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Lay, Skilling, Guilty; Prosecution Reacts to Enron Verdicts; The FBI and Congress; Marine Corps to Probe Iraq Civilian Deaths; Bonny Jain Interview
Aired May 25, 2006 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: It was the biggest business failure in U.S. history, and the two men in charge are to blame. Enron founder Kenneth Lay and former CEO Jeffrey Skilling both were convicted of fraud and conspiracy today and could face decades in prison. You heard the verdicts first from CNN's Ali Velshi in Houston -- Ali.
ALI VELSHI, CNN CORRESPONDENT: Well, this is what everybody's been waiting for, Kyra. This is six charges against Ken Lay, guilty on all six counts; 28 charges against Jeff Skilling, the former CEO of the company. He was found guilty on 19 of those. One of those was an insider trading charge.
They're going to be sentenced on September 11th. And until then, both of these men will remain free.
They have had to surrender their passports and put up a bond. But this is one -- one former employee of Enron I just spoke to, Kyra, said to me, "This is like the Astros winning the Super Bowl." It is a big, big day for a lot of people in Houston.
Enron was one of the biggest companies in the entire country, but it was one of the biggest employees -- employers in Houston. It was absolutely huge. And Ken Lay and Jeff Skilling having maintained for the last four years that they didn't do anything wrong. They have been blaming their former chief financial officer, Andy Fastow, who is one of 16 former Enron executives who has pled guilty, and in some cases supported the government in its effort.
The government needed this trial to show that they can enforce laws that allow -- that allow investors to feel safe in the markets. And this is the biggest corporate trial of the century. The government got a conviction and a lot of investors can feel a little bit safer today because of it -- Kyra.
PHILLIPS: A lot of new laws in place as well. I asked Jeffrey Toobin this. What do you think? Hopefully this will be last trial of this magnitude. Jeffrey obviously said -- and you know this -- I mean, corporate crooks aren't going to go away, but this was pretty massive and set quite an example.
VELSHI: And, you know, one of the things about this that's complicated is that these cases have been complicated. They involve accounting, they involve all of these kinds of things that the judge is very concerned and the prosecution is very concerned about making sure the jury could connect. And this jury sat here for months and listened.
PHILLIPS: Ali, stay with me and listen to this -- listen to this with me.
VELSHI: Yes.
PHILLIPS: Government press are going on -- Enron task force, Ali. Let's listen.
SEAN BERKOWITZ, PROSECUTOR: You can't lie to shareholders. You can't put yourself in front of your employees' interests. No matter how rich and powerful you are, you have to play by the rules.
I want to say a few words about the victims in this case, those who lost their security and their retirement. Nothing that happened today is going to bring that back for them. They're not going to get their retirement money or their security back. What we do hope is that today's verdict lets them know the government will not let corporate leaders violate their trust and get way with it.
Many victims have personally come up to all of us throughout the trial and thanked us. They don't need to do that. We're doing our job and we're proud to do our job.
I'm proud of everybody on this team, and we'll introduce all of the lawyers -- Mr. Hueston, Ms. Rumbler (ph), Mr. Wilton (ph), Mr. Wise (ph), Mr. Strickland (ph), Mr. Atkins (ph), and Mr. Stolber (ph), who can't be with us.
The FBI has conducted a five-year investigation that has ended with today's verdict. And no matter how complicated or sophisticated the fraud that you might think of perpetrating, know that people like this stand ready to investigate and to try the cases as necessary.
To those who would think in the future of fraudulently misrepresenting your company to the public, know that people like this are ready. People like this are ready, and you will be held accountable for your actions.
I want to thank you. And I want to turn it over to Mr. Hueston, who wants to say a few words.
JOHN HUESTON, ENRON TASK FORCE: In the last few months of 2001, Ken Lay had a chance to prevent the outcome that happened. To prevent an outcome that threw thousands of employees out of work, to prevent the loss of retirement funds, of pension plans, of billions of dollars of investors' monies. He had a golden opportunity to save Enron, but he made a fateful choice in late 2001, and he made that choice to put his own interests ahead of that of his shareholders and investors.
And he did that by choosing not tell the unvarnished truth, and he did it by choosing not ask the hard questions. Not to ask the easy questions, when they were put in his own hands to ask, choosing time and time again to put himself in front of the investors, causing a collapse that has devastated America. This jury has spoken. CEOs cannot hide behind accountants, they can't hide behind lawyers, they can't hide behind claims of ignorance. That's especially when they've been paid tens of millions of dollar to be the faithful stewards of shareholders and investors.
This jury has spoken and they have brought justice. We are proud to be a part of that justice.
QUESTION: Mr. Hueston, what was your personal reaction when you heard Lay's verdict come down?
HUESTON: My personal reaction was that, with these verdicts, that people will have confidence in the United States to effectively and exhaustively prosecutor fraud wherever it is, even at the highest levels of the biggest corporations. And I was proud for all of that is we were able to work hard with the FBI and others to do that.
And we will continue to do that wherever we find fraud in any corporation. And I hope that brings people to be confident in us and our abilities. There was no personal reaction. It was just pride in the team and our effort.
