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"Newsweek" Backs off Quran Interrogation Story; Russian Officials Accused of Oil-for-Food Wrongdoing; Expert Doubts North Korea will Test a Nuke

Aired May 16, 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.


KYRA PHILLIPS, HOST: Politics and religion: the media and the military; a billion or so furious Muslims -- you don't have to read between the lines to find the controversy in and around "Newsweek" magazine. The widely respected journal says it regrets reporting U.S. military investigators had found interrogators were desecrating copies of the Quran, the Muslim holy book, as a means of breaking detainees at Guantanamo Bay.
"Newsweek" says its original source is no longer certain where he or she came across that outrageous allegation, but the damage is done. Violence sparked by the initial report claimed several lives in Afghanistan last week, and the government there is appalled.

"Newsweek" is apologetic.

(BEGIN VIDEO CLIP)

DAN KLAIDMAN, "NEWSWEEK" MAGAZINE: This was an honest mistake. We are, obviously, not very happy about it, and -- and trying to deal with it as openly as we can.

(END VIDEO CLIP)

PHILLIPS: For what the White House has to say about this, we turn to CNN's Ed Henry -- Ed.

ED HENRY, CNN CORRESPONDENT: Good afternoon, Kyra.

President Bush himself was at an energy event in Virginia today. He was asked about the "Newsweek" controversy and declined to comment.

But a few moments ago I spoke to White House press secretary Scott McClellan, who said he finds it very puzzling that "Newsweek" has acknowledged errors in this story but stopped short of actually retracting the story. White House officials are very concerned that, while "Newsweek's" story is being broadcast in the Muslim world, Islamic leaders in Afghanistan, Pakistan and elsewhere say they will be going ahead with protests that were already planned over the original "Newsweek" story, apology or not.

And in fact, Scott McClellan says he's concerned that it may be too difficult to get the genie back in the bottle.

(BEGIN VIDEO CLIP) SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The damage has been done, and what this report did was provide people who are opposed to the United States and who are on the other side of the war on terrorism with the ability to go out and exploit this report for their own purposes. They've used it to incite violence, violence that has led to the deaths of individuals. Some 15, 16, 17 individuals have lost their lives in the aftermath of this report.

(END VIDEO CLIP)

HENRY: Because of the sensitivity of this story, White House officials have kicked into high gear their media operation that's based in London that reaches out directly to the Muslim press. White House officials say it's critical at this moment to spread the word around the world that, in fact, "Newsweek" has apologized and get that out, especially to the Muslim press -- Kyra.

PHILLIPS: All right, Ed Henry, more to come, I'm sure.

Defending his decision to close or realign military bases around the country, Defense Secretary Donald Rumsfeld appeared today before the base closings commission.

He said the old system was designed during the Cold War and adds that the Pentagon's proposed changes will help America meet new global demands. The Pentagon has proposed closing or reducing forces at 62 major bases, hundreds of other smaller ones.

Rumsfeld told the commission that he recognizes the changes will cause some pain for affected communities.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Change is never easy. Abraham Lincoln once compared trying to change the United States Army to bailing out the Potomac River with a teaspoon.

In a case like this, when communities are impacted, change is particularly hard. Affected communities have legitimate arguments as to why their installation should be considered essential. And that's why the BRAC process was created, to take a long, hard, careful unbiased look at the overall infrastructure and make tough decisions so we can shift resources to where they're urgently needed.

(END VIDEO CLIP)

PHILLIPS: And before any final decisions are made, the commission will hold hearings around the country.

Other news across America. Get ready for another busy hurricane season. The National Oceanic and Atmospheric Administration is predicting 12 to 15 named tropical storms that will develop in the Atlantic this year, with seven to nine of the storms becoming hurricanes. Of those, three could become major hurricanes. Here's a look at some of the names chosen for the year.

On CNN.com you can find out how hurricanes are rated and which cities historically have been most vulnerable.

The FAA says action is imminent against a pilot who breached restricted airspace over Washington. Last week's incident caused a major scare and caused prompt evacuation of the White House and U.S. Capitol. Possible penalties include the suspension or revocation of the pilot's license, or a fine.

