, you spoke of the need to establish a culture of life. And yet there is one way in which the United States has long been out of step with much of the rest of the world in terms of, one, appreciation of life, and that is in the use of the death penalty.

BUSH: Right.

QUESTION: Can you please talk a little bit about your view of the death penalty and how that fits into your vision of a culture of life?

BUSH: Sure, thanks. I have been a supporter -- supportive of death penalty, both as governor and president. And the difference between the case of Terri Schiavo and the case of a convicted killer is the difference between guilt and innocence. And I happen to believe that the death penalty, when properly applied, saves live of others. And so I'm comfortable with my beliefs that there's no contradiction between the two.

QUESTION: Mr. President, Bill Sternburg (ph) with "USA Today."

BUSH: Oh, hi there. Got a great seat, didn't you?

QUESTION: Yes. Your fellow Republican from Texas, Tom DeLay, has blamed the ethical controversy around him largely on bias by the liberal news media. Do you agree with him on that?

BUSH: Of course not! Go ahead, sorry to interrupt you.

QUESTION: And do you think Mr. DeLay has become a liability to your party or your agenda?

BUSH: No, I appreciate that. Look, as I read his comments today, he want the Ethics Committee to review his case and he's willing to step up and talk to the Ethics Committee about it. And secondly, I'm looking forward to working with Tom. He's been a very effective leader. We've gotten a lot done in the legislature and I'm convinced we'll get more done in the legislature and I'm looking forward to working with him.

Yes, sir.

QUESTION: Mr. President, Tim Franklin from "The Baltimore Sun." I know you'd be disappointed if you didn't get an FOI question, so I...

BUSH: I thought you were going ask about, like, the Oriole/National thing, the broadcast agreement or whatever.

QUESTION: In processing FOI requests, should government officials presume that information should be given to citizens, or should the burden fall on citizens to convince government to give them access to information?

BUSH: That's an interesting way to put the question. Look, the presumption ought to be that citizens ought to know as much as possible as the government decision-making. Rich and I talked about this backstage a little bit, of course. He's constantly lobbying me.

I know there is a tension now between making the decision that which is -- that which can be exposed without jeopardizing the war on terror. And I understand there is suspicion that we -- you know, we're too security-conscious.

Let me refer you to the WMD that the Silberman/Robb commission (ph), as an example, however, of how I hope that we're becoming balanced between that which the public ought to know and that which, if we were to expose, would jeopardize our capacity to do our job, which is to defend America. 90 percent of the report was declassified. I think that might have surprised the press corps. I don't know. I don't want to speak for you all. But I think people following this issue were surprised that so much was declassified.

And yet the Silberman/Robb commission made it really clear that had the other 10 percent been declassified, it would have created -- it would jeopardized our capacity to protect the country. It would have exposed sources and uses. Rich talked about -- you know, I didn't realize we spent that much money on protecting it, but we also spend a lot of money on analyzing -- because somebody told me there's 3.5 million FOI requests a year, which is a lot. I can't tell you the percentage which passed or not passed, but there's an active interest in people reading documents. And I would hope that those who expose documents are wise about the difference between that which truly would jeopardize national security and that which should be read.

John Cornyn is a good friend and we look forward to analyzing and working with legislation that will make -- that would help put a free press' mind at ease that you're not being denied information you shouldn't see. I will tell you, though, I am worried about things getting in the press that put people's live at risk. I'm sure you feel the same way. Everybody in the room feels that same way.

And it's that judgment about what would put somebody life's at risk and what doesn't is where there's tension. And, you know, I just -- to answer your question, you know, I believe in open government. I've always believed in open government. Rich is right, you know, I don't e-mail, however. And there's a reason. I don't want you reading my personal stuff. There is a -- there's got to be a certain sense of privacy. You know, you're entitled to how I make decisions, and you're entitled to ask questions, which I answer. I don't think you're entitled to be able to read my mail between my daughters and me.

And so -- so I've made an easy decision there. I just don't do it, which is sad, really, when you think about it. Everything is investigated in Washington. And that's just the nature of the way here right now. And so, you know, we're losing a lot of history, not just with me, but with other presidents, as well. And so there's a balance to all of this. You know, I hope when it's all said and done, that we were fair to the press corps and the American people.

I said it's hard -- in my inaugural address, I did talk about -- you know, we've got to be consistent. I talked to Vladimir Putin about a free press. We got to make sure our own press is free. I know that. I talked to the people in Iraq about a free press and transparency and openness and I'm mindful that we can't talk one way and do another. But we're still at war and that's important for people to realize. Right after September 11th, I was fully aware that the farther we got away from September 11th, the more likely it would be that people would forget the stakes.

I wish I could report that, you know, all is well. It's not. It's just not. It's going to take a while. What is better is that there's fewer al Qaeda and we got them off balance and we'll continue to press. And so long as, you know, people can be endangered by leaks, we just got to be real careful. Anyway -- I probably talked you to death. It's called filibustering.

QUESTION: Mr. President...

PHILLIPS: The president of the United States taking questions there from various editors at the American Society of Newspaper Editors Convention at the Marriott Hotel there in Washington, D.C. Just listening to the question and answering, the only thing I learned there is that president doesn't e-mail. I didn't know that. Due to privacy concerns, he says, he doesn't want to get himself into trouble.

Anyway, we'll continue to follow the president and what he has to say there and questions and answers that take place. We'll have more LIVE FROM right after a break.

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Aired April 14, 2005 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CO-HOST: Live this hour, President Bush speaks to newspaper editors, takes third questions. We'll bring that to you when it happens.
KYRA PHILLIPS, CO-HOST: Kickback scheme involving Saddam Hussein's government. A Texas businessman arrest for allegedly giving him millions of dollar in the U.N. oil-for-food program.

