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Another Man Arrested in Natalee Holloway Disappearance; U.S., Iraqis Fight Insurgents in Karabila; Suspected Child Molester Kept Detailed Notebooks

Aired June 17, 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.


KYRA PHILLIPS, HOST: New developments in the Natalee Holloway case. Another person arrested. We're live from Aruba.
A suspected serial child molester. Police say this man kept weird lists which could link him to hundreds of victims.

Operation Spear, a CNN exclusive. We'll take you inside U.S. Marines' aggressive move against Iraq insurgents.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: To think about what might have happened if we hadn't been there that day. The casualties on our side could have been a whole lot worse.

(END VIDEO CLIP)

PHILLIPS: A soldier's heroism saves lives, and she becomes the first woman since World War II to get a Silver Star.

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

We only know him as SGC, but Aruban authorities say the 26-year- old man has become another piece of the puzzle in the Natalee Holloway investigation. Today he became the fourth person arrested in the disappearance of the Alabama teen.

CNN's Karl Penhaul, working his sources in Palm Beach, Aruba. He joins me now by phone with details on this and other developments in the case -- Karl.

KARL PENHAUL, CNN CORRESPONDENT: Kyra, the island's police commissioner has told me that the arrest took place about 6:25 and that the male suspect is age 26 years old. He gave us no more details at that stage.

However, we have just come the house of the suspect, where he was arrested at 6:25 this morning. We spoke to his uncle, who is a neighbor of that house in Santa Cruz. That's a town in the center of Aruba, in the center of the island.

His uncle, a former police inspector who is now retired, told us the name of the man who was arrested this morning, telling us it was Steve Cruz (ph). Steve Cruz (ph) is also, he says, involved in a bar business, which operates in the high-rise hotel area of the island. He says that the arrest took place around half past 6. He said very few police officers were involved and that there wasn't, in his words, much noise.

He also described his nephew, Steve Cruz (ph), as a quiet kind of a guy but gave us more than that, except to say that he is divorced and has a 2-year-old son.

He said that he didn't know what, if any, connection there is between Steve Cruz and the three other suspects, the three young men who are already in custody, Kyra.

PHILLIPS: So Steve Cruz (ph), that name once again added to the most recent list here, the fourth person arrested now in this missing teen probe. Karl, what more can you tell us about the search for Natalee Holloway?

PENHAUL: Well, in addition to the arrests this morning, police are obviously continuing their interrogation of the three suspects who have been now in custody for almost 10 days now.

What a law enforcement source close this investigation has told us is that investigators are also still looking at Internet information from the computer hard drive of one computer seized from the home of what we understand is the Kalpoe brothers' home. One of the Kalpoes, the eldest, 21-year-old Deepak Kalpoe, did in fact work at the Cyber Zone Internet cafe here in Aruba. And the computer was seized from their home address during the raid on their home, Kyra.

PHILLIPS: Our Karl Penhaul bringing us latest developments there from Aruba. Once again, Steve Cruz (ph), the fourth individual now, the fourth suspect to be arrested in that Aruba investigation.

Now to Iraq and Operation Spear. It's taking aim at an area the U.S. military calls the worst problem in the battle against foreign fighters. Hundreds of U.S. troops and Iraqi soldiers are in Karabila, a town just -- not far, just a few Miles from the Syrian border.

U.S. forces have been in that area before, and CNN's Jane Arraf is in that specific area and joins us now with her exclusive report.

Jane, why is this area so crucial to bringing down the insurgency?

JANE ARRAF, CNN CORRESPONDENT: Kyra, it's because this is an area that's never really never been brought under control. The Marines refer to it as the Wild West, and in a sense it is.

There's no police force here. There's almost no Iraqi army. A functioning civil government is a dream. And all the things that are starting to happen in Baghdad and other parts of the country are certainly not happening here.

What is happening is an intense, continued fight against insurgents and particularly foreign fighters. This battle has been raging all day now. There's a brief lull, but it's not over. Marines believe that at least 100 foreign fighters here in this city of 60,000 people and I believe a lot of them are still coming through Syria -- Kyra.

PHILLIPS: Jane, you've also had a chance to talk with civilians in that area. No doubt this has got to be a frightening experience for them. Tell me about the family that you came across that was waving the white flag.

ARRAF: (UNINTELLIGIBLE) and then one by one the white flag started coming out. At the house there was a young man (UNINTELLIGIBLE) who was waving the white flag who said he didn't want to be attacked by American forces.

They're afraid. They're definitely afraid. And they say the explosions are unbearable. A lot of them are trying to leave. But they tell us that there are no insurgents. Now, it may be that they they're too afraid to tell us about the insurgents. It may be that they truly believe that.

