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New Jersey Shutdown; North Korea Threat; Ex-GI Accused of Rape, Murder in Iraq; Hans Blix Interview

Aired July 06, 2006 - 13:30   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: No budging on the budget. That's the problem in New Jersey, where state government is still shutdown for a sixth day. All but the most essential services and offices are closed or on hold, including vehicle-inspection centers and Atlantic City casinos.
CNN's Mary Snow reports from Trenton.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT: The people most directly affected by this government shutdown here in New Jersey are taking their message straight to the state capital. People rallying outside the Trenton statehouse, urging lawmakers to pass a budget. A stalemate that has shut down the government for six days now has impacted some 45,000 state workers who've been furloughed.

The latest effects of this government shutdown was seen in Atlantic City, when 12 casinos were shutdown. That also impacted workers who don't -- are not on the state payroll. These are businesses directly affected by the casino industry shutdown. Some of these workers saying they are furious and also growing desperate for a paycheck.

Now, inside the capital building, Governor Jon Corzine addressed the state legislature for a third day in a row, appealing to them to pass a budget.

GOV. JON CORZINE (D), NEW JERSEY: No one wants to hear another speech. No one wants to hear more excuses, most certainly not the citizens of New Jersey. They want a budget. They want a government that works for them. Let us resolve to pass a budget that can be agreed upon today.

SNOW: The governor told lawmakers the state is putting nearly 100,000 workers, innocent bystanders he calls them, in a financial hole and putting the state in a financial hole each hour that goes by without a budget.

Mary Snow, CNN, Trenton, New Jersey.

(END VIDEOTAPE)

WHITFIELD: Their competition is decades old, their rivalry intense. But when Pepsi-Cola was offered a chance to get a leg up on Coca-Cola, they went to Coke instead. Then the feds got involved. CNN's Rusty Dornin has more on the pop plot that fizzled -- Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Or the scheme that went flat, we could go on and on and on.

Yes, in about 20 minutes, the three people accused of trying to sell Coke secrets to Pepsi will appear in federal court. They're charged with wire fraud, and also stealing and selling trade secrets. Of course, the story is, they tried to sell it to Pepsi. Pepsi ratted them out to Coke, Coke called the FBI.

From there, there were clandestine meeting, there was exchange of money, there was even a meeting at the airport where one of the accused tried to give -- or gave documents to an undercover FBI agent, and the FBI agent gave him back a box of girl scout cookies stuffed with $30,000 in cash. Ended up they wanted $1.5 million for more of Coke's secrets.

They were arrested yesterday. All three of them in Atlanta. One of them is an executive assistant to one high-level Coke executive. Coke is not revealing who that is. And also saying -- Coke does say that their secret recipe that has been so closely guarded for more than 100 years was never in danger of either being revealed or stolen. But there were other things such as a new product line and that sort of thing that were still very confidential and very secret that they were trying to sell to Pepsi. But Pepsi did the right thing, or wore the right hat.

And as industry analysts say, really it's no surprise because in this day and age, many of these corporations, when it comes to trade secret are really on the same team. Nobody really wants that happening. It's unethical, and they also could get in a lot of trouble themselves for it.

WHITFIELD: Unethical, and they have this relationship, however, though, Coke and Pepsi, being that they're arch rivalries, but at the same time there's a great amount of respect those corporations have for one another, as to why they would go to the feds and say, hey, this is what's going on.

DORNIN: Well, absolutely. And like I said, Pepsi could have been liable, too. I mean, if they would have accepted those secrets, they would have been criminally liable as well. So you know, they wanted no part of any kind of scheme like that. I mean, any other thing is fair game here out in the ad world and trying to get the consumer. They'll fight each other to the very last drop. But when it comes to the ethical aspects of trade secrets, they know that they've got to uphold their side of the bargain, so to speak.

WHITFIELD: All right, Rusty Dornin, thanks so much.