Ecstasy turns to agony. National Guardsmen accused of smuggling thousand of illegal pills aboard an Air Force jet.

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

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

O'BRIEN: Up first this hour, rounding up the usual suspects. Probably some unusual suspects, as well. Ten thousand, 340 bail jumpers, jail breakers, and other fugitives netted in a week-long sweep dubbed Operation Falcon for federal and local cops organized nationally.

We expect to hear more from in a Justice Department news conference at the top of the next hour. In the meantime, we get facts and figures from CNN justice correspondent Kelli Arena, joining us from Washington -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Miles, according to a lot of law enforcement officials in the field, this was truly an extraordinary effort. It took place over a week's period, from April 4 to April 10. And as you said, more than 10,000 fugitives were captured.

Let's take a being at some of those numbers. One hundred sixty- two individuals that have been accused or convicted of murder. Sixty hundred thirty-eight wanted for armed robbery; 553 wanted for rape or sexual assault.

All of those details and more, as you said, coming out of the Justice Department later on today. But basically, what one law enforcement told us earlier, Miles, that anybody with a badge and a pair of handcuffs was asked to help out. There were 25 federal agencies, along with state and local partners that assisted in this effort.

It was all in honor of Victims Protection Week, and it was led by the U.S. marshals. And a little point you may not know, the U.S. marshals capture more fugitives each year than all of the federal law enforcement agencies combined.

And several of those marshals out in the field are hoping that the attention given to this effort will convince lawmakers and those in charge of the purse strings to keep giving them the resources and manpower they need to get their job done.

O'BRIEN: So it -- was it a publicity stunt then?

ARENA: Well, no, I think it was -- it was truly a coordinated effort to show, hey, this is what we can do, you know, with the right focus. Obviously, good intention, they wanted to take a look at, you know, victims' protection. We can say, look, this is what -- let's do what they can for those victims.

And for example, Miles, you've got -- priorities have to be put in place here. You've got so many men, so many hours -- and women, don't want to leave them out. And so many hours in a day to go after the fugitives in your area.

Let's say you've got a murderer versus a carjacker. Priorities dictate you're going to go after the murderer, perhaps, instead of the carjacker. Well, this -- having more resources and money allows them to go after everyone down the line, you know. A victim of a crime is a victim of a crime. They don't care, you know, the extent of it. It's victimization, and they want justice.

O'BRIEN: Kelli Arena, Washington, thank you very much.

ARENA: You're welcome.

O'BRIEN: Again, stay with CNN for the latest on Operation Falcon. Attorney General Alberto Gonzales will announce details of the bust in a live news conference at the top of the hour. We'll bring you that when it happens, of course.

PHILLIPS: Greasing the wheels in oil-for-food, filling the coffers of a soon to be toppled dictator. Explosive new allegations today amid the shambles of a U.N. program design to sustain Iraqi during prewar sanctions against its government.

If you've been watching CNN, you saw U.S. prosecutors unveil corruption charges against a Texas oil man, two of his overseas associates and the company they work for, called Bayoil.

We get the details now from CNN senior U.N. correspondent Richard Roth. Interesting developments, Richard.

RICHARD ROTH, CNN CORRESPONDENT: Kyra, remember the rock group Ten Years After? Well, even if you don't, 10 years ago today, the U.N. Security Council passed a resolution, in effect, approving the oil-for-food program.

But one item not really focused on at the time. They gave Saddam Hussein the right to choose which companies he would be dealing with, which vendors, as part of the buying of oil and then, in exchange, for distribution and receipt of humanitarian goods. It was always then known in recent years as the cash cow for Saddam Hussein.

So today an -- indictment unveiled. First time an American businessman, an American company, David Chalmers, head of Bayoil, charged with three felonies, including breaking the economic embargo against Iraq, wire fraud and financial transactions with a government, a state sponsor of terrorism.

The U.S. attorney described the heart of the scheme.

(BEGIN VIDEO CLIP)

DAVID KELLEY, U.S. ATTORNEY: What they did was they worked with the pricing. So they were taking money essentially off the top that would have gone into the escrow account. So they did it in a couple ways.

First, you're taking money off the top. In order to make that work without anybody seeing it, they're cutting the price of the oil down. Had they done what was an appropriate price of the oil and not taken the money off the top, for their surcharge, the illegal surcharge, logic tells you that more money would have gone where it was supposed to be going.

(END VIDEO CLIP)

ROTH: That escrow account that is where all of the -- the money was supposed to legally go, which was monitored by the U.N. through a French bank, but that's not exactly what happened. Saddam Hussein and so-called middleman and other businesses still being investigated, worked out these schemes for both sides to profit -- Kyra.

PHILLIPS: It will be interesting to see if there are other businesses involved.

Meanwhile, what happens to David Chalmers and his business? Is it going out of -- out of business, and are we going to hear from him?

ROTH: Well, U.S. attorney Kelley said he didn't think there was much left of Bayoil. In an hour or so, Chalmers makes his first court appearance in Houston. And then he's going to be formally arraigned in New York Monday morning.

PHILLIPS: All right. Richard Roth, thanks so much.

Well, Al Qaeda in Iraq supposedly in the thick of this morning's twin suicide bombings in downtown Baghdad. Those targeting police and a separate attack on police in Kirkuk killed a minimum of 14 people, all while a 25-member task force works to free a kidnapped American.

We get the latest on all of this from CNN's Aneesh Raman. He's in the capital -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Kyra, good afternoon.