Well, a lot of green allegedly flowed into Moscow's Red Square. Top Russian politicians, including advisers to Russian President Vladimir Putin, accused of shady dealings with Iraq during the U.N.'s oil-for-food program. They're (ph) hollering "nyet" over the sticky fingers allegations, laid out in a scathing Senate report.

Our senior United Nations correspondent, Richard Roth, has the story.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN CORRESPONDENT (voice-over): Vladimir Zhirinovsky may be best known for his ultranationalist views, his bawdy behavior during three failed runs for president of Russia, or his antics inside the Russian parliament.

But according to U.S. congressional investigators, Russia's deputy parliament speaker was also a recipient of lucrative vouchers from Saddam Hussein's regime to buy Iraqi oil under the U.N.'s oil- for-food program.

A report released today alleges that Zhirinovsky and his political party were allocated 76 million barrels of Iraqi crude between 1997 and 2002. The oil was allegedly a reward for supporting Saddam's regime and calling for an end to economic sanctions against it, according to former top Iraqi officials, interviewed by Senate investigators.

Iraqi oil ministry records cited in the report allege Zhirinovsky even hired an American company, Houston-based Bayoil, as a middle man to take possession of some of his oil and sell it on the open market. Bayoil and its CEO are under federal indictment for paying Saddam illegal surcharges to get Iraqi oil.

Zhirinovsky says he did lobby Iraq to get millions in debts to Russia paid off, but never personally profited from oil-for-food payoffs.

VLADIMIR ZHIRINOVSKY, RUSSIAN DEPUTY PARLIAMENT SPEAKER (through translator): We received no money from Iraq, signed no contracts and haven't seen any Iraqi oil whatsoever, not a single drop of it.

ROTH: The alleged profit for Zhirinovsky on his deals, about $9 million, but according to the Senate report, Zhirinovsky was not the only Russian politician rewarded by Iraq.

The report says President Vladimir Putin's United Russia Party got oil allocations, as did top Putin advisor Alexander Voloshin, the Russian foreign ministry. In all, some 90 million barrels to top Russian officials and $3 million profit, according to the Senate report.

Former Iraqi officials told investigators they were buying influence and providing compensation for support, especially at the U.N. Security Council.

The Russian government was largely silent, though a deputy foreign minister said, "No evidence, showing that Russian companies or individuals involved in the oil-for-food program committed offenses has been provided. We are puzzled by the nature of the report."

(END VIDEOTAPE)

ROTH: According to the Senate committee in 2000, Saddam Hussein ordered Russia to be rewarded for threatening to use a veto against a measure in the Security Council that would toughen sanctions on Iraq -- Kyra.

PHILLIPS: Richard, we know when all this information came forward about the oil-for-food scandal, that it wasn't going to end any time soon with regard to individuals being held accountable.

Is Vladimir Putin the first big leader being held accountable, besides the scrutiny over the U.N. and with Kofi Annan and with others involved in the U.N.? And could there be other major leaders held accountable?

ROTH: Well, his name, according to the Senate committee, he was unaware of -- or there was no proof he was aware of what was going on, these transactions.

Yes, he -- his country is the first to be in the spotlight because of that Senate committee. Paul Volcker, the independent inquiry head, is going to be probing the countries themselves. In a few months we will hear more of this.

A lot of this comes from a list found more than a year ago of 270 names, an Iraqi oil ministry list listing politicians, journalists, businesses. And this is just more investigation of those lists and people coming forward in interviews with former Iraqi officials.

And tomorrow on Capitol Hill, you'll have two European parliamentarians. There names are going to be talked about. One of them is going to be there, George Galloway, antiwar activist, minister of parliament in Britain. He says he's going there with both guns ablazing. He denies accepting any money, but the committee says otherwise.

PHILLIPS: All right. Richard Roth, we'll talk to you tomorrow. Thank you so much.

Well, just how big a threat is North Korea? Strong words from the White House about Kim Jong-Il. We're going to talk about it again on LIVE FROM, straight ahead.

And if you're amused by those nerdy "Star Wars" fans lining up for the newest movie, well, the joke may be on you. That story straight ahead.

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

(COMMERCIAL BREAK)

PHILLIPS: Talking more about that "Newsweek" article about the desecration of the Quran. Donald Rumsfeld, also chairman of the joint chiefs, Richard Myers, addressing that right now.

