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American Morning

Huge Money Scandal?; Iraq Constitution Deadlock; Accutane New Rules

Aired August 16, 2005 - 07:29   ET


SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome back, everybody. It's just about half past the hour on this AMERICAN MORNING. I'm Soledad O'Brien.
CAROL COSTELLO, CNN ANCHOR: And I'm Carol Costello in for Miles today.

Coming up, the controversial drug Accutane. The government is taking some aggressive steps to track the popular drug, Accutane. We'll tell you why.

O'BRIEN: The FDA commissioner is going to join us, in fact, in just a few minutes to explain a first of its kind national registry. We'll take a look at the stumbling blocks might be there.

First, though, a look at the morning's top stories with Kelly Wallace.

Good morning.

KELLY WALLACE, CNN ANCHOR: Hello to you. And good morning, everyone.

Here are some of those stories "Now in the News."

We begin with a deadly helicopter crash in Afghanistan. Spain confirming that 17 Spanish troops were killed near the western Afghan city of Herat, in what's being described as an accidental crash. The 17 were serving under NATO command and were part of a peacekeeping operation there. It is not known what caused the helicopter to go down.

Israeli settlers are just hours now to leave parts of Gaza and the West Bank or face eviction by force. Some scuffles have broken out. Israeli police say they have arrested 500 people so far. Officials say some one-third of the area's 8,500 residents have already left. The official deadline runs out today at 5:00 p.m. Eastern.

Some aftershocks and a small tsunami triggered by a major earthquake in Japan. A quake measuring 7.2 by the U.S. Geological Survey rattled the northeastern part of the country, including Tokyo. It shut down roads and the rail system, including high-speed bullet trains. There are reports of injuries and damage.

A warning now for women taking daily amounts of non-aspirin painkillers. A new study suggests women taking these over-the-counter drugs are about twice as likely to develop high blood pressure. Details appear in the American Heart Association journal "Hypertension." We'll have more details on this study in the next hour.

And a major win for Phil Mickelson. He now moves up to the number three spot in the world of golf behind Tiger Woods and Vijay Singh. The left-handed Mickelson got a birdie on the 18th hole Monday, winning the PGA championship. And, yes, you're looking at Mickelson's three children running around the green celebrating with their father. This is Mickelson's second straight year.

COSTELLO: That's his little good luck charm.

WALLACE: It is a major win.

O'BRIEN: We don't need to see the winning shot.

WALLACE: I know. I just love watching that little girl...

O'BRIEN: We can look at the toddlers.

WALLACE: ... running around the green. That's so sweet.

O'BRIEN: That's really sweet.

WALLACE: Congrats to him.

O'BRIEN: Yes. Thanks, Kelly.

COSTELLO: Thanks, Kelly.

O'BRIEN: Well, California Governor Arnold Schwarzenegger is back in the news. Now reports that the publisher of the "National Enquirer," which also publishes a variety of muscle and fitness magazines, paid a woman $20,000 to keep an alleged affair with Schwarzenegger quiet.

CNN's Donna Tetreault has details.


DONNA TETREAULT, CNN CORRESPONDENT (voice-over): California's governor is once again finding himself the focus of unwanted attention. A book by biographer Laurence Leamer details an alleged deal for Gigi Goyette, a longtime friend of Schwarzenegger, that Leamer says was for her to keep quiet about a relationship with the now governor of California.

Prior to the election, he says Goyette was paid thousands by the tabloid publisher American Media to keep quiet about an alleged affair.

LAURENCE LEAMER, BIOGRAPHER: She definitely told me she was paid. She was given a wire transfer for $20,000. And I have seen the contract. I have a copy of the contract, explicitly says it's $20,000; it explicitly says that she's never to talk about a relationship with Arnold Schwarzenegger to anybody else.

TETREAULT: Goyette denies the affair. She says she and Schwarzenegger were nothing but friends and co-workers, but she does admit to the payment.

GIGI GOYETTE, KABC: I didn't really feel I was being bought to be quiet. I just -- basically, they were saying to me, let's not talk about anything until after the election. It's a sensitive time right now.

TETREAULT: Once Schwarzenegger announced his candidacy for the governor's office on the Jay Leno show, he predicted a tough road ahead.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: And I know they're going to throw everything at me, and, you know, say that I have no experience, and that I'm a womanizer, and I'm a terrible -- a terrible guy, and all of those kinds of things is going to come my way.

TETREAULT: In 2001, American Media reported in its "National Enquirer" magazine that Goyette had a seven-year-long affair with Schwarzenegger. Several phone calls to the company have gone unreturned.

The governor had this to say about the allegations.

UNIDENTIFIED MALE: Did they cover up an alleged affair?

SCHWARZENEGGER: Not that I know of. You'll have to ask them. I have nothing to do with that.