Violence defining this day in Iraq. Two near simultaneous suicide car bombs, detonating early this morning, outside the ministry of interior, in south central Baghdad. The target, apparently an Iraqi police convoy. Police officials say that at least 11 Iraqis were killed. Upward of 40 of them wounded. The majority of casualties, Kyra, we know to be civilians.

Now, north of the capital city, in the town of Kirkuk, gunmen opened fire on a police station there. Three Iraqi police officers killed, four Iraqis wounded.

And also, late word coming to us that in Hillah this evening, a suicide bomber has detonated at a marketplace. Four Iraqi policemen there were killed; six others were wounded.

Now, all of this violence, underscoring the need for Iraq's transitional government to take shape and deal with security. A key figure in that government will be Ayad Allawi, the interim prime minister, now set to rise as a key opposition force.

I spoke to him today. He has been deliberately quiet in all these past weeks of negotiation. And he spoke really to any notion of American troop reduction and withdrawal. Jalal Talabani, the Iraqi president, told Wolf Blitzer that that could take place, a withdrawal, within two years. I asked Ayad Allawi about that timeline.

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER: I think, as -- if we expedite institutions, security institutions, and if there are no disruptions now, in this coming government, and if the next government will go on with whatever had been achieved, maybe we can do it in four years (ph).

(END VIDEO CLIP)

RAMAN: Now, Allawi is the country's perhaps best known secular politician. He said that he is worried that political Islam, as he calls it, could rise with the new government led by Ibrahim al-Jafari and the Shia United Iraqi Alliance. So Allawi set to rise in the opposition, Kyra, and perhaps return to the top spot next year under the new constitution.

PHILLIPS: Meanwhile, we can't stop thinking about Jeffrey Ake, the kidnapped American. What's the status on that, Aneesh?

RAMAN: We spoke to embassy officials here today. They tell us that, as is procedure, a working group has been established just to deal with this situation. Some 25 people part of that. It's an interagency group, trying as best as they can to secure his release.

This comes a day after that video with masked men at his side, guns pointing at head. Mr. Ake did call upon both the American government to engage the insurgents in dialogue and for U.S. troops to withdraw.

Everyone just waiting in terms of any information. The secretary of state saying the United States does not and will not negotiate with terrorists. So the efforts continue here in the capital city. PHILLIPS: Aneesh Raman, thank you so much -- Miles.

O'BRIEN: Ecstasy on the Galaxy. Two U.S. Air National Guard troops face the prospect of years in prison if they're convicted of smuggling Ecstasy pills aboard their C-5 cargo plane, known as the Galaxy.

CNN's Kathleen Koch is tracking the story at the Pentagon for us -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Miles, this was a massive amount of the drug Ecstasy, with a street value of more than $11 million. And now under arrest and charged last night with conspiracy to import and distribute it are an Air National Guard pilot and the load master of his plane.

Now according to the U.S. attorney's office for the southern district of New York, 28 large bags holding some 290,000 pills were found in the luggage of Captain Franklin Rodriguez and Master Sergeant John Fong, after they returned to the U.S. from an official mission aboard an Air Force cargo plane.

Authorities alleged that what happened was that on April 8, the two men flew from Stewart Air National Guard Base in Newburgh, New York, to Germany, and then on to the public of Georgia to deliver supplies. The U.S. attorney's office says that during their return stop in Germany, the men went to a hotel room and loaded the packages of Ecstasy into their personal luggage.

The men were then arrested Tuesday as they unloaded those bags from the plane and into the pilot's car.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They were carrying these drugs with them. They were apprehended by members of our strike force, as well as the Department of Defense.

CAPT. KEVIN KERLEY, NEW YORK POLICE: The investigation is continuing. We believe that there's no other military personnel involved in this ring. The investigation is continuing in Europe and in the continental U.S. at this time.

(END VIDEO CLIP)

KOCH: Officials here at the Pentagon are stunned by these developments. Spokesman Bryan Whitman saying, quote, "We have a zero tolerance policy when it come to drugs, and they will be dealt with very seriously."

Apparently, this was not the first time. According to court papers, the two Air National Guardsmen told law enforcement officials that they had made a similar trip at least three times before. The master sergeant saying that he had been paid $10,000 for each of those previous trips. Now, Miles if these two men are convicted of both of the charges they face, they could go to prison for 40 years each and face $2 million in fines.

O'BRIEN: And Kathleen would that be a military court or civilian court?

KOCH: Apparently, civilian court because as Air National Guardsmen, they are not full-time military. They have other jobs in the civilian sector, so at this point, tried in the civilian court, yes.

O'BRIEN: Kathleen Koch at the Pentagon, thank you.

PHILLIPS: And an active missing child media alert just in to CNN. This is what we can tell you, that the state of Alabama has issued this emergency missing child media alert for a young lady by the name of Jade Sophia Padgett.

The Cherokee County Sheriff's Department and the Alabama Department of Public Safety are asking for your help to locate Jade Sophia Padgett. White female, 16 years old, 5'6", 115 pounds, dark hair, dark brown eyes.

She was last seen yesterday about 3 p.m. at Sand Rock School in Cherokee County. She is believed to be in danger. Jade was wearing a long sleeved white T-shirt, faded blue jeans and tennis shoes.

Police say it's believed that she may be with an unknown older white male, possibly in his 30s, whom she met on the Internet. Once again, Jade Sophia Padgett is the name. Sixteen years old. If you have any information regarding this missing teen, you're asked to contact the Cherokee County Sheriff's Department or the Alabama Department of Public Safety. We'll continue to follow up more. Jade Sophia Padgett.

