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Paula Zahn Now

The Secret No-Fly List Is a Hassle; Car's Black Box May Invade Privacy

Aired August 20, 2004 - 20:00   ET

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

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


PAULA ZAHN, CNN ANCHOR: Tonight, the secret no-fly list. If your name's on it, you're grounded, whether you're a terrorist or a senator or just some guy named Dave Nelson.
DAVE NELSON, NEW YORK RESIDENT: I'm Dave Nelson.

DAVE NELSON, CHICAGO: No, my name is Dave Nelson.

DAVE NELSON, NEW YORK: No, I'm the real Dave Nelson.

(BEGIN AUDIO CLIP)

EMINEM: So won't the real Slim Shady please stand up...

(END AUDIO CLIP)

ZAHN: Will the real Dave Nelson please step out of the line?

And the black box inside your car. It knows how fast you drive, it knows if you buckle up, and you may not even know it's watching you. Tonight, your safety versus your privacy.

Good evening. Welcome. Glad to have you with us tonight as we wrap up the week here.

In this age of terrorism, everyone agrees extra security precautions, especially at airports, are a necessary inconvenience. Sometimes, however, the inconvenience can become a nightmare.

Tonight, cases of mistaken identity. It happens to people you'd think would never be questioned in a million years.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): Would anyone really confuse this man with a terrorist?

SEN. TED KENNEDY (D), MASSACHUSETTS: I got on the watch list last April.

ZAHN: During a Senate committee hearing this week, Senator Ted Kennedy of Massachusetts, surely one of the most recognizable public figures in the country, told Department of Homeland Security officials his story.

KENNEDY: I was taking a plane to Boston, and I get out to the U.S. Air, and I come up the corridor, and I want my ticket. They said we can't give it to you. I said, well, wait a minute here. I say, a visa -- I'll -- there must have been a mixup, and the person behind the gate said I can't sell it to you. You can't buy a ticket to go on the airline to Boston. I said, well, why not? We just -- we can't tell you.

ZAHN: Kennedy says it happened a number of times this spring. Airline agents wouldn't sell him a ticket because his name apparently was similar to a name on a secret government list of people who were not allowed to fly, a precaution taken after the September 11 hijackings.

KENNEDY: I tried to get on the plane back to Washington. You can't get on the plane. I went up to the desk. I said I've been getting on this plane, you know, for 42 years, and why can't I get on the plane back to Boston -- back to Washington? They said you can't get on the plane back to Washington. So my administrative assistant talked to the Department of Homeland Security, and they said there's some mistake.

ZAHN: The American Civil Liberties Union has filed lawsuits over this issue in San Francisco and Seattle demanding that the government explain how wrongly flagged travelers can get off the list.

Kennedy isn't the only prominent figure whose name has been flagged. Georgia Congressman John Lewis today said it's also happened to him and says an airline official told him, once you're on the list, there is no way to get off it.

Not true, according to Homeland Security Undersecretary Asa Hutchinson.

ASA HUTCHINSON, UNDERSECRETARY, DEPARTMENT OF HOMELAND SECURITY: It is important for the average citizen to know the process that they can call our TSA ombudsman, who will take the information down, verify that they -- their name is not the same as what's confusingly similar on the list, and we can actually enter into the database that they have been cleared so that that should be prevented in the future.

ZAHN: Yet in Ted Kennedy's case, even a personal call from Homeland Security Secretary Tom Ridge failed to straighten it out the first time.

KENNEDY: It happened three more times, and, finally, Secretary Ridge called to apologize on it. It happened even after he called to apologize because they couldn't -- my name was on the list at the airports and with the airlines and the Homeland Security. He couldn't get my name off the list.

(END VIDEOTAPE)

ZAHN: All right. So you see what Senator Ted Kennedy went through.

So why would a guy named Dave Nelson end up on the federal no-fly list. Well, apparently, there is one Dave Nelson who may well deserve to be on that list, but there are some 5,000 other Dave Nelsons who do not. And we're about to talk to two of them who, like the rest of us, know fighting that the war on terror is certainly a serious business.

That aside, the Dave Nelson dilemma has inspired comedians to write this: "They call me David Nelson, and my name has been besmirched. When I fly across the country, I will always be strip- searched. Somewhere a David Nelson is allegedly quite mean, and the TSA ain't able to declare my persona clean. I missed my flight from Texas, and I missed my flight from Spain. You'd think my second cousin was a Tikriti named Hussein. I am scrutinized and sanitized by security, and then the next time that I fly, they have to do it all again."