But what they're trying to do now is flee the bombing. There have been civilians, men, women and children, taking the roads out of Karabila. But today with the intense fighting going on, the explosions, the rocket propelled grenades, the bombings, everyone is staying put. But they are very, very afraid, they tell me -- Kyra.

PHILLIPS: Our Jane Arraf live from Karabila there in Iraq with her exclusive report. Jane, thank you so much.

Elsewhere in Iraq, a fiery and deadly attack in the country's capital. One person was killed, eight others wounded when a car bomb exploded outside a Shiite mosque in Baghdad. It happened after Friday prayers. And that blast also ignited two fuel containers, causing a huge fire that damaged the mosque and nearby shops.

Two U.S. troops killed in Iraq may be the victims of fragging. That's military speak for soldiers killing their superiors. Captain Phillip Esposito and First Lieutenant Louis Allen were first believed to have died in a mortar attack near Tikrit earlier this month. But now a soldier under their command is charged with killing them. Staff Sergeant Alberto Martinez is being held at a U.S. base in Kuwait. The Army says the explosion that killed Esposito and Allen came from inside the base where the men were stationed.

Meanwhile, the U.S. military is honoring a 23-year-old sergeant serving in Iraq. Leigh Ann Hester has become the first female soldier to receive the Silver Star since World War II. That honor recognized her role during an insurgent ambush in a convoy in March.

Hester was part of a military unit providing security. Her award citation says that she killed at least three insurgents. She also moved her Humvee behind the attackers and prevented their escape.

Earlier today on CNN's "AMERICAN MORNING," Hester praised all of her female colleagues in Iraq.

(BEGIN VIDEO CLIP) LEIGH ANN HESTER, SILVER STAR RECIPIENT: We're all here to do, you know, the same job, whether it be, you know, military police. Women are allowed in and we're combat support. The only -- the only things that we're not allowed in is combat arms, which is infantry, field artillery, things of that nature. But as MP's, we're out there every day, outside of the wire, sweeping for roadside bombs and dealing with insurgents. So in my opinion, I think women do just as good a job as the men do here.

(END VIDEO CLIP)

PHILLIPS: Well said. Two men from Hester's unit also received the Silver Star for their roles in the same action.

Police in California say it's a chilling discovery. Seven notebooks, more than 1,300 pages in all, filled with names and codes. And what they may signify is disturbing. Investigators say the list could uncover the biggest child molestation case ever.

Robert Handa from CNN affiliate KTVU reports.

(BEGIN VIDEOTAPE)

LT. SCOTT CORNFIELD, SAN JOSE POLICE: On the surface this appears to be monumental.

ROBERT HANDA, KTVU REPORTER (voice-over): Police say 63-year-old Dean Arthur Schwartzmiller may have molested thousands of children, mostly boys, in five states, as well as in Brazil and Mexico. Police displayed numerous pictures of the convicted child molester taken since 1999.

Schwartzmiller is being held without bail for a total of seven counts of child molestation in San Jose.

Police said officers seized numerous records from the suspect's home that showed 36,720 names of possible victims. The pages also have codes that police say indicate certain sex acts Schwartzmiller engaged in with the child listed.

CORNFIELD: If we have a small percentage of the numbers that we see here are accurate that would still probably make him the most active child molester we have ever seen in San Jose, and he may well be one of the most active child molesters across the country.

HANDA: Schwartzmiller has a companion, Fred Everts, who has been charged with seven counts of child molestation, but investigators still aren't sure if those cases are connected with Schwartzmiller. The two men shared a home in south San Jose under the name of Dean and Fred Harmon.

Some neighbors said they never trusted the man who turned out to be Schwartzmiller.

LISA THORNBURG, SUSPECT'S NEIGHBOR: I was suspicious of him the very first weekend that we moved in here, because he was out in the front yard talking to my kids and bought them ice cream from the ice cream man. And when they came home and told me that the man who lived there by himself with another man bought him ice cream I just immediately said, "No, there's just something not right here. You need to stay away."

(END VIDEOTAPE)

PHILLIPS: Coming up in the next hour of LIVE FROM, I'll talk about the case with Sergeant Tom Simms. He's a member of the children exploitation detail at the San Jose Police Department.

(BEGIN VIDEO CLIP)

PHILLIPS (voice-over): Next on LIVE FROM, home video of a family milestone. But some hospitals are banning cameras from the delivery room. CNN's Dr. Sanjay Gupta has the story.

Later on LIVE FROM, a CNN investigation, trucks going up in flames hours after being bought. Why? And can it happen to you?

