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Georgia Police Search for Missing Toddlers; Settlement Announced for Victims of Adelphia Fraud
Aired April 25, 2005 - 15:00 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: Checking some stories now in the news. State Department officials confirm Vice President Dick Cheney and Secretary of State Condoleezza Rice are reaching out to Iraqi leaders, hoping to end a stalemate over national assembly seats and get the new government up and running. Under Iraq's interim constitution, the newly elected prime minister must step down if he fails to form a new government by May 7.
It's the worst train accident Japan has seen in more than 40 years: 57 reported dead, more than 400 injured when a commuter train derailed Monday morning near Osaka. Investigators are looking into reports the train was running late and was perhaps speeding to try and catch up.
House Majority Leader Tom DeLay hitching a free ride tomorrow aboard Air Force One. He's been invited to travel with President Bush from Galveston to Washington. Now the trip comes at an interesting time, as DeLay battles bad press after allegedly accepting free trips from lobbyists, but a spokesman for DeLay declined to comment on any political significance of that Air Force One ride.
Up first this hour, a desperate search here in Georgia for two toddlers missing now for 45 hours.
KYRA PHILLIPS, CO-HOST: Nicole Payne and her brother, Jonah, were reported missing by their mother Saturday evening. CNN's Tony Harris is with the searchers now with the latest -- Tony.
TONY HARRIS, CNN CORRESPONDENT: Yes, Kyra, so many more questions than we have answers for right now.
As you mentioned, the search continues here in warren Warrenton, Georgia -- this is a small community just west of Augusta, Georgia -- for 3-year-old Jonah Payne and his 2-year-old sister Nicole.
Here's what we know so far. As you mentioned, the mother of the two children, Lottie Kain, reported the two children missing at about 6:15 on Saturday evening, and here's the story that she tells authorities, that at about 4 p.m. in the afternoon, she brought the kids into the house.
There was a period of time when she went off to the bathroom. She says she spent about three to five minutes in the bathroom. When she came out, she noticed that the front door was open, that the kids were gone. She goes out into the front yard and she notices that the gate to the yard is also open. The kids are nowhere in sight. She calls authorities at about 6:15 on Saturday afternoon. As you know, we've got Daylight Saving Time, so there is some time to put together a search. And what the authorities tell us is they put together a very exhaustive search of an area. You can you see a pond behind me, and as you go down this road behind me to the family home there are a number of other ponds. And then there is a pretty extensive wooded area.
So they put together this search. They put a helicopter up in the air with infrared capabilities and they were not able to locate the kids.
Now, at some point yesterday the search was called off, because as we were told, it was going nowhere. What we can tell you is that this morning there was a lot of the stress on the faces of law enforcement officials trying to find these kids.
There were a number of reasons to be concerned. First of all, these two children have health issues that they need to have addressed on a daily basis. And also, as you know, there's been a bit of a cold snap here in the southeast, and the temperatures overnight have been dipping into, you know, the middle to low 30s. So there is some concern about if these kids did, in fact, wander off and were not abducted, that these temperatures are not conducive for kids to be outside in the very -- the small amounts of clothing they were wearing at the time of their disappearance.
We can also report at this time that there has been a lot, and I mean a lot of activity down this road that leads to the family home. We can tell you that officials from the children's school have been summoned to the family home. We can also tell you that the pastor for the family has also driven down this road to go to the family home and that an ambulance has also driven down this road recently.
Now we're not going to jump to any conclusions here. We just want to report what we're seeing. A lot of activity very near the family home here in Warrenton -- Kyra.
PHILLIPS: All right, Tony Harris. Doesn't sound good. We'll continue to stay in touch with you. Thank you -- Miles.
O'BRIEN: Calling in the chits from the Saudis. Today in Crawford, Texas, President Bush greeted Saudi Crown Prince Abdullah. The president wants a hand with spiraling gas prices drilling holes in Americans' wallets.
Mr. Bush is seeking relief from the world's biggest oil exporter. Here's what he said before the crown prince arrived.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Part of that energy and the crown prince understands that it's very important for there to be a -- make sure that price is reasonable. Higher oil price will damage markets, and he knows that.
(END VIDEO CLIP)
O'BRIEN: The two leaders also expected to exchange ideas on the Middle East peace process, the war on terror and Mr. Bush's stated desire for steps towards democracy in the Saudi kingdom.
Judy Woodruff will examine the visit of Crown Prince Abdullah. That's on INSIDE POLITICS, which happens 3:30 Eastern time, the bottom of this hour.
PHILLIPS: You probably notice that it's costing a tad bit less to fill up your tank. The Lundberg survey of gas stations across the country finds a gallon of self-serve regular now costs on average $2.24 a gallon. That's down nearly a nickel a gallon from two weeks ago.
San Francisco has the highest prices at $2.64 a gallon. Tulsa, Oklahoma, the lowest at $2.04.
Whatever you're paying, oil prices are still hovering at near record highs. That's got President Bush pushing the world's leading oil producer to pump more. But can Saudi Arabia really make that much of a difference?
Joining me now for more on that, CNN's Chris Huntington. You tend to wonder. It doesn't fall back on Saudi Arabia. There are other options, right, Chris?
CHRIS HUNTINGTON, CNN CORRESPONDENT: Well, there's certainly plenty of other major producers. There's perhaps a misconception in this country about just how much of the U.S. energy needs the Saudis supply.