And I am seeing double tonight and not just because it's Friday night, because we do, indeed, have both Dave Nelsons here.

Welcome. Good to see both of you.

Dave in New York, I'm going to start with you first. How big of a hassle has this been for you? What's happened to you.

DAVE NELSON, NEW YORK: Well, it not a huge hassle, I have to say, but it's a repeated and regular hassle. Usually, you go to the ticketing agent, and you give them your I.D. If you have a reservation, they punch it into the computer, and, immediately, you'll get sort of a quizzical look on the person's face, and they'll pick up a red phone and make a call, and you stand there sort of hanging around, and then, eventually, you get cleared, and you go through.

ZAHN: How many times did this happen before you realized there was a pattern in?

DAVE NELSON, NEW YORK: Oh, I think, by the third time, I recognized there was something going on.

ZAHN: And what were you told then, when you were on to it?

DAVE NELSON, NEW YORK: I wasn't told anything. I -- one of the recent times, I asked one of the Port Authority policemen, and he said well, we're stopping people with -- who have usual or normal last names. I don't know what he meant by that, but...

ZAHN: But, at one point, the FBI was actually involved in your case?

DAVE NELSON, NEW YORK: That's true.

ZAHN: How did that come about?

DAVE NELSON, NEW YORK: I was stopped in the airport in San Diego, and they called the local police, who came to the terminal, checked me out, and then they tried to punch me through, they got stopped again, and they had to call the FBI. So I was there for about an hour.

ZAHN: And what did the FBI tell you? DAVE NELSON, NEW YORK: The FBI didn't tell me anything. Apparently, they told them that, you know, I wasn't going to blow the plane up or anything.

ZAHN: When you went through this, were you insulted by it, or do you understand in this post-9/11 environment why this happens?

DAVE NELSON, NEW YORK: Yes, I mean, I have a pretty thick skin, and, you know, it -- they haven't made me miss any flights, so I'm not -- I mean, it's a pain, but it's not -- you know, it's not something that I get too upset over.

ZAHN: And, Dave Nelson in Chicago, you're approaching this maybe in a more serious way. You've actually filed a lawsuit. It has been a huge inconvenience to you, hasn't it?

DAVE NELSON, CHICAGO: Well, that's right. The ACLU on my behalf has filed a lawsuit for me and for all the Dave Nelsons, including the one in New York.

ZAHN: How much trouble has it been for you to finally board flights?

DAVE NELSON, CHICAGO: Really it's not about inconvenience. It's ultimately about security, of course. Every minute spent looking at me or another Dave Nelson, such as the one in New York, is a minute spent away from the real important job of finding terrorists.

ZAHN: So what's the point of suing the government?

DAVE NELSON, CHICAGO: Well, first and foremost, it would be terrific if the government were to create a process where Dave Nelsons can be told that they're on a list and then explain to the government who they are and get off of that list so that we're not delayed and so the government can concentrate or focus its efforts more efficiently on finding the terrorists.

ZAHN: Now, Dave, you think things have actually gotten a little better. How so?

DAVE NELSON, NEW YORK: They have, the frequency of the delays. It's only been my experience that the frequency of the delays and the duration of the delays has definitely, in the last six, 12 months, gone down.

ZAHN: Did you ever think your personal situation would inspire a bunch of comedians to make jokes about what you and the other fellow Dave Nelsons have faced here over the last several months?

DAVE NELSON, NEW YORK: No, I've been an inspiration to many, unwittingly so.

ZAHN: Did you think you were going to be comedy fare, Dave Nelson in Chicago?

DAVE NELSON, CHICAGO: I wouldn't have anticipated it, but I'm thrilled that it's happening.

ZAHN: OK. Final question to the two of you. I know you feel a little less hassled than Dave Nelson in Chicago, but, bottom line, Dave in Chicago, do you understand the challenge the TSA is up against in this post-9/11 environment?

DAVE NELSON, CHICAGO: Sure I understand the political pressure, I understand the importance of communicating to the public that the airways are safe, and I'm behind that effort 100 percent. Indeed, our effort in this lawsuit and away from the lawsuit is to help with that process.

ZAHN: And how do you see this fight?