Also ahead, a tank company battles its way into Baghdad. An Army captain takes us inside his tank and into the war zone.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: Once again I want to remind you that we're staying on top of the search for Natalee Holloway in Aruba.

CNN has confirmed that there are now four suspects in custody. Three, as you know, already have been in custody for days. Now a fourth suspect, the man by the name of Steve Cruz (ph).

We are working on more information on this suspect. We'll keep you posted on the investigation and the search for Natalee Holloway.

President Bush on the road again today, pushing his desire for every eligible American to sign up for the soon to come Medicare prescription drug benefit. He's in a Minneapolis suburb, urging people not only to get educated on the program ahead of time but to spread the word to friends and family.

When the drug benefit takes an effect in January, it will be the first of its kind in Medicare's 40-year history. But it won't be cheap. The White House estimates $500 billion over eight years. How's that little detail sitting with taxpayers?

Let's tap into the Dolans' well of wisdom for their take on the program. Ken and Daria from CNN's "DOLANS UNSCRIPTED." Of course, we know all our viewers watch this every weekend.

Great to see you guys.

KEN DOLAN, CO-HOST, "DOLANS UNSCRIPTED": Kyra, I have a question for you, my dear. Why has it taken us so long to finally work with you? We don't even miss Miles O'Brien.

PHILLIPS: Well, he has this attachment to you guys. He never let me do the segment. Now I finally get to meet you and talk to you.

DOLAN: It's nice to be with you, Kyra.

PHILLIPS: It's a pleasure. And besides, I found out you guys are golfers, so we already have a great connection.

DARIA DOLAN, CO-HOST, "DOLANS UNSCRIPTED": We have a great connection.

PHILLIPS: All right. But in the meantime, let's...

D. DOLAN: Medicare. Let's talk about something the president is on the road trying to get us all to talk up with our parents and older neighbors, et cetera, et cetera.

Well, I'd be happy to talk, Mr. President, but what are the details? Those will not be released until October 1. And according to "The New York Times" on the 22nd of May, it will be the second rewrite, at least the second rewrite that went into book form, because the one that they came out with was confusing. It was incorrect in some situations and just didn't even work for people who have worked a long time for Medicare.

PHILLIPS: Ken, didn't even Health and Human Services have to rewrite the manual? Isn't that what you guys were telling me earlier on?

D. DOLAN: That's it.

K. DOLAN: It's a mess. I will tell you this, Kyra, meaning no disrespect to anything going on in Washington. It's like, saying, "Kyra and hubby, I'm so sorry that" -- you telling your finance company, "We can't make our mortgage payments, but we want to put in a swimming pool anyway."

We've got $13 trillion unfunded Bucks in Medicare and Medicaid. It's a thing out of control. The new prescription drug program has a $500 deductible. Hey, Washington! Here's a clue! Seventy percent of people on Medicare and Medicaid...

D. DOLAN: Medicare.

K. DOLAN: Medicare -- don't spend $500 a year. Thank you so much to the other 30 percent.

PHILLIPS: OK, we're talking about spending money. Here's what confuses me. You throw out all these big numbers, OK, talk about all this money.

K. DOLAN: Yes.

PHILLIPS: What about this $1 billion that the administration is spending on advertising to promote this program? And I don't -- can't that...

D. DOLAN: They will -- Congress has allocated a billion dollars so the president and anybody else can go out on the road. They can print these brochures to try and get seniors and the disabled to sign up for this new benefit.

You know, I hate to sound cynical, but you know, every time I think I'm cynical, something new happens to make it even worse.

How many uninsured children and young working families could have been covered with some sort of insurance for a billion bucks?

K. DOLAN: Forty-four -- 44 million people have no insurance in America, as Daria said, including kids. So let's drop another $500 billion on this prescription -- prescription drug problem.

Hold on, let me just say one more thing. I talked to somebody in the advertising business today, and he said one of the reasons why the Baby Boomers and older are not getting more advertising money spent on them is because they're set in their ways for so many years. And that's why some people who should be in the prescription drug program won't, because it's mass confusion. And the billion bucks so far from advertising and marketing, as you said, Kyra, has been a waste of money.

PHILLIPS: But here's something interesting. Daria, on the note to prescription drugs, rather, Daria, you mentioned the V.A. has it right.

D. DOLAN: Well, yes. The Veterans Administration has negotiated drug prices with the drug manufacturers in the world. So, consequently, they get the cheapest you can get short of going across the border to Canada or overseas to order prescription drugs.