DONALD RUMSFELD, SECRETARY OF DEFENSE: ... three or four times in a matter of seconds. And while truth is trying to still put their boots on.

And people have said, my goodness, why does it take so long for someone to come back and have the actual facts? Well, it takes a long time to be truthful, to be responsible. It takes a long time to review 25,000 documents, which is what they've had to do.

And the only other thing I'd say about it is people lost their lives. People are dead, and that's unfortunate, and people need to be very careful about what they say, and just as people need to be careful about what they do. Question?

UNIDENTIFIED FEMALE: (UNINTELLIGIBLE) How much will be made available? What will be the criteria, please?

RUMSFELD: There are a variety of different provisions that involve personnel assistance and community assistance. And it is managed through various departments of the federal government.

And the president clearly is attentive to this and has encouraged the Department of Labor, Department of Commerce, Department of Defense and other departments to be -- to recognize the impact that change of this type can have on local communities. And it's real, and it's personal. And we simply have to do the best job...

PHILLIPS: Secretary of Defense Donald Rumsfeld there, talking about the plan to shut down or scale back dozens of U.S. military bases. He was testifying today there on the Hill with the chairman of the joint chiefs of staff. Richard Myers, we'll continue what he has on say. No information coming out the briefing at the moment.

Also, we've been talking about that "Newsweek" article. "Newsweek" has apologized but they're not retracting the article about the desecration of the Quran taking place in Guantanamo Bay among detainees. Richard Myers once again reiterating the fact they're still investigating if indeed it was a detainee that possibly might have caused the desecration of the Quran. Investigations still under way. We'll continue to follow that.

Now let's talk North Korea, the United States and North Korea and the strongest warning from the Bush administration on the north's nuclear program. It's clearly a threat but nonspecific enough to keep the north guessing. Here it is from President Bush's national security adviser in an interview on "LATE EDITION" with CNN's Wolf Blitzer.

(BEGIN VIDEO CLIP)

STEPHEN HADLEY, NATIONAL SECURITY ADVISOR: We've seen some activity that is consistent with possible preparations for a nuclear test. We don't know for sure. As you know, North Korea is a very hard target. There's a lot we don't know about it.

We've shared that information with -- with our allies in the six party talk. Obviously, it would be a very serious development. It would be something where the North Koreans would be defying not only us but our partners in the six party talks, and action would have to be -- have to be taken.

(END VIDEO CLIP)

PHILLIPS: Sounds potentially ominous. Is it? Joining me from Cambridge, proliferation expert Jim Walsh of Harvard University.

Jim, first thing comes to my mind as we listen to Stephen Hadley there, national security adviser, calling North Korea a very hard target. First of all, should the administration, should President Bush be calling North Korea a target, and Kim Jong-Il a tyrant?

JIM WALSH, HARVARD UNIVERSITY: Well, you know, my own view, and you heard me say this before Kyra, is that name calling is not a substitution for a nonproliferation policy. These are serious issues and they require serious policies.

But it's more than a joke. The U.S. took some criticism over the weekend from China, suggesting that this name calling is actually making it hard to come to the table and to have a negotiation. You know you can't -- if you want to deal with them, when you can't slap them in the face and then invite them to sit down and have dinner with you.

And there's some feeling that, as long as there's this very public tit for tat, we're not going to get anywhere at the negotiating table.

PHILLIPS: All right. Well, speaking of negotiations, today South Korea said it made a, quote unquote, significant proposal to get North Korea to return to six-nation nuclear talks. What do you know about that?

WALSH: Well, there's not much known. That's a brand new report today, but it is interesting. It immediately raises two questions.

First of all, did the U.S. know about this proposal that South Korea is offering. And No. 2, did they sign off on it?

There's been some tension between North -- excuse me, between the U.S. and our South Korean allies, and longtime Korea watchers, that's the thing they're sort of most concerned about. And this whole North Korea thing is are we creating a rift or a separation between South Korea and North Korea, because each country views the problem a little differently?

And if this is a new proposal, and it's the South Korean's new proposal, that might be additional evidence that there is some distance between the U.S. position and the South Korean position.