DAVE NELSON, NEW YORK: Sure. I mean, I understand what they're facing, but you have to think that they could go about it a different way, perhaps a more effective way.

ZAHN: Well, we appreciate both of your sharing your stories with us tonight. Dave Nelson, Chicago. Dave Nelson here in the New York studio. Thanks. Good luck traveling.

DAVE NELSON, NEW YORK: Thanks.

DAVE NELSON, CHICAGO: Thanks a lot.

ZAHN: And coming up, from terror watch list to the invisible passenger watching you behind the wheel. The box that has been keeping tabs on your driving. That story when we come back.

(COMMERCIAL BREAK)

ZAHN: Chances are you don't know it, but your car may be spying on you. There is a computer inside many cars that works in some ways like the flight data recorder on an airplane, and the information it saves can be used against you in court if you get into an accident. It raises some very important questions about your privacy versus your safety.

Here's Technology Correspondent Daniel Sieberg.

(BEGIN VIDEOTAPE)

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT (voice-over): A mother was driving this SUV on an open highway in broad daylight when the crash occurred. There were no other cars involved in the accident and road conditions were perfect. Two children died in the crash.

The Georgia State Patrol's special collision unit was called in to figure out what happened. A silent, unbiased passenger in the car will provide them with accurate information about the vehicle's performance just seconds before the crash. It's not a human witness. It's an event data recorder -- or, for lack of a better term, a black box.

(on camera): Now what information are you hoping to get from the device?

SGT. WADE CHAFFIN, GEORGIA STATE PATROL: Well, actually, my current cable reading in the software tells me that this car will give us pre-crash graphs, which will give us its vehicle speed five seconds prior to impact. It will gives us the brake switch circuit status.

SIEBERG (voice-over): Speed, braking, whether seat belts are buckled -- they're among the dozens of readings measured by the more sophisticated black boxes. Unlike flight recorders on the airplane which are recording constantly, the device in your car wakes up when a crash may be imminent, sensing a sudden change in speed.

Of course, it's not the only information investigators will use. They'll also consider human factors like fatigue or alcohol levels and road condition.

CHAFFIN: This is just piece of the puzzle. Just a piece and -- but it's a good piece. It's a key piece.

SIEBERG: The troopers still don't know exactly why this accident happened, but say they suspect driver error. Still, the box may provide clues. It's one of the reasons the National Transportation Safety Board is now recommending that all cars have the device.

The technology was originally designed to control and monitor air bags. Variations have been in some cars since the 1970s, but they raise a serious personal privacy issue, according to constitutional law attorney Mark Rasch.

MARK RASCH, CONSTITUTIONAL LAW ATTORNEY: The black box is in our car to protect the automobile manufacturer from liability for product -- defective product liability. It's not there to gather evidence for law enforcement, and most people don't even know that the box is there or what it's doing.

So we have a box that's collecting personal data about us, without our knowledge, without our consent, without our ability to control it.

SIEBERG: In court, either side can use the data, and one tragic case illustrates its influence in swaying a jury.

(on camera): It was the middle of the night in this South Florida suburb, August of 2002, when 16-year-old Jamie Maier was backing out of this driveway. Another car driven by Edwin Matos coming from this direction was on a collision course. Both Maier and another passenger died in the accident.

ROBERT STANZIALE, ATTORNEY FOR EDWIN MATOS: He was not going an excessive speed!

SIEBERG (voice-over): Matos said he was driving 50 miles per hour, but the event data recorder in his car told a different story.

STANZIALE: He was very surprised. He had no idea that there was a -- you know, a device which was allegedly recording information, you know, from his vehicle that could subsequently be used against him in court.

SIEBERG: The black box indicated Matos was traveling more than a hundred miles per hour when he slammed into the teenager's vehicle, He was convicted of two counts of vehicular homicide and sentenced to 30 years in prison.

In California, a new law makes the data property of the car's owner, unless there's a court order. But, in other states, black box data is an illegal gray area. In the case of the Georgia SUV accident, troopers got a signed warrant -- just in case -- before downloading the data.

CPL. JIM WICKER, GEORGIA STATE PATROL: To cover ourselves, we go ahead and obtain the search warrant for this information. That way, we can get this introduced into court, we feel, without any problems, and we've not violated anybody's rights.

STANZIALE: People don't realize that you have something in your vehicle every day, as you drive down the road, that ultimately could testify against you.