QUESTION: Were you surprised (INAUDIBLE)?
BERKOWITZ: We were -- we were not surprised by anything. I think what that shows is that the jury carefully went through all of the evidence and considered everything. And we're very pleased with the hard work that the jury did. So we weren't surprised in any sense.
QUESTION: (INAUDIBLE) sentence. So will you all be trying to cut him a break?
HUESTON: We're going to -- we're going to calmly and objectively look at all of the sentencing factors and work to bring about a just sentence that reflects what the victims have lost and things that have happened to the community, as well as what justice should be done in the individual case.
QUESTION: What will you ask for, do you think?
BERKOWITZ: We -- there's a long process to go through, and on September 11th our positions will be clear.
QUESTION: The fact that they've shown no remorse, that they repeatedly say that they've done nothing wrong, is that going to enter into their sentencing, and the fact that you will ask for maybe a more harsh sentence because of that?
BERKOWITZ: I think personal acceptance and personal responsibility plays a very important role in sentencing.
QUESTION: (INAUDIBLE)?
UNIDENTIFIED FEMALE: I just want to reiterate what Mr. Hueston and Mr. Berkowitz said, which is this team of people that helped -- can you hear me, Mary? This team of people that helped bring this case to justice is just phenomenal. And people worked around the clock reviewing literally millions of pages of documents, many of whom most of you probably didn't see. And I know that all of us are just very, very proud to have had the opportunity to represent the United States in this case, and just to see the work of public servants coming together to present it.
QUESTION: Do you worry about appeals? I mean, the appeal process is going to be lengthy, I suppose.
HUESTON: We're not at all worried about the appeals given the good work that this judge did in this case.
UNIDENTIFIED FEMALE: Absolutely.
QUESTION: Mr. Berkowitz have said victims have come up to you?
HUESTON: Victims have sent us letters around the world, e-mails through the course of this prosecution, as well as other shareholders in other companies saying thanks for moving forward and working on this case. And that's been the kind of thing that kept us going late at night and made us feel good about what we were going to do regardless of the verdicts.
BERKOWITZ: Yes. Let me say a little word.
The personal sacrifice of everybody up here has been -- the personal sacrifice of everybody up here has been unbelievable. Nobody has worked harder than everybody who's standing here today, and people who aren't even here today. And we're very proud of that hard work.
And we did it because we believed if what we were doing, and we have not made comments throughout the trial because we let our talking in the courtroom and the evidence play out. And I do want to say, though, that throughout, people have worked into the night, many sleepless nights from everybody here, to present what you saw in that courtroom that resulted in this verdict today.
QUESTION: Who did you talk to in D.C. since the verdict was announced?
BERKOWITZ: Our people at the Justice Department had public statements to make and we've spoken with them.
QUESTION: What kind of personal calls have you gotten since then?
BERKOWITZ: You know what? We have been busy talk amongst ourselves, and we have not had time to reflect on this. And I think that unless there's anything else, we're probably going to -- probably going to step aside and go get a well-deserved drink and an afternoon off.
(LAUGHTER)
QUESTION: What kind of a sentence will you recommend? PHILLIPS: A well-deserved drink and an afternoon off.
Ali Velshi, you might want to go join the Enron task force once the day wraps up here. I understand, Ali, you've got an alternate juror?
OK, no. I'm being told she's working her way up to the mic.
Is that right, Ali? You're going to be talking to one of the alternate jurors in a moment?
VELSHI: I'll be talking to one of the -- yes, right. She was in -- you know, she was an alternate juror, which means that...
PHILLIPS: That's all right. Grab your mic there, pal.
VELSHI: Put on my mic here.
PHILLIPS: You started thinking about that day off and the drink with the task force.
VELSHI: Yes, exactly. Well, you know, these guys were working like beasts. They have been -- they have been totally -- you know, for four years, like thousands and thousands of pages of documents. But it's kind of like the news business, Kyra, because what they had to do is they had all sorts of stuff, and they knew there was no way you can just drop that into the jury and have them figure that out.
And what the jurors -- and we'll hear from one of the alternate jurors shortly -- but what they've been saying that is that -- is that, you know, they would be hearing evidence and it would go one way or another. And this is one of our alternate jurors.
Ma'am, your name is?
AMANDA PERRY, ALTERNATE JUROR: Amanda Perry.
VELSHI: And you were an alternate, right? So you were in the -- you were in the court the whole time, you heard everything?
PERRY: Yes.
VELSHI: We were just talking -- Kyra Phillips was just talking to me about what you guys went through. What were you thinking? This was one complicated case. IT was complicated for us to follow it as reporters.
PERRY: Right.
VELSHI: How do you feel about that? How complicated was it?
PERRY: It was extremely complicated, especially going into not having any clue about accounting or anything in that nature. But both sides did an excellent, excellent job in presenting their cases and making it so we could understand it. And they -- everything was very clearly pinpointed. And they took a lot of time to do it, but I think in the end it was worth it, because we did have a clear understanding.
VELSHI: Did you feel when you got into that jury room that the case was clear one way or the other? Did you know which way you were leaning?
PERRY: No. From the beginning, you know, they told us -- I -- most of us in there had no idea what exactly had happened at Enron, why it had -- went bankrupt. We didn't know the details of it. And so, going into it, we couldn't judge on what happened.
And so we went into it, and the first time we saw them, the first things we heard, they were intelligent individuals. We admired them for the strength they had to build the company to what it was. And -- but you've got to look at the law that's in front of you and you've got to look at the facts that are in front of you.
VELSHI: Did you feel at any point that there was a message to be sent on -- for all those people who were hurt by the collapse of Enron?
PERRY: I think like Deb (ph) said that it should -- the SEC should try and clear up some laws so that it can stop it from happening again since it's not the first company that did. And hopefully it could be the last.
VELSHI: So the message is not as much for Jeff Skilling and Ken Lay, but that the SEC and the government should make it better for people?
PERRY: Oh, definitely for them, because, I mean, this company, their witnesses, as well as the prosecution's witnesses, had said over and over again that this company was their world, it meant everything to them. Well, if it's their world, then why did they rely on so many people to tell them so many details and facts about what was going on?
VELSHI: So you really do believe that there's something to the fact that Ken Lay and Jeff Skilling were duped by some people? You feel that some people did do things that they didn't know about?
PERRY: I think so. But I think that if it would have been a hands-on thing like they claim to be -- you know, they claim to be very hands-on people, and this company was their world. And I think that if it was that, this won't wouldn't have happened.
VELSHI: And one last thing. When Ken Lay and Jeff Skilling took the stand and testified in their own defense, what -- how, if anything, in any way, did that change your opinion of them?
PERRY: Not a lot, because still on the stand they had to -- they were -- you know, they had a great presence about them. They did great things for the community. They were very intellectual people.
I think, you know, like Ken Lay lost his temper a little bit, but who wouldn't when you're in that situation? I mean, nobody knows what he's feeling but him. You know, this puts an -- you know, an enormous amount of stress on him and his family for the past four years. And who knows what he's feeling. He wants his side and his point to be heard.
VELSHI: How do you feel about them today? Do you feel bad they're going to jail, like Ken Lay may spend the rest of his life in jail?
PERRY: Oh, of course. I mean, you know, he's got kids and grandkids, and I hate to see that to happen to anybody. Nobody want that.
VELSHI: Good work in the jury room. And thank you for joining us.
PERRY: Thank you.
VELSHI: So, Kyra, rather than me telling you about the jury, you get to hear it right from somebody who was in there. It looks like that case was complicated and that jury worked really, really hard to try and come to the right decision.
PHILLIPS: Ali Velshi, thanks.
Well, another developing story. Dig carefully, you never know what you might find. That's the instruction to work crews right now at a Michigan farm where former Teamsters' leader Jimmy Hoffa may be buried.
It took three hours to tear down a barn at the farm yesterday. And if you might notice -- there you go. There's the videotape that we have of it.
They are actually digging up a concrete floor to see if anything is underneath it. You may remember Hoffa disappeared in 1975, about the same time the barn was built on the farm owned by a Hoffa associate.
Live pictures now via one of our affiliates out of Michigan there, WDIV. You can see an overall view of where that dig is happening on that barn.
Well, coming up, tough talk for some U.S. Marines serving in Iraq after reports of civilians being killed for no reason. Our Jamie McIntyre's at the Pentagon with the story.
You're watching CNN, the most trusted name in news.
(COMMERCIAL BREAK)
PHILLIPS: Almost a week after the FBI searched the Capitol Hill office of Congressman William Jefferson, more fallout. A law enforcement source tells The Associated Press investigators copied some of the material on Jefferson's computers.
CNN Justice Correspondent Kelli Arena keeping an eye and probing into definitely what she's learning in Washington right now.
Kelli, we've heard a lot about -- or I guess a lot of talk about a possible compromise between the Department of Justice and the congressmen. What are your sources telling you?
KELLI ARENA, CNN JUSTICE CORRESPONDENT: My sources are saying over their dead bodies, Kyra. They feel that the FBI went in there with a judicial warrant, that this is a felony that they are investigating, and that they had the right to do it, they were perfectly on legal ground, and that you cannot put the cat back in the bag. And they already have the documents, that this is just public posturing. And at the end of the day, they're going to keep their documents.
PHILLIPS: So I understand the FBI wants to interview members of Congress as part of its leak investigation into who told "The New York Times" about the NSA's domestic surveillance program.
ARENA: Right. Right. Another story with more friction. Yes, they need more friction there.
PHILLIPS: Well, a lot of antagonism going -- who do they want to talk to?
ARENA: Well, they want to talk to Senate and House leaders from both parties. There's a very small universe of people who would have had that information. And so obviously if you are going to investigate who leaked the information, you need to talk to the people who had it in the first place.
PHILLIPS: Why do officials believe it's necessary?
ARENA: Well, because they feel that in order to look anyone in the face and say, we've done a thorough investigation -- you know, this wasn't just, you know, a brush-over, we did your job, we did -- you know, we went to every avenue that we needed to -- to maintain credibility in an investigation, you need to talk to all of the people who may have been involved.
PHILLIPS: It's unprecedented.
ARENA: It's not unprecedented.
PHILLIPS: No?
ARENA: There have been leak investigations before concerning 9/11 intelligence, where congressmen have been interviewed. So this is not a precedent-setting move by any means.
Again, you know, officials say, we are investigating a crime, and so we have to follow the evidence where it leads us. And if that leads us into a congressman's office, well, you can, you know, bet your bottom dollar we're in there talking to him or her.
PHILLIPS: Kelli Arena, thanks for the update.
ARENA: You're welcome.
PHILLIPS: Well, we're moving over to a much different subject, and that's lunchtime at the aquarium. Whale-sized appetites, razor- sharp teeth, they call it a feeding frenzy for a reason.
CNN's Sean Callebs has a front row seat at the all new Aquarium of the Americas in New Orleans. I was kind of hoping to see you get in on the action. Maybe you are going to.
SEAN CALLEBS, CNN CORRESPONDENT: If I'm unlucky I will.
First, I want to show you what it looks like up here. We have Michelle, Elizabeth and Nicole. And I'm going to do a little bit of feeding here, too. But we also have a shot from down there, so you see just how beautiful it is and how much work they've done on this aquarium.
The big, large sharks down there are sand tiger sharks.
Is that right?
And that's what Elizabeth is going to feed.
Elizabeth, you have this long grappling (ph) pole. They won't let me do it because they don't trust me. But they've actually -- the thing grabs the tongs and runs off with it. But watch as this tiger shark I guess just senses it, because they do this every day.
PHILLIPS: Why don't the aggressive sharks eat the other fish in the tank, Sean?
CALLEBS: Do you know why the sharks don't eat the fish in the tank?
Because these fish are fed very well. The sharks are fed very well. They're not hungry. And normally they would only go after another fish in here if it showed, like, some sign of being weak or something like that. Like if I fell in, that would be a way...
PHILLIPS: All right. What are you -- you know, that's -- what is that a manta ray? What is that?
CALLEBS: Yes, that's a manta ray. What is this? A mackerel?
UNIDENTIFIED FEMALE: Yes.
CALLEBS: This is a mackerel. Watch this guy. Come on, fellow.
PHILLIPS: Now wait, this...
CALLEBS: Look at him.
PHILLIPS: Their tails can sting you, right?
CALLEBS: No, they can't sting you.
PHILLIPS: The tails aren't poisonous? Am I thinking of something else?
CALLEBS: You're not thinking of a manta ray or a sting ray. PHILLIPS: Oh, that's what I'm thinking of, right? Big difference.
CALLEBS: Now they're all laughing at me.
PHILLIPS: OK. That was my stupid question.
All right. So what do you think? Which one is the most aggressive out of the sharks, do you think?
CALLEBS: There's one in there that they call Sid Vicious, and it's the female. And it is a piece of work.
They say very frequently it will grab the pole. That -- is that Sid, the one that just grabbed it? Sid's the big one there.
PHILLIPS: OK.
CALLEBS: Sid is the largest of the three that I've seen in there. Man. You know, I felt really comfortable when the rope was up here. There was a rope a while ago, and it's gone.
PHILLIPS: Well, I think we can see them under water right now. Is he the biggest one in the tank, Sid, Sid Vicious?
CALLEBS: Yes, he is the biggest one in the tank.
PHILLIPS: Oh, yes, we saw him.
CALLEBS: Come here, fellow.
PHILLIPS: Let's not call him over.
Now, how do they -- how do they clean these tanks?
CALLEBS: I'm struggling.
You know, it's amazing how they clean them. Actually, jump in there. They put three divers in there.
I'm going to let Nicole and Elizabeth continue to feed. Let me show you something.
PHILLIPS: OK.
CALLEBS: I'm going to scoot away for just a second.
PHILLIPS: Oh, I kind of wanted to see you feed the manta rays a little more, but that's all right.
CALLEBS: Well, I'll feed the manta rays. Don't worry.
PHILLIPS: OK. Very different from the stingray, FYI.
CALLEBS: So what happens there, they put three divers in the water. PHILLIPS: OK.
CALLEBS: And one of the divers cleans the tank and the other two have these PVC pipes. And if the sharks get too close, then they just poke them away with this PVC pipe. So that's how it's done.
PHILLIPS: OK.
CALLEBS: But they said, you know, they always feel -- whoa, did you see that one? That is one big shark.
PHILLIPS: Ooh, we missed that. OH, wait. We're seeing it under water now. Here's he comes again. He's coming back up there.
CALLEBS: The shark is?
PHILLIPS: Yes.
CALLEBS: Wow.
PHILLIPS: Yes, there he is right there. He's coming -- we see him under water, and he's coming up close to where you are.
CALLEBS: See, I think that's a brown shark, isn't it? This is a brown shark?
UNIDENTIFIED FEMALE: That's a nurse shark.
CALLEBS: That's a nurse shark. The brown sharks usually lie on the bottom all day long.
PHILLIPS: OK.
CALLEBS: Come here, little fellow. Here, manta ray.
PHILLIPS: Where did all of these animal come from, Sean?
CALLEBS: You know, that's a great question, Kyra. A lot of these animals -- oh jeez. A lot of these animals were donated.
The sharks actually came from South Carolina, the Ripley's Believe it or Not Museum. So, only -- but the rays came from, if I'm not mistaken, Sea World in Florida.
And they're used to being -- these rays were actually petted. So they're used to being hand fed.
PHILLIPS: OK.
CALLEBS: And the tarpon were actually caught off the Louisiana coast up in the area called Grand Isle during the great tarpon rodeo. And so they -- then they brought those up here.
The sea turtle, sea turtle is one resilient animal. When all of the power went out and 10,000 animals got killed in this aquarium, the sea turtle, the tarpon, and I believe the alligator gar were the only three in this Gulf exhibit to live. And the way they were able to do that, they can come up to the surface and they can gulp air.
The rest of the fish couldn't do that so they all died. So really, it has been an amazing amount of work in a matter of months to get this ready.
And Kyra, you've been down here. You know how important it is to tourism.
PHILLIPS: I know. It is, yes.
CALLEBS: I mean, the quarter has stuff for adults, but this is something for the whole family. So they're eager to get this place up and running again.
They had a million visitors last year. That adds up to, you know, tens of millions of dollars for this community. And it's going to great once it gets fully up and running.
So we get a little behind-the-scene tour.
Oh, I guess this is where they're feeding the sea turtle. This guy here is named Midas. I got here just in the nick of time. Our good buddy David is just finishing up.
PHILLIPS: Wow. Midas is an appropriate name for him.
CALLEBS: In the next hour, we're going to be with David and we're going to hang out with the penguins. So you'll have to check that out.
PHILLIPS: All right.
CALLEBS: Those things, they look so nice and docile. And those beaks will just rip flesh from your arm. So you really have to approach them in a very delicate way. But you can't see, the next hour we'll show you David's hands, all scarred up from the beaks of those animals.
PHILLIPS: Poor Dave. All right.
CALLEBS: I'm going to jump on this tortoise right now.
PHILLIPS: OK, yes. Let's see you go for a little swim. All right.
Then we'll see you back next hour. And you're right, Sean, it's pretty awesome to see them up and running, and it is a great tourist attraction.
CALLEBS: It's good news.
PHILLIPS: Yes, it sure is. It's great for the economy there.
Thanks, Sean. We'll see you next hour.
Well, America has a new geography champ, and he's going join us a little later in the show as well. If you don't know atoll from an atoll, then you probably won't know the answer to this question from the bee.
Name the judicial capital of South Africa. You can see your choices. You'll get the answer when LIVE FROM continues.
(COMMERCIAL BREAK)
PHILLIPS: All right, here's the question we asked just before the break. What's the judicial capital of South Africa? Pretoria, Bloemfontein or Capetown. What did you say? We're not going to give the answer? Is that what you said? We're going to let Susan answer it? Oh, perfect. OK.
We were going to say -- well, we are going to meet the 12-year- old who knew the answer to that and a whole lot more coming up in the show. He actually won the geography bee. But Susan, what do you think? Do you know what the judicial capital of South Africa is?
SUSAN LISOVICZ, CNN CORRESPONDENT: I did not know until I cheated and looked at script. Even though I've been to South Africa and I guessed wrong. I was there on assignment for ten days and still did not know the answer.
PHILLIPS: What was your assignment?
LISOVICZ: It was to cover the first democratic elections in South Africa.
PHILLIPS: Well, that's pretty awesome.
LISOVICZ: Tremendous experience, yes.
PHILLIPS: Yes, no kidding. All right, it's Bloemfontein, I'm told, B. And I had to practice saying that correctly because I would have completely butchered it. Bloemfontein. There you go. Brilliant. He's so brilliant.
All right, we've been talking about this all afternoon, Susan. Ken Lay, Jeffrey Skilling, found guilty on fraud and conspiracy charges in the Enron trial. If I remember correctly -- when was it you interviewed Ken Lay?
LISOVICZ: I interviewed Ken Lay the year that the company collapsed, but under very different circumstances. The very beginning of 2001, he was attending one of the most elite business conferences in the world, the World Economic Forum in Davos, Switzerland. This is where prime ministers and presidents and other rock star CEOs like Bill Gates and Jack Welch are commonplace. And he was there. And the interview was very much about the success and the extraordinary, dynamic nature of the marketplaces and how Enron was able to seize and capitalize on it.
And I find it, of course, ironic that by the end of the year, the company had collapsed in the biggest bankruptcy at the time, and that he didn't -- he said that he wasn't at fault. He didn't take any of the blame, basically. But he took a lot of the credit, and didn't wash with a lot of people, including 12 jurors today in Houston.
PHILLIPS: Well, were you surprised by the verdict? And what did you think about the defense's strategy?
LISOVICZ: I was not surprised by the verdict at all. You know, Kyra, one of the best books on this is written by our colleagues over at "Fortune" magazine. It's called "The Smartest Guys in the Room." And the basic gist is that this was no accident that Jeff Skilling and Ken Lay were running one of the biggest and most successful companies in the world. And I think that jurors found it very hard to believe that these kind of hands-on managers simply did not know what was going on.
As for the defense, it was an interesting defense, as well. They were blaming market forces. Let me read you quickly a quote from Ken Lay himself while he was on the stand where he says, "We thought 'The Wall Street Journal' was on a witch hunt against Andy Fastow and maybe Enron. It was absolutely destroying the confidence of our shareholders and the company and driving down the price of our stock." And, obviously, jurors just didn't accept that. They thought that the principals of the company, the CEO -- and Ken Lay, of course, is the founder of the company.
PHILLIPS: Well, there have been a number of high profile convictions and corporate scandals, including WorldCom, Tyco, Imclone. You've covered all of these. Why do think there's been such a fascination with Enron?
LISOVICZ: You know, it spoke so much of the times, both the great times and the bad times. Enron, a dynamic company, really embodied the promise of the 1990s and the go, go '90s and that the market was only going up. And when it collapsed, there was so -- there was such a web of deceit and conspiracy. It wasn't only just the principals involved. Arthur Andersen went down in flames. There was criticism that Arthur Andersen signed off on it. It was too big of a client to say no to. Banks loaned them money on very risky or questionable deals.
It was something that really affected investor sentiment. It destroyed $2 billion of pensions, $60 billion in market value, at least 5,000 jobs. So it was something that was just tremendously huge. And it did affect market sentiment. And something like Sarbanes-Oxley and some of the activist shareholders that we've seen are direct results of that kind of scandal -- Kyra.
PHILLIPS: All right, Susan Lisovicz, thank you so much. We'll continue to check -- let's see, what do we have? Yes, we got about another hour and a half, so we'll check in on the markets and talk more as we get closer to the closing bell. There's some numbers right there. You want to just give us a quick pop before we go?
(MARKET REPORT)
(COMMERCIAL BREAK)
PHILLIPS: Battle-hardened is one thing, but are U.S. marines in Iraq becoming indifferent to human life? Their top general is so concerned that he's on his way there himself.
CNN senior Pentagon correspondent Jamie McIntyre joins me with more on that. Give us a little background, Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Kyra, this is an indication of how seriously the Pentagon take this. The Marine Corps' top general, Michael Hagee, the Marine Corps commandant, he's on a plane right now on his way to Iraq to give personal remarks to U.S. troops there, particularly marines, in the wake of two investigations out that are looking into allegations that marines may have murdered innocent civilians.
The allegation is that in November of last year, in Haditha, a group of marines went house to house and slaughtered civilians, perhaps as many as 24, and that then tried to cover up the allegation with a story that said that the civilians had been killed by a roadside bomb and then a firefight that resulted after that.
Again, the marines are taking this so seriously that today they dispatched a general up to Capitol Hill to brief members of Congress about this and also a second allegation that just surfaced yesterday that a smaller group of marines may have killed an Iraqi civilian west of Baghdad in April.
Afterwards, Senator John Warner, chairman of the Senate Armed Services Committee, came out and talked to reporters about the allegations and about General Hagee's trip to Iraq and other marine bases.
(BEGIN VIDEO CLIP)
SEN. JOHN WARNER (R), ARMED SERVICES CHMN.: He's taking this matter extremely seriously and he felt that it was his duty to go over and personally look into this situation and personally talk to those Marines in country to assure them that the highest standard of the Corps are to be kept by every Marine from private to general. He expects no less, nor do the people of this country.
(END VIDEO CLIP)
MCINTYRE: Senator Warner said that, based on his 30 years of experience -- and, of course, he's a former Navy secretary -- he thought that these were some of the most serious charges of a potential atrocity committed by U.S. troops that he was aware of.
Here's just, by the way, some of the things that General Hagee is going to be telling the troops according to someone who copied his remarks provided by his staff. He says, quote, "Recent allegations concerning actions of the Marines in combat have caused him concern." He says to his Marines, "They should cause you concern as well."
He said, "The most difficult part of courage is not the raw physical courage, it's rather the moral courage to do the right thing in the face of danger and pressure from other Marines." He says, "We do not employ force just for the sake of employing force. We use lethal force only when justified, proportional, and most importantly," he says, "lawful."
Again, an indication of how seriously they take this, that he's personally going to Iraq and then he's going to travel back to the U.S. and meet with Marines in Camp Lejeune and Camp Pendleton to underscore this message. This in advance of even the final investigation being made public -- Kyra.
PHILLIPS: All right, Jamie McIntyre, thanks so much. And we do expect to hear more on this tonight, definitely more on Iraq tonight. CNN is going to have special live coverage of the Bush-Blair news conference. Wolf Blitzer will be in "THE SITUATION ROOM" at 7:00 Eastern. The leaders meet with reporters at 7:30, so stay with CNN for complete coverage.
Stopped in their tracks, even in their tunnels. Amtrak and regional commuter trains stalled by a power outage on one of the busiest rail lines in America at the height of the morning rush. It took more than two hours to get the trains and tens of thousands of passengers moving again on the northeast corridor between D.C. and New York. No words yet on what caused that outage.
And later on LIVE FROM, the winner of the National Geography Bee is going to join me, and we're going to put him to the test, of course. In the meantime, see if you could be a champ. Here's an actual question from this year's bee.
Twice a month near the time of the new and full moons, tidal ranges are greater than normal? So what is the term for these tides? There's your choices. Well, they're kind of going far away. Sorry about that. I don't know if we can get closer to them again. We'll tell you after the break. How about that?
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PHILLIPS: Do you know the answer? What are those tides near the new and full moons called? Autumnal, equatorial or spring tides? The answer is, A, autumnal.
And now time for all of us to feel just a little inadequate, at least when it comes to geography. The National Geographic Society has a new champion, and if you don't know your globe from a hole in the ground, well, pay attention here to Alex Trebek.
(BEGIN VIDEO CLIP)
ALEX TREBEK: Name the mountains that extend across much of wales from the Irish Sea to the Bristol Channel. Time is up.
Neeraj did not have enough time to write down a response. Bonny Jain wrote down Cambrian. The correct response is Cambrian. Bonny Jain, congratulations. You're the National Geographic Bee champion.
(END VIDEO CLIP)
PHILLIPS: And here he is. Bonny Jain, the National Geography Bee champion, and with a big, fat scholarship check to boot. Hi, Bonny.
BONNY JAIN, NATIONAL GEOGRAPHIC BEE CHAMP: Hello.
PHILLIPS: Well, I'm not even going to attempt to duel with you, because I'll admit it right now, and I'll get it -- just lay it out on the table. I know you will beat me with every question, so I'm not even going to attempt to challenge you. But I do have a couple of questions for you about news stories that we've been covering today. So can I throw them out and see if you can answer them?
JAIN: Sure.
PHILLIPS: OK, a couple of stories that we've talking about. One story in the news today is Mt. Everest. I don't know if you heard about the death that took place. It's actually a pretty sad story but got a lot of people talking about the mountain and climbing the mountain, which leads us to the question, it's the highest mountain in the world, but what is the second highest mountain in the world?
JAIN: It's K2, also known by the name of Godwin-Austen.
PHILLIPS: OK, now, we knew it was K2, but we didn't know -- it's also known as what?
JAIN: Godwin-Austen.
PHILLIPS: Outstanding. Do you know the history behind that name, by chance?
JAIN: It was the name of some British surveyor or general.
PHILLIPS: I love it. All right. We've been also talking about the penguins at the New Orleans Aquarium, at the Audubon Zoo. Do you know the tropical zone where penguins are -- well, where they are indigenous? Which tropical zone?
JAIN: They're indigenous in the Galapagos Islands.
PHILLIPS: You got it.
All right, the final one. Another story that we've been covering internationally. East Timor, do you know the capital?
JAIN: Dili.
PHILLIPS: You even said it better than us, because we said Dili. Say it properly for me?
JAIN: Dili.
PHILLIPS: Dili. Outstanding. Bonny, I knew you were going to ace every one of those. So do you spend all of your time studying maps and studying books? I mean, how -- or is this just something that comes naturally for you as you have been reading throughout school?
JAIN: Well, in last three years I've been studying a lot for this.
PHILLIPS: Tell me how you study. What do you study?
JAIN: I'll like, look over my atlas a lot and I'll read encyclopedia articles, including like Wikipedia, and Britannica, Encarta. Then I'll make notes from the encyclopedic articles and the atlas. And I have over, like, 1,000 pages of notes total if I were to print them out so ...
PHILLIPS: So every day did you study like that?
JAIN: Yes. I studied almost every day for the last -- for a few years.
PHILLIPS: How many hours a day?
JAIN: In last two or three months, combined with time for the spelling bee, I've been spending four hours every day and eight hours every weekend.
PHILLIPS: Oh my gosh. So what do you do for fun or is that fun for you? Do you really enjoy it?
JAIN: It's fun, but other than that I like to play tennis, play video games, swim. I play violin also so ...
PHILLIPS: Wow. Well, I should have gotten you to bring your violin. So, who's inspired you to do this? Is this something that you were interested in as a very young child or did someone say, hey, I notice you've got a gift for this? What do you think of becoming an expert?
JAIN: Well, I've been interested, like, since my parents -- they got me this one dictionary and it had a list of countries in the back and it had a small map of the world along with flags. And I'd just like, look over that every single day and I really got interesting into geography. Then a few years later, I watched the National Geography Bee on T.V. and that's when I decided I wanted to do this.
PHILLIPS: Are your parents really smart?
JAIN: Yes. They're pretty knowledgeable about geography too.
PHILLIPS: All right, but you probably -- I mean, you probably top them when it comes to geography, yes?
JAIN: In some place, yes.
PHILLIPS: You're being humble. So what do you want to do when you grow up?
JAIN: I want to go into the field of physics, by a physicist.
PHILLIPS: Say that again, I'm sorry.
JAIN: Physics. PHILLIPS: Physics, really? Are you hoping to discover something -- put your blueprint on something?
JAIN: Yes. I want to do that.
PHILLIPS: Have you already thought of something?
JAIN: Not in particular yet, but there's still time.
PHILLIPS: Obviously, you have plenty of time. So where's the -- your most favorite place that you have traveled to?
JAIN: I'd probably say the city of Jaipur in northwestern India, it's just west of New Delhi.
PHILLIPS: What's your background? Are you from India, is your family from India?
JAIN: Yes.
PHILLIPS: Well that's amazing. Do you know a lot about places that you've never been to that maybe you want to go to?
JAIN: Yes. I mean, the place I'd like to go the most are the Greek and Roman ruins. They say a lot about ancient culture and architecturally they're also great wonders.
PHILLIPS: Well I think you should tell your parents that's where you want to go next for spring break. We'll be following you to the spelling bee. I understand you're going to be competing in that as well.
JAIN: Yep.
PHILLIPS: All right Bonny. Bonny Jain, congratulations, great talking to you.
JAIN: Thank you. Nice talking to you, too.
PHILLIPS: Well straight ahead, entertainment news with Sibila Vargas of "SHOWBIZ TONIGHT." I don't know Sibila, can you top that?
SIBILA VARGAS, CNN ENTERTAINMENT CORRESPONDENT: No been but the only geography that we needed to know last night was what was happening in Hollywood, Kyra, at the Kodak Theater. Not the Oscars, the "American Idol" finale. The winner and the highlights when LIVE FROM returns.
(COMMERCIAL BREAK)
PHILLIPS: The national suspense level is a notch lower today in the Katharine or Taylor discussion has finally been settled. It's "American Idol," folks, and we're all nursing our "Idol" hangovers. Well, everybody else probably except me. I didn't see it, but Sibila Vargas, I know you've been tracking it. I know millions of people watch this show. VARGAS: Absolutely. So do you know if it was McPheever of Soul Patrol?
PHILLIPS: Actually yes, I'm hip to the lingo, thanks to my crew.
VARGAS: You got that. Well, it was certainly the night millions of fans around the world have been waiting for.
(BEGIN VIDEO CLIP)
RYAN SEACREST, HOST, AMERICAN IDOL: Taylor Hicks.
(END VIDEO CLIP)
VARGAS: And so it goes, the fifth season of T.V.'s ratings juggernaut ends with Taylor Hicks as the last man standing. A dream come true for this Alabama native.
(BEGIN VIDEO CLIP)
TAYLOR HICKS, AMERICAN IDOL: I was just telling myself when Ryan and Katharine, I was just -- don't fall to the floor. Don't let your knees buckle. And I'm living the American dream.
(END VIDEO CLIP)
VARGAS: More than 60 million votes were cast and when the totals were counted, 29-year-old silver-haired soul man beat out the California cutie, Katharine McPhee. In addition to the crow-pleasing performances by Taylor and Katharine, current and former "Idol" favorites also took the stage, as well as this show-stopping performance by this guy.
(BEGIN VIDEO CLIP)
PRINCE, SINGER: (SINGING)
(END VIDEO CLIP)
VARGAS: That's right, his royal funkiness, Prince, was there. But he was not the only star power to entertain a packed house at Hollywood's famed Kodak Theater. Legendary songwriter Burt Bacharach played the piano as this season's top 12 took turns singing some of his greatest hits, a great moment there.
And Dionne Warwick pleased the audience with a melody of tunes, including "That's What Friends Are For." It was a touching moment for this year's finalists, who clearly have become friends off the stage. But in the end, the night belonged to Taylor Hicks, the fifth "American Idol," who sang the show to its close.
(BEGIN VIDEO CLIP)
HICKS: Come on, America. I'm living the American dream. (SINGING)
(END VIDEO CLIP)
VARGAS: And he certainly did make a lot of people proud last night. And tonight on "SHOWBIZ TONIGHT," more "Idol" worship. What Taylor Hicks told "SHOWBIZ TONIGHT" about being named new "American Idol." But did he really deserve to win? The "Idol" frenzy on the T.V.'s most provocative entertainment news program. "SHOWBIZ TONIGHT," 11 p.m. Eastern on CNN's Headline Prime. Back to you, Kyra.
PHILLIPS: I don't know, I think I was kind of digging Prince. He was sounding pretty good there. It's been a long time since I've heard him.
VARGAS: Absolutely, he looked pretty good too. Not bad. That guy never changes, never ages.
PHILLIPS: Always has the beautiful dancers, though, around him. Thanks, Sibila.
Well an elementary school principal turned Enron juror. What really happened in the deliberation room and what did it take for a jury of their peers to convict Enron's top dog? The last hour of LIVE FROM in just a moment. You're watching CNN, the most trusted name in news.
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