PHILLIPS: Meanwhile, for the past few weeks, we keep talking about this testing that's been going on, but still, no proof of nukes. So is this just a cat and mouse game that's going continue until somehow certain individuals decide they're going to sit down and talk sensibly? Or how long -- how long does it take to interpret this so- called black box that you keep talking about?

WALSH: Well, Kyra, you're absolutely right to say that it's a cat and mouse game. And it's a cat and mouse game we've seen before. You remember some years back, the U.S. was concerned about a tunnel that had been dug in a North Korean mountain, and there was a back and forth. And eventually the U.S. got to see the tunnel and saw that there was nothing inside.

So this is sort of standard operating procedure for dealing with the North Koreans.

But more directly to your point, how much longer will this go on? My own view is if the North Koreans are going to test, and I don't think they will, but if they are going to test, it's probably going to be sooner rather than later.

And the U.S. policy on this is on a train that is headed towards a collision course in June. The U.S. is talking about tough engagement in June, trying to get a quarantine on North Korea, trying to get them referred to the Security Council.

So I would say if things are going to break positively or break negatively, it's going to happen over the next month, month and a half.

PHILLIPS: So when you look at the threat, final question here, the threat -- the threat of nuclear weapons, is it fair to say this is how much the U.S. spends on defense and this is how much North Korea spends on defense, and can you, within those numbers -- can you really see -- can you get a reality check of this really happening?

WALSH: Well, that's a really interesting question. You know, the North Korean economy is $26 billion. Now, we spend 20 times that amount just on our military, just on the Pentagon, let alone our whole economy. So this is a tiny country, a poor country, a country that is not doing well.

Now, the fact that it has nuclear weapons is its only trump card. And that's what it's try to play here. It's not crazy. It's trying to use its last asset to advance its agenda.

I do not think the North Koreans are going to up and attack us. I don't think we're going to up and attack them. But when you have two countries that don't understand each other, that don't have much information about each other and that both like to enjoy bluster and brinksmanship, that is a recipe for miscalculation and for accident.

PHILLIPS: Jim Walsh, Harvard University. Thanks, Jim.

WALSH: Thank you, Kyra.

PHILLIPS: Wine lovers have one less reason to whine. We'll uncork a new Supreme Court ruling just ahead on LIVE FROM. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

VERONICA DE LA CRUZ, CNN CORRESPONDENT: As the summer draws near, so does graduation for college seniors. So before you don that cap and gown, get ready for the real world with five must-haves at CNN.com/us.

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If you're looking for a place to start your search, try CareerBuilder's job search engine on CNN.com.

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From the dotcom news desk, I'm Veronica de la Cruz.

(END VIDEOTAPE)

PHILLIPS: Wine lovers today raising a glass to the U.S. Supreme Court. Kathleen Hays has the story live from the New York Stock Exchange, but she's not drinking right now.

Hi, Kathleen.

(STOCK REPORT)

PHILLIPS: I'm losing half my staff already. All right, Kathleen, see you tomorrow.

All right. Straight ahead, Candy Crowley with a preview now of "INSIDE POLITICS."

Hi, Candy. CANDY CROWLEY, HOST, "INSIDE POLITICS": Hey, Kyra, thanks so much.

Today on "INSIDE POLITICS," we'll have the latest on the unfolding drama over the president's judicial nominees.

Plus, a look at the mayoral race in Philadelphia, Mississippi, a town still dealing with the murders of three civil rights' workers in 1964. As a defendant goes trial in the case, we'll take a look whether the town is ready to elect an African-American woman to be mayor.

"INSIDE POLITICS" begins in just a moment.

(COMMERCIAL BREAK)

PHILLIPS: Now in the news, brace for a busy hurricane season. The National Oceanic and Atmospheric Administration is predicting 12 to 15 named tropical storms that will develop in the Atlantic this year. And of those, three could become major hurricanes.

Well, health officials are voicing more concern over the Marburg Fever outbreak in Angola. Health workers are seeing cases pop up in new communities now. The ebola like disease has killed close to 300 people in the African nation since October.

A political milestone for women in Kuwait. Kuwait's all-male parliament today granted women the right to vote and run in elections for the first time. Women and men reacted with celebrations in the streets.

Investigators are hoping to retrieve a small jet from a bay in Atlantic City, New Jersey today. The twin-engine jet ran off the airport runway, plunged into the water and four people aboard suffered minor injuries. Authorities are looking into possible brake failure.

I'm Kyra Phillips. More LIVE FROM tomorrow. "JUDY WOODRUFF'S INSIDE POLITICS," up next.

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


Aired May 16, 2005 - 15:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, HOST: Politics and religion: the media and the military; a billion or so furious Muslims -- you don't have to read between the lines to find the controversy in and around "Newsweek" magazine. The widely respected journal says it regrets reporting U.S. military investigators had found interrogators were desecrating copies of the Quran, the Muslim holy book, as a means of breaking detainees at Guantanamo Bay.
"Newsweek" says its original source is no longer certain where he or she came across that outrageous allegation, but the damage is done. Violence sparked by the initial report claimed several lives in Afghanistan last week, and the government there is appalled.

"Newsweek" is apologetic.

(BEGIN VIDEO CLIP)

DAN KLAIDMAN, "NEWSWEEK" MAGAZINE: This was an honest mistake. We are, obviously, not very happy about it, and -- and trying to deal with it as openly as we can.

(END VIDEO CLIP)

PHILLIPS: For what the White House has to say about this, we turn to CNN's Ed Henry -- Ed.

ED HENRY, CNN CORRESPONDENT: Good afternoon, Kyra.

President Bush himself was at an energy event in Virginia today. He was asked about the "Newsweek" controversy and declined to comment.

But a few moments ago I spoke to White House press secretary Scott McClellan, who said he finds it very puzzling that "Newsweek" has acknowledged errors in this story but stopped short of actually retracting the story. White House officials are very concerned that, while "Newsweek's" story is being broadcast in the Muslim world, Islamic leaders in Afghanistan, Pakistan and elsewhere say they will be going ahead with protests that were already planned over the original "Newsweek" story, apology or not.

And in fact, Scott McClellan says he's concerned that it may be too difficult to get the genie back in the bottle.

(BEGIN VIDEO CLIP) SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The damage has been done, and what this report did was provide people who are opposed to the United States and who are on the other side of the war on terrorism with the ability to go out and exploit this report for their own purposes. They've used it to incite violence, violence that has led to the deaths of individuals. Some 15, 16, 17 individuals have lost their lives in the aftermath of this report.

(END VIDEO CLIP)

HENRY: Because of the sensitivity of this story, White House officials have kicked into high gear their media operation that's based in London that reaches out directly to the Muslim press. White House officials say it's critical at this moment to spread the word around the world that, in fact, "Newsweek" has apologized and get that out, especially to the Muslim press -- Kyra.

PHILLIPS: All right, Ed Henry, more to come, I'm sure.

Defending his decision to close or realign military bases around the country, Defense Secretary Donald Rumsfeld appeared today before the base closings commission.

He said the old system was designed during the Cold War and adds that the Pentagon's proposed changes will help America meet new global demands. The Pentagon has proposed closing or reducing forces at 62 major bases, hundreds of other smaller ones.

Rumsfeld told the commission that he recognizes the changes will cause some pain for affected communities.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Change is never easy. Abraham Lincoln once compared trying to change the United States Army to bailing out the Potomac River with a teaspoon.

In a case like this, when communities are impacted, change is particularly hard. Affected communities have legitimate arguments as to why their installation should be considered essential. And that's why the BRAC process was created, to take a long, hard, careful unbiased look at the overall infrastructure and make tough decisions so we can shift resources to where they're urgently needed.

(END VIDEO CLIP)

PHILLIPS: And before any final decisions are made, the commission will hold hearings around the country.

Other news across America. Get ready for another busy hurricane season. The National Oceanic and Atmospheric Administration is predicting 12 to 15 named tropical storms that will develop in the Atlantic this year, with seven to nine of the storms becoming hurricanes. Of those, three could become major hurricanes. Here's a look at some of the names chosen for the year.

On CNN.com you can find out how hurricanes are rated and which cities historically have been most vulnerable.

The FAA says action is imminent against a pilot who breached restricted airspace over Washington. Last week's incident caused a major scare and caused prompt evacuation of the White House and U.S. Capitol. Possible penalties include the suspension or revocation of the pilot's license, or a fine.

Well, a lot of green allegedly flowed into Moscow's Red Square. Top Russian politicians, including advisers to Russian President Vladimir Putin, accused of shady dealings with Iraq during the U.N.'s oil-for-food program. They're (ph) hollering "nyet" over the sticky fingers allegations, laid out in a scathing Senate report.

Our senior United Nations correspondent, Richard Roth, has the story.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN CORRESPONDENT (voice-over): Vladimir Zhirinovsky may be best known for his ultranationalist views, his bawdy behavior during three failed runs for president of Russia, or his antics inside the Russian parliament.

But according to U.S. congressional investigators, Russia's deputy parliament speaker was also a recipient of lucrative vouchers from Saddam Hussein's regime to buy Iraqi oil under the U.N.'s oil- for-food program.

A report released today alleges that Zhirinovsky and his political party were allocated 76 million barrels of Iraqi crude between 1997 and 2002. The oil was allegedly a reward for supporting Saddam's regime and calling for an end to economic sanctions against it, according to former top Iraqi officials, interviewed by Senate investigators.

Iraqi oil ministry records cited in the report allege Zhirinovsky even hired an American company, Houston-based Bayoil, as a middle man to take possession of some of his oil and sell it on the open market. Bayoil and its CEO are under federal indictment for paying Saddam illegal surcharges to get Iraqi oil.

Zhirinovsky says he did lobby Iraq to get millions in debts to Russia paid off, but never personally profited from oil-for-food payoffs.

VLADIMIR ZHIRINOVSKY, RUSSIAN DEPUTY PARLIAMENT SPEAKER (through translator): We received no money from Iraq, signed no contracts and haven't seen any Iraqi oil whatsoever, not a single drop of it.

ROTH: The alleged profit for Zhirinovsky on his deals, about $9 million, but according to the Senate report, Zhirinovsky was not the only Russian politician rewarded by Iraq.

The report says President Vladimir Putin's United Russia Party got oil allocations, as did top Putin advisor Alexander Voloshin, the Russian foreign ministry. In all, some 90 million barrels to top Russian officials and $3 million profit, according to the Senate report.

Former Iraqi officials told investigators they were buying influence and providing compensation for support, especially at the U.N. Security Council.

The Russian government was largely silent, though a deputy foreign minister said, "No evidence, showing that Russian companies or individuals involved in the oil-for-food program committed offenses has been provided. We are puzzled by the nature of the report."

(END VIDEOTAPE)

ROTH: According to the Senate committee in 2000, Saddam Hussein ordered Russia to be rewarded for threatening to use a veto against a measure in the Security Council that would toughen sanctions on Iraq -- Kyra.

PHILLIPS: Richard, we know when all this information came forward about the oil-for-food scandal, that it wasn't going to end any time soon with regard to individuals being held accountable.

Is Vladimir Putin the first big leader being held accountable, besides the scrutiny over the U.N. and with Kofi Annan and with others involved in the U.N.? And could there be other major leaders held accountable?

ROTH: Well, his name, according to the Senate committee, he was unaware of -- or there was no proof he was aware of what was going on, these transactions.

Yes, he -- his country is the first to be in the spotlight because of that Senate committee. Paul Volcker, the independent inquiry head, is going to be probing the countries themselves. In a few months we will hear more of this.

A lot of this comes from a list found more than a year ago of 270 names, an Iraqi oil ministry list listing politicians, journalists, businesses. And this is just more investigation of those lists and people coming forward in interviews with former Iraqi officials.

And tomorrow on Capitol Hill, you'll have two European parliamentarians. There names are going to be talked about. One of them is going to be there, George Galloway, antiwar activist, minister of parliament in Britain. He says he's going there with both guns ablazing. He denies accepting any money, but the committee says otherwise.

PHILLIPS: All right. Richard Roth, we'll talk to you tomorrow. Thank you so much.

Well, just how big a threat is North Korea? Strong words from the White House about Kim Jong-Il. We're going to talk about it again on LIVE FROM, straight ahead.

And if you're amused by those nerdy "Star Wars" fans lining up for the newest movie, well, the joke may be on you. That story straight ahead.

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

(COMMERCIAL BREAK)

PHILLIPS: Talking more about that "Newsweek" article about the desecration of the Quran. Donald Rumsfeld, also chairman of the joint chiefs, Richard Myers, addressing that right now.

DONALD RUMSFELD, SECRETARY OF DEFENSE: ... three or four times in a matter of seconds. And while truth is trying to still put their boots on.

And people have said, my goodness, why does it take so long for someone to come back and have the actual facts? Well, it takes a long time to be truthful, to be responsible. It takes a long time to review 25,000 documents, which is what they've had to do.

And the only other thing I'd say about it is people lost their lives. People are dead, and that's unfortunate, and people need to be very careful about what they say, and just as people need to be careful about what they do. Question?

UNIDENTIFIED FEMALE: (UNINTELLIGIBLE) How much will be made available? What will be the criteria, please?

RUMSFELD: There are a variety of different provisions that involve personnel assistance and community assistance. And it is managed through various departments of the federal government.

And the president clearly is attentive to this and has encouraged the Department of Labor, Department of Commerce, Department of Defense and other departments to be -- to recognize the impact that change of this type can have on local communities. And it's real, and it's personal. And we simply have to do the best job...

PHILLIPS: Secretary of Defense Donald Rumsfeld there, talking about the plan to shut down or scale back dozens of U.S. military bases. He was testifying today there on the Hill with the chairman of the joint chiefs of staff. Richard Myers, we'll continue what he has on say. No information coming out the briefing at the moment.

Also, we've been talking about that "Newsweek" article. "Newsweek" has apologized but they're not retracting the article about the desecration of the Quran taking place in Guantanamo Bay among detainees. Richard Myers once again reiterating the fact they're still investigating if indeed it was a detainee that possibly might have caused the desecration of the Quran. Investigations still under way. We'll continue to follow that.

Now let's talk North Korea, the United States and North Korea and the strongest warning from the Bush administration on the north's nuclear program. It's clearly a threat but nonspecific enough to keep the north guessing. Here it is from President Bush's national security adviser in an interview on "LATE EDITION" with CNN's Wolf Blitzer.

(BEGIN VIDEO CLIP)

STEPHEN HADLEY, NATIONAL SECURITY ADVISOR: We've seen some activity that is consistent with possible preparations for a nuclear test. We don't know for sure. As you know, North Korea is a very hard target. There's a lot we don't know about it.

We've shared that information with -- with our allies in the six party talk. Obviously, it would be a very serious development. It would be something where the North Koreans would be defying not only us but our partners in the six party talks, and action would have to be -- have to be taken.

(END VIDEO CLIP)

PHILLIPS: Sounds potentially ominous. Is it? Joining me from Cambridge, proliferation expert Jim Walsh of Harvard University.

Jim, first thing comes to my mind as we listen to Stephen Hadley there, national security adviser, calling North Korea a very hard target. First of all, should the administration, should President Bush be calling North Korea a target, and Kim Jong-Il a tyrant?

JIM WALSH, HARVARD UNIVERSITY: Well, you know, my own view, and you heard me say this before Kyra, is that name calling is not a substitution for a nonproliferation policy. These are serious issues and they require serious policies.

But it's more than a joke. The U.S. took some criticism over the weekend from China, suggesting that this name calling is actually making it hard to come to the table and to have a negotiation. You know you can't -- if you want to deal with them, when you can't slap them in the face and then invite them to sit down and have dinner with you.

And there's some feeling that, as long as there's this very public tit for tat, we're not going to get anywhere at the negotiating table.

PHILLIPS: All right. Well, speaking of negotiations, today South Korea said it made a, quote unquote, significant proposal to get North Korea to return to six-nation nuclear talks. What do you know about that?

WALSH: Well, there's not much known. That's a brand new report today, but it is interesting. It immediately raises two questions.

First of all, did the U.S. know about this proposal that South Korea is offering. And No. 2, did they sign off on it?

There's been some tension between North -- excuse me, between the U.S. and our South Korean allies, and longtime Korea watchers, that's the thing they're sort of most concerned about. And this whole North Korea thing is are we creating a rift or a separation between South Korea and North Korea, because each country views the problem a little differently?

And if this is a new proposal, and it's the South Korean's new proposal, that might be additional evidence that there is some distance between the U.S. position and the South Korean position.