Almost two days since North Korea's missile test, and yes, still fallout. If Pyongyang was angling for the world's attention, it certainly got it. Here's what we know: The U.N. Security Council by a lopsided majority votes to prepare a resolution condemning North Korea. Also at the U.N., talks of sanctions. President Bush speaks by phone with the presidents of China and Russia, both of whom are against cutting off money and aid to North Korea. They both have veto power on the Security Council.

And still more test launches? Well, maybe. North Korea's foreign ministry reserves the right to test weapons without asking for anyone's permission.

The White House on North Korea -- cautious, measured, rallying the allies, pushing diplomacy, diplomacy, and more diplomacy. Press Secretary Tony Snow took reporters questions a few minutes ago. Our White House correspondent Ed Henry was there -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Good afternoon, Fred.

That's right, Tony Snow mentioning, as you did, those phone calls. The president burning the phone lines late into the night to some of his counterparts overseas. This morning, as well, calling the leaders of China and Russia. In the words of Tony Snow, engaged in vigorous outreaches.

For those reports you were mentioning, about whether or not North Korea may be inching closer within days or weeks of launching another long-range missile, Tony Snow said that, frankly, he does not know, the White House does not know at this time, mostly because North Korea -- its dictator, Kim Jong-Il, so inscrutable, unable to decipher exactly what will be his next move, that in fact the White House really has no idea how close North Korea may be to launching more missiles.

The president himself was out there again today, as you noted, really stressing diplomacy, diplomacy, diplomacy. But also trying to tell the American people, do not expect a quit outcome to this situation. The president, of course, has been singed by allegations that he did not give diplomacy enough of a chance before the war in Iraq.

So at a joint press availability today with the Canadian prime minister, he kept talking about diplomacy, reaching out to partners and allies, and saying that he's rallying support against Kim Jong-Il.

Take a listen to the president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He's going to pose less of a threat the more isolated he becomes and the more we work together.

(END VIDEO CLIP)

HENRY: The problem, though, as you noted earlier, Fred, is that the calls to the leaders of China, President Hu, leader of Russia, President Putin, today, they are not on board with sanctions before the United States, as you noted.

Tony Snow, though, insisting that the leaders of China and Russia are in concert with the United States, at least in saying that it's time for North Korea to come back to those six-party talks we've heard so much about. But critics noting those six-party talks have really yielding little so far -- Fred.

WHITFIELD: All right, Ed Henry at the White House, thank you so much. Thank you.

HENRY: Thank you.

WHITFIELD: A rise in tensions and clashes as Israeli troops move back into Gaza. Latest word, leaders with the Hamas-led government are urging their forces to join the fight.

CNN's Paula Hancocks is in Gaza City, and she joins us via broadband right now.

What's the latest, Paula?

PAULA HANCOCKS, CNN CORRESPONDENT: Hello, Fredricka.

Well, we've heard some significant words from the Palestinian interior minister through his spokesman just about a half an hour ago, Saeed Shiam Hased (ph), that all Palestinian security forces should take arms and go and fight against the Israelis.

Now, this is the first time we heard a government minister actually saying the security forces should rise up and join the resistance against this particular invasion from Israel.

Now, we have heard strong rhetoric from the Israeli government. We've heard Israeli Prime Minister Ehud Olmert say that this was -- he was going to do everything in his power to bring this kidnapped soldier back, he gave the green light to go deep into Gaza, to go into residential areas, and very densely populated residential areas, and do whatever necessary to bring this soldier back.

Now we've had significant violence in Gaza this Thursday. We know that six Palestinians were killed in the early hours of Thursday morning, with clashes with Israeli military. And also another six were killed, according to Palestinian security sources, this afternoon in Beit Lahiya, in the northern part of Gaza. Israeli defense sources say only four were killed.

But we are seeing a significant step up in these clashes. We're hearing apache helicopters in the air, and throngs taking up any intelligence that they can. So this is a significant escalation, especially with rhetoric like this. There have been security forces, obviously, taking up arms and fighting against the Israelis, but this includes the police, as well; those that haven't yet joined up in this fight -- Fredricka.

WHITFIELD: Paula Hancocks in Gaza city, thanks for that update. And now we're learning more about a former soldier charged with a rape and killings in Iraq. More on that story and the family affected by it when LIVE FROM continues.

(COMMERCIAL BREAK)

WHITFIELD: And you're looking at a live picture right now, San Diego, the USS Ronald Reagan pulled into port there. Five thousand sailors on board. Now back home after six months on duty during Operation Iraqi Freedom.

More of LIVE FROM in a moment.

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WHITFIELD: Former U.S. Army Private Steven Green remains the only person charged in the alleged rape and murders of an Iraqi woman and her family back in March. Green is being transferred today from North Carolina to Kentucky. He could get the death penalty if convicted. Back in Iraq, anger continues to grow.

CNN's Arwa Damon gives us a look at the scene of the alleged crimes.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice-over): This plain concrete house may have been the scene of a gruesome crime, a crime the U.S. government says was committed by U.S. soldiers. Almost four months later, despite the house being cleaned out, bloodstains and evidence of burning can still be seen in these Associated Press pictures.

The crime, the alleged rape of a young woman, identified as Adir Kasum Kassam (ph), believed to be barely in her 20s. She, her little sister and her parents murdered. Their bodies burned in what authorities say was an attempted cover-up.

"We found them dead in the house," the girl's brother, Ahmed Kassam (ph) says. "We also found the house blackened and smoke erupting from it."

Her uncle, Amed Taha (ph), says, "The Americans are behind this incident. People in the area saw the Americans, but they are afraid."

The bodies were buried quickly back in mid-March, but the story of what happened here is only now being told. Following the arrest in the United States of Steven D. Green, a former Army private first class, accused by the U.S. government of being one of those responsible for the rape and killings.

And now the Iraqi government is investigating. And the Iraqi prime minister expressing outrage, blaming a system in which U.S. forces in Iraq are immune to Iraqi prosecution, accountable only to the U.S. government.

UNIDENTIFIED MALE (through translator): We believe the immunity given to international forces is what emboldened them to commit such crimes in cold blood. This requires that such immunity should be reconsidered. We affirm we must participate in investigating crimes committed against the Iraqi people.

DAMON: The U.S. military says it will engage with the prime minister on the issue of immunity.

(on camera): But with emotions already running high in Iraq, what is alleged to have happened in this house will likely make the job of U.S. troops here even more difficult.

Arwa Damon, CNN, Baghdad.

(END VIDEOTAPE)

WHITFIELD: Much more on the Steven Green case, including the reasons behind his military discharge, next hour. CNN's senior Pentagon correspondent Jamie McIntyre will join us for those details.

The threat from North Korea. How concerned should the rest of the world be? We'll hear from a man who has inspected nuclear weapons around the globe. My interview with Hans Blix, coming up.

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WHITFIELD: It's times like these that we rely on people who have actually been to North Korea for information not censored or controlled by the government.

A short time ago, I spoke with Hans Blix, the former chief U.N. weapons inspector. He's most notably associated with the search for WMD in Iraq. And now he believes North Korea poses the biggest threat on earth.

(BEGIN VIDEOTAPE)

HANS BLIX, FMR. CHIEF U.N. WEAPONS INSPECTOR: We saw in the beginning of the '90s that the North Koreans were able to reprocess spent fuel and produce plutonium, and we discovered that they had more plutonium than they declared. So that was the beginning of the first crisis which was settled through the agreed framework.

Since then, of course, they have -- the agreed framework began to fall apart, partly due to what the North Koreans did and partly because of the U.S. actions. And then there was the knowledge that they tried to import the capacity to enrich uranium.

And in 2003, the recent talks, the six-party talks in Beijing started, and I think that has been fairly hopeful and going on the right track. But it came off track a number of months ago when the U.S. accused North Korea of counterfeiting, and took some measures against North Korea. And so they're after the North Koreans. We're not willing to go back to the talks, but it's essentially all about negotiation.

WHITFIELD: So when North Korea says it has the right to defend itself and that's what this is all about, it has the right to fire these test missiles as a deterrent, do you think there's an underlying message in all of this as well?

BLIX: Well, they are right in saying that there is no treaty, no convention against missile tests. And the U.S. and many others test them all the time without our raising our brows too much about it. It's bad, but that's the situation.

I think the North Koreans want to tell the world that they are dangerous. They're not threatening, but they are dangerous, just as the U.S. and Japan and others will send ships in the Sea of Japan not so long ago under the Proliferation Security Initiative were also telling by this gesture that the U.S. and others can inflict pain if they wanted to, but it's not a signal that they will.

WHITFIELD: So when you talk, again, about the six-party talks, among those members of the six parties, China, it would seem, has the greatest pull. And if they don't have the negotiating power over North Korea, then who does?

BLIX: Well, when you are saying negotiating power you are thinking of sticks, mainly, the punishment, the penalties. I think perhaps even more important are the rewards, the carrots that can be put on the table. You must try to imagine what makes North Korea tick. Why do they act as they do?

I mean, first of all, they want to preserve their independence. They don't want the government to lose its power. And I think, therefore, what the U.S. and others have offered, mainly security, to them is important. We may not like the regime. Most of us don't do that. But threatening with regime change, I think, would be the worst thing you can do, if you want to persuade them to go off the course towards nuclear weapons.

The U.S. and the others have said that we can promise North Korea that they will not be attacked from the outside and will not be subverted from the inside, and I think that's a good start. But they need many more carrots than that, of course.

WHITFIELD: When you talk about nuclear threats, globally, how does Iran and North Korea compare? Which one is more frightening to you?

BLIX: Well, it's evident that the North Koreans have come much further. They had quantities of plutonium. Some people estimate, experts estimate, that it might be enough for six weapons. That's possible.

Iran does not. Iran is working on the technique of enriching uranium and they have -- appear to have succeeded in, perhaps, enriching in milligram quantities up to a level of four percent. Well, they will need many kilograms up to a level of 90 percent. So Iran is years away from the sufficient amount of material for a bomb, whereas the North Koreans probably has plutonium for a number of nuclear bombs. WHITFIELD: So having said that, did North Korea fall under radar, since there's been so much world attention on Iran as of recent, and just recently now North Korea?

BLIX: Well, in a way, of course, they do, but they fall under the attention span, perhaps we should say. I'm sure that the U.S. radar and others' radar are directed to them, but there's much more attention paid to the uranium.

On the other hand, both areas are dangerous. In the case of Iran, there is a worry about Israel, and that adds a threat and adds a danger to the situation. In the case of Korea, if they were to go for a nuclear weapon and develop in that direction, well, then the feelings in Japan might harden.

Japan has been very firmly rejecting nuclear weapons, but if there were to be a consistent threat from North Korea, it will strengthen forces in Japan, who will be interested in going for nuclear weapons. That would change the strategic situation very, very much and would increase the tension with China.

And I'm sure that neither the U.S., nor China, would like that to happen, so there are very strong reasons why one would wish not to have a further development in the direction of weapons in North Korea.

(END VIDEOTAPE)

WHITFIELD: Former chief weapons inspector Hans Blix.

Gay rights activists were left at the altar today twice. The highest courts in two states ruled against gay marriage. First, the New York Court of Appeals upheld a state law that bans same-sex marriages. Later, the Georgia Supreme Court upheld a state constitutional amendment that does the same thing.

Inside the minds of two young killers, 936 pages of evidence -- what do they reveal about the teens who carried out the Columbine massacre? New details today from Colorado ahead on the next hour of LIVE FROM.

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