Elsewhere across America, another day on the witness stand for the mother of the teenager who says Michael Jackson molested him. The woman says that she was sad, confused, and basically acting when she praised Jackson in a videotaped rebuttal to an inflammatory BBC documentary. Yesterday she described Jackson's alleged plot to keep her family under wraps at Neverland and beyond. Cross-examination is still to come.

If you're headed for the airport, leave the Zippo at home. Today's the day a long-expected ban takes effect on cigarette lighters in airplanes, passengers cabins or cargo holds. You can still take matches in your carry-ons, but can't smoke.

After years or trying, banks and credit card companies are poised to hit the jackpot on bankruptcy legislation. The House of Representatives is almost sure to pass a Senate-passed bill, forcing many bankruptcy flyers -- filers, rather, to pay what they owe. Many Democrats say the changes are an outrage.

O'BRIEN: President Bush just a few minutes away from making some remarks to newspaper editors gathered in Washington. We will bring you some of that when he speaks, of course.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Right now!

(END VIDEO CLIP)

O'BRIEN: Tracking down fugitives. We'll take you, along with the federal marshals, hot on the trail, ahead on LIVE FROM.

And keeping secrets at the Vatican. In an age of cell phones and satellites and listening devices, how will the process of selecting the next pope stay private?

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

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O'BRIEN: In just four days, the College of Cardinals begins its tradition-rich process of selecting a new pope. In 1900 years of papal elections, the Catholic Church has never, until now, had to deal with one threat in particular: high-tech spying on the secret conclave.

CNN's Chris Burns explains how it could happen.

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT (voice-over): At the Vatican, as the leaders of the church prepare to choose a new pontiff, the saints watch over the secrets of the inner sanctum. So do the Vatican police, trying to stay one step ahead of spying technology.

Security experts say the sky's the limit, from monitoring cell phone conversations to eavesdropping from high above. Look how close satellites can peek.

ANDREA MARGELLETTI, CENTER FOR INTERNATIONAL STUDIES: Surely, many intelligence agencies in the world are trying to penetrate inside the Holy See. Will do it with special aircraft, for example, spy planes, with -- drop things, or lasers.

BURNS: Lasers that could be pointed at windows of the Sistine Chapel to pick up conversations where the cardinals will cast their votes. Or the windows of the Vatican Santa Marta Hotel, where the cardinals are staying.

Vatican experts say the church's security force is expected to sweep the grounds for bugs and other gadgets during the conclave.

MIRIAM TOMPONZI, PRIVATE DETECTIVE: There is a microspy, a microphone.

BURNS: Private detective Miriam Tomponzi displays some of the classic tricks: the lighter that's a camera. Another that converts into a bug. The pen that's a microphone.

TOMPONZI (through translator): There's absolutely no doubt we could spy on the Vatican and the conclave.

BURNS: But the security for this conclave has been years in the making.

(voice-over) Pope John Paul II himself issued counterintelligence orders for conclaves, banning cell phones, recorders, radios, television, electronic organizers, to protect the cardinals from, in his words, threats to their independent judgment.

(voice-over) More than that, experts say, a pope spied on for years under communist regimes in Poland, helped better sensitize the Vatican to espionage.

MARGELLETTI: I think for now we at the Holy See much less vulnerable than ever.

BURNS: Less vulnerable from outside spying, perhaps, but experts also say that won't make the Vatican free of internal intrigue, as rivals jockey for power in the shadows of the saints.

Chris Burns, CNN, Vatican City.

(END VIDEOTAPE)

PHILLIPS: Other news around the world now.

Homebound: after a diplomatic mission overseas, Defense Secretary Donald Rumsfeld wrapped up a tour of the Middle East and Asia today. It included stops in Iraq, Afghanistan and Pakistan and a final stop today in Kyrgyzstan.

Bidding farewell to Europe's longest-serving monarch. Mourners are paying their respects to Monaco's Prince Rainier today. The 81- year-old ruler died last week after suffering lung, heart and kidney problems. He's to be buried tomorrow alongside his wife, Grace Kelly.

Britain's highest profile newlyweds attended their first royal engagement as husband and wife today. Prince Charles and Camilla, a.k.a. the Duchess of Cornwall, greeted hundreds of well-wishers in stormy Scotland. Camilla later performed her first duty as a royal: she opened a playground.

Want to take you straight to President Bush as he speaks live now at a convention of newspaper editors. He's expected to take questions. Let's listen in.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... more than you know. I -- I miss my hometown newspaper. Austin was my hometown newspaper for quite a while. I miss reading it every morning, as it was thrown on the governor mansion's doorsteps, but not enough to want to stay here for four more years.

I appreciate your leadership, Rich. Two thoughts came to mind when I first saw Rich. One, he has to work with a guy named Ken Herman. Is Herman in the pool today?

UNIDENTIFIED MALE: Yes, sir, Mr. President!

BUSH: Yes, OK. Just trying to help you out. Kind of like you tried to help me out, if you know what I mean.

And, second, I know Rich is proud of his son, Rich Junior, who is in Baghdad. My daughter, Barbara, one of our daughters, went to Yale, and she brought a fellow over the other day. I said, "What are you doing?"

He said, "Well, I was in your daughter's class. I'm in Baghdad, and I'm working with the State Department to help shepherd the press corps."

I said, "Who are some of the characters you've run into there?" And he mentioned a guy named John Burns, who I'd known when my dad was liaison officer in China. And believe it or not, he mentioned Opple (ph). I said, I know the old man.

I know you're proud of him. I appreciate the service he's providing.

I want to thank Carla Garrett Harrison (ph), as well, from Clark County, Ohio. Happens to be one of my favorites.