SEIBERG: If you don't know whether you have an event data recorder if your car, well, you can always refer to the owner's manual. But if you're thinking about ripping it out, think again. It's also the brains for your air bag system, and, without it, the air bags won't deploy in the event of an accident.

(END VIDEOTAPE)

ZAHN: So you don't want to think about yanking them out.

Joining us now from Washington, two people who come at this from very different sides: Ellen Engelman Conners, chairman of the National Transportation Safety Board, and David Sobel, co-founder and general counsel of the Electronic Privacy Information Center.

Good to see both of you. Welcome.

David, I'm going to start with you this evening. To put this into perspective, you have some 30 million cars and trucks in America that now have the most basic of these black boxes. What is it that you're afraid of?

DAVID SOBEL, ELECTRONIC PRIVACY INFORMATION CENTER: Well, first of all, I don't think there's a real problem with the technology itself if it's used properly in a limited way -- for accident reconstruction purposes, for instance.

But I think the real problem that we're seeing is that the technology is widely deployed in millions of cars, and, for the most part, the drivers have no idea that this technology is in their car. They don't know what kind of information is collected, and they don't how much of the information is collected, and they don't know what rules, if any, apply to who can get their hands on that information.

So it's really a question of a lack of information when this technology is being very quickly deployed and the legal structure that really is going to control how that information is going to be used hasn't been developed yet, with the exception of the law in California. So it's...

ZAHN: So, Ellen, what...

SOBEL: It's really a question of information.

ZAHN: And, in California -- we should make it clear -- they have a law there that helps determine who has ownership of this information that actually is saved in these little black boxes.

Ellen, what is it that consumers should be aware of that is being tracked by these black boxes and the potential for abuse down the road?

ELLEN ENGLEMAN CONNERS, CHAIRMAN, NTSB: Well, I think it's very important to understand that we're measuring vehicle data. This isn't a reality TV show with a camera and a microphone on the driver doing 24-7 surveillance.

It's measuring speed. It's measuring velocity upon impact. It's measuring if the brakes are on or off during an event. And that's critical to understand. We're talking about event data during an accident, not a seven-day-a-week tape that will run continuously.

ZAHN: But who could potentially use that information, Ellen, down the road?

ENGLEMAN CONNERS: Well, we want to use it for safety purposes. We have 42,000 people dying every year on the highway. During your show tonight, Paula, five more people will die in highway accidents.

So we want to be able to get factual data, objective data, not guess, not supposition, not a witness that thinks a car was going so fast or not, but objective, non-human data so that we can do safety reconstruction, design better vehicles and design safer highways.

ZAHN: So, David, in your estimation, given where this technology is going, is there a way you can balance the safety concerns that Ellen has here this evening with some of your concerns about this technology being abused or misused?

SOBEL: I think we can, and, certainly, as I say, it starts with getting information in the hands of the consumers who have this technology in their cars, and that's a necessary first step. Then it's a question of how the technology is deployed, and I think we need some legal protections in place, for instance, to make sure that only five seconds of driving information is collected, rather than five minutes' worth or five hours of information.

Keep in mind that with storage media becoming so inexpensive, I think there's going to be a tendency, as this technology develops, to collect more and more of this information.

ZAHN: So... SOBEL: Also, you know, cars increasingly have location capabilities, GPS technology on board. So, over time, there's going to be some pressure to begin collecting location information about where cars have been at particular times. So we need...

ZAHN: All right. So...

SOBEL: We need to have controls in place.

ZAHN: I hear what you're saying, David.

So, Chairman, I guess my question to you, in closing here tonight, is how can you assure the American consumer who have these black boxes in their cars and trucks that the information in these black boxes will not be used against them, that their vehicles won't be used against them in court?

ENGLEMAN CONNERS: The Safety Board is an independent agency for safety investigations. We're not a regulatory agency. But we're very aware and concerned about the privacy issues and feel that with proper regulation, proper data protection, we can focus on safety, use the tools of technology that we can develop today and implement today, in order to help start saving those 42,000 lives that we lose every year.

ZAHN: I thank you both. You've have said a lot tonight to make us all think. David Sobel, Ellen Engelman Conners, thank you.

SOBEL: Thank you, Paula.

ENGLEMAN CONNERS: Thank you.

ZAHN: Coming up next, we turn to Iraq and what could finally be the end of a bloody battle for a sacred holy site.