You know, we just showed you the videotape there of President Bush walking arm in arm with Crown Prince Abdullah. You might call that some gentle arm-twisting on the part of the president.
But the fact is, there's not a whole lot further the Saudis can go. They're pretty much pumping right near full capacity right now. The general consensus in the energy markets is that the Saudis are producing about 9.5 million barrels a day, that they could squeak that up to about maybe close to 11 million, tops, in the next couple of weeks. But that would be it.
And the scary thing for the energy markets, Kyra, is that that would pretty much use up all of this global spare capacity in all of the oil markets, and in fact, one energy analyst telling me that if Saudi Arabia were to come out of, say, this meeting today and say, "yes, we're going to boost to absolute red line capacity," that, in fact, the opposite effect might be achieved of raising prices instead of lowering them, because then the oil markets would say, well that's it. There's no more spare capacity in the world right now.
Take a look at some of these figures from the U.S. Energy Department that show how much or in fact how little oil we actually get from Saudi Arabia. You can see there these are in thousands of barrels per day. But really, think of it as 1.5 million barrels a day that we get from Saudi Arabia. It's about the same as we get from Canada and also nearly as much from Mexico.
The U.S. currently imports about 10 million a day. We use total about 20 million. So you can see that while Saudi Arabia is significant, it is not the lion's share of the energy that we use in this country.
There's another feature to Saudi Arabian oil, and that is that it is so-called sour crude, which is more difficult to refine into gasoline. It's less desirable for most refiners. So in fact, the extra oil that Saudi could put on the market right now is that sour crude, which probably wouldn't really be too desirable to refine into gasoline. And therefore you wouldn't really see prices at the pump come down any.
One other feature I want to share with you is to show you sort of Saudi's position in the global production of crude oil. Right now, global production about 84 million barrels. Total OPEC near 30. And you can see Saudi Arabia at just a little bit below 9.5. So maybe Saudi Arabia can squeak up to 10, possibly some say 11 million barrels a day. But that really doesn't solve the problems worldwide, nor does it solve prices at the pumps here in the United States -- Kyra.
PHILLIPS: Chris Huntington, you know we'll be following it. Thank you. And for a look at the nation's gas pains, information, hybrid cars and a guide to gas and oil prices around the U.S. you can log onto CNNmoney.com/gas.
Well, a convicted sex offender takes his own life after taunts and name calling by his neighbors. But is a local country commissioner -- county commissioner, rather to blame?
O'BRIEN: Plus, could little Jessica Lunsford have been saved from the man accused of kidnapping and killing her? We speak to a former child sex offender about how to better track predators and to protect our kids.
(COMMERCIAL BREAK)
(WEATHER REPORT)
O'BRIEN: All right. We are going down to Washington right now, I believe.
PHILLIPS: Justice Department.
O'BRIEN: Justice Department. And Attorney General Gonzales with an important settlement announcement on the Adelphia story.
ALBERTO GONZALES, ATTORNEY GENERAL: ... the chief postal inspector for the U.S. Postal Service.
We are here today to announce an unprecedented act of justice and restitution for the men and women, families and stockholders who lost billions of dollars as a result of the accounting fraud schemes and looting of Adelphia Communications Corporation. As many of you know, on July 8 of last year, Adelphia's founder, chairman and CEO, John J. Rigas, and son, CFO Timothy J. Rigas, were convicted on conspiracy, securities fraud and bank fraud charges. The evidence at trial showed that the defendants engaged in a long-running criminal scheme to misrepresent Adelphia's financial condition and its performance in order to meet Wall Street's expectations.
The evidence also showed that the defendants systematically looted the corporation's assets for their own benefit, using the company's money to buy real estate and other assets for the Rigas family and causing the company to issue hundreds of thousands of dollars to the securities family, for which the company was never paid.
John and Timothy Rigas each face up to 215 years in prison for their actions. Today, the Justice Department has taken additional action, working with its other departments and agencies in the federal government, to ensure the defendants are forced to help compensate the victims for their loss.
First, the Justice Department has reached an agreement with John Rigas that obligates all members of the Rigas family to forfeit to the United States in excess of 95 percent of all the family's assets.
These assets include privately owned cable systems worth between $700 and $900 million; all Adelphia securities owned by the Rigas family and its affiliated entities, valued at approximately $567 million; and real estate holdings valued at $10 million. In total, this represents the largest forfeiture ever made by individuals in a corporate fraud manner.
Second, today, I am announcing the creation of the Adelphia Victim Compensation Fund to compensate the victims who lost money as a result of fraud at Adelphia.
Under the terms of a second agreement reached in this manner, Adelphia Corporation not be prosecuted for the actions of its executives but will incur two obligations: to continue to cooperate with the government, and to contribute $715 million to this new fund.
President Bush created the Corporate Fraud Task Force in July of 2002, with a goal of providing justice for American investors and restoring integrity to the American marketplace. It was a major victory for the task force and for honest and accountability in corporate America when John Rigas and Timothy Rigas were found guilty by a jury last summer.
When these convictions were announced it was a day justice for corporate executives, corrupt corporate executives. Today is a day of restitution for the victims of corporate corruption.