Just a couple thoughts, and I'd be glad to answer some questions, if you have any.

Here's what Jefferson said. Jefferson said, "Our liberty depends on freedom of the press that cannot be limited without being lost." He also went on to say, "I've given up newspapers and I find myself much happier."

I haven't given up newspapers. I do find myself much happier than I've been in a long time in Washington. I'm enjoying myself. It's been a fascinating experience to be the president of the country. It's been a remarkable time in Washington.

You know, as Rich said, the last time I was here, we were talking about the EP-3. Seems like an eternity ago. A lot has happened.

I -- somebody said, "Well, how do you describe the presidency?"

I said, "It is a decision-making job. I make a lot of decisions."

At your next editorial board when you're dealing with the future president, you ought to say, how do you intend to make decisions? What is the process by which you will make large decisions and small decisions? How do you decide?

I've got a decision to make today. Do I go with a fast ball or a slider?

A couple of thoughts about this year and the agenda. And then questions.

First, we got a problem with energy. And it's a problem that didn't happen overnight. It's a problem that's been brewing for quite awhile, because the country has yet to implement a strategy that will make us less dependent on foreign sources of energy.

You know, I was at Fort Hood the other day and sitting, having lunch with some soldiers. And the second question the fellow asked me was, "Why don't you lower gasoline prices?"

I said, "I'd like to." I said, "The problem is the supplies are out of balance with demand when it comes to the major feed stock of gasoline, which is crude oil."

We've got to think long term in this country. And Congress needs to pass the bill that I suggested in 2001, to begin the process of changing how we consume energy in America.

We need to be better when it come to conservation. Need to continue spending money on research and development, to find ways to make corn economic, ethanol, biodiesel. We have to continue exploring way to make sure we can burn coal in environmentally-friendly ways.

I know we need to continue to explore for natural gas in our own hemisphere in environmentally-friendly ways.

But Congress needs to get off the dime. I'm looking forward to working with them. So one of the initiatives that I will push again is to get an energy bill out.

I will tell you with $55 oil, we don't need incentives to oil and gas companies to explore. There's plenty of incentive. What we need is to put a strategy in place that will help this country over time become less dependent. It's really important. It's an important part of our economic security and it's an important part of our national security.

I'm also talking about retirement security. I'm talking about it a lot. Frankly, I'm not a really popular fellow on Capitol Hill for talking about it. I recognize that. One of these issues that I think people would rather avoid than take on. There's -- written about this, I'm confident, though, the old third rail of American politics. If you touch it, you know, you don't do so well politically.

I think Rich would attest to this, that when I was governor, I felt like it was important to take on big issues. And I tried to convince the legislature to work with me on the school funding issue before it became adjudged by the courts to be unconstitutional or property taxes got so high that it created a real problem. Well, I tried. And worked hard. Now they're dealing with it, I think.

I feel the same way about Social Security. It's -- we got a serious problem. I don't care what your party is or what your political philosophy is. You can't -- you can't ignore the math.

And the math really is this. Baby Boomers like me are ready to retire in four years. I'll be 62 in four years. That's -- actually, a fairly convenient date for me. And we're living longer.

And people ran for office saying, "Vote for me. I promise you more benefits."

So you've got a lot of people like me, getting ready to retire, living longer, and we've been promised greater benefits than previous generations. And yet there's fewer people to pay the bill.

And so what ends up happening is that a pay as you go system goes in the red in a relatively short period of time. And every year it's in the red, it gets worse and worse and worse. And the fundamental question confronting Congress is, are they willing to take on this issue now, before it's too late? Before by waiting, the cost becomes more and more severe?

And so I'm going to spend a lot of time on Social Security. I enjoy it. I enjoy taking on the issue. I guess it's the mother in me. You know, I appreciate calling people to action. I like doing it. And the more resistance I find for people to protect the status quo, the more determined I am to continue building the case that there is a problem and assuring seniors that they're going to get their check.

And we just started the process. It may seem like a long time to you. But realistically, we've really just started. If you ask questions about it, I'll be glad to expand on what I mean by that. But there's -- I've got a lot more time to tell people there is a problem.

See, I think the American people are beginning to realize it, but they've got to understand the significance of the problem. And then seniors have got to realize they're fine when it comes to the check. Because once I make that case, then the issue becomes a generational issue. Grandparents are going to have to start the question, "What are you going to do about my grandkids?"

Now, in my State of the Union address I did lay out options. And I think I have a responsibility to lay out options. I bet I'm the first president ever to talk about a variety of options that ought to be on the table that people ought to come forth and discuss.

And so I'm looking forward to working with Congress. I'm look forward to continuing to remind people we've got a problem. I'm absolutely convinced that when it's all said and done, inaction will create a political problem for people. The third rail of politics will be failure to solve the problem.

And so just to give you a head's up, I'll be coming to your communities, continuing to talk about this issue a lot. I'm going to Cleveland tomorrow to talk about the issue.

Overseas, there's a lot going on. And it's -- I believe our actions have helped make the world a more peaceful place.

Rich was right, obviously, times changed dramatically on September 11, 2001, and we're still at war with terrorists. There are still people there who would like to create harm to America. The only way to deal with him in my opinion is to keep them on the run, is to keep enormous pressure, pressure on their finances, pressure on their safe havens, pressure on the people who are willing to accommodate their philosophy, and we're doing that. And not only doing it alone, we're doing it in a lot of other countries.

We've got a lot of folks who understand the stakes in dealing with al Qaeda. We got a lot of people around the world who are more than willing to share intelligence and to help follow leads and to bring people to justice.

