Return to Transcripts main page

Live From...

Scooter Libby Pleads Not Guilty; Bush Faces Protests at Americas Summit; Human Rights Group Names Off-shore CIA Detention Centers

Aired November 03, 2005 - 13:00   ET

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

(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We have declared to the world that he is innocent.

UNIDENTIFIED MALE: Back up, please

(END VIDEO CLIP)

DARYN KAGAN, CO-HOST: Scooter Libby plans to fight. The vice president's former chief of staff heads to court. We are live from Washington with more on the CIA leak scandal.

TONY HARRIS, CO-HOST: And if Wal-Mart sneezes, will your company catch a cold? Will a trend at the retail giant mean changes for your health insurance at work?

From the CNN center in Atlanta, I'm Tony Harris.

KAGAN: And I'm Daryn Kagan. You'll see Kyra Phillips later tonight on "NEWSNIGHT" at 10 p.m. Eastern. CNN's LIVE FROM starts right now.

HARRIS: A power broker in the White House. One week, facing a federal judge. The next, Lewis "Scooter" Libby goes to court to answer the charges that forced him to resign as Vice President Dick Cheney's right hand man.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In pleading not guilty, he has declared to the world that he is innocent. He has declared that he intends to fight the charges in the indictment. And he has declared that he wants to clear his good name and he wants a jury trial. We do not intend to try this case in the press. Mr. Libby intends to clear his good name by using the judicial process.

(END VIDEO CLIP)

HARRIS: Also in the courtroom, our chief national correspondent, John King. John, take your time. Walk us through this extraordinary morning. And don't leave out the comment Libby made to you outside of the courthouse.

JOHN KING, CNN CORRESPONDENT: Well, Tony, it was an extraordinary morning, as you noted at the top. And this man was one of the most powerful men in Washington just a week ago.

He was not only the vice president' chief of staff. He was a key aide to the president of the United States, someone who was involved in conversations about whether to go to war in Iraq, about who to pick for Supreme Court vacancies. Lewis Libby a very powerful man in Washington. Obviously, more powerful when it comes to the vice president's office, this being the most powerful vice presidency in history, by most accounts.

You see Scooter Libby, Lewis Libby, known by the nickname Scooter Libby, hobbling into court there. He has a broken foot.

The proceeding lasted only nine minutes, and Mr. Libby spoke only 15 words. He said, "Yes, I do," when the judge asked him if he would waive his right to have the entire indictment read in court, five counts against him.

Then he said, "With respect, your honor, I plead not guilty." The only other words he spoke, when he said, "I am, your honor," when the judge asked him if he was waiving his right to a speedy trial.

Why waive that right? Because of the profoundly complicated issues in this case. Much of the evidence, the special prosecutor, Pat Fitzgerald, said, would be classified information. Scooter Libby's lawyers made clear that they expect legal battles when they go to the reporters who are likely to be witnesses in this case and ask for information. They didn't say what information. But you can expect they will ask to interview those reporters. They might ask for notes, e-mails, back and forth between those reporters and their editors. They're expecting a protracted legal battle there.

So only a nine minute hearing, 15 words from Mr. Libby. But key issues emerging. All of his lawyers need to get security clearances before they can see the evidence against Mr. Libby.

Mr. Libby clearly, and his attorney outside the courtroom, saying he plans to fight this. That all could change, once the defense sees the actual evidence, in a process called discovery. They will file motions. They will, of course, try to have the indictment dismissed. Most defense teams do that.

The next court hearing not until February 3. That is because of how long it will take to declassify some of the information, to get security clearances for the lawyer, so they can read the classified information. So a status hearing on the morning of February 3.

You mentioned what Mr. Libby said to me. I've known him for some time, have covered him for a number of years. As he was leaving the courtroom on crutches, I asked him how he was holding up. He smiled and he nodded and then he sort of gave a whimsical look and said, "This is not where I'm used to seeing you."

HARRIS: Hey, John, just curious. Who is this new face that we see leading the defense team for Scooter Libby?

KING: That is Ted Wells. He is from New York/New Jersey area. He is known as a very accomplished criminal defense attorney. Joseph Tate was Mr. Libby's lawyer throughout the grand jury process. He is known more for white collar investigations, not so much known as a courtroom litigator.

Mr. Wells, though, has a very good, very accomplished reputation as a very tough defense lawyer in the courtroom. So in terms of the personnel, not only his words today, but in picking Mr. Wells, Mr. Libby indicating from day one of this case as it goes into court that he's planning to fight and fight hard.

HARRIS: CNN's John King. John, thank you.

KAGAN: Looking back on Friday, Scooter Libby announced his resignation within hours of his indictment. But more often than not, the resignation comes first. So we were wondering, when is the last time a White House official was indicted while still in office? And here now is what we found.

(BEGIN VIDEOTAPE)

HARRIS (voice-over): The last sitting cabinet member to be indicted was Reagan Labor Secretary Raymond Donovan. Donovan was charged in September 1984 with grand larceny. He went on leave and then resigned in 1985. He was later acquitted.

Then there was Clinton housing secretary Henry Cisneros. He actually resigned in 1996 before being indicted on several counts of conspiracy and obstruction of justice. He pleaded guilty to a misdemeanor in 1999 and got off with a $10,000 fine.

Those are cabinet members, though. What about members of the White House staff? You may think of Nixon's chief of staff, H.R. Haldeman. But he also resigned before he was indicted. In 1973, Haldeman and six other staff members resigned during the Watergate scandal, but they were indicted afterward. Haldeman was eventually convicted and served 18 months in prison.

Ultimately, the most recent White House officer to be indicted was Orville Babcock. He was President Grant's personal secretary 130 years ago. Babcock was accused of helping whiskey makers evade taxes. But Grant came to his defense, and he was acquitted.

(END VIDEOTAPE)

KAGAN: They went out with the trash but two violent offenders who escaped from a maximum security prison Columbia, South Carolina, are now back in custody.

Jimmy Causey and Johnny Brewer were serving life sentences without parole at the Broad River Correctional Institute. Early Tuesday morning that changed. That's when they reportedly hid inside of a Dumpster and were hauled off in a trash truck.

State law enforcement officials caught up with the escapees at a hotel in Ridgeland, South Carolina, and recaptured them just a short while ago without incident. HARRIS: From the frying plan into the fry fryer, President Bush leaving his domestic troubles behind for awhile and likely to face more of this, mass protest in Argentina. He is on his way right now to meet with leaders of 33 other countries at the Summit of the Americas. Not all of them what you would call friendly allies.

CNN's Lucia Newman join us from Mar del Plata, Argentina -- Lucia.

LUCIA NEWMAN, CNN CORRESPONDENT: Hello, Tony.

Well, absolutely, President Bush will not only not be welcomed on the streets of Mar del Plata, a very, very popular seaside resort here in Argentina, he will also have to face one of his biggest adversaries in the hemisphere.

Venezuela's president, Hugo Chavez, has vowed, in fact, to do everything he can to counter any initiative put forth by President Bush, especially if it has to do with free trade. In fact, he has gone so far as to agree to attend a rally, an anti-globalization, anti-summit, and especially anti-Bush rally, which will take place tomorrow, right before the actual summit itself starts.

That, of course, considered to be a slap across the face for the U.S. president.

Now, all this focus on President Chavez, of course, has made many be concerned that this will detract from the real reason for the summit, which is to fight against poverty and unemployment in the hemisphere. So much so that President Bush's national security adviser, in fact, had to come out and say this summit is not about Hugo Chavez.

Now, another major reason for concern here is security, of course. Those pictures you saw yesterday, they were 250 miles away from where I'm talking to you from. They were in Buenos Aires, where anti-Bush protesters torched at least 15 wagons of a commuter train.

That, of course, has led to huge security precautions here in the seaside resort. At least 7,500 police and national guardsmen here are cordoned off the area of the summit and hotel where President Bush will be staying. Very, very tight security, indeed, in place.

But as we saw, all this anti-American and anti-Bush feeling in this part of the world. Argentina, in fact, is the country that's supposed to have -- this according to a recent poll, has the highest anti-Bush sentiment in Latin America. And that, of course, leads to concern that there could be real violence once the summit begins here, Tony.

HARRIS: Boy, frying pan to the fire, indeed. Lucia Newman, thank you.

KAGAN: Back in the Washington area, Britain's future king and his new bride continue to charm the yanks. Prince Charles and the Duchess of Cornwall just visited the National Institutes of Health. That is where they chatted with patients with osteoporosis.

The duchess even made some rare public comments on the issue. Her mother and grandmother both suffered from the bone disease.

This hour, her husband is expected to share his view on classical architecture at the National Building Museum. We'll take you there for his comments.

(BEGIN VIDEO CLIP)

HARRIS (voice-over): Next on LIVE FROM...

UNIDENTIFIED MALE: The shark came up and nailed me right about where my belly button is and left a tooth right there.

HARRIS: A surfer's close encounter. He tells us his amazing story.

Later on LIVE FROM, preparing for a pandemic. An airline stockpiles bird flu treatment. What's your employer doing to protect you?

Tomorrow on LIVE FROM, best-selling author Anne Rice converges from witches and vampires to Jesus Christ. She'll join us live to talk About her new novel and leap of faith.

(COMMERCIAL BREAK)

KAGAN: So question for you here, just how much of the CIA's business should you and I know? Opinions vary on that question. And the secretive agency is especially quiet when it comes to the location of terror suspect.

CNN national security correspondent David Ensor reports on efforts to find out what America's spies are up to.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): Ramzi Binalshibh, Khalid Shaikh Mohammed and other senior al Qaeda leaders are held by the CIA in undisclosed locations around the world. That much is well known.

But "The Washington Post" reports some are held in a Soviet-era compound in a former east bloc nation and in other new European democracies. An official at Human Rights Watch said he is convinced some CIA prisoners are there, after tracking the movements of CIA aircraft in recent years.

TOM MALINOWSKI, HUMAN RIGHTS WATCH: We think we know that because we've looked at the flight records of the CIA aircraft that we know are ferrying high-value detainees around the world, from Afghanistan to these locations.

ENSOR: CNN has previously reported that Abu Zubaida and other CIA prisoners were once held in Thailand. That facility has been closed. CIA al Qaeda prisoners are also still held in Afghanistan, sources have said. And a few remain at the Guantanamo Bay prison in Cuba. The CIA and Bush administration officials declined to talk about the prisoners.

ALBERTO GONZALES, ATTORNEY GENERAL: We have a very patient diabolical enemy that's intent on harming Americas. And so we need to be doing everything we can to protect America.

ENSOR: Though Human Rights Watch named former east bloc countries where it says the CIA detainees are held, CNN and "The Washington Post" decided not to report the names of those countries at the request of U.S. officials.

LEONARD DOWNIE, EXECUTIVE EDITOR, "WASHINGTON POST": In this case, we agreed to keep the names of those particular countries out, because we were told, and it seems reasonable to us, that there could be terrorist retaliation against those countries or, more importantly, disruption of other very important intelligence activities, anti- terrorist activities.

ENSOR: But Human Rights Watch is even putting out aircraft tail numbers and names of towns in Europe. It is a tactic that angers many intelligence professionals.

MICHAEL SCHEUER, FORMER CIA OFFICER: It's sexy. It's splashy but it's irrelevant. How else would you get someone from A to B unless you've used an airplane? And the exposure of such either firms or aircraft just undoes years of cover-building and makes America weaker.

MALINOWSKI: I can't believe that three years after their capture we're still getting enough useful actionable intelligence out of these detainees to justify the enormous damage this kind of secret incommunicado, illegal detention is doing to the United States around the world.

ENSOR (on camera): But U.S. Intelligence officials insist these prisoners still are producing intelligence that is useful in the war against terrorism. They don't want to give that up, even though human rights groups are pushing hard now to have these CIA prisoners moved out of secret places and put on some sort of trial.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

HARRIS: Well, here's the question, will flu fears make history repeat itself? Remember these images from the 2003 SARS virus scare? People wore masks, changed their travel plans. Will the same thing happen if there is a flu pandemic? We'll talk about the potential ahead on LIVE FROM.

And later, the saga of the surfer, the shark, and the tooth the great white left behind.

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

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

SHANNON COOK, CNN.COM: President Bush nominates his economic adviser, Ben Bernanke, to succeed Alan Greenspan. For a federal focus, log on to CNNmoney.com/Fed.

Bernanke is known for sharing Greenspan's tough stance on inflation and while he might not be a household name, critics have generally lauded the nomination. Take a look back at the Federal Reserve chairman from 1951 in this gallery.

William McChesney Martin Jr. held the post for almost two decades, the longest tenure in Fed history. The Greenspan era ends when the maestro, as he's become known, steps down on January 31.

So what is the outgoing chair's next move? Well, one financial expert predicts Greenspan will write a book. Others suggest he'll become a freelance economic consultant.

And just how much do you know about the Central Bank of the United States? Test your Fed IQ with our quiz.

For the dotcom desk, I'm Shannon cook.

(END VIDEOTAPE)

HARRIS: Can you say big? Major, surprising? A New Jersey jury has delivered a verdict in the second Vioxx trial. Susan Lisovicz has details from the New York Stock Exchange.

Hi, Susan.

(STOCK REPORT)

(COMMERCIAL BREAK)

KAGAN: Let's take a look at what's happening now in the news.

Former FEMA boss Mike Brown writing cute e-mail while hurricane victims suffered. That is the allegation today from lawmakers investigating the government's highly criticized response to Hurricane Katrina. In several e-mail messages, Brown jokes with colleges about how he looks on television. House Democrats say it demonstrates a leader who was out of touch and overwhelmed. Much more on the story next hour on LIVE FROM.

A threat that world leaders cannot ignore. U.N. Secretary- General Kofi Annan urges individual countries to overcome their national interest and work collectively in the fight against a potential bird flu pandemic. He warns, quote, "Once human to human transmission has been established, we would have only a matter of weeks to lock down the spread before it spins out of control." HARRIS: Well, speaking of bird flu, one British airline company is taking no chances. Virgin Atlantic Airways announces it's ordering a stockpile of the anti-viral drug Tamiflu. The company says it's ordering the Tamiflu as a responsible employer and air carrier.

"TIME" magazine also reports Virgin Atlantic is looking into new technologies to kill germs on aircraft.

Which make us think, what are U.S. companies doing, if anything, to plan for a possible flu pandemic? History tells us the 1918 Spanish Flu outbreak took its heaviest toll on healthy young adults, the age group that is still the backbone of the American workforce.

David Heyman is the director of the homeland security program at the Center for Strategic and International Studies. He joins me from Washington to talk about the economic impact of a pandemic flu outbreak and what employers can and should be doing to plan now.

David HEYMAN, good to talk to you.

DAVID, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Good to see you.

HARRIS: Well, David, I'm a business owner and I get all this news that I've received this week from the president, from Mike Leavitt, health and human services secretary, before Congress, talking about all of this, $7.1 billion or possibly more to prepare. What should I be thinking? How should I respond?

HEYMAN: Well, businesses and private individuals have an obligation and, frankly, a public duty to do what they can to protect themselves. While it's primarily the government's responsibility to develop the vaccines and to make sure that the anti-viral medications are available, citizens and businesses can take some steps in case an outbreak occurs.

HARRIS: Where would you start? Where would you start if you're a business?

HEYMAN: If I was a business, the first thing I'd want to make sure is that we have identified our vital business operations and our essential employees, that we've put in place communication plans so that we notify people in the event of something catastrophic over the horizon.

We need to put in place the contingency plans for working offsite if possible. And, in addition to that, continuity of management. If there is something catastrophic, it's possible that management might not be around.

Now these are also steps that one would take if there's a terrorist attack. But rapid catastrophic pandemic flu could have the same effect.

HARRIS: Particularly acute is your concern, if your business has a significant international component, it seems to me. HEYMAN: Well, this is obviously not going to work for people who have businesses that are largely socially interactive.

HARRIS: Yes.

HEYMAN: That is, things like hospitality businesses, which rely on people to people contact. And so this won't be effective for everyone.

But everybody can put in place, even today, good infection- control procedures or personal hygiene. That is to say, hand washing, cough-and-sneeze etiquette. Those types of things, which are old medicine, can help limit the transmission of disease. And, frankly, this season, we've got a flu season coming up, seasonal flu. Everybody should be putting those plans in place.

HARRIS: You know, David, the concern is that we started to get some infected birds, and that we get that leap to human-to-human contact with this strain. I know there are unknowns and variables in all of this, but if you're an employee and this worst-case doomsday scenario should materialize, what should you be able to expect of your employer in terms of short-term and long-term care?

HEYMAN: Well, short-term care -- I mean, ultimately, we're going to have to rely on our public-health infrastructure to help facilitate health care needs in the middle of a crisis. That's where the government's responsibility is. Both local and city officials need to put their plans in place. The federal government is contributing billions of dollars to develop vaccines in the long term, and in the short term, having the anti-viral, Tamiflu and others, available. Businesses in the short term. As I said, infection-control procedures, continuity of business operations, but providing health care, that's the responsibility of doctors and the public health infrastructure.

HARRIS: David Heyman, good to talk to you. Thanks for taking the time today.

HEYMAN: Thank you.

HARRIS: And you can get more on bird flu and the pandemic threat on "HOUSE CALL" with Dr. Sanjay Gupta. His guest this week is infectious disease specialist Dr. Anthony Fauci. That's "HOUSE CALL," Saturday morning, 8:30 Eastern, only here on CNN.

PHILLIPS: Ahead on LIVE FROM, seven days of riots in suburban Paris. Everyone there is on edge. What's behind this? LIVE FROM the chaos, after this.

(COMMERCIAL BREAK)

KAGAN: Suburban Paris is burning, part of it, anyway. Rioters set 40 car and buses on fire overnight, marking a full week of escalating tense and violence on the outskirts of the French capital.

Our Jim Bittermann joins us now by phone. Jim, what's the latest.

JIM BITTERMANN, CNN CORRESPONDENT: Daryn, the latest is what the government is trying to stop another night from turning into an eighth night of violence out in the streets and the various suburbs, and it's not clear exactly what they've decided on. Basically, measures they've taken so far have not had any effect really on calming down the situation. As you mentioned, there were a number of cars set on fire. Nine different suburbs were involved in last night's rioting, and probably the most alarming thing is that the police were fired upon and the fire department were fired upon. Four shots were taken at the police and the fire department. And a police station was briefly taken over by some of the demonstrators.

So it's a very touchy situation. It's been going on now for a week. And the government methods really haven't worked. So one of the things that's being considered here is something that one of the police units suggested, and that is to call in the military, call in the army, and impose a curfew on some of these suburbs.

KAGAN: Jim, what about criticism that the French government was slow to respond because of bickering between the rival leaders?

BITTERMANN: Well, I don't think that had so much to do with it as the fact that this is a problem that people have tended -- various governments over the years have tended to ignore. It really is kind a systemic social problem. The problem is that a lot of immigrants -- and there are now sons and daughter of immigrants, live in these very poor area, and the unemployment is very high, up to 25 percent in some cases. And these folks feel neglected, excluded, disadvantaged, and not part of French society, as they are not.

I mean, the fact is, there are among five million people who live in these kinds of suburbs who are said to be severely disadvantaged because of their income levels, and they feel like they're ignored essentially, and they don't see any way out of it, especially since we're talking here, a lot of people refer to these areas as immigrant communities. In fact, they once were immigrant community. Now they're full of communities full of French citizens, because the sons and daughters of the immigrants automatically get French citizenship, and they still get excluded from jobs and whatnot on the basis of their names basically.

KAGAN: And this goes to an ongoing debate within France, on the other side, those that think that the immigration policies in France are too liberal?

BITTERMANN: Well, in fact, that's what has come out of this. The right wing particularly here has taken this up and said, you know, they've got to stop such liberal immigration policies.

Really, though, there haven't been very much liberal immigration policies in the last few years. They've tightened down a lot. It's this question of what do you do with young teenagers who are the sons and daughters of immigrants who come here and who bear names that sound North African. They may be called Ahmad or Mohammed, and then they go in to apply for a job, next to a resume from somebody named Maurice or John Pierre, and you know who gets the job first in almost every case.

So there's this feeling of exclusion, that they haven't properly integrated into French society, and it's a problem going on since the early '80s.

KAGAN: Jim Bittermann, joining us on the phone from Paris. Jim, thank you -- Tony.

HARRIS: And, Daryn, we're going to see in just a couple of moments new video in to CNN. And this is President Bush's Supreme Court nominee, Samuel Alito, who has been meeting with senators, as you know, since the nomination was announced, meeting here with Republican senator from Texas John Cornyn. And he's been meeting -- and I think we have some conversation between the two of them. Let's listen in.

(BEGIN VIDEO CLIP)

SEN. JOHN CORNYN (R), TEXAS: ... of your opinions? Can you roughly categorize them? I mean, how many administrative ...

JUDGE SAMUEL ALITO, SUPREME COURT NOMINEE: Not very many administrative. We don't get -- the administrative cases that we get in any volume are Social Security, disability appeals and immigration cases.

CORNYN: Immigration cases. I was surprised to hear in the Ninth Circuit got a large percentage of immigration appeals.

ALITO: Well, there's percentages higher obviously. But we get a lot. People -- asylum cases, people who arrive at the Newark Airport or Philadelphia Airport and ask for asylum.

CORNYN: We're going to go this way? OK.

(END VIDEO CLIP)

HARRIS: And this is the continuation of the meeting and greeting that has been going on between the nominee and senators, some of these senators who are going to be very key in the confirmation process. That continues, and is coming up in just a few short weeks.

Senator Lincoln Chafee today, if you're talking about the schedule that Samuel Alito has kept. He's also met with Senator Robert Byrd and you saw the meeting just a few moments ago, and Senator Mark Pryor later this afternoon. And then somewhere about 4:30 this afternoon, he will meet with Senator John McCain of Arizona, all in the lead-up to the confirmation hearings with the Judiciary Committee that's coming up soon -- Daryn.

KAGAN: Tony, thank you.

Coming up, riding the waves at a popular surf spot in California turned out to be a close call for an young man. We'll show you the teeth marks.

Also ahead on LIVE FROM, Wal-Mart, famous for rolling back price, now in the news for a proposed rollback in employee benefits. The question is might Wal-Mart be on the right track with this. We'll look into that when LIVE FROM returns.

(COMMERCIAL BREAK)

HARRIS: All right, stay with me a second. Do you remember the show "Wild Kingdom"? OK, remember that while Jim Fowler was wrestling the wild anaconda, Marlin Perkins would pause to pitch insurance? Well, it seems these days, some major U.S. companies are thinking about pitching the employee health insurance right out of the window. CNN's Tom Foreman on a growing debate.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Out in the morning rush of Washington, D.C., like six out of 10 Americans, Tim Kane gets health insurance through his job.

TIM KANE, HERITAGE FOUNDATION: I think my hands are tied. I have to go through my employer.

FOREMAN: But, as an economist at the conservative Heritage Foundation, Tim supports an idea that might put other commuters into shock. Workplace health plans can be, should be and may be going away.

KANE: Americans should understand that they would be much better off if businesses weren't providing them health care, if they could buy it on the free market cheaply.

FOREMAN: This is controversial stuff. Wal-Mart, with more than 1.2 million American workers, is being criticized right now over a leaked company memo that suggests health care costs should be better contained.

Wal-Mart Watch is a new advocacy group, funded in part by labor unions, to keep an eye on how the economic giant is shaping American life.

ANDY GROSSMAN, EXECUTIVE DIRECTOR, WAL-MART WATCH: I think that Wal-Mart today, as we speak, is attempting to change health care for the American worker to the worst.

FOREMAN (on camera): And you're saying that affects all of us, whether or not we work for Wal-Mart?

GROSSMAN: When Wal-Mart makes a change in the way their do their business, then other businesses follow.

FOREMAN (voice-over): Wal-Mart told us in a written statement, it is expanding and improving its health insurance program. But it adds: "Every business is asking the question. How do we balance the genuine desire to provide the best benefits, while remaining competitive in the global economy?"

That's the catch. The United States is a rarity among nations in firmly tying health insurance to jobs, making it a cost of doing business. So, how did it get that way? Blame it on World War II, when fear of inflation prompted president Roosevelt to freeze wages. With so many Americans going to battle, businesses were frantic for workers. So, instead of more money, they offered health insurance.

Healthy employees are undeniably better for business, better for society, but is that Wal-Mart's responsibility?

(on camera): Well, this is a private company. What business is it of yours how they do their business?

GROSSMAN: We, the taxpayers, are paying for Wal-Mart to profit. And, so, therefore...

FOREMAN: And you believe that gives you a say?

GROSSMAN: Therefore, we have a say. We're stockholders. We are shareholders in the company.

FOREMAN (voice-over): A study before Congress last year said less than half of Wal-Mart employees were fully covered by the company insurance and that a significant number secure their health care from publicly subsidized programs.

George Miller from California authored that report.

REP. GEORGE MILLER (D), CALIFORNIA: I don't think that Wal-Mart either has built an acceptable system for health care for employees and they haven't really provided much to the national debate on how we can accomplish this as a -- as a nation.

UNIDENTIFIED MALE: New at Wal-Mart...

FOREMAN: The debate over how workplace health insurance might fade and what might replace it is not just about Wal-Mart.

KANE: And Wal-Mart's trying to stay out of that mess. And it is a very tricky problem.

FOREMAN: But, when a company that big even whispers change, these days, everyone listens. Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

KAGAN: Wait until you get a bite out of this story. A Bay area man needs a new surfboard today. The I know that's probably not a lead story, but the way he lost his old surfboard is.

Tim West (ph) was looking for waves at the famous Maverick surf spot yesterday. Instead, he found an enormous shark, or rather an enormous shark found him. That's a tooth you're looking at. Most of the time these stories end badly.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It threw me out of the water about two feet. My board went the opposite direction. So I flew off the right side, and I just saw a big thrashing off to the side.

(END VIDEO CLIP)

KAGAN: The shark left a tooth in the surfboard -- I think we have another look at that. West says it will take more than a little shark attack to keep him from going back out again.

HARRIS: Are you kidding?

KAGAN: We didn't say he was brilliant, Tony. We just said he was lucky.

HARRIS: Oh man. Definitely lucky.

Well, you know, every year, it seems clothier Abercrombie & Fitch manages to test the limit. In the past, it's been thong underwear for 7-year-olds and half naked ads. This time around, some explicit t- shirts have sparked a protest in Pennsylvania.

CNN senior correspondent Allan Chernoff went to see what all the fuss is about.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT (voice over): Is the shirt funny or demeaning?

UNIDENTIFIED FEMALE: That is ridiculous.

UNIDENTIFIED FEMALE: That's repulsive. That's disgusting.

CHERNOFF: Some Pennsylvania high school students are so offended by the new line of Abercrombie & Fitch t-shirts, they're organizing a female boycott of the chain. A girlcott, they're calling it.

EMMA BLACKMAN-MATHIS, "GIRLCOTT" ORGANIZER: These t-shirts, in my opinion, are absolutely and positively degrading to ourselves and other women around us.

CHERNOFF: Abercrombie & Fitch said it had no one available for an on-camera interview. Instead, the company gave CNN a statement: "Our clothing appeals to a wide variety of customers. These particular t-shirts have been very popular among adult women, to whom they are marketed."

Though some adults we spoke with said they wouldn't wear the shirts.

UNIDENTIFIED FEMALE: I think they have a sense of humor. I wouldn't wear them. I wouldn't want my kids wearing them.

CHERNOFF (on camera): Abercrombie calls these attitude t-shirts. And attitude does not come cheap. They cost $25 a piece.

"I had a nightmare I was a brunette."

UNIDENTIFIED FEMALE: Well, I mean, I just completely don't agree with that all.

UNIDENTIFIED FEMALE: I think that's perfect. I really want that one.

UNIDENTIFIED FEMALE: It is a good shirt.

UNIDENTIFIED FEMALE: I think that's great, yes.

CHERNOFF: Now, do you know there are a bunch of high school girls who are actually calling for a girlcott of Abercrombie because of these shirts.

UNIDENTIFIED FEMALE: It's crazy. It's crazy. It's just a bit of fun.

CHERNOFF (voice-over): For Abercrombie, which markets clothing by featuring models who barely wear any, it's a perfect mix of profitable fashion and image building. The company's past controversies include catalogs of partially-undressed women and bare- bottom guys, and thong underwear for young girls.

(on camera): "Do I make you look fat?"

UNIDENTIFIED FEMALE: I wouldn't buy that.

CHERNOFF: But you're laughing.

UNIDENTIFIED FEMALE: It's funny.

CHERNOFF: It's funny. But would you want your daughter to wear it?

UNIDENTIFIED FEMALE: No.

CHERNOFF (voice-over): Of course, sex and controversy sell in America. The students behind the protest say they recognize they're helping to draw attention to Abercrombie & Fitch, but say their principles are more important than the company's profits.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

KAGAN: OK, so my challenge, I go from those t-shirts to Prince Charles.

Lack of class to a class act. Prince Charles is at the National Building Museum today. He's receiving the Vincent Scully Award -- Vincent Scully Prize. It goes for the prince's long-standing interest in building an environment and commitment to creating urban areas with human scale. Just one of the prince's many passions. As he and Camilla make their way across the country.

HARRIS: Then it's on to New Orleans.

KAGAN: And then San Francisco.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

HARRIS: And, coming up in the second hour of LIVE FROM, they failed when New Orleans needed them most, but can the levees be built back so they won't fail again?

KAGAN: A man who's investigating what went wrong during the hurricane joins us live.

First, though, let's listen in a little bit -- Prince Charles in Washington, D.C. at the National Building Museum.

PRINCE CHARLES, UNITED KINGDOM: ... Professor Scully and I agree profoundly on some crucial fundamentals. Three issues strike me in particular: the importance of retaining our connection with the natural world, particularly through the garden; the value of traditional urbanism; and the abiding significance of the sacred.

My own garden, which Elizabeth mentioned, surrounding my Gloucester home in High Grove, has long been a labor of love, and an attempt, probably rather inadequate, I don't know, to work as much in harmony with nature as possible. Shaping it over the last 25 years has repeatedly given me cause to reflect upon what it is to be part of nature, not apart from it.

There is a profound need, I believe -- indeed, I would go so far as to say there has never been a greater need -- in light of the terrible forces of chaos we are helping to unleash through becoming further and further apart from nature throughout the 20th century -- a profound need to move toward architecture and planning which similarly reconnects the human and natural worlds with one another.

There is also a pressing need to take up the great human cultural story once again. In the same way, ladies and gentleman, that our food and the way the produced can tell a special story, so our building should tell the irresistible story of human character and idiosyncrasy. We have overindustrialized the whole business of food production. We have overindustrialized our whole approach to the built-in environment. We have removed the soul, surely what the cultural element is all about at the end of the day, and thus lost the balance, the balance of things, that must lie at the heart of a truly human civilization.

Ultimately, as Professor Scully himself has observed, this has to become a collective effort from us all. To this end, my foundation has begun to engage with cutting-edge scientists, those trying better to understand the natural world through what are known as the sciences of complexity. And one of the central issues we've been discussing with them is nature's way of handling large numbers. Nature offers clues as to how quantity and quality can go hand in hand, how a complex order can respect diversity, how we can again achieve the fine grain of scale that makes buildings and streetscapes such as...

KAGAN: We've been listening into Britain's Prince Charles. He is visiting here in the States with his bride, Camilla, today. And right now at the National Building Museum in Washington, D.C., he is being honored for his longtime commitment to the environment and building eco-friendly communities.

LIVE FROM continues right now.

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