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President Bush Promises Justice in Haditha Investigation; Alabama Police Search For Abducted Attorney

Aired May 31, 2006 - 15:00   ET

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


KYRA PHILLIPS, CNN ANCHOR: Our top story at the top of the hour: the search for an attorney that appears to have been abducted out of a parking lot now being held by her captor, going from ATM to ATM.
Carol Lin working the story for us in the newsroom.

Any more details?

CAROL LIN, CNN ANCHOR: Kyra, we are trying to enhance the video that we just got in. It's surveillance camera videotape of this parking lot.

Look in the upper left-hand corner. There you go. You see the silver SUV pulling into that parking space there? And we are -- we are trying to enhance it as well. But you see Sandra Gregory getting out of her car. All right. And, at some point, there is a -- kidnap suspect who comes up. I don't think we see that point, but we are -- we are kind of debating that in the newsroom right now.

At one point -- all right, let's see if this is the guy. Here we go. So, he encounters her there behind the car, pushes her. There's kind of a fight on the other side of this vehicle. And she pushes back. She pushes back. She's not going into this vehicle willingly. All right, but, eventually, they end up getting inside the SUV, and the SUV drives off.

PHILLIPS: So, it was the man that was walking...

LIN: It was.

PHILLIPS: It was?

LIN: It was.

PHILLIPS: OK.

LIN: We have got a -- I have had another chance to take a look at this videotape.

We were talking about whether there was someone behind that, you know, that black car...

(CROSSTALK)

PHILLIPS: Right. LIN: ... that she's parking right next to, or if, in fact, it's this guy who is -- you are about to see walking down this alleyway or side street.

PHILLIPS: Well, at least there are some details on the suspect that has allegedly abducted her, when we see him walking down. At least we can see. It looks like he's in black pants and possibly white tennis shoes, a white shirt.

LIN: Here he is.

(CROSSTALK)

PHILLIPS: ... right here, black pants, possibly white tennis shoes...

LIN: Right.

PHILLIPS: ... and some type of...

LIN: Witnesses -- there was a witness at the scene who described him wearing a striped shirt and sunglasses.

PHILLIPS: OK.

LIN: She's wearing a red tank top and black capri pants with silver earrings.

PHILLIPS: And, of course, her car, a silver Lexus SUV, license plate IC4850G (sic).

You actually talked to one of her law partners as well. He said that might have been her apartment complex? Or was that the...

LIN: Right.

PHILLIPS: OK. It...

(CROSSTALK)

LIN: Her apartment complex. She lives in downtown Birmingham, near their office. And he said it's just an easy walk.

And -- and he also described her as a good talker. You know, she's a good attorney. She's really just a -- a lovely person. He could not say enough about her. And we were talking about, well, what is she -- how is she dealing with this situation?

And -- and he said, she's a lawyer. She's a good talker. If -- if anybody can talk herself out of this situation, it's going to be Sandra Gregory.

PHILLIPS: These are the skills.

Now, I'm being that told we -- the license plate number actually is a one, not an I. So, the license plate is 1C4850G, 1C4850G, a silver Lexus SUV.

And, of course, Birmingham police, homicide division, wants you to contact them or the Crimestopper number, if they think they might have gotten a visual on -- on this car, right?

LIN: Right, because she may have been seen also at these three different ATMs, at the A&M -- AmSouth Banks, because there were three ATMs that were used. Her card was used to withdraw money.

So, this is now a kidnapping. It's a robbery. Police are just working as hard as they can to try to find this woman. And it's got to help that her picture is up. There's a car seat in the back of that SUV. And her law partner told me, Kyra, that she's the mother of a young girl. You know, she's -- she's a mom.

PHILLIPS: And -- and her daughter with the grandparents right now? Is that what the partner said?

LIN: Someone had picked her up.

PHILLIPS: OK.

LIN: He didn't -- I don't think he said the grandparents, but that she definitely has been picked up and -- from school. So, she's safe right now, and as the hunt goes on for her mother.

PHILLIPS: All right. We will stay on top of this story. Let us know when you get new details, Carol.

Let's talk about Haditha, Iraq, now. You know it's just west of Baghdad. And something happened there last November, something pretty bad, even by Iraq war standards. Two dozen civilians were killed, some of them women, some of them children. And depending on whom you believe, they were either collateral casualties or gunned down in cold blood by U.S. Marines.

The quest for answers is on. President Bush is promising justice.

Let's get straight to the Pentagon and our senior correspondent there, Jamie McIntyre.

Jamie McIntyre, you have been on the story from the very beginning. How has it developed?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Kyra, one thing that is really not in question anymore is that these 24 civilians were, in fact, shot by U.S. Marines.

The question is the circumstances under which they were shot and whether or not there was any justification. CNN has talked to one of the Marines who was in one of the 12 who was in this four-vehicle convoy that got hit by an IED that November day of last year and precipitated the events that followed, in which a number of Marines went house to house and encountered these civilians. This Marine, James Crossan, was badly injured in the attack that killed one of the fellow Marines. And he described a situation in Haditha that was quite deadly, and in which it was hard to tell who the enemy was. But he was not conscious at the time these events took place and doesn't know exactly what happened.

(BEGIN VIDEO CLIP)

LANCE CORPORAL JAMES CROSSAN, U.S. MARINE CORPS: I don't know what happened. But they might have got scared, or they were just pissed, really pissed off, and did it. But, like, just, the person -- it just depends on the person. Like, after seeing so much death and destruction, pretty soon, you just become numb and really don't think about it anymore. Like, over in Fallujah, saw dead bodies pretty much every day. So, I really didn't think anything of it.

(END VIDEO CLIP)

MCINTYRE: Now, CNN has confirmed that the full-scale criminal investigation by the Naval Criminal Investigation Service was kicked off after a preliminary military inquiry determined that the official story, that these civilians had died as a result of a blast of an IED and the resulting firefight, didn't hold up, that the evidence didn't support that story.

Today, President Bush promised that there would be full accountability.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Marine Corps is full of men and women who are honorable people, who understand rules of war. And if in fact these allegations are true, the Marine Corps will work hard to make sure that that culture, that proud culture, will be reinforced, and that those who violated the law, if they did, will be punished.

(END VIDEO CLIP)

MCINTYRE: CNN has also confirmed that 15 families of victims were paid compensation by the U.S. military of up to $2,500 apiece, a total of $38,000 paid. The U.S. military stresses, though, that those payments are not admission of a mistake. They're simply recognition that noncombatants died in an operation -- Kyra.

PHILLIPS: All right, Jamie McIntyre, thanks so much.

And, also, later this hour, we are actually going to talk to one of our reporters and cameramen who knew some of those Marines. Actually, they were embedded with some -- some brothers within a different unit, and actually knew some of the commanding officers that have been reassigned since this has happened. So, we're going to talk one-on-one with them for their firsthand account of when they were there in Haditha, and how they knew some of the Marines that are tied to this incident. Well, investigations are one thing, but members of the Afghan parliament want the prosecution of U.S. soldiers confronted with the worst rioting in Kabul since the Taliban fled.

CNN Pentagon correspondent Barbara Starr is on assignment in Kabul and has reaction.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Afghanistan's parliament has called for the prosecution of the U.S. soldier responsible for the traffic accident here on Monday that sparked the worst rioting in the capital since the Taliban fled.

A U.S. military spokesman, however, indicated at a press conference that no U.S. military personnel, including the soldier responsible for the accident, because the vehicle's brakes failed, would be turned over to the Afghan government.

COL. THOMAS COLLINS, COALITION SPOKESMAN: The soldier is not under arrest. We have no indications at this time that he acted inappropriately.

STARR: At the same time, there was an acknowledgement that U.S. troops did more than just fire over the heads of the rioting crowd when the melee broke out.

COLLINS: Our initial investigation -- and, again, I want to underscore this is very early in the process -- shows that fire came from the crowd, and our soldiers used their weapons to defend themselves. There's a lot we do not know.

STARR: U.S. and NATO commanders, as well as the Afghan government, are all keeping a very close eye on the situation. Afghan troops are poised just outside the city, and the Afghan police here remain on high alert. Everyone is determined that this city will remain calm.

Barbara Starr, CNN, Kabul, Afghanistan.

(END VIDEOTAPE)

PHILLIPS: Attorney abducted.

We're following a developing story, a 34-year-old woman kidnapped in Birmingham near her downtown office.

Stay with CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: Signed, sealed and sworn in twice -- the president himself officially handed General Michael Hayden the reins of the Central Intelligence Agency a short time ago.

Today's public swearing-in was a follow-up to a private meeting yesterday with John Negroponte, the director of national intelligence. Hayden becomes the first active-duty or retired military officer to take control of the CIA in 25 years, which may explain his no-nonsense remarks to his new staff.

(BEGIN VIDEO CLIP)

MICHAEL HAYDEN, CIA DIRECTOR: The president has laid out in front of us what we have to do. And, as I said, yesterday, in the bubble, when I talked to you for the first time, let's just go to work.

(END VIDEO CLIP)

PHILLIPS: Signs of life from CBS correspondent Kimberly Dozier, the word from Landstuhl. Despite being under sedation and on a ventilator, Dozier recognized the presence of her family and boyfriend today, and squeezed her boyfriend's hand.

Dozier remains in critical condition at the U.S. military hospital in Germany, two days after the Baghdad bombing that killed her photographer and sound tech, along with a U.S. soldier and an Iraqi translator.

Chinese doctors at a field hospital, American Marines at a medical unit in a soccer stadium, multinational efforts to help thousands of people left injured, desperate or homeless by Saturday's quake in Indonesia. More than 6,000 people are dead.

CNN's Hugh Riminton is there.

(BEGIN VIDEOTAPE)

HUGH RIMINTON, CNN CORRESPONDENT (voice-over): They are still bringing the injured in. These are the overflow from hospitals unable to cope.

Ten-year-old Doni Setayawan (ph) was carried here by his father. The house collapsed on him. Infection has now set in, and there is little comfort in the treatment. He is one of hundreds being processed in a sprouting maze of military hospitals.

It is often basic, barefoot surgery in open-sided tents. Doni's (ph) father, Sunati (ph), is given antibiotics for his boy and is told to carry him home. But like 130,000 other people, his home is gone. And half-a-million more have been forced to flee because their houses are no longer stable.

Homeless children are everywhere, begging for food or for scraps of cash. More than a dozen countries are now helping directly. This is a Singaporean tent hospital, the patients fed by volunteers. The U.S. Marines have arrived, a fresh tent hospital, plus skills honed in the Asian tsunami, last year's Pakistan earthquake, and in Iraq.

(on camera): Do you learn? Is -- is there a rapid learning curve...

(CROSSTALK)

CAPT. DAVID LANE, U.S. NAVY: There's a rapid learning curve. There sure is. You can really tell the people that have been there before. You know, you really want to come here and do everything you can for everybody you see.

RIMINTON: Indonesia's president, Susilo Bambang Yudhoyono, spent a night in a tent with survivors. In just two years in office, he has faced the tsunami, volcanic eruptions, other earthquake disasters, and now this. He has become practiced at offering comfort.

(on camera): If there's a sense people are now starting to get over the first emergency phase of this disaster, there can be no pretense that this place is suddenly about to snap back to normal. Quite apart from the thousands of people dead and injured, there is village after village where there is nothing left but this.

(voice-over): Everywhere, signs of life interrupted, but amid all this, an unexpected sound. In this little village, 24 people died and 70 were injured.

"It's OK to laugh," says villager Iwan (ph). "Everything that happens comes from God," he says. "We must accept it. Be grateful we're alive. Look to the future."

For now, that future involves scavenging the ruins of his own house, where the gas bottle he bought last Friday is suddenly the most valuable thing he owns.

Hugh Riminton, CNN, Bantul, Indonesia.

(END VIDEOTAPE)

PHILLIPS: So, just what happened in Iraqi town of Haditha? President Bush vows punishment if laws were broken, specifically if U.S. Marines shot two dozen Iraqi civilians to death in November, and then tried to make the story go away.

Accounts differ wildly from the initial official report to the statements of witnesses and survivors. The Pentagon is investigating. And the White House says a full report will be released to the public when it's complete.

Well, one of my colleagues knows the Marines at the heart of all of this story personally. Arwa Damon has gone into battle with them, watched them perform under the most insane conditions and stands in awe of them.

Read along with me from Arwa's personal notes: "I was pinned on rooftops with them in Ubeydi for hours taking incoming fire, and I've seen them not fire a shot back because they did not have positive identification on a target.

"I was with them in Husayba as they went house to house in an area where insurgents would booby-trap doors, just waiting for the Marines to come through and open fire. There were civilians in the city as well, and the Marines were always keenly aware of that fact. How they didn't fire at shadows, not knowing what was waiting in each house, I don't know. But they didn't."

You can read Arwa's recollection in full on CNN.com.

Well, Arwa saw those missions firsthand as an embedded reporter. That means she and a crew went along as guests of the Marines and under their protection. It's the best and the safest way for a journalist to cover all sides of a combat mission. I have been there, too.

Gabe Ramirez has been there. He's a CNN photographer. And correspondent Jennifer Eccleston has also been there. Gabe is in L.A. Jennifer is in New York.

Welcome to you both. Great to see both of you.

GABE RAMIREZ, CNN PHOTOGRAPHER: Hey, Kyra.

JENNIFER ECCLESTON, CNN CORRESPONDENT: Hi, Kyra.

PHILLIPS: Well, I know that both of you, including Arwa, know a lot of these men personally. So, this is not an easy story to talk about.

But, Gabe, I want to talk with you. I know you got to know some of these commanding officers that have been reassigned. But you saw them in a different light. You saw them under stress. And there is definitely a certain mentality that they carry out when it comes to what Arwa said, really focusing on making the right decision under a stressful situation.

RAMIREZ: Right. Well, yes. I didn't speak to -- I didn't get to know them very well. But there was one commanding officer that I got to know fairly well who has been named.

And, yes, I mean, they -- they were very professional Marines. They didn't act any differently from the Marines I had met in -- previously. And they were working under very stressful circumstances, no doubt. And they -- they seemed to perform as well as any other unit I had been with. And I had been with several.

PHILLIPS: And, Jennifer, you know, I remember a number of your reports from there, and you were in full gear and right there in the thick of things, in the middle of it. What do you remember about the mental discipline among these Marines?

ECCLESTON: It was impressive. And it's something that I think we all reflected upon every single day, because, you know, when you're in -- a part of these embeds, you -- you live their lives. So, you gauge your sort of mental stability right alongside their mental stability.

And this -- in Haditha, at this stage, the number of IEDs that were going off every day, the sheer force of the explosions, it was the background noise to our embeds, it was the only way for these Marines to actively engage -- and that's in very loose terms -- the so-called enemy.

And that was frustrating for them. It was frightening for us, frightening for them as well. But you always had that -- the fear of the unknown. You never knew whether or not your vehicle was going to go over one of those IEDs, whether you were going to step on one, whether the guy next to you, who is actually protecting you as an embedded reporter -- they look after you rather well, as everybody knows -- they try to, at least -- whether that guy is going to go.

So, with that as a backdrop to this -- and you know, these are Marines. These are people who are trained to fight. And they weren't actually able to fight them in what they thought was -- was a level playing field. These -- they were being attacked by snipers and again through these IEDs.

So, there was a great deal of frustration. There was some anger. But, overall, it was -- at least from the time we were there, it was very tempered.

PHILLIPS: Gabe, what do you remember about how the townspeople reacted to these men?

RAMIREZ: Well, the town itself at the time was fairly deserted.

A lot of people had left, in anticipation of this invasion, or this operation. The people that were there were clearly frightened. They had voiced their concerns about -- about what was going on to Arwa, who spoke -- who speaks -- spoke Arabic. She was working as our producer at the time. They were clearly frightened.

I was going through some raw videotape that I had shot at the time earlier today. And one of the men she talked to was worried that the Marines were going to shoot him outside his house. But the Marines -- but they -- but the Marines at the time we were doing this operation were very professional, and they were walking in from house to house.

And it was tense, but they were not actively engaged in any kind of firefight. The IEDs were the main thing. And, as Jennifer can tell you, I mean, there were several instances in which the three of us were interviewing a Marine standing, unbeknownst to us, right on top of an IED.

And then, maybe 20 minutes later, an electronic explosive ordnance tech would find it. So, those were sobering moments for all of us and for the Marines as well. So, yes, the populace was -- they were -- they were naturally scared, but the -- but the Marines were, at the time, you know, acting in a very professional and a very standard operational manner.

PHILLIPS: Jen, how did these guys decompress? I mean, they're obviously stretched to the limit. Gabe, you were telling me some of these guys are on their third tour of duty.

But what do you remember, Jen, about how they, you know, come back and just try to -- to get everything all together, after being, what, hovering over an IED or having to watch a fellow Marine get shot?

ECCLESTON: You know, it -- it's fascinating. And I can recall a couple of times where -- where it actually stuck in my mind and how -- what -- when they say they're brothers, they really are.

Usually, especially, rather, on these -- at the company level, where there are some 15 guys, they are each other's best friends. They are their family. And -- and they're also their fellow Marines. And there is a great deal of affection between them.

So, when they're out there doing the job, they're out there doing the job. And it's -- it's very aesthetic. They go out. They do it. They get the -- the mission is over with. When they come back, and they can just share a joke or they start singing, or they turn on their -- their iPods or their C.D. players, and then they decompress, it's -- it's fascinating.

And it's almost incomprehensible, in a way, to understand how they could make that leap, to go out to where they're -- they're actively under this -- this cloud of fear, whether or not they're actively engaged or not, or somebody is sniping at them, or there are explosions all around them, and then they go back to -- to the forward operating base, the FOB, and -- and -- and they can sit and relax and share a joke over -- over an MRE.

PHILLIPS: Jennifer Eccleston...

RAMIREZ: Yes, I absolutely -- oh, sorry.

I -- I just wanted to say I absolutely agree with that. And I -- and they were -- they were full of humor. And they were -- they were very war weary, but they were definitely full of humor.

PHILLIPS: I'm being told, though, we're just about to lose our connection to both of you, satellite-wise.

GABE RAMIREZ, Jennifer Eccleston, we admire both of you and your work. Thanks so much for your time.

We're going to take a quick break -- more LIVE FROM next.

(COMMERCIAL BREAK)

PHILLIPS: More on that attorney that has been abducted.

Carol Lin working all the details for us -- Carol.

LIN: You bet.

And I have got one of the lead investigators on the telephone. Lieutenant Henry Irby joins me on the telephone right now.

Lieutenant, you are looking for Sandra Eubank Gregory. We have seen some dramatic videotape of when this attorney was kidnapped from the parking lot outside of her downtown Birmingham loft. Can you give us an idea of where you think she might be? Do you have any idea? LIEUTENANT HENRY IRBY, BIRMINGHAM POLICE DEPARTMENT: No idea at this time.

However, if there's anyone who has any information to the whereabouts of Ms. Sandra Eubank Gregory, they are encouraged to call the Birmingham Police Department at 205-254-1708 or 254-1764.

LIN: Lieutenant, we're showing the videotape right now, this fight in the parking lot, right next to Sandra Gregory's Lexus SUV there. It looks like she put up a fight. Have you had a chance to take a look at this videotape?

IRBY: Yes.

But, at this time, the case is still under investigation. And it's too early to determine whether or not there was some type of resistance or a fight at this time.

PHILLIPS: Do you think that she knew her kidnapper?

IRBY: The case is still under investigation. At this time, there's no way of knowing that.

PHILLIPS: All right. But you're not willing to rule it out at this point?

IRBY: No.

PHILLIPS: Are you looking at her past case files here to see if there was a disgruntled spouse or a client? She practiced family law.

IRBY: Well, again, at this time, the case is still under investigation. And, even if we had, we would not be able to release that information at this time.

LIN: So, can you confirm this suspect is in fact wearing a striped shirt and sunglasses? Any more information on him?

IRBY: Yes.

The information that we released was that the suspect is wearing a striped, short-sleeved, white, black and gray shirt, with dark pants and sunglasses.

LIN: And how did -- just taking a look at this videotape, what do you think happened?

IRBY: Well, at this time, we believe that the victim was forced to get back into her vehicle and then made to drive off with the suspect in the vehicle.

LIN: And three ATM withdrawals, is that right, on her ATM card?

IRBY: Well, at this time, we can't confirm or deny that at this time, because the case itself is still under investigation.

LIN: OK. Would it be wrong to report that it appears that this suspect is taking her from bank to bank to try to get money?

IRBY: We really can't confirm or deny that.

LIN: All right.

Lieutenant, is this all you're that willing to say at this point?

IRBY: Yes.

LIN: All right, Lieutenant Henry Irby, talking about the kidnapping of Sandra Eubank Gregory, thank you very much.

Kyra, also with me on the telephone is Judge Gary Pate. He's a Jefferson County judge.

Judge Pate, you know the attorney here, the kidnap victim.

JUDGE GARY PATE, JEFFERSON COUNTY, ALABAMA: Yes, ma'am. Yes, ma'am.

LIN: How do you know her? Have you worked with her?

PATE: Well, she has -- she has practiced in my court and in the other courts around Jefferson County for several years now.

LIN: This is what we know about her. She's 34. She lives in downtown Birmingham. She has a little girl. What else can you tell us about Sandra Gregory?

PATE: Well, I think one of the main things I would tell her is what a neat, great person she is.

Everybody who knows Sandy (ph) just thinks she hung the moon. She's one of those folks that, as soon as you meet her, you like her. You know, so many lawyers have a -- a reputation as being hard to get along with. And Sandy (ph) is just the opposite. She's just as good a person and as good a lawyer as we have here.

LIN: Is it -- does she have any enemies? Did she create any enemies in her law practice?

PATE: Well, my goodness, if you do domestic work and work in family corporate, there's always going to be people who are angry at what happened. But as far as the idea that Sandy has had enemies or whatever, I think that's preposterous. No, no, no. She's really a remarkably nice lady.

LIN: Sir, we are looking at this videotape. It's literally a crime going down in this parking lot as we watch her get out of her silver SUV, a man walks down this alleyway, approaches her from the back of the car. It looks like there was a shoving match and that they both ended up back in this SUV as it's driving off now. It looked like she was putting up a fight. Can you give us an idea, knowing her as you know her, how she would have handled that situation? PATE: Well, she -- I haven't seen the video. You've got me at a disadvantage there. But I would say that she is an extremely savvy, very clever person. She's just as bright as she can be. And certainly if you're doing this sort of practice, you are used to dealing with angry or difficult people. So I would expect Sandy to keep her wits about her and to make good choices.

LIN: A clever woman.

PATE: Yes, very much so.

LIN: 8:30 in the morning. That's the time that we're -- that this picture was taken as this kidnapping went down. Shortly after the SUV leaves the parking lot, we see that there was a woman who walked into the frame and just got into her car. Perhaps she didn't hear any yelling. I don't know how Sandy Gregory dealt with that situation. Have you heard of any eyewitnesss to this crime?

PATE: No. No. I know there was an eyewitness that called -- called it in, apparently. There was a construction worker on the site who saw this and is the one that called it in. But other than that, I haven't heard anything.

LIN: All right. Judge Gary Pate, thank you so much for talking about Sandra Gregory.

PATE: Yes, I want to ask everybody to keep Sandy and her family in their prayers.

LIN: Oh, you bet. As she is. Thank you very much, judge.

PATE: Thanks so much.

LIN: So, Kyra, we've just heard from the judge, who has worked with this woman. We heard from the lead investigator who, frankly, didn't have much to say. Definitely needs and wants the publicity on this case, as people try to keep their eyes peeled for this woman who was kidnapped at 8:30 in the morning just outside of her downtown Birmingham loft. Amazing pictures there of the kidnapping going on.

PHILLIPS: All right, we'll stay on the story. Carol Lin, thank you so much.

About face on the issue of face-to-face talks with Iran. The Bush administration has decided it will talk with Iran directly about its nuclear ambitions if Iran stops enriching uranium first.

Let's turn to CNN's senior U.N. correspondent Richard Roth for more on this developing story -- Richard.

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Kyra, the U.S. and the big powers on the Security Council are going to talk about all of this in Vienna on Thursday. No firm response yet from the Iranians regarding the United States' shift in position, but reaction from the key powers on the Security Council. China and Russia taking note, praising it, but with reservations, while Britain says Iran knows what it has to do.

(BEGIN VIDEO CLIP)

WANG GUANGYA, CHINESE AMBASSADOR TO U.N.: I believe that direct talks is always good without any precondition. We'll welcome a very active participation of the United States on this diplomatic effort. The more Washington talks about diplomacy and political process and not something else, the better it is, as far as we're concerned.

EMYR JONES PARRY, BRITISH AMBASSADOR TO U.N.: From the viewpoint of the E.U. 3, let's be clear, there is a conditionality attached to resuming negotiations. And that is that Iran should first comply with what the presidential statement of the Security Council said and what the governing board has asked it to do.

(END VIDEO CLIP)

ROTH: Already on the table from the United States and others, a package of incentives to the Iranian government, something Tehran has not jumped at yet, regarding economic help and other guarantees. This will be talked about again in Vienna on Thursday. But right now, here at the U.N., Kyra, the big powers are not going to go ahead, it seems, while -- with a tougher measure against Iran while the U.S. says it's still interested in diplomacy and wants to back it up by saying come to the table as long as you freeze your nuclear enrichment program, which Iran has not been willing to do so far.

PHILLIPS: Richard, how did Iranians find out about Rice's statement?

ROTH: Well, two ways. Secretary of State Rice gave the Swiss ambassador in Washington a letter. That is because there are no diplomatic relations between the U.S. and Iran. And also, in a rare call, the U.S. ambassador here, John Bolten, telephoned his Iranian counterpart to say a similar letter was headed his way.

PHILLIPS: Richard Roth,live from the U.N. Thanks so much. I'm just getting word that we're going to talk to Wolf Blitzer, coming up in just a few minutes. He had an interview one-on-one with Condoleezza Rice and talked to her about this very issue. So we'll bring that you coming up in just a little bit.

Straight ahead, there's a killer loose on the streets of Detroit. A deadly drug cocktail has claimed dozens of life. Find out what they're doing to stop it when LIVE FROM returns.

(COMMERCIAL BREAK)

PHILLIPS: Well, the big dig's over at a Michigan horse farm. It cost about a quarter million dollars to figure out Jimmy Hoffa's not buried there. Fifteen to 20 FBI agents spent two weeks at Hidden Dreams Farm, along with anthropologists, archaelogists, a demolition crew, specially trained dogs and guards. All they found were a water line, a beer can and other trash. Hoffa disappeared in July of 1975 and investigators suspect the formster teamster's boss was killed by the mob. A deadly combination in Detroit: heroin or cocaine, mixed with a powerful painkiller called fentanyl. It's blamed for 48 deaths in two weeks. No one died yesterday, or so far today, a welcome respite for health experts and law enforcement. That includes Dr. Michelle Reid, chairwoman of the Detroit/Wayne County Fentanyl Work Group.

Doctor, thanks for being with us.

DR. MICHELLE REID, CHAIR, FENTANYL WORK GROUP: Thank you.

PHILLIPS: When did you first hear this was a problem?

REID: We've been looking at this since last month, since April.

PHILLIPS: And have you ever seen anything like this in your career, this painkiller mixed with heroin?

REID: No, I haven't seen deaths at this rate in the whole time I've been with the county for the past 18 years.

PHILLIPS: So what do you know about the distribution, who's taking it? Is it crossing all lines economically?

REID: Absolutely. When we're looking at the deaths from fentanyl that have been confirmed, about 106 over the last six months. This drug of abuse is an equal opportunity destroyer. We have men and women in equal amounts, African-Americans and caucasians equally. And almost equally distributed between residents of the city of Detroit and the outlying suburbs.

PHILLIPS: So, doctor, where is this deadly mix coming from and who's distributing it?

REID: That is the million dollar question. We're receiving updates and information from the Drug Enforcement Agency, the Wayne County sheriff and the Detroit Police Department as we speak, and that's what everybody is trying to get to the bottom of.

PHILLIPS: So, Dr. Reid, I mean, meth was sort of the popular drug among our youth for a while. I mean, it still is. But I remember the big splash that we saw in the headlines. Is this -- is this sort of the new hot drug among our youth?

REID: We have concerns, in that many of the drug users are older individuals. I think of those 106 cases, the average age was about 45 years old, although we do have a very unfortunate story the other day about a high school student, 17 years old, who died from the -- possibly from the use of such drug combinations.

PHILLIPS: So what are you doing to alert people?

REID: I think the main thing -- we want to get a message out -- is that treatment works, that recovery from drug addiction and alcoholism is possible, and that people who recover can and do lead productive lives, that we have a statewide hotline for people to get help. And you can call at 1-888-736-0253. We've distributed over 15,000 flyers to people in drug abuse and mental health programs. The media has worked with us to get the word out through the print media, through the radio, sharing the information on Web sites, so that it's very important that the community understand that drug abuse kills.

PHILLIPS: So are you working with the drug units there in the Detroit area? And how are you sort of studying the patterns here?

REID: Actually, the medical examiner invited the Centers for Disease Control to come down, and they actually have done some analysis and are working to look at what are the real patterns and trends here. Obviously, the cases that we've had most recently are not confirmed yet, and it usually takes anywhere from four to six weeks for the toxicology to come out.

But what alarmed us during the month of May and April is that -- the increased numbers of death per day. Ordinarily, from all drug sources, whether legally or illegal use, we would have two to three deaths a day in Wayne County due to drug use, not necessarily abuse.

And in this case, it was almost 10 deaths each day. So this is what set the alarm and resulted in Mr. Robert A. Ficano, our county executive, putting out a health alert for the general public.

PHILLIPS: Well, we paid attention to it, too, and we'll stay on the story. Dr. Michele Reid, thanks for your time. I sure appreciate it.

REID: Thank you.

PHILLIPS: Well, cleared of doping seven years later. Dutch investigators are saying Lance Armstrong's very first win in the Tour de France in 1999 was on the up and up. At the time, there was no hint of scandal, but after Armstrong won the race a few more times, anti-doping authorities retested his samples. They reportedly came back positive for an endurance-boosting hormone. Now, those same authorities are accused of misconduct and may face legal action.

Severe weather moving through the Midwest. This video just in from Ohio. Heavy rain causing major traffic delays. More on that story too.

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PHILLIPS: Reynolds Wolf, tell us about the severe weather in Ohio.

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PHILLIPS: Will the United States negotiate with Iran? Wolf Blitzer just spoke with Secretary of State Condoleezza Rice. We'll debrief him straight ahead.

(COMMERCIAL BREAK) PHILLIPS: They talk big, talked tough, talked to reporters, talked in circles. Might the U.S. and Iran now talk directly about Iranian nukes? Well, in a major break from the precedent, the Bush administration says, yes, if Iran stands down on its nuke research first.

CNN's Wolf Blitzer sat down with the Secretary of State today and joins me now from the "SITUATION ROOM." Wolf, what did you ask?

WOLF BLITZER, CNN ANCHOR: Well, I pressed her on the whole issue of whether the United States is making concessions to Iran right now, expressing a willingness to negotiate, to talk directly as part of a multi-national group with the Iranians. A break from the past, if in fact the Iranians go forward and suspend their nuclear enrichment program, which a lot of experts believe they will not be doing. The secretary was very firm in saying this is a test for Iran right now. Listen to this.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: We want Iran to come back to negotiations, negotiations that we have been supporting, and that we would now be prepared to join if Iran suspends. But let me be very clear what this is not. This isn't some sort of grand bargain. This isn't an offer of normalization of relations. This isn't an offer of let's let bygones be bygones and we'll try to establish a new relationship. This is a very specific choice that is being given to Iran. Abandon your nuclear weapons ambitions or face isolation. And we need it and we need now to sharpen that contradiction and to make it possible to know whether Iran intends to negotiate seriously or not.

(END VIDEO CLIP)

BLITZER: I got impression, Kyra, that the whole new initiative now to express this readiness, to sit down directly with Iran, is designed in a large measure to get the Europeans, namely, the British, the French, the Germans, as well as the Russians and the Chinese who have veto power at the United Nations security council, to get them on board for sanctions.

If in fact, the Iranians should refuse this overture from the United States. If they do, the U.S. believes that it will be on stronger grounds going forward with the possible economic and political diplomatic sanctions against Iran down the road. But it's clearly an effort to try to get the Iranians to rethink their nuclear weapons program.

PHILLIPS: Any talk about military intervention, possible military intervention?

BLITZER: I asked that question specifically, what are the military options? Is there a military option if the Iranians refuse to budge, and she didn't really budge on that. She said the President has all of his options in front of him. Right now, the major option is the diplomatic option to try to get the Iranians to rethink their entire nuclear strategy. But, clearly, no options are being removed from the table right now, even though the emphasis is on political, economic, diplomatic pressure as opposed to military pressure.

PHILLIPS: Wolf Blitzer, look forward to more in the "SIT ROOM" coming up in just a little bit.

Well, taking the long way straight to the top, we're talking about the Dixie Chicks straight ahead.

(SINGING)

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(BEGIN VIDEO CLIP)

MATT LAUER, CO-HOST, TODAY SHOW (voice-over): We wish you the best in every single aspect of your life. We love you and we're going to miss you. Cheers.

KATIE COURIC, FORMER CO-HOST, TODAY SHOW: Thank you so much.

CROWD: Here, here.

(END VIDEO CLIP)

PHILLIPS: Well "Today" has turned into yesterday for Katie Couric. The long-time "Today Show" host has worked her final morning shift after a decade and a half of pre-dawn commutes to the NBC studios. Couric has found a new job with better hours. She'll anchor the "CBS Evening News." Couric has been at the "Today Show" for 15 years, an eternity in television. But she didn't start there.

(BEGIN VIDEO CLIP)

COURIC: Nationwide are capitalizing on this new affluence. And you can bet your Bergdorf's baby bootie that older, upscale parents are proving to be an ideal target market. When it comes to eating, nothing says...

(END VIDEO CLIP)

PHILLIPS: Here's the proof, a very young Katherine Couric as she called herself back in the 1980s, reporting right here on CNN. Remember, Katie, who saw you first?

(BEGIN VIDEO CLIP)

DIXIE CHICKS, MUSICAL GROUP: (SINGING)

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PHILLIPS: Well nothing like a controversy to boost record sales. The Dixie Chicks latest album, "Taking The Long Way," hit No. 1 on the Billboard 200 music chart in its first week. Country radio still isn't giving the group a lot of air play, especially after new criticism of President Bush from singer Natalie Maines. More tonight from the outspoken Dixie Chicks on "LARRY KING LIVE." He'll talk about why they're taking on the president and they'll take your calls, tonight on 9:00 Eastern, only on CNN.

Well since we do a company shareholders' revolt over record profits, ExxonMobil earned a record $36 billion last year. But sky- high gas prices and executive salaries have some major stockholders fuming at the company's annual meeting in Dallas. CNN's Ali Velshi watching it all from New York. He's got all the inside scoop. They were fuming, huh?

ALI VELSHI, CNN ANCHOR: They were fuming. That's good, I like that, gas, fuming. You know, the normal protests Kyra that you see -- this was in Dallas and there are the normal protests for people who think these oil companies are not environmentally friendly and things like that.

But there's a little added twist this time, and this is of course not just about the profits, but about that fat pay package that outgoing CEO Lee Raymond got when he left the company in December. Depending how you add it up, the extra that he got for leaving the company was about $150 million, $170 million. There were a number of shareholders who were really upset about that, saying that seems to be irresponsible. Now there are always shareholders, dissident shareholders who don't like how much the CEO gets paid.

But this one got some momentum because two of the country's state pension funds -- North Carolina and New York withheld their joint, about 35 million votes saying that they think that the board wasn't responsible. Now withholding votes means basically, it's like a no- confidence vote. And even though there were 35 million shares, it didn't amount to much. The board was re-elected. But I sort of describe it, Kyra, as a bit of a shot across the bow to corporate America.

PHILLIPS: Well here we want to see lower gas prices. Meanwhile, this guy is getting so much money. I mean, could Lee Raymond decide to give some of the money back? Could ExxonMobil say, "Hey, justify what they paid him?"

VELSHI: You might see full-page ads from ExxonMobil explaining why they've done it. You might see an offer to give some money back. You might see absolutely nothing. But this is going to become a bigger theme in corporate America right now. You know, with the noise of the Enron trial behind us, people are going to start paying attention to what CEOs are doing today and we're going to hold their feet to the fire, Kyra.

PHILLIPS: All right, Ali Velshi -- well you always have a chance to interview -- oh, is that a bell? Oh, bummer.

VELSHI: That's the bell.

PHILLIPS: See you tomorrow, pal.

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