Today, I was with the Indian foreign minister and we were talking about the neighborhood. And I reminded him that I was appreciative of the efforts of President Musharraf and his efforts in fighting Al Qaeda. I thought it was in the best interest of the United States and India that President Musharraf be tough when it comes to running down people in caves that are trying to do harm to free people. After all, India's a free country. It makes sense to encourage a leader like President Musharraf.

We're getting help in Saudi Arabia. The terrorists made a tactical mistake in my judgment by attacking the kingdom of Saudi Arabia. They now understand the stakes. And so we've got an ally in chasing down Al Qaeda. And we'll continue to do so. It's just -- you've got to know, we're going to be relentless and unyielding. And we'll do everything we can to bring people to justice.

In the long-term, to solve the problem, however, of a radical ideology is to defeat it with freedom, is to encourage societies to become open, free, transparent societies, based upon rule of law, with respect for minority rights, honoring each human being. Oh, I know some people said that's not possible in certain societies. I don't believe that. I just don't believe it. I believe everybody longs to be free. I believe deep within everybody's soul is a desire to live in a free world. People of Afghanistan prove that theory, right, poor people were subjugated with incredible brutalism, brutality from the Taliban, and yet when given a chance to vote, millions voted.

Same in Iraq. Over eight million people voted, in spite of the fact they were threatened, cajoled, some killed as they tried to exercise something that they believed was their right, God-given right to do, which is express yourself freely in a society. Lebanon, there's movement in Lebanon now to be free, to have a democracy that works. We're working with France and other countries to enable Lebanon's democracy to flourish by insisting that, first and foremost, Syria get completely out of the country. I don't mean halfway out. I don't mean 80 percent out. I mean 100 percent out. Not only Syrian military, but the secret police and secret service and intelligence officers that are embedded in the Syrian -- in the Lebanese government.

I met with Prime Minister Sharon this weekend. I am hopeful that there will be a Palestinian state living side by side with Israel in peace. I believe in order for that to work, however, we need to work, the free world needs to work, with the Palestinians to develop the institutions necessary for democracy to survive, and that's going to take work.

I felt Prime Minister Sharon's decision to withdraw from the Gaza was bold and necessary. He came to Washington on I think it was April 14th, last year, and informed me that he was going to do this, and I thought it was a really interesting decision. I admire strong, courageous decision-making. It created -- his decision created an opportunity now for America, the E.U., Russia, the United Nations, to work with the Abbas government, to set up a democratic state in the Gaza.

And today I announced that Jim Wolfensohn, the former head of the World Bank, is going to be the director of our operation with Abbas, to help him build a government, to help him try to pull out of this ash heap of what used to exist. A government that will function and meet the will of the people. And I think it's possible. I wouldn't be expanding U.S. capital if I didn't. And I know it's necessary if you want to see peace in that part of the world.

So lots going on worldwide based upon a fundamental premise that freedom is a necessary part of achieving a peaceful world. And so I'm looking forward to the next four years, working on this agenda, working with friends and allies to continue the spread of freedom, defying the cynics and the critics who believe the free only belong to a certain type of religion or certain type of person. My hope is of course is when it's all said and done, to look back and say, this world is a more peaceful place after eight year of my administration.

So, Rich, thanks for having me. Looking forward to taking a few questions. You've got the floor.

(APPLAUSE)

UNIDENTIFIED MALE: President Bush has graciously agreed to take questions as time allows. (INAUDIBLE) members are invited to come to the microphones in the audience. Please tell us your name and newspaper.

And I'm going to take the opportunity, Mr. President, to ask the first question. I thought at one time you had a hard time with the political crowd here in D.C., the voters and the entrenched, and I see that -- I picked up a baseball hat for this new team you got here. I see they named it after you. It's got a big 'W' on it. You going to the game tonight?

BUSH: Yes, I thought you were going to ask about FOI.

UNIDENTIFIED MALE: That's to come.

BUSH: Go ahead. You want to ask the first question.

UNIDENTIFIED MALE: No, there'll be questions out here, think.

BUSH: OK, I'll ask them myself then. Yes, sir?

QUESTION: Mr. President, Clarence Pennington, retired, Ohio editor. We remember -- I remember, you saying that you're not going to give up all your eyes ideas for a while, until you find out what opposition is saying about Social Security. When I heard that I thought it was a good idea. Well, it's been a while. Is there anybody talking yet? What are they saying?

BUSH: Yes. I don't remember putting it that way. I thought what I said was I welcomed all ideas on the table, and that if you're a Democrat or Republican, please bring your ideas forward, and I'll do my best to make sure you don't get ridiculed, punished, whatever word you want to use, for being bold enough to come up and discuss ways to solve the problem.

But it's interesting, you say we've been here a while. We have been talking about it for a while, but it's going to take a while more to make it clear to people in Congress that we've got a problem, see? They're not going to respond until the people say clearly there's a problem and what are you going to do to fix it? And it takes a while because, frankly, this is a heavy lift for some in Congress. Why deal with an issue if you don't have to? And so I'm going to spend a lot more time talking about the problem, making it clear to people.

There's dialogue going on quietly up there. People are slowly, but surely, beginning to share ideas, and we spent a lot of time on Capitol Hill, we -- my staff in particular -- working with members, trying to listen to their ideas, trying to begin to fashion a long- term, permanent solution to the Social Security issue.

QUESTION: Just between us what is being said? Any of them saying anything?

BUSH: Are they saying anything?

QUESTION: Well, yes about there -- nobody from the opposition is hash had a new idea for you?