The president's Corporate Fraud Task Force will continue to work to ensure justice for the workers and shareholders who lost billions of dollars to this fraud. We will also continue to work with those corporate leaders and CEOs whose exemplary ethical standards and transparent business models have built our economy and instilled trust in investor's worldwide.
Our decision not to charge Adelphia Corporation recognizes that the corporation was also a victim of its executives' crimes, that it cooperated fully in the investigation, and that it took significant remedial measures.
And it is important to note that the agreements announced today achieve a more favorable result for victims of fraud at Adelphia than could have been achieved, had forfeiture proceedings been pursued only against John and Tim Rigas, the two defendants convicted today in the criminal case.
Today's agreement obligates all members of the Rigas family who were joint owners with John and Tim Rigas to forfeit their assets. These agreements will help to maximize the returns to investors in Adelphia's ongoing bankruptcy proceeding, and will provide compensation to victims who would otherwise recover little or nothing in the bankruptcy.
The Adelphia Victim Compensation Fund will be jointly administered by the Department of Justice and the United States Securities and Exchange Commission. As the agreements announced today are subject to court review and approval, distributions from the victim compensation fund must await approval of the agreements.
In the interim, a fund administrator will be appointed, and details for a process by which victims can submit claims for their losses will be developed and announced. The U.S. attorney's office for the southern district of New York has established a page on its web site where updated information will get posted.
I thank the dedicated public servants at the Department of Justice, Securities and Exchange Commission and the U.S. Postal Service who have worked on this case.
We are now happy to take any questions you might have.
UNIDENTIFIED MALE: General Gonzales, are any of you...
O'BRIEN: We have been listening to Alberto Gonzales, the U.S. attorney general, announcing a record setting settlement with bankrupt Adelphia Communications, the fifth largest cable provider of the United States. Seven hundred 15 million dollars, which will fund, and basically compensate investors hurt by the fraud perpetuated by the Rigas family.
The Rigas family has to forfeit more than 95 percent of their assets as part of this deal. This actually exceeds or is in the same ballpark, I should say, as the WorldCom settlement, which was $750 million back in 2003.
And just to button this up for you, we should tell you that the parent corporation of CNN, Time Warner, along with Comcast Corporation, agreed this past week to purchase Adelphia's assets to the tune of $17.6 billion in cash and stock -- Kyra. PHILLIPS: Moving on, did signs lead to suicide? In Ocala, Florida, police say they don't know who posted them, but when a convicted sex offender saw his face and name on a sign reading "child rapist," he apparently took his life. More now from Carl Willis of Orlando affiliate WFTV.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: He felt a lot of shame for what he did.
CARL WILLIS, WFTV REPORTER (voice-over): Investigators believe that shame led registered sex offender Clovix Claxton to commit suicide.
UNIDENTIFIED MALE: Yes, I mean, I think the flyer was a good idea.
WILLIS: The 38-year-old was arrested for failing to register in Florida in 2003 after being convicted for molesting a child in Tacoma, Washington, 14 years ago. He's been in the Florida sex offender database for years.
But investigators say the man who reportedly had the mental capacity of a 10-year-old lost it this week and had to be sent to a mental health facility when he saw these flyers with the bold words, "child rapist," posted all over his neighborhood.
UNIDENTIFIED MALE: He was very distraught over it and just didn't know how to handle it, and made, you know, comments about ending it all, overdosing, you know, and committing suicide.
WILLIS: The man's parents found him dead Thursday morning with a flier next to his body. His neighbors now have mixed emotions about it.
UNIDENTIFIED MALE: Well, it's like this. I think for some good they may do, I think they can do a lot more damage.
UNIDENTIFIED MALE: It's terrible that he did that, but as far as the flier, I'm a father, and I live here in the neighborhood. And if, you know -- I would never have no idea that this guy moved into the neighborhood.
WILLIS: In the meantime, investigators will try to find an exact cause of death. They say whoever printed the flyers likely meant well but may have gone too far.
UNIDENTIFIED MALE: You've got to find a happy medium. We can't have a vigilante posse out running in the streets.
(END VIDEOTAPE)
PHILLIPS: In the same week as Clovis Claxton's death, we learn of a man accused of killing a 9-year-old Florida girl was on a missing sex offender sent to local authorities months earlier.
So what concerns might these stories raise about sex offender tracking?
Jake Goldenflame is a recovering sex offender and author of "Overcoming Sexual Terrorism." He's been on our show before. He joins me once again from San Francisco.
Jake, thanks for being with me again.
JAKE GOLDENFLAME, AUTHOR, "OVERCOMING SEXUAL TERRORISM": Thank you for letting me be here.
PHILLIPS: Well, first of all, what do you think of this story coming out of Florida?
GOLDENFLAME: It scares me, because at the same time as we've got that story, I've got a letter I received over the weekend from a sex offender in another state's prison, in which he's telling me that the sex offenders out on the yard are saying the next time, they're going to take some kids with them.
In other words, what I'm looking at is a situation where, if we push these guys into a corner where they feel that they have nothing left to lose, yes, they may kill themselves like this man, and they may just as easily take a child with them. It's a dangerous place to push them.
PHILLIPS: Now, you spent time in jail, of course, when you were convicted. And did you ever think of committing suicide? Was the pressure so strong and were you feeling so guilty?
GOLDENFLAME: Yes.