The administration refuses to sit down. I guess all of them, on both sides of the aisle, don't want to not get the monies that the drug lobby throws their way when they're trying to run for reelection, so they refused to sit down and negotiate drug prices. So the rest of us taxpayers and working seniors will be forced to pay the highest prices.

And who says it's going to cost $500 billion? In 1965 Lyndon Johnson swore that after 20 years Medicare would cost -- would have cost $8 billion. Well, 20 years later, Medicare had cost $88 billion.

So if we don't have the details to tell our parents to sign up for this, how can they already know that it's only going to cost $500 billion?

K. DOLAN: She gets emotional, Kyra. I love this.

PHILLIPS: Which happens, I understand, quite a bit even off camera, right? But we won't get into that.

K. DOLAN: Yes.

D. DOLAN: I'm Italian-American. What can I say?

K. DOLAN: Well, you know...

PHILLIPS: So here we are...

K. DOLAN: Because the final word, Kyra, is that if you -- if you qualify for prescription drugs, take a look at it. There's a dizzying array of services, but the old story is if the money's there and you can make something out of it and make a buck and save a buck, good luck. It's a mess.

D. DOLAN: And it's still so confusing. I can't tell you how many stories we've done with seniors, very intellectual seniors...

K. DOLAN: Smart people.

D. DOLAN: ... who still look at all the paperwork and say, "I still don't get it."

K. DOLAN: Exactly right. The billion dollars hasn't been spent very well, Kyra. We're not against any program that helps senior citizens, especially lower income people. This is no the program.

PHILLIPS: They need the help.

K. DOLAN: Yes, they need it.

PHILLIPS: They need the help.

D. DOLAN: Seniors should have been given the free drug plan as it stands, but it did not have to be rolled out for the country at large when, as Ken said, more than 70 percent of seniors have some sort of coverage through their Medigap and pay less than what it would cost to join this.

K. DOLAN: Adjusted.

PHILLIPS: Ken and Daria, what a pleasure.

D. DOLAN: I'm speechless.

K. DOLAN: That's unusual!

PHILLIPS; Oh! That was much too fun. And, of course, coming up this weekend, you don't want to miss the show. "DOLANS UNSCRIPTED," Saturday morning, great way to get your day going.

K. DOLAN: Thanks Kyra.

PHILLIPS: Get you all fired up. What a pleasure. Ken and Daria, thank you.

K. DOLAN: Thanks, Kyra. We'll talk again.

PHILLIPS: Sounds great. Well, straight ahead, tense moments in a Florida neighborhood. Caught on home video as a blimp comes crashing down. We've got the details on what happened.

And shaken up in California. Several recent earthquakes have residents wondering if the big one is on the way.

Powerful movers and shakers ranked by "Forbes" magazine. Oprah Winfrey on top. Can you take a guess who else is on the list? We're going to count down some of them after the break.

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

(COMMERCIAL BREAK)

PHILLIPS: Looking now at some stories making news across America.

Two members of the anti-animal cruelty group PETA arrested for alleged animal cruelty. Police in North Carolina say that the two were dumping dead dogs and cats into a shopping center trash bin. No word yet on exactly why they were doing that. The two are out on bond.

Goodyear blimp down. Thousands of Coral Springs, Florida, residents held their breath as they watched the slowest air crash in Broward County history. The blimp went down in a self-storage park. The pilots walked away. Nobody on the ground was hurt. Thunderstorms may have been a factor.

The first day of summer is almost upon us. Will somebody please inform northern California? More than an inch of fresh snow fell on the Sierras overnight as temps fell to freezing at Lake Tahoe. Should I mention that Anchorage, Alaska, is 20 degrees warmer than the Donner Pass today?

When it comes to powerful celebrities, Oprah Winfrey takes the crown. That's according to this year's power rankings from "Forbes" magazine. With a look at some other individuals on the list, Chris Huntington, our own powerful reporter, live from the New York Stock Exchange.

Hi, Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Kyra, you're on the list, too, by the way.

PHILLIPS: Don't I wish!

HUNTINGTON: Yes. Well, Oprah Winfrey, of course, making a comeback this year of sorts. She moved up from the No. 3 spot last year to reclaim the lead. Oprah displaced Mel Gibson for the top spot on the "Forbes" list, who dropped down to No. 3. They traded spots.

Tiger Woods, George Lucas and Shaquille O'Neal also made the top five. George Lucas, of course, of "Star Wars" fame, topped the money- earning list this past 12 months, making $290 million in the past 12 months.

Well, rounding out the top ten, Steven Spielberg, Johnny Depp, Madonna, Elton John and Tom Cruise, who of course, made news today.

Well, the "Forbes" rankings looked at celebrity earnings, as well as a number of popularity standards including Internet presence, magazine cover stories and mentions on TV and radio -- Kyra.

(STOCK REPORT)

(COMMERCIAL BREAK)

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Aired June 17, 2005 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, HOST: New developments in the Natalee Holloway case. Another person arrested. We're live from Aruba.
A suspected serial child molester. Police say this man kept weird lists which could link him to hundreds of victims.

Operation Spear, a CNN exclusive. We'll take you inside U.S. Marines' aggressive move against Iraq insurgents.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: To think about what might have happened if we hadn't been there that day. The casualties on our side could have been a whole lot worse.

(END VIDEO CLIP)

PHILLIPS: A soldier's heroism saves lives, and she becomes the first woman since World War II to get a Silver Star.

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

We only know him as SGC, but Aruban authorities say the 26-year- old man has become another piece of the puzzle in the Natalee Holloway investigation. Today he became the fourth person arrested in the disappearance of the Alabama teen.

CNN's Karl Penhaul, working his sources in Palm Beach, Aruba. He joins me now by phone with details on this and other developments in the case -- Karl.

KARL PENHAUL, CNN CORRESPONDENT: Kyra, the island's police commissioner has told me that the arrest took place about 6:25 and that the male suspect is age 26 years old. He gave us no more details at that stage.

However, we have just come the house of the suspect, where he was arrested at 6:25 this morning. We spoke to his uncle, who is a neighbor of that house in Santa Cruz. That's a town in the center of Aruba, in the center of the island.

His uncle, a former police inspector who is now retired, told us the name of the man who was arrested this morning, telling us it was Steve Cruz (ph). Steve Cruz (ph) is also, he says, involved in a bar business, which operates in the high-rise hotel area of the island. He says that the arrest took place around half past 6. He said very few police officers were involved and that there wasn't, in his words, much noise.

He also described his nephew, Steve Cruz (ph), as a quiet kind of a guy but gave us more than that, except to say that he is divorced and has a 2-year-old son.

He said that he didn't know what, if any, connection there is between Steve Cruz and the three other suspects, the three young men who are already in custody, Kyra.

PHILLIPS: So Steve Cruz (ph), that name once again added to the most recent list here, the fourth person arrested now in this missing teen probe. Karl, what more can you tell us about the search for Natalee Holloway?

PENHAUL: Well, in addition to the arrests this morning, police are obviously continuing their interrogation of the three suspects who have been now in custody for almost 10 days now.

What a law enforcement source close this investigation has told us is that investigators are also still looking at Internet information from the computer hard drive of one computer seized from the home of what we understand is the Kalpoe brothers' home. One of the Kalpoes, the eldest, 21-year-old Deepak Kalpoe, did in fact work at the Cyber Zone Internet cafe here in Aruba. And the computer was seized from their home address during the raid on their home, Kyra.

PHILLIPS: Our Karl Penhaul bringing us latest developments there from Aruba. Once again, Steve Cruz (ph), the fourth individual now, the fourth suspect to be arrested in that Aruba investigation.

Now to Iraq and Operation Spear. It's taking aim at an area the U.S. military calls the worst problem in the battle against foreign fighters. Hundreds of U.S. troops and Iraqi soldiers are in Karabila, a town just -- not far, just a few Miles from the Syrian border.

U.S. forces have been in that area before, and CNN's Jane Arraf is in that specific area and joins us now with her exclusive report.

Jane, why is this area so crucial to bringing down the insurgency?

JANE ARRAF, CNN CORRESPONDENT: Kyra, it's because this is an area that's never really never been brought under control. The Marines refer to it as the Wild West, and in a sense it is.

There's no police force here. There's almost no Iraqi army. A functioning civil government is a dream. And all the things that are starting to happen in Baghdad and other parts of the country are certainly not happening here.

What is happening is an intense, continued fight against insurgents and particularly foreign fighters. This battle has been raging all day now. There's a brief lull, but it's not over. Marines believe that at least 100 foreign fighters here in this city of 60,000 people and I believe a lot of them are still coming through Syria -- Kyra.

PHILLIPS: Jane, you've also had a chance to talk with civilians in that area. No doubt this has got to be a frightening experience for them. Tell me about the family that you came across that was waving the white flag.

ARRAF: (UNINTELLIGIBLE) and then one by one the white flag started coming out. At the house there was a young man (UNINTELLIGIBLE) who was waving the white flag who said he didn't want to be attacked by American forces.

They're afraid. They're definitely afraid. And they say the explosions are unbearable. A lot of them are trying to leave. But they tell us that there are no insurgents. Now, it may be that they they're too afraid to tell us about the insurgents. It may be that they truly believe that.

But what they're trying to do now is flee the bombing. There have been civilians, men, women and children, taking the roads out of Karabila. But today with the intense fighting going on, the explosions, the rocket propelled grenades, the bombings, everyone is staying put. But they are very, very afraid, they tell me -- Kyra.

PHILLIPS: Our Jane Arraf live from Karabila there in Iraq with her exclusive report. Jane, thank you so much.

Elsewhere in Iraq, a fiery and deadly attack in the country's capital. One person was killed, eight others wounded when a car bomb exploded outside a Shiite mosque in Baghdad. It happened after Friday prayers. And that blast also ignited two fuel containers, causing a huge fire that damaged the mosque and nearby shops.

Two U.S. troops killed in Iraq may be the victims of fragging. That's military speak for soldiers killing their superiors. Captain Phillip Esposito and First Lieutenant Louis Allen were first believed to have died in a mortar attack near Tikrit earlier this month. But now a soldier under their command is charged with killing them. Staff Sergeant Alberto Martinez is being held at a U.S. base in Kuwait. The Army says the explosion that killed Esposito and Allen came from inside the base where the men were stationed.

Meanwhile, the U.S. military is honoring a 23-year-old sergeant serving in Iraq. Leigh Ann Hester has become the first female soldier to receive the Silver Star since World War II. That honor recognized her role during an insurgent ambush in a convoy in March.

Hester was part of a military unit providing security. Her award citation says that she killed at least three insurgents. She also moved her Humvee behind the attackers and prevented their escape.

Earlier today on CNN's "AMERICAN MORNING," Hester praised all of her female colleagues in Iraq.

(BEGIN VIDEO CLIP) LEIGH ANN HESTER, SILVER STAR RECIPIENT: We're all here to do, you know, the same job, whether it be, you know, military police. Women are allowed in and we're combat support. The only -- the only things that we're not allowed in is combat arms, which is infantry, field artillery, things of that nature. But as MP's, we're out there every day, outside of the wire, sweeping for roadside bombs and dealing with insurgents. So in my opinion, I think women do just as good a job as the men do here.

(END VIDEO CLIP)

PHILLIPS: Well said. Two men from Hester's unit also received the Silver Star for their roles in the same action.

Police in California say it's a chilling discovery. Seven notebooks, more than 1,300 pages in all, filled with names and codes. And what they may signify is disturbing. Investigators say the list could uncover the biggest child molestation case ever.

Robert Handa from CNN affiliate KTVU reports.

(BEGIN VIDEOTAPE)

LT. SCOTT CORNFIELD, SAN JOSE POLICE: On the surface this appears to be monumental.

ROBERT HANDA, KTVU REPORTER (voice-over): Police say 63-year-old Dean Arthur Schwartzmiller may have molested thousands of children, mostly boys, in five states, as well as in Brazil and Mexico. Police displayed numerous pictures of the convicted child molester taken since 1999.

Schwartzmiller is being held without bail for a total of seven counts of child molestation in San Jose.

Police said officers seized numerous records from the suspect's home that showed 36,720 names of possible victims. The pages also have codes that police say indicate certain sex acts Schwartzmiller engaged in with the child listed.

CORNFIELD: If we have a small percentage of the numbers that we see here are accurate that would still probably make him the most active child molester we have ever seen in San Jose, and he may well be one of the most active child molesters across the country.

HANDA: Schwartzmiller has a companion, Fred Everts, who has been charged with seven counts of child molestation, but investigators still aren't sure if those cases are connected with Schwartzmiller. The two men shared a home in south San Jose under the name of Dean and Fred Harmon.

Some neighbors said they never trusted the man who turned out to be Schwartzmiller.

LISA THORNBURG, SUSPECT'S NEIGHBOR: I was suspicious of him the very first weekend that we moved in here, because he was out in the front yard talking to my kids and bought them ice cream from the ice cream man. And when they came home and told me that the man who lived there by himself with another man bought him ice cream I just immediately said, "No, there's just something not right here. You need to stay away."

(END VIDEOTAPE)

PHILLIPS: Coming up in the next hour of LIVE FROM, I'll talk about the case with Sergeant Tom Simms. He's a member of the children exploitation detail at the San Jose Police Department.

(BEGIN VIDEO CLIP)

PHILLIPS (voice-over): Next on LIVE FROM, home video of a family milestone. But some hospitals are banning cameras from the delivery room. CNN's Dr. Sanjay Gupta has the story.

Later on LIVE FROM, a CNN investigation, trucks going up in flames hours after being bought. Why? And can it happen to you?

Also ahead, a tank company battles its way into Baghdad. An Army captain takes us inside his tank and into the war zone.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: Once again I want to remind you that we're staying on top of the search for Natalee Holloway in Aruba.

CNN has confirmed that there are now four suspects in custody. Three, as you know, already have been in custody for days. Now a fourth suspect, the man by the name of Steve Cruz (ph).

We are working on more information on this suspect. We'll keep you posted on the investigation and the search for Natalee Holloway.

President Bush on the road again today, pushing his desire for every eligible American to sign up for the soon to come Medicare prescription drug benefit. He's in a Minneapolis suburb, urging people not only to get educated on the program ahead of time but to spread the word to friends and family.

When the drug benefit takes an effect in January, it will be the first of its kind in Medicare's 40-year history. But it won't be cheap. The White House estimates $500 billion over eight years. How's that little detail sitting with taxpayers?

Let's tap into the Dolans' well of wisdom for their take on the program. Ken and Daria from CNN's "DOLANS UNSCRIPTED." Of course, we know all our viewers watch this every weekend.

Great to see you guys.

KEN DOLAN, CO-HOST, "DOLANS UNSCRIPTED": Kyra, I have a question for you, my dear. Why has it taken us so long to finally work with you? We don't even miss Miles O'Brien.

PHILLIPS: Well, he has this attachment to you guys. He never let me do the segment. Now I finally get to meet you and talk to you.

DOLAN: It's nice to be with you, Kyra.

PHILLIPS: It's a pleasure. And besides, I found out you guys are golfers, so we already have a great connection.

DARIA DOLAN, CO-HOST, "DOLANS UNSCRIPTED": We have a great connection.

PHILLIPS: All right. But in the meantime, let's...

D. DOLAN: Medicare. Let's talk about something the president is on the road trying to get us all to talk up with our parents and older neighbors, et cetera, et cetera.

Well, I'd be happy to talk, Mr. President, but what are the details? Those will not be released until October 1. And according to "The New York Times" on the 22nd of May, it will be the second rewrite, at least the second rewrite that went into book form, because the one that they came out with was confusing. It was incorrect in some situations and just didn't even work for people who have worked a long time for Medicare.

PHILLIPS: Ken, didn't even Health and Human Services have to rewrite the manual? Isn't that what you guys were telling me earlier on?

D. DOLAN: That's it.

K. DOLAN: It's a mess. I will tell you this, Kyra, meaning no disrespect to anything going on in Washington. It's like, saying, "Kyra and hubby, I'm so sorry that" -- you telling your finance company, "We can't make our mortgage payments, but we want to put in a swimming pool anyway."

We've got $13 trillion unfunded Bucks in Medicare and Medicaid. It's a thing out of control. The new prescription drug program has a $500 deductible. Hey, Washington! Here's a clue! Seventy percent of people on Medicare and Medicaid...

D. DOLAN: Medicare.

K. DOLAN: Medicare -- don't spend $500 a year. Thank you so much to the other 30 percent.

PHILLIPS: OK, we're talking about spending money. Here's what confuses me. You throw out all these big numbers, OK, talk about all this money.

K. DOLAN: Yes.

PHILLIPS: What about this $1 billion that the administration is spending on advertising to promote this program? And I don't -- can't that...

D. DOLAN: They will -- Congress has allocated a billion dollars so the president and anybody else can go out on the road. They can print these brochures to try and get seniors and the disabled to sign up for this new benefit.

You know, I hate to sound cynical, but you know, every time I think I'm cynical, something new happens to make it even worse.

How many uninsured children and young working families could have been covered with some sort of insurance for a billion bucks?

K. DOLAN: Forty-four -- 44 million people have no insurance in America, as Daria said, including kids. So let's drop another $500 billion on this prescription -- prescription drug problem.

Hold on, let me just say one more thing. I talked to somebody in the advertising business today, and he said one of the reasons why the Baby Boomers and older are not getting more advertising money spent on them is because they're set in their ways for so many years. And that's why some people who should be in the prescription drug program won't, because it's mass confusion. And the billion bucks so far from advertising and marketing, as you said, Kyra, has been a waste of money.

PHILLIPS: But here's something interesting. Daria, on the note to prescription drugs, rather, Daria, you mentioned the V.A. has it right.

D. DOLAN: Well, yes. The Veterans Administration has negotiated drug prices with the drug manufacturers in the world. So, consequently, they get the cheapest you can get short of going across the border to Canada or overseas to order prescription drugs.

The administration refuses to sit down. I guess all of them, on both sides of the aisle, don't want to not get the monies that the drug lobby throws their way when they're trying to run for reelection, so they refused to sit down and negotiate drug prices. So the rest of us taxpayers and working seniors will be forced to pay the highest prices.

And who says it's going to cost $500 billion? In 1965 Lyndon Johnson swore that after 20 years Medicare would cost -- would have cost $8 billion. Well, 20 years later, Medicare had cost $88 billion.

So if we don't have the details to tell our parents to sign up for this, how can they already know that it's only going to cost $500 billion?

K. DOLAN: She gets emotional, Kyra. I love this.

PHILLIPS: Which happens, I understand, quite a bit even off camera, right? But we won't get into that.

K. DOLAN: Yes.

D. DOLAN: I'm Italian-American. What can I say?

K. DOLAN: Well, you know...

PHILLIPS: So here we are...

K. DOLAN: Because the final word, Kyra, is that if you -- if you qualify for prescription drugs, take a look at it. There's a dizzying array of services, but the old story is if the money's there and you can make something out of it and make a buck and save a buck, good luck. It's a mess.

D. DOLAN: And it's still so confusing. I can't tell you how many stories we've done with seniors, very intellectual seniors...

K. DOLAN: Smart people.

D. DOLAN: ... who still look at all the paperwork and say, "I still don't get it."

K. DOLAN: Exactly right. The billion dollars hasn't been spent very well, Kyra. We're not against any program that helps senior citizens, especially lower income people. This is no the program.

PHILLIPS: They need the help.

K. DOLAN: Yes, they need it.

PHILLIPS: They need the help.

D. DOLAN: Seniors should have been given the free drug plan as it stands, but it did not have to be rolled out for the country at large when, as Ken said, more than 70 percent of seniors have some sort of coverage through their Medigap and pay less than what it would cost to join this.

K. DOLAN: Adjusted.

PHILLIPS: Ken and Daria, what a pleasure.

D. DOLAN: I'm speechless.

K. DOLAN: That's unusual!

PHILLIPS; Oh! That was much too fun. And, of course, coming up this weekend, you don't want to miss the show. "DOLANS UNSCRIPTED," Saturday morning, great way to get your day going.

K. DOLAN: Thanks Kyra.

PHILLIPS: Get you all fired up. What a pleasure. Ken and Daria, thank you.

K. DOLAN: Thanks, Kyra. We'll talk again.

PHILLIPS: Sounds great. Well, straight ahead, tense moments in a Florida neighborhood. Caught on home video as a blimp comes crashing down. We've got the details on what happened.

And shaken up in California. Several recent earthquakes have residents wondering if the big one is on the way.

Powerful movers and shakers ranked by "Forbes" magazine. Oprah Winfrey on top. Can you take a guess who else is on the list? We're going to count down some of them after the break.

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PHILLIPS: Looking now at some stories making news across America.

Two members of the anti-animal cruelty group PETA arrested for alleged animal cruelty. Police in North Carolina say that the two were dumping dead dogs and cats into a shopping center trash bin. No word yet on exactly why they were doing that. The two are out on bond.

Goodyear blimp down. Thousands of Coral Springs, Florida, residents held their breath as they watched the slowest air crash in Broward County history. The blimp went down in a self-storage park. The pilots walked away. Nobody on the ground was hurt. Thunderstorms may have been a factor.

The first day of summer is almost upon us. Will somebody please inform northern California? More than an inch of fresh snow fell on the Sierras overnight as temps fell to freezing at Lake Tahoe. Should I mention that Anchorage, Alaska, is 20 degrees warmer than the Donner Pass today?

When it comes to powerful celebrities, Oprah Winfrey takes the crown. That's according to this year's power rankings from "Forbes" magazine. With a look at some other individuals on the list, Chris Huntington, our own powerful reporter, live from the New York Stock Exchange.

Hi, Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Kyra, you're on the list, too, by the way.

PHILLIPS: Don't I wish!

HUNTINGTON: Yes. Well, Oprah Winfrey, of course, making a comeback this year of sorts. She moved up from the No. 3 spot last year to reclaim the lead. Oprah displaced Mel Gibson for the top spot on the "Forbes" list, who dropped down to No. 3. They traded spots.

Tiger Woods, George Lucas and Shaquille O'Neal also made the top five. George Lucas, of course, of "Star Wars" fame, topped the money- earning list this past 12 months, making $290 million in the past 12 months.

Well, rounding out the top ten, Steven Spielberg, Johnny Depp, Madonna, Elton John and Tom Cruise, who of course, made news today.

Well, the "Forbes" rankings looked at celebrity earnings, as well as a number of popularity standards including Internet presence, magazine cover stories and mentions on TV and radio -- Kyra.

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