BUSH: Oh, they may have, but they're not willing to put it on the table yet publicly. It's going to take a while. This a process. I unfortunately don't get to write the legislation. I propose, Congress disposes. But yes, we've got some good ideas. Remember a lot of the interesting ideas I quoted in the State of the Union were ideas from people like Bill Clinton or Senator Daniel Patrick Moynihan. These citizens who have stepped forward and talked about way to permanently fix Social Security. I keep emphasizing permanently, because in 1983, President Reagan and Tip O'Neill came together and said, let's fix -- put a 75-year fix out there for Social Security. And here we are, 22 years later, worrying about permanently fixing it again. So now's the time to do it forever.

And -- but I'm pleased with the progress. I'm also understanding that this is just the beginning stages of what is a difficult debate for some.

Remember, some in Congress would rather not discuss this issue at all. They would rather say, well, please don't jeopardize -- put me in jeopardy. Please don't cause me to have to take a tough vote. And, you know, I just got a different perspective. I think now is the time to fix the problem. The longer you wait, every year you wait, it costs a future generation $600 billion, and so I'll continue talking about the issue a lot. But I -- beginning a little movement up there, people are talking. (INAUDIBLE)

OK, yes?

QUESTION: Mr. President, George Condon (ph) with Copley News Service. A month ago, you stood in Crawford with the leaders of Mexico and Canada and talked about the importance of balancing security, but maintaining the free flow of trade and people across the borders. But this month, your Department of Homeland Security has said they're going to be requiring passports for tourists coming across the border. As somebody who is familiar with the long lines at today's border, do you -- what's your reaction to the protests from the business and tourism community and do you support the requirement of passports?

BUSH: Yes, the -- I'm aware of the issue, obviously. When I first read that in the newspaper, about the need to have passports, particularly the day crossings that take place, about a million, for example, in the state of Texas, I said, what's going on here? I thought there was a better way to do -- to expedite legal flow of traffic and people. Evidently, this has been mandated in law, and so I've talked to Condi about -- and Homeland -- the Homeland Security people, about making -- seeing if there's some flexibility in the law that would allow for, example, finger imaging to serve as the so- called passport for daily traffic.

But you're right, it's going -- I mean, if people have to have a passport, it's going to disrupt honest flow of traffic. I think there's some flexibility in the law and that's what we're checking out right now. On the larger scale, look, we've got a lot to do to enforce the border. For those of you in Arizona, you now know Arizona has got more illegal immigrants coming across the border than I guess any other state right now.

My view is Congress needs to work with us to pass an immigration reform -- one, got to enforce the border better. We've increased border spending by 34 percent since, I think, 2001. But it doesn't make any sense to me to have a system that kind of forces an industry to develop, an industry that smuggles people, an industry that forges documents, an industry that really doesn't represent the best of America.

It seems like to me what we ought to do is be as open about it, and say, look if you're a willing worker and willing employee and you can't find an American, here's a legal way to work. Here's a document which enables you to be here legally, so that if you decide to go home for a little bit, you can. And there would be a time limit on the document, time limit on the right to be here to work.

To me, it's a more humane way than a system which encourages employers who are looking for workers to break the law, to accept, you know, unknowingly accept illegal documentation, for example. And so I -- and this is' tough issue. Look, I understand. The danger with the immigration issue is that it can be -- it can lead to nativism and encourage behavior which is really not how Americans should view the world.

The long-term solution, by the way, to -- for example, immigration issues with Mexico, is for Mexico to grow a middle class. That's why I'm such a big believer in NAFTA. It's in our interest that, you know, wealth be spread out to the hemisphere. The best way to spread wealth is through trade, so that Mexico can grow and become a vibrant place so people are more likely to be able to find a job closer to home. But the reality is, if you make 50 cents in the interior of Mexico and $5 in Texas, you're going to do $5, if you can make it.

And so now's the time for legal -- reforming of the immigration system. I don't believe in blanket amnesty. I think it would be a mistake. I think that wouldn't -- it would -- all that would do is create another incentive for 8 million people, or whatever the number is, to come. And so I think if somebody wants to be a citizen, they ought to get in line like everybody else who's gotten in line to become a citizen of the United States.

And so my vision is one that's work-related. And, you know, hopefully we can get Congress to move on it. There's some bipartisan movement on this issue as well, but I'm under no illusions, it's a tough issue for people. And it's a hard one. But the system's not working right now.

And when you talk about border security, George, it's a -- you know, it would be better if our border patrol agents were chasing down, you know, drugs and guns, than trying to chase down people. By that, I mean it would be much more efficient use of taxpayer's money if the system were legal, the worker system was legal, so that the border patrol could focus on other issues. In other words, if it were legal, people wouldn't have to get in the back of an 18-wheeler. If it were legal to come here and work, you wouldn't have to walk miles across a hot desert. And it would make it easier to protect our border with the immigration system that worked on legalizing work.

Yes, sir.

QUESTION: Thank you, Mr. President. Brian Monroe (ph) from Knight Ridder. We'll all aware of the past issues with Armstrong Williams and the video news releases and using government funds to promote true media in journalists, a position that you feel you need to get out. Is that consistent with your values and your first amendment beliefs and do you think that's deceptive to the American people?

BUSH: Yes, it's deceptive to the American people if it's not disclosed. And I -- first of all, in reviewing this issue, have been told this has gone on for quite a while. It doesn't excuse behavior here, but nevertheless, it has been, in that it's illegal -- it's illegal to use these video news clips, but it's incumbent upon people who use them to say this news clip was produced by the federal government. Armstrong Williams -- it was wrong what happened there, in the Education Department.

But no, I think there needs to be full disclosure about the sourcing of the video news clip in order to make sure that people don't think their taxpayers' money is being used to -- in wrong fashion. Thank you.