PHILLIPS: Meanwhile, for the past few weeks, we keep talking about this testing that's been going on, but still, no proof of nukes. So is this just a cat and mouse game that's going continue until somehow certain individuals decide they're going to sit down and talk sensibly? Or how long -- how long does it take to interpret this so- called black box that you keep talking about?

WALSH: Well, Kyra, you're absolutely right to say that it's a cat and mouse game. And it's a cat and mouse game we've seen before. You remember some years back, the U.S. was concerned about a tunnel that had been dug in a North Korean mountain, and there was a back and forth. And eventually the U.S. got to see the tunnel and saw that there was nothing inside.

So this is sort of standard operating procedure for dealing with the North Koreans.

But more directly to your point, how much longer will this go on? My own view is if the North Koreans are going to test, and I don't think they will, but if they are going to test, it's probably going to be sooner rather than later.

And the U.S. policy on this is on a train that is headed towards a collision course in June. The U.S. is talking about tough engagement in June, trying to get a quarantine on North Korea, trying to get them referred to the Security Council.

So I would say if things are going to break positively or break negatively, it's going to happen over the next month, month and a half.

PHILLIPS: So when you look at the threat, final question here, the threat -- the threat of nuclear weapons, is it fair to say this is how much the U.S. spends on defense and this is how much North Korea spends on defense, and can you, within those numbers -- can you really see -- can you get a reality check of this really happening?

WALSH: Well, that's a really interesting question. You know, the North Korean economy is $26 billion. Now, we spend 20 times that amount just on our military, just on the Pentagon, let alone our whole economy. So this is a tiny country, a poor country, a country that is not doing well.

Now, the fact that it has nuclear weapons is its only trump card. And that's what it's try to play here. It's not crazy. It's trying to use its last asset to advance its agenda.

I do not think the North Koreans are going to up and attack us. I don't think we're going to up and attack them. But when you have two countries that don't understand each other, that don't have much information about each other and that both like to enjoy bluster and brinksmanship, that is a recipe for miscalculation and for accident.

PHILLIPS: Jim Walsh, Harvard University. Thanks, Jim.

WALSH: Thank you, Kyra.

PHILLIPS: Wine lovers have one less reason to whine. We'll uncork a new Supreme Court ruling just ahead on LIVE FROM. Stay with us.

(COMMERCIAL BREAK)

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PHILLIPS: Wine lovers today raising a glass to the U.S. Supreme Court. Kathleen Hays has the story live from the New York Stock Exchange, but she's not drinking right now.

Hi, Kathleen.

(STOCK REPORT)

PHILLIPS: I'm losing half my staff already. All right, Kathleen, see you tomorrow.

All right. Straight ahead, Candy Crowley with a preview now of "INSIDE POLITICS."

Hi, Candy. CANDY CROWLEY, HOST, "INSIDE POLITICS": Hey, Kyra, thanks so much.

Today on "INSIDE POLITICS," we'll have the latest on the unfolding drama over the president's judicial nominees.

Plus, a look at the mayoral race in Philadelphia, Mississippi, a town still dealing with the murders of three civil rights' workers in 1964. As a defendant goes trial in the case, we'll take a look whether the town is ready to elect an African-American woman to be mayor.

"INSIDE POLITICS" begins in just a moment.

(COMMERCIAL BREAK)

PHILLIPS: Now in the news, brace for a busy hurricane season. The National Oceanic and Atmospheric Administration is predicting 12 to 15 named tropical storms that will develop in the Atlantic this year. And of those, three could become major hurricanes.

Well, health officials are voicing more concern over the Marburg Fever outbreak in Angola. Health workers are seeing cases pop up in new communities now. The ebola like disease has killed close to 300 people in the African nation since October.

A political milestone for women in Kuwait. Kuwait's all-male parliament today granted women the right to vote and run in elections for the first time. Women and men reacted with celebrations in the streets.

Investigators are hoping to retrieve a small jet from a bay in Atlantic City, New Jersey today. The twin-engine jet ran off the airport runway, plunged into the water and four people aboard suffered minor injuries. Authorities are looking into possible brake failure.

I'm Kyra Phillips. More LIVE FROM tomorrow. "JUDY WOODRUFF'S INSIDE POLITICS," up next.

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