PHILLIPS: You did?
GOLDENFLAME: Yes. Yes. As I was waiting for my sentencing, I got to a point where I was seriously contemplating suicide, and I thank my family for having pulled me out of that one.
PHILLIPS: Does the temptation just become so strong that it's overbearing? That you feel that you've lost control of everything? Is there just no reasoning at all with what you're feeling and what you're dealing with?
GOLDENFLAME: Well, let me tell it to you this way, if I may. That was the time I felt suicidal. After I came back from prison, and I'd been out a year and a half or so, I found myself in an environment where there was just so much negativity around me on the subject of sex offenders that, at that point in my life, I honestly didn't see any chance to have a future.
And at that point, I remember feeling there's no point to working on recovering any further, I'll never have a future. And I became so alone in my feelings, I thought, you know, all I can do is give up and be what I was. I'm going to go someplace else and do that.
And fortunately, when I got away from that real hostile negative environment, my good health returned to me, and the whole idea of going back to being an offender again was repulsive and I never did so.
PHILLIPS: Well, let's talk about that some more.
GOLDENFLAME: Sure.
PHILLIPS: Because evidently, it was less than a day after this man's release from a psychiatric hospital that he took his life.
GOLDENFLAME: Yes.
PHILLIPS: He saw these signs.
GOLDENFLAME: Yes.
PHILLIPS: Many people will say once, "You know what? Once you're a sex offender, you're a sex offender for life. I mean, there is no recovery process."
However, you say that is not true, if the psychiatric treatment is well done, if there are certain guidelines that you follow, that it does work?
GOLDENFLAME: It also takes the help of your community. I happen to have the good fortune of living in San Francisco, which is a very tolerant community. I've been very open with my community. I told them from the time that I came here in 1996, "This is my background. I ask that you know it."
People have thanked me for divulging that to them and, as a result, they have encouraged me. They keep their watch on me as they should. I have very good relations with the police department here. All the cops on the street, they know me. They appreciate my honesty.
And between the community's help and the good work that the therapists did and the counseling I stay in, yes, that recovery stays in place.
PHILLIPS: So Jake, what do you think about sex offenders wearing tracking devices?
GOLDENFLAME: I'm against it. I'm against it 100 percent. There's a case...
PHILLIPS: Tell me why.
GOLDENFLAME: There's a case we made for monitoring, but the reason I'm against it is this. These tracking devices have two parts to them. One is fairly unobtrusive. The watch band, or the bracelet that goes on your ankle.
But the other part of it is about the size of a lunch box, and as a result when you carry it around it's like having a mark of Cain stamped on your forehead. And people shun individuals like that, as they've done with Kerry Verse (ph), for example. They shun them from community to community. You can't reintegrate. Now, by contrast, voluntarily, this is my tracking devices. It's called a cell phone, and I make sure the police have its number. The signal allows them to find me any place I go. They can also issue voice commands to me. They can give its number to local police jurisdictions if I'm away to the city, and they know that they can find me this way. It does just as good a job without putting that mark of Cain on my forehead.
PHILLIPS: But you are the exception; you are not the rule. When you see the cases of these sex offenders running free and not registering and killing children, I mean, something has to be done to those that have not had the treatment that you've had and are committed to what you say is a recovery.
GOLDENFLAME: Well, I am in favor of stiffer penalties for people who don't register, because I take registration seriously. I have a web site up, at CalSexOffenders.net for my fellow sex offenders, explaining the registration law to them, urging them to register, giving them a list of recovery resources around the world they can go to.
And I do feel registration is our ticket back into society. It's the sign we've got to have to be able to say to the community, "I can be trusted here. I am obeying the law."
PHILLIPS: Jake Goldenflame. The book is "Overcoming Sexual Terrorism." We appreciate your time once again today. It's always interesting to talk to you, Jake.
GOLDENFLAME: Thank you.
PHILLIPS: You surprise me every time I talk to you. Thank you, Jake.
GOLDENFLAME: Thank you, Kyra.
PHILLIPS: All right -- Miles.
O'BRIEN: A check of the markets is ahead. LIVE FROM back after a brief break.
(COMMERCIAL BREAK)
(STOCK REPORT)
O'BRIEN: Thank you very much, Susan Lisovicz.
PHILLIPS: Won't she see me tomorrow, too?
O'BRIEN: Yes. Actually, she'll see you and not me. But that's...
PHILLIPS: She got us mixed up.
O'BRIEN: Details that really don't need to be belabored at this point, because we're sucking up Judy's time. PHILLIPS: All right. We don't want to do that.
O'BRIEN: So that wraps up our time on LIVE FROM. Let's make way for...
PHILLIPS: Judy Woodruff and "INSIDE POLITICS." There you go.
Hi, Judy.
O'BRIEN: Hey, Judy.
JUDY WOODRUFF, HOST, "INSIDE POLITICS": Hi there, thanks to both of you.
Well, the judicial battle rages on in the U.S. Senate. I'll talk with the Senate minority leader, Harry Reid, and with Senator Elizabeth Dole about the fight over some of the president's judicial nominees.
Plus, gas prices fall for the first time this year. Despite the drop, new polls show a rising negative economic outlook. Our Bill Schneider looks at what it could mean for the Bush administration.
INSIDE POLITICS begins in just a moment.