TETREAULT: Donna Tetreault, for CNN, Los Angeles.


O'BRIEN: Joining us this morning is Laurence Leamer. His book, "Fantastic: The life of Arnold Schwarzenegger," details the alleged deal with Gigi Goyette.

Nice to see you, Laurence. Thanks for talking with us this morning.

Thanks for having me.

Take us back to the original "National Enquirer" article, which was written in 2001. They gave details of an affair, and it was an article written with an interview with Gigi Goyette. What happened after that?

LEAMER: Yes. Well, they had paid her $30,000 for that. And it was an explosive article that alleged that she was Governor Schwarzenegger's mistress or had been. And that was one of the reasons he immediately after or at that time backed away from running for governor in 2002. And the "National Enquirer" said in its pages that if he would run, they had other stories that they were prepared to write about him. O'BRIEN: Two years later, she has another meeting with the writer from the first article of 2001. What happened that time around?

LEAMER: Well, this is right after Arnold Schwarzenegger announces he's running for governor and a few weeks after he had a meeting with David Becker, the CEO of American Media, where they discussed what kind of arrangement he'd have with that company that owned the body building magazines and wanted Schwarzenegger to be executive editor. So at this meeting, three days after he announces, Gigi Goyette is given $20,000 supposedly for her story. And she signs a contract, which says that she can never talk about her relationship with Schwarzenegger again, except to the "National Enquirer" and American Media, and nothing ever appears.

O'BRIEN: You've talked to her. What did she think that payment was for?

LEAMER: Well, she says she was told that originally it was for her to be quiet just during the campaign. And she says that when she finally received the contract, it had been changed. The page had been changed. And it said that she would never, never be able to talk about him again.

O'BRIEN: So she had in perpetuity a confidentiality agreement. She has a lawyer now. When this most recent story came out in the "L.A. Times," you talked to her. What was her reaction?

LEAMER: Well, she thought the story was accurate. I had written that same story or most of that story three weeks before in an opinion piece in the "L.A. Times." I have seen the contract. And, you know, the problem is not whether there was a sexual relationship or not. The question is: Did American Media essentially kind of bribe her to keep her quiet during the campaign? That's the real question that should be answered.

O'BRIEN: What if -- and many say, even if the company is not buying her silence, even if it's not a bribe, it certainly to many has a perception of some kind of a payoff when you consider the financial arrangement, as you pointed out, between Arnold Schwarzenegger and other companies owned by the same -- other magazines owned by the same company. But how big of a problem at the end of the day is it for Governor Arnold Schwarzenegger, even if there's nothing illegal about this?

LEAMER: It's a big problem, because it's not only this, it's that during the campaign American Media celebrated him in the tabloids as being Abraham Lincoln and George Washington. They published a 120- page magazine celebrating him again. And after he was elected, he signed a deal in which he was going to receive at least $1 million a year for five years. Now that's become public, he's backed away from this.

So these things have been picking away at his popularity. He's an immensely powerful, optimistic figure, an immensely charismatic man, but these are real troubles for him. O'BRIEN: The polls show dissatisfaction certainly by the voters in California. I think his approval rating was 65 percent. It's now dropped to 34 percent. Do you think this individual story dooms any hopes that he has for re-election, or is that overstating it?

LEAMER: No. I mean, listen, this man can come back. Again, this election is going to be this fall, these initiatives. He's got millions and millions of dollars of campaign money. He's a brilliant speaker. He will come back. But whether he ever can be that transcendent reformer, that positive and optimistic figure that most Californians celebrated, that's kind of doubtful.

O'BRIEN: Laurence Leamer. And his book is called "Fantastic: The Life of Arnold Schwarzenegger." Nice to see you, Laurence. Thanks for talking with us.

LEAMER: Thank you.

COSTELLO: Let's talk about Iraq now. Iraq's Constitutional Committee is back at work today. Their deadline has been extended until next Monday. Last night's failure to complete a draft of the constitution has serious consequences, not only for Iraq but for U.S. forces as well.

U.S. ambassador to Iraq, Zalmay Khalilzad, is live from Baghdad now.

Good morning, sir.


COSTELLO: I'm fine. In your estimation, how big of a setback was this?

KHALILZAD: I didn't quite hear it. Can you repeat that, please?

COSTELLO: How big of a setback was this?

KHALILZAD: Oh, it's a disappointment, not a significant setback. Look, Iraq is in the middle of a conflict, disagreement among people about the future of the constitution. It's supposed to bring them together. They set themselves the target of August 15 to produce that draft. They were very close. They ran out of time last night, and they gave themselves an additional week. That was allowed in the law.

You know, we should remember that it took us many years to put our own constitution together, and they're in much more difficult circumstances than we were.

COSTELLO: I understand that. But it was just back on August 9 that Defense Secretary Donald Rumsfeld was telling the American people how very, very important it was to meet this August 15 deadline. Listen.

(BEGIN VIDEO CLIP) DONALD RUMSFELD, DEFENSE SECRETARY: It's important that they stay with their timetable. This will be a critical step in persuading the majority of the Iraqis that the new Iraq is worth fighting for, that they have a stake in it.


COSTELLO: All right. So how are Iraqis reacting to this, in light of what Donald Rumsfeld said?

KHALILZAD: Well, you know, the Iraqis reacted very positively to it. You saw the representatives of the Iraqi people unanimously voted to give the committee one more week. So I don't think the Iraqis...

COSTELLO: I mean the Iraqi citizens.

KHALILZAD: ... have any problem with that happening.

COSTELLO: I mean the Iraqi citizens.

KHALILZAD: Well, the Iraqi citizens are represented by the assembly. We have not done a survey yet of the attitude of the Iraqi people. But I suspect they will understand. They will be supportive of the fact that they needed a few more days to work out the difficult, difficult issues that the country is facing and facing with in order to put the constitution together.

COSTELLO: But aren't they already a little aggravated with the General Assembly?

KHALILZAD: Well, I don't know whether they're aggravated with the General Assembly or not. I don't know. The understanding of our own congress with the American people is also not very -- I don't know whether that's any different than in terms of understanding of the assembly with the people. But I think that people anywhere can understand that, look, when you're putting a constitution together, you're dealing with very big issues, difficult issues. People need to make compromises, come into an agreement with each other, and you have to take the time necessary to make sure.

COSTELLO: I totally -- I totally understand that. I'm just going back to how important that the Bush administration made this August 15 deadline. And now it seems everybody is sort of downplaying it, like, oh, this is just democracy at work.

Let's listen to Condoleezza Rice.


CONDOLEEZZA RICE, SECRETARY OF STATE: We are witnessing democracy at work in Iraq. The new constitution will be the most important document in the history of the new Iraq. We're confident that they will complete this process and continue on the path toward elections for a permanent government at the end of the year.


COSTELLO: So there is a certain amount of backtracking here. I mean, isn't everyone, including you, lowering expectations now?

KHALILZAD: Well, no. What I have told the American people when I spoke last week to several news outlets is that this is a very important thing to get it right and to get it within the timeframe that Iraqis have agreed to produce it. I said they were very close last night. They needed a few more days. The Iraqi law allows for that, and the General Assembly approved it.

We shouldn't exaggerate its importance that they need a few more days. It's important that they get it right, that they're as broad as possible. And that this right, not in terms of the broad principles, but also that it's right in details.

And part of the problem last night was that the draft needed to be looked at very closely in terms of wording, in terms of making sure that things that people wanted included were, in fact, included. That things that were excluded from the various text were, in fact, excluded. I don't think this is a big deal.

COSTELLO: All right. We'll keep following it. Of course, they have seven more days. Thanks so much for joining us this morning, Ambassador Zalmay Khalilzad.

O'BRIEN: It's time to get to the weather now.


O'BRIEN: Still to come this morning, thinking about buying a home? You're going to want to know just how high real estate prices could go before the bubble bursts. We'll take a look as we mind your business just ahead.

COSTELLO: And safety concerns over an acne drug lead to a first of its kind registry. We'll take a look at how it works. That's next on AMERICAN MORNING.


O'BRIEN: The Food and Drug Administration is taking some unprecedented steps to track the use of the prescription drug -- prescription acne medication, Accutane. Some background now on the drug, which has been plagued by safety concerns.


O'BRIEN (voice over): For years, the FDA and the makers of Accutane have known the drug can cause severe birth defects. More recently, it's been linked to depression, even suicide.

Well now, thousands of Americans who take the popular acne drug, along with those who prescribe it and dispense it, will have to enroll in a national registry. It's part of a major government program called "I Pledge." In it, steps to ensure that women know the risks and don't get pregnant while taking Accutane or its generic versions.

The action comes after decades of safety warnings and other restrictions, and a study last fall showing a biological connection to depression in teenagers. That study compared the brains of young adults taking Accutane with those taking antibiotics. In the so- called "Accutane brain," activity in the front part of the brain was down 21 percent.

DR. DOUGLAS BREMMER, PSYCHIATRIST: This plays a critical role in emotion. If there's a decrease in function in that part of the brain, then it would make sense there would be changes in mood.


O'BRIEN: Lester Crawford is the commissioner of the FDA

Nice to see you, sir. Thank you for talking with us.


O'BRIEN: I assume this registration will be for new prescriptions and the existing prescriptions as well. What's the primary goal of this registry?

CRAWFORD: Well, the primary goal is to make sure that we have a chain from the manufacturer to the consumer that is inviolate. That they register in the program. They make sure that only our rules are followed. That the patients are informed, if they're below the age of consent, that their parents are involved so that we have a tightly- controlled program, so the product can stay on the market. It's vital for patients for which other medications do not work to prevent scarring and other forms of toxicity.

O'BRIEN: So, is it to monitor the drug and the drug use? Or is it to make sure that doctors are prescribing it to patients who really need it? As you point out, it's a very powerful drug.

CRAWFORD: Yes, it's both. It's to patients who really need it that other medications have not helped. And then to be very certain that women of childbearing age that may become pregnant do not get the drug.

O'BRIEN: How does a registry work as sort of, in a nutshell, I guess, I'd like to you to describe it.

CRAWFORD: Well, there are two ways. There's an online version that's And then also there's a telephone number that patients can ring up. It queries them. It takes them through a program to make sure they understand themselves the program that the doctor has detailed to them. And then they're obviously put in touch with a registered physician, a physician that has been trained in this program and is willing to be a counselor, and also the person who prescribes the drug.

And then they work together to monitor the use of the drug and also to be sure that there is no pregnancy. There is the requirement of two pregnancy tests that are negative, for example.

O'BRIEN: Aren't the risks, though, of potentially a pregnancy which could lead to birth defects and the links to suicide and depression in teenagers, aren't those risks significant enough to merit just withdrawing the drug all together?

CRAWFORD: Well, you know, there are two basic options. Withdrawing it all together, if this doesn't work, or limiting it to males. We believe it's very important to keep the drug on the market, but to tightly control it.

As you mentioned in the promo, this is an unprecedented kind of program of risk management.

So, we think on balance, to take this drug away from those people that would be permanently scarred and otherwise injured unless they had access to this, the most effective drug for patients that do not respond to other medications, would be wrong. And so therefore, we are doing this particular strong program, which is precedential (ph).

O'BRIEN: The FDA whistleblower, David Graham, has said that actually it's not going to make a difference when it comes to restricting doctors who have been prescribing Accutane to patients who really don't need it, who have acne, but not so severe acne.

CRAWFORD: Well, we have more faith in doctors than that. We believe that, you know, they are, you know, the bulwark of drug use. And I think if this product is limited to those who really want to be involved in this program, then it will work. It's a question of making sure that not every physician has access to the product, but those that are specially enrolled in this program. And also that the patients themselves are adequately informed. It will work if that happens.

O'BRIEN: Dr. Lester Crawford, FDA commissioner. Nice to see you, sir. Thanks.

CRAWFORD: Thank you very much.

O'BRIEN: Carol.

COSTELLO: And still to come, record sales, record prices. The cost of buying a house is getting, oh, so much more expensive. How much more? Get ready for sticker shock. We're "Minding Your Business" next on AMERICAN MORNING.


COSTELLO: Need we tell you this? U.S. home prices are still surging. But when you see how much, well, you might faint.

Ali Velshi is here for Andy Serwer. He's "Minding Your Business."

This is incredible! ALI VELSHI, CNN CORRESPONDENT: Yes. This is for all those folks who said, you know, I'm not going to buy. I'm going to wait until this is over.

COSTELLO: Until the bubble is bursting.

VELSHI: The bubble is bursting. Well, we've now had the biggest gain in some markets in 25 years.

This is the feel good/feel bad part. Here is for the feel good people. If you bought in some of these markets, let's take a look at what your increases have been.

Typically, these are places people have gone to retire. Phoenix, Arizona, up 47 percent year over year. Fort Myers, Florida, 45 percent. Reno, 37 percent. Durham, North Carolina, 31 percent more than people paid a year ago.

It's a story of the economy, though. If you look at places where prices are down, it will tell you the same story. Places where they manufacture things or there are basic materials. Kalamazoo, Michigan, 3.5 percent lower. Youngstown, Ohio, 2.7 percent lower. Chattanooga, 1 percent lower. And Topeka, Kansas, .6 percent.

No major surprises. The only good news is the places that are lower are not as low in percentage terms as the place that have gone up.

COSTELLO: Oh, I know a little something about Youngstown, and they've been low.

VELSHI: Yes. This is what's happening. These are places where manufacturing jobs are disappearing, and people are going to retire in other places. So it's exactly what we think is happening. This is a year-over-year thing. Who knows what happens a year from now? A lot of people think...

COSTELLO: But you'll be here to tell us.

VELSHI: I'll be here the whole time.

COSTELLO: All right. Thank you, Ali - Soledad.

O'BRIEN: In just a moment, lots of military mothers are worried about their children these days. But how many are deployed overseas with them? We're going to meet a special mother-daughter team just ahead on AMERICAN MORNING.