QUESTION: Mr. President, Wendy Zompherelli (ph) of "The Roanake Times" in Virginia. In the aftermath of the terribly distressing national debate over the case of Terri Schiavo, you spoke of the need to establish a culture of life. And yet there is one way in which the United States has long been out of step with much of the rest of the world in terms of, one, appreciation of life, and that is in the use of the death penalty.

BUSH: Right.

QUESTION: Can you please talk a little bit about your view of the death penalty and how that fits into your vision of a culture of life?

BUSH: Sure, thanks. I have been a supporter -- supportive of death penalty, both as governor and president. And the difference between the case of Terri Schiavo and the case of a convicted killer is the difference between guilt and innocence. And I happen to believe that the death penalty, when properly applied, saves live of others. And so I'm comfortable with my beliefs that there's no contradiction between the two.

QUESTION: Mr. President, Bill Sternburg (ph) with "USA Today."

BUSH: Oh, hi there. Got a great seat, didn't you?

QUESTION: Yes. Your fellow Republican from Texas, Tom DeLay, has blamed the ethical controversy around him largely on bias by the liberal news media. Do you agree with him on that?

BUSH: Of course not! Go ahead, sorry to interrupt you.

QUESTION: And do you think Mr. DeLay has become a liability to your party or your agenda?

BUSH: No, I appreciate that. Look, as I read his comments today, he want the Ethics Committee to review his case and he's willing to step up and talk to the Ethics Committee about it. And secondly, I'm looking forward to working with Tom. He's been a very effective leader. We've gotten a lot done in the legislature and I'm convinced we'll get more done in the legislature and I'm looking forward to working with him.

Yes, sir.

QUESTION: Mr. President, Tim Franklin from "The Baltimore Sun." I know you'd be disappointed if you didn't get an FOI question, so I...

BUSH: I thought you were going ask about, like, the Oriole/National thing, the broadcast agreement or whatever.

QUESTION: In processing FOI requests, should government officials presume that information should be given to citizens, or should the burden fall on citizens to convince government to give them access to information?

BUSH: That's an interesting way to put the question. Look, the presumption ought to be that citizens ought to know as much as possible as the government decision-making. Rich and I talked about this backstage a little bit, of course. He's constantly lobbying me.

I know there is a tension now between making the decision that which is -- that which can be exposed without jeopardizing the war on terror. And I understand there is suspicion that we -- you know, we're too security-conscious.

Let me refer you to the WMD that the Silberman/Robb commission (ph), as an example, however, of how I hope that we're becoming balanced between that which the public ought to know and that which, if we were to expose, would jeopardize our capacity to do our job, which is to defend America. 90 percent of the report was declassified. I think that might have surprised the press corps. I don't know. I don't want to speak for you all. But I think people following this issue were surprised that so much was declassified.

And yet the Silberman/Robb commission made it really clear that had the other 10 percent been declassified, it would have created -- it would jeopardized our capacity to protect the country. It would have exposed sources and uses. Rich talked about -- you know, I didn't realize we spent that much money on protecting it, but we also spend a lot of money on analyzing -- because somebody told me there's 3.5 million FOI requests a year, which is a lot. I can't tell you the percentage which passed or not passed, but there's an active interest in people reading documents. And I would hope that those who expose documents are wise about the difference between that which truly would jeopardize national security and that which should be read.

John Cornyn is a good friend and we look forward to analyzing and working with legislation that will make -- that would help put a free press' mind at ease that you're not being denied information you shouldn't see. I will tell you, though, I am worried about things getting in the press that put people's live at risk. I'm sure you feel the same way. Everybody in the room feels that same way.

And it's that judgment about what would put somebody life's at risk and what doesn't is where there's tension. And, you know, I just -- to answer your question, you know, I believe in open government. I've always believed in open government. Rich is right, you know, I don't e-mail, however. And there's a reason. I don't want you reading my personal stuff. There is a -- there's got to be a certain sense of privacy. You know, you're entitled to how I make decisions, and you're entitled to ask questions, which I answer. I don't think you're entitled to be able to read my mail between my daughters and me.

And so -- so I've made an easy decision there. I just don't do it, which is sad, really, when you think about it. Everything is investigated in Washington. And that's just the nature of the way here right now. And so, you know, we're losing a lot of history, not just with me, but with other presidents, as well. And so there's a balance to all of this. You know, I hope when it's all said and done, that we were fair to the press corps and the American people.

I said it's hard -- in my inaugural address, I did talk about -- you know, we've got to be consistent. I talked to Vladimir Putin about a free press. We got to make sure our own press is free. I know that. I talked to the people in Iraq about a free press and transparency and openness and I'm mindful that we can't talk one way and do another. But we're still at war and that's important for people to realize. Right after September 11th, I was fully aware that the farther we got away from September 11th, the more likely it would be that people would forget the stakes.

I wish I could report that, you know, all is well. It's not. It's just not. It's going to take a while. What is better is that there's fewer al Qaeda and we got them off balance and we'll continue to press. And so long as, you know, people can be endangered by leaks, we just got to be real careful. Anyway -- I probably talked you to death. It's called filibustering.

QUESTION: Mr. President...

PHILLIPS: The president of the United States taking questions there from various editors at the American Society of Newspaper Editors Convention at the Marriott Hotel there in Washington, D.C. Just listening to the question and answering, the only thing I learned there is that president doesn't e-mail. I didn't know that. Due to privacy concerns, he says, he doesn't want to get himself into trouble.

Anyway, we'll continue to follow the president and what he has to say there and questions and answers that take place. We'll have more LIVE FROM right after a break.

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