(COMMERCIAL BREAK)
END
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Aired April 25, 2005 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CO-HOST: Checking some stories now in the news. State Department officials confirm Vice President Dick Cheney and Secretary of State Condoleezza Rice are reaching out to Iraqi leaders, hoping to end a stalemate over national assembly seats and get the new government up and running. Under Iraq's interim constitution, the newly elected prime minister must step down if he fails to form a new government by May 7.
It's the worst train accident Japan has seen in more than 40 years: 57 reported dead, more than 400 injured when a commuter train derailed Monday morning near Osaka. Investigators are looking into reports the train was running late and was perhaps speeding to try and catch up.
House Majority Leader Tom DeLay hitching a free ride tomorrow aboard Air Force One. He's been invited to travel with President Bush from Galveston to Washington. Now the trip comes at an interesting time, as DeLay battles bad press after allegedly accepting free trips from lobbyists, but a spokesman for DeLay declined to comment on any political significance of that Air Force One ride.
Up first this hour, a desperate search here in Georgia for two toddlers missing now for 45 hours.
KYRA PHILLIPS, CO-HOST: Nicole Payne and her brother, Jonah, were reported missing by their mother Saturday evening. CNN's Tony Harris is with the searchers now with the latest -- Tony.
TONY HARRIS, CNN CORRESPONDENT: Yes, Kyra, so many more questions than we have answers for right now.
As you mentioned, the search continues here in warren Warrenton, Georgia -- this is a small community just west of Augusta, Georgia -- for 3-year-old Jonah Payne and his 2-year-old sister Nicole.
Here's what we know so far. As you mentioned, the mother of the two children, Lottie Kain, reported the two children missing at about 6:15 on Saturday evening, and here's the story that she tells authorities, that at about 4 p.m. in the afternoon, she brought the kids into the house.
There was a period of time when she went off to the bathroom. She says she spent about three to five minutes in the bathroom. When she came out, she noticed that the front door was open, that the kids were gone. She goes out into the front yard and she notices that the gate to the yard is also open. The kids are nowhere in sight. She calls authorities at about 6:15 on Saturday afternoon. As you know, we've got Daylight Saving Time, so there is some time to put together a search. And what the authorities tell us is they put together a very exhaustive search of an area. You can you see a pond behind me, and as you go down this road behind me to the family home there are a number of other ponds. And then there is a pretty extensive wooded area.
So they put together this search. They put a helicopter up in the air with infrared capabilities and they were not able to locate the kids.
Now, at some point yesterday the search was called off, because as we were told, it was going nowhere. What we can tell you is that this morning there was a lot of the stress on the faces of law enforcement officials trying to find these kids.
There were a number of reasons to be concerned. First of all, these two children have health issues that they need to have addressed on a daily basis. And also, as you know, there's been a bit of a cold snap here in the southeast, and the temperatures overnight have been dipping into, you know, the middle to low 30s. So there is some concern about if these kids did, in fact, wander off and were not abducted, that these temperatures are not conducive for kids to be outside in the very -- the small amounts of clothing they were wearing at the time of their disappearance.
We can also report at this time that there has been a lot, and I mean a lot of activity down this road that leads to the family home. We can tell you that officials from the children's school have been summoned to the family home. We can also tell you that the pastor for the family has also driven down this road to go to the family home and that an ambulance has also driven down this road recently.
Now we're not going to jump to any conclusions here. We just want to report what we're seeing. A lot of activity very near the family home here in Warrenton -- Kyra.
PHILLIPS: All right, Tony Harris. Doesn't sound good. We'll continue to stay in touch with you. Thank you -- Miles.
O'BRIEN: Calling in the chits from the Saudis. Today in Crawford, Texas, President Bush greeted Saudi Crown Prince Abdullah. The president wants a hand with spiraling gas prices drilling holes in Americans' wallets.
Mr. Bush is seeking relief from the world's biggest oil exporter. Here's what he said before the crown prince arrived.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Part of that energy and the crown prince understands that it's very important for there to be a -- make sure that price is reasonable. Higher oil price will damage markets, and he knows that.
(END VIDEO CLIP)
O'BRIEN: The two leaders also expected to exchange ideas on the Middle East peace process, the war on terror and Mr. Bush's stated desire for steps towards democracy in the Saudi kingdom.
Judy Woodruff will examine the visit of Crown Prince Abdullah. That's on INSIDE POLITICS, which happens 3:30 Eastern time, the bottom of this hour.
PHILLIPS: You probably notice that it's costing a tad bit less to fill up your tank. The Lundberg survey of gas stations across the country finds a gallon of self-serve regular now costs on average $2.24 a gallon. That's down nearly a nickel a gallon from two weeks ago.
San Francisco has the highest prices at $2.64 a gallon. Tulsa, Oklahoma, the lowest at $2.04.
Whatever you're paying, oil prices are still hovering at near record highs. That's got President Bush pushing the world's leading oil producer to pump more. But can Saudi Arabia really make that much of a difference?
Joining me now for more on that, CNN's Chris Huntington. You tend to wonder. It doesn't fall back on Saudi Arabia. There are other options, right, Chris?
CHRIS HUNTINGTON, CNN CORRESPONDENT: Well, there's certainly plenty of other major producers. There's perhaps a misconception in this country about just how much of the U.S. energy needs the Saudis supply.
You know, we just showed you the videotape there of President Bush walking arm in arm with Crown Prince Abdullah. You might call that some gentle arm-twisting on the part of the president.
But the fact is, there's not a whole lot further the Saudis can go. They're pretty much pumping right near full capacity right now. The general consensus in the energy markets is that the Saudis are producing about 9.5 million barrels a day, that they could squeak that up to about maybe close to 11 million, tops, in the next couple of weeks. But that would be it.
And the scary thing for the energy markets, Kyra, is that that would pretty much use up all of this global spare capacity in all of the oil markets, and in fact, one energy analyst telling me that if Saudi Arabia were to come out of, say, this meeting today and say, "yes, we're going to boost to absolute red line capacity," that, in fact, the opposite effect might be achieved of raising prices instead of lowering them, because then the oil markets would say, well that's it. There's no more spare capacity in the world right now.
Take a look at some of these figures from the U.S. Energy Department that show how much or in fact how little oil we actually get from Saudi Arabia. You can see there these are in thousands of barrels per day. But really, think of it as 1.5 million barrels a day that we get from Saudi Arabia. It's about the same as we get from Canada and also nearly as much from Mexico.
The U.S. currently imports about 10 million a day. We use total about 20 million. So you can see that while Saudi Arabia is significant, it is not the lion's share of the energy that we use in this country.
There's another feature to Saudi Arabian oil, and that is that it is so-called sour crude, which is more difficult to refine into gasoline. It's less desirable for most refiners. So in fact, the extra oil that Saudi could put on the market right now is that sour crude, which probably wouldn't really be too desirable to refine into gasoline. And therefore you wouldn't really see prices at the pump come down any.
One other feature I want to share with you is to show you sort of Saudi's position in the global production of crude oil. Right now, global production about 84 million barrels. Total OPEC near 30. And you can see Saudi Arabia at just a little bit below 9.5. So maybe Saudi Arabia can squeak up to 10, possibly some say 11 million barrels a day. But that really doesn't solve the problems worldwide, nor does it solve prices at the pumps here in the United States -- Kyra.
PHILLIPS: Chris Huntington, you know we'll be following it. Thank you. And for a look at the nation's gas pains, information, hybrid cars and a guide to gas and oil prices around the U.S. you can log onto CNNmoney.com/gas.
Well, a convicted sex offender takes his own life after taunts and name calling by his neighbors. But is a local country commissioner -- county commissioner, rather to blame?
O'BRIEN: Plus, could little Jessica Lunsford have been saved from the man accused of kidnapping and killing her? We speak to a former child sex offender about how to better track predators and to protect our kids.
(COMMERCIAL BREAK)
(WEATHER REPORT)
O'BRIEN: All right. We are going down to Washington right now, I believe.
PHILLIPS: Justice Department.
O'BRIEN: Justice Department. And Attorney General Gonzales with an important settlement announcement on the Adelphia story.
ALBERTO GONZALES, ATTORNEY GENERAL: ... the chief postal inspector for the U.S. Postal Service.
We are here today to announce an unprecedented act of justice and restitution for the men and women, families and stockholders who lost billions of dollars as a result of the accounting fraud schemes and looting of Adelphia Communications Corporation. As many of you know, on July 8 of last year, Adelphia's founder, chairman and CEO, John J. Rigas, and son, CFO Timothy J. Rigas, were convicted on conspiracy, securities fraud and bank fraud charges. The evidence at trial showed that the defendants engaged in a long-running criminal scheme to misrepresent Adelphia's financial condition and its performance in order to meet Wall Street's expectations.
The evidence also showed that the defendants systematically looted the corporation's assets for their own benefit, using the company's money to buy real estate and other assets for the Rigas family and causing the company to issue hundreds of thousands of dollars to the securities family, for which the company was never paid.
John and Timothy Rigas each face up to 215 years in prison for their actions. Today, the Justice Department has taken additional action, working with its other departments and agencies in the federal government, to ensure the defendants are forced to help compensate the victims for their loss.
First, the Justice Department has reached an agreement with John Rigas that obligates all members of the Rigas family to forfeit to the United States in excess of 95 percent of all the family's assets.
These assets include privately owned cable systems worth between $700 and $900 million; all Adelphia securities owned by the Rigas family and its affiliated entities, valued at approximately $567 million; and real estate holdings valued at $10 million. In total, this represents the largest forfeiture ever made by individuals in a corporate fraud manner.
Second, today, I am announcing the creation of the Adelphia Victim Compensation Fund to compensate the victims who lost money as a result of fraud at Adelphia.
Under the terms of a second agreement reached in this manner, Adelphia Corporation not be prosecuted for the actions of its executives but will incur two obligations: to continue to cooperate with the government, and to contribute $715 million to this new fund.
President Bush created the Corporate Fraud Task Force in July of 2002, with a goal of providing justice for American investors and restoring integrity to the American marketplace. It was a major victory for the task force and for honest and accountability in corporate America when John Rigas and Timothy Rigas were found guilty by a jury last summer.
When these convictions were announced it was a day justice for corporate executives, corrupt corporate executives. Today is a day of restitution for the victims of corporate corruption.
The president's Corporate Fraud Task Force will continue to work to ensure justice for the workers and shareholders who lost billions of dollars to this fraud. We will also continue to work with those corporate leaders and CEOs whose exemplary ethical standards and transparent business models have built our economy and instilled trust in investor's worldwide.
Our decision not to charge Adelphia Corporation recognizes that the corporation was also a victim of its executives' crimes, that it cooperated fully in the investigation, and that it took significant remedial measures.
And it is important to note that the agreements announced today achieve a more favorable result for victims of fraud at Adelphia than could have been achieved, had forfeiture proceedings been pursued only against John and Tim Rigas, the two defendants convicted today in the criminal case.
Today's agreement obligates all members of the Rigas family who were joint owners with John and Tim Rigas to forfeit their assets. These agreements will help to maximize the returns to investors in Adelphia's ongoing bankruptcy proceeding, and will provide compensation to victims who would otherwise recover little or nothing in the bankruptcy.
The Adelphia Victim Compensation Fund will be jointly administered by the Department of Justice and the United States Securities and Exchange Commission. As the agreements announced today are subject to court review and approval, distributions from the victim compensation fund must await approval of the agreements.
In the interim, a fund administrator will be appointed, and details for a process by which victims can submit claims for their losses will be developed and announced. The U.S. attorney's office for the southern district of New York has established a page on its web site where updated information will get posted.
I thank the dedicated public servants at the Department of Justice, Securities and Exchange Commission and the U.S. Postal Service who have worked on this case.
We are now happy to take any questions you might have.
UNIDENTIFIED MALE: General Gonzales, are any of you...
O'BRIEN: We have been listening to Alberto Gonzales, the U.S. attorney general, announcing a record setting settlement with bankrupt Adelphia Communications, the fifth largest cable provider of the United States. Seven hundred 15 million dollars, which will fund, and basically compensate investors hurt by the fraud perpetuated by the Rigas family.
The Rigas family has to forfeit more than 95 percent of their assets as part of this deal. This actually exceeds or is in the same ballpark, I should say, as the WorldCom settlement, which was $750 million back in 2003.
And just to button this up for you, we should tell you that the parent corporation of CNN, Time Warner, along with Comcast Corporation, agreed this past week to purchase Adelphia's assets to the tune of $17.6 billion in cash and stock -- Kyra. PHILLIPS: Moving on, did signs lead to suicide? In Ocala, Florida, police say they don't know who posted them, but when a convicted sex offender saw his face and name on a sign reading "child rapist," he apparently took his life. More now from Carl Willis of Orlando affiliate WFTV.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: He felt a lot of shame for what he did.
CARL WILLIS, WFTV REPORTER (voice-over): Investigators believe that shame led registered sex offender Clovix Claxton to commit suicide.
UNIDENTIFIED MALE: Yes, I mean, I think the flyer was a good idea.
WILLIS: The 38-year-old was arrested for failing to register in Florida in 2003 after being convicted for molesting a child in Tacoma, Washington, 14 years ago. He's been in the Florida sex offender database for years.
But investigators say the man who reportedly had the mental capacity of a 10-year-old lost it this week and had to be sent to a mental health facility when he saw these flyers with the bold words, "child rapist," posted all over his neighborhood.
UNIDENTIFIED MALE: He was very distraught over it and just didn't know how to handle it, and made, you know, comments about ending it all, overdosing, you know, and committing suicide.
WILLIS: The man's parents found him dead Thursday morning with a flier next to his body. His neighbors now have mixed emotions about it.
UNIDENTIFIED MALE: Well, it's like this. I think for some good they may do, I think they can do a lot more damage.
UNIDENTIFIED MALE: It's terrible that he did that, but as far as the flier, I'm a father, and I live here in the neighborhood. And if, you know -- I would never have no idea that this guy moved into the neighborhood.
WILLIS: In the meantime, investigators will try to find an exact cause of death. They say whoever printed the flyers likely meant well but may have gone too far.
UNIDENTIFIED MALE: You've got to find a happy medium. We can't have a vigilante posse out running in the streets.
(END VIDEOTAPE)
PHILLIPS: In the same week as Clovis Claxton's death, we learn of a man accused of killing a 9-year-old Florida girl was on a missing sex offender sent to local authorities months earlier.
So what concerns might these stories raise about sex offender tracking?
Jake Goldenflame is a recovering sex offender and author of "Overcoming Sexual Terrorism." He's been on our show before. He joins me once again from San Francisco.
Jake, thanks for being with me again.
JAKE GOLDENFLAME, AUTHOR, "OVERCOMING SEXUAL TERRORISM": Thank you for letting me be here.
PHILLIPS: Well, first of all, what do you think of this story coming out of Florida?
GOLDENFLAME: It scares me, because at the same time as we've got that story, I've got a letter I received over the weekend from a sex offender in another state's prison, in which he's telling me that the sex offenders out on the yard are saying the next time, they're going to take some kids with them.
In other words, what I'm looking at is a situation where, if we push these guys into a corner where they feel that they have nothing left to lose, yes, they may kill themselves like this man, and they may just as easily take a child with them. It's a dangerous place to push them.
PHILLIPS: Now, you spent time in jail, of course, when you were convicted. And did you ever think of committing suicide? Was the pressure so strong and were you feeling so guilty?
GOLDENFLAME: Yes.
PHILLIPS: You did?
GOLDENFLAME: Yes. Yes. As I was waiting for my sentencing, I got to a point where I was seriously contemplating suicide, and I thank my family for having pulled me out of that one.
PHILLIPS: Does the temptation just become so strong that it's overbearing? That you feel that you've lost control of everything? Is there just no reasoning at all with what you're feeling and what you're dealing with?
GOLDENFLAME: Well, let me tell it to you this way, if I may. That was the time I felt suicidal. After I came back from prison, and I'd been out a year and a half or so, I found myself in an environment where there was just so much negativity around me on the subject of sex offenders that, at that point in my life, I honestly didn't see any chance to have a future.
And at that point, I remember feeling there's no point to working on recovering any further, I'll never have a future. And I became so alone in my feelings, I thought, you know, all I can do is give up and be what I was. I'm going to go someplace else and do that.
And fortunately, when I got away from that real hostile negative environment, my good health returned to me, and the whole idea of going back to being an offender again was repulsive and I never did so.
PHILLIPS: Well, let's talk about that some more.
GOLDENFLAME: Sure.
PHILLIPS: Because evidently, it was less than a day after this man's release from a psychiatric hospital that he took his life.
GOLDENFLAME: Yes.
PHILLIPS: He saw these signs.
GOLDENFLAME: Yes.
PHILLIPS: Many people will say once, "You know what? Once you're a sex offender, you're a sex offender for life. I mean, there is no recovery process."
However, you say that is not true, if the psychiatric treatment is well done, if there are certain guidelines that you follow, that it does work?
GOLDENFLAME: It also takes the help of your community. I happen to have the good fortune of living in San Francisco, which is a very tolerant community. I've been very open with my community. I told them from the time that I came here in 1996, "This is my background. I ask that you know it."
People have thanked me for divulging that to them and, as a result, they have encouraged me. They keep their watch on me as they should. I have very good relations with the police department here. All the cops on the street, they know me. They appreciate my honesty.
And between the community's help and the good work that the therapists did and the counseling I stay in, yes, that recovery stays in place.
PHILLIPS: So Jake, what do you think about sex offenders wearing tracking devices?
GOLDENFLAME: I'm against it. I'm against it 100 percent. There's a case...
PHILLIPS: Tell me why.
GOLDENFLAME: There's a case we made for monitoring, but the reason I'm against it is this. These tracking devices have two parts to them. One is fairly unobtrusive. The watch band, or the bracelet that goes on your ankle.
But the other part of it is about the size of a lunch box, and as a result when you carry it around it's like having a mark of Cain stamped on your forehead. And people shun individuals like that, as they've done with Kerry Verse (ph), for example. They shun them from community to community. You can't reintegrate. Now, by contrast, voluntarily, this is my tracking devices. It's called a cell phone, and I make sure the police have its number. The signal allows them to find me any place I go. They can also issue voice commands to me. They can give its number to local police jurisdictions if I'm away to the city, and they know that they can find me this way. It does just as good a job without putting that mark of Cain on my forehead.
PHILLIPS: But you are the exception; you are not the rule. When you see the cases of these sex offenders running free and not registering and killing children, I mean, something has to be done to those that have not had the treatment that you've had and are committed to what you say is a recovery.
GOLDENFLAME: Well, I am in favor of stiffer penalties for people who don't register, because I take registration seriously. I have a web site up, at CalSexOffenders.net for my fellow sex offenders, explaining the registration law to them, urging them to register, giving them a list of recovery resources around the world they can go to.
And I do feel registration is our ticket back into society. It's the sign we've got to have to be able to say to the community, "I can be trusted here. I am obeying the law."
PHILLIPS: Jake Goldenflame. The book is "Overcoming Sexual Terrorism." We appreciate your time once again today. It's always interesting to talk to you, Jake.
GOLDENFLAME: Thank you.
PHILLIPS: You surprise me every time I talk to you. Thank you, Jake.
GOLDENFLAME: Thank you, Kyra.
PHILLIPS: All right -- Miles.
O'BRIEN: A check of the markets is ahead. LIVE FROM back after a brief break.
(COMMERCIAL BREAK)
(STOCK REPORT)
O'BRIEN: Thank you very much, Susan Lisovicz.
PHILLIPS: Won't she see me tomorrow, too?
O'BRIEN: Yes. Actually, she'll see you and not me. But that's...
PHILLIPS: She got us mixed up.
O'BRIEN: Details that really don't need to be belabored at this point, because we're sucking up Judy's time. PHILLIPS: All right. We don't want to do that.
O'BRIEN: So that wraps up our time on LIVE FROM. Let's make way for...
PHILLIPS: Judy Woodruff and "INSIDE POLITICS." There you go.
Hi, Judy.
O'BRIEN: Hey, Judy.
JUDY WOODRUFF, HOST, "INSIDE POLITICS": Hi there, thanks to both of you.
Well, the judicial battle rages on in the U.S. Senate. I'll talk with the Senate minority leader, Harry Reid, and with Senator Elizabeth Dole about the fight over some of the president's judicial nominees.
Plus, gas prices fall for the first time this year. Despite the drop, new polls show a rising negative economic outlook. Our Bill Schneider looks at what it could mean for the Bush administration.
INSIDE POLITICS begins in just a moment.
(COMMERCIAL BREAK)
END
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