Plus, clues to the fate of an American hostage.

(COMMERCIAL BREAK)

ZAHN: U.S. military officials tell CNN tonight that they are suspending combat operations in the Iraqi City of Najaf so the Iraqi interim government can negotiate with militant cleric Muqtada al Sadr.

Also, one of al Sadr's senior aides says the militant leader has promised to hand over the Ali mosque to Iraq's highest Shiite leader, the Grand Ayatollah Ali Sistani. Those are the latest statements in a day of back-and-forth assertions about the siege of one of Shiite Islams' holiest shrines.

Also today, an aide to al Sadr told CNN that he has been assured that American journalist Micah Garen would be released sometime Friday or Saturday. Garen and his Iraqi translator were taken captive a week ago by a group calling itself the Martyrs Brigade.

Our John Vause joins us in Baghdad, and he joins us live to bring us up to date on what is going on there. John, we'd love for you to clear up some of the confusion here. There have been lots of reports and retractions all day long about the Iraqi military actually going into the shrine in Najaf. Did that actually happen?

JOHN VAUSE, CNN CORRESPONDENT: Well, Paula, there's no way to independently confirm that Iraqi police or Iraqi security forces ever entered the Imam Ali Mosque at any time today. From the Pentagon all the way down to our own CNN crew on the ground in Najaf, they're all saying that there's no hard evidence to suggest that they actually went into the mosque.

U.S. Marines on the ground in Najaf do have a theory. It's only speculation, but what they're saying is that, early Friday, there was a three-hour cease-fire in place to observe Friday prayers. The Marines are speculating that during that cease-fire, possibly one or two or a handful of Iraqi policemen or security forces may have entered the mosque then.

Now, from that, it appears that the interior ministry here in Baghdad has got these erroneous reports that the mosque was -- that the standoff was over, that the police were in control. But, certainly, no evidence to suggest that Iraqi police or any Iraqi security forces went into the mosque en masse.

ZAHN: So who is in control of the mosque tonight?

VAUSE: Everyone's working on the assumption that Muqtada al Sadr is still in control of the mosque. Late today, there are reports from Najaf that his militia are outside the mosque.

When they're going into the Imam Ali Mosque, they're, in fact, leaving their weapons outside, only to reclaim them once they leave the mosque later on.

We're also told that there are a number of women and children inside the mosque as well. And, at this stage, everyone is assuming that it is still Muqtada al Sadr who is inside the mosque. It is one of the biggest mosques in all of the Middle East. He is somewhere inside that mosque, calling the shots.

ZAHN: He did not deliver his normal Friday sermon, though, did he?

VAUSE: That's right, and there is a lot of speculation to find out where he actually is. He did not turn up to the Kufa mosque which is just outside Najaf. He, obviously, physically couldn't get there, but we have not seen Muqtada al Sadr in days. There's been no public statements.

The U.S. military is saying it has no hard intelligence on his exact whereabouts. And we were told by al Sadr's spokesmen and his aides within the last 24 hours -- they're insisting that the cleric is not inside the Imam Ali Mosque, and they won't tell us where he is, Paula.

ZAHN: Let's turn to the issue of this journalist taken who was taken hostage, Micah Garen. There have been reports all day long that he would either be released today or tomorrow. Obviously, that hasn't happened here, Friday, at this hour, in the states. What do you know about his situation?

VAUSE: Well, what we were told -- that when he was initially kidnapped, they gave a deadline of 48 hours. We're not too sure when that deadline was started, when the deadline was. But what we are being told by a senior al Sadr aide is that they are now involved in negotiating his release. They're saying that that release is imminent and that Garen is still in good health.

This is a positive sign, Paula, because this is the same aide who was involved in the release of James Brandon. He was a British journalist who was kidnapped from a hotel room in Basra about a week or so, and he was released within just a few hours.

Now al Sadr has come out and publicly condemned these type of kidnappings, calling them un-Islamic. So the signs -- while nothing positive yet, it's still -- it's looking encouraging that he -- that Garen could be released soon.

ZAHN: It may be encouraging, but a lot of us back here saying we'll believe it when we see it.

John Vause, thank you so much.

Coming up next, on to the presidential campaign. You might expect the war in Iraq to be a red hot topic. But Vietnam is still generating a lot of heat. That's coming up.

(COMMERCIAL BREAK)

ZAHN: The John Kerry campaign has filed a complaint tonight with the Federal Election Commission, claiming that ads attacking his Vietnam War record are being illegally coordinated with the Bush/Cheney campaign and the Republican National Committee.

The complaint is based on federal law that require groups like Swift Boat Veterans for the Truth, which can collect unrestricted donations, to operate separately from campaign organizations.

The Bush campaign calls the complaint frivolous and false. The veterans' group began its attack with an ad accusing Kerry about his action in combat.

CNN political analyst Bill Schneider has more.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): The ad ran for eight days in three states.

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He's lying about his record.

SCHNEIDER: The ad was run by a group of Vietnam War veterans who call themselves Swift Boat Veterans for Truth. Questions have emerged about inconsistencies in their testimony.

For instance, former Rear Admiral Roy Hoffman says in the ad...

REAR ADMIRAL ROY HOFFMAN, U.S. NAVY (RET.): John Kerry has not been honest.

SCHNEIDER: But last year, Hoffman told the "Boston Globe" that he corroborated the actions that won Kerry a Silver Star.

"It took guts, and I admire that," Hoffman said.

George Elliot and Adrian Lonsdale, who also appear in the ad, showed up in at a news conference in Boston during Kerry's 1996 Senate campaign, where they also backed up Kerry's version of events.

Now, the Kerry campaign has released an ad making this counter- charge.

UNIDENTIFIED MALE: The people attacking John Kerry's war record are funded by Bush's big money supporters.

SCHNEIDER: There's Texas real estate developer, Bob Perry, one former Governor George W. Bush's biggest backers, who contributed $200,000 to the swift boat veterans group.

"New York Times" reporter Kate Zernike, who has been following this story calls Perry...

KATE ZERNIKE, REPORTER, "NEW YORK TIMES": The biggest donor in Texas, a huge Bush donor.

SCHNEIDER: There's public relations executive Merrie Spaeth, another Bush contributor who helped organize the swift boat veterans.

ZERNIKE: A woman who has done their P.R., works in the Reagan White House and coached President Bush's father for his debate with Geraldine Ferraro.

SCHNEIDER: Next week, Swift Boat Veterans for Truth plans to release a second ad. This one uses excerpts from Kerry's 1971 testimony before the Senate Foreign Relations Committee.

KERRY: They had personally raped, cut off ears, cut off heads.

UNIDENTIFIED MALE: The accusations that John Kerry made against the veterans who served in Vietnam was just devastating.

SCHNEIDER: But in his testimony, Kerry was actually quoting statements made by other veterans.

KERRY: Several months ago in Detroit we had an investigation at which over 150 honorably discharged and many very highly decorated veterans testified to war crimes committed in Southeast Asia.

SCHNEIDER: Kerry's actual statement was, "They told the stories at times they had personally raped, cut off ears, cut off heads." Earlier this year, Kerry said this about his 1971 testimony.

KERRY: I think the way I characterized it at that time was mostly the voice of the young, angry person who wanted to end the war.

(END VIDEOTAPE)

ZAHN: And that was Bill Schneider. Joining us now to square off over these campaign ads are "CROSSFIRE" co-hosts Tucker Carlson and Paul Begala. All fired up on a Friday night.

Welcome, gentlemen.

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Yes.

PAUL BEGALA, CO-HOST, "CROSSFIRE": Thanks, Paula.

ZAHN: Tucker, we just had the White House today again repeating that it had nothing to do with these ads. Yet in Bill Schneider's piece, he talked about the web of connections that exist between the people who financed these ads and two different Bush administrations.

What do you make of that?

CARLSON: Well, it's not surprising. I mean, they're anti-Kerry ads, you know, they're designed to defeat John Kerry's attempt to become president.

It turns out that a lot of well-connected, prominent Republicans in Texas know each other. That's true for Republicans across country. I'm sure the Bush campaign, especially coming after the polls that show these ads hurt Kerry among veterans, secretly approves of the ads. I mean, this is -- talk about news from nowhere.

You've got to admit, though, that Kerry has run his presidential campaign on this idea that he's a war hero and you're not. He's a war hero; you're not. You're not allowed to criticize him because of that. If you run your campaign on something, it's just not surprising that people attack you on it.

ZAHN: Paul, why did John Kerry wait so long to blast the president for, in his estimation, allowing these to run?

BEGALA: I think he should have waited longer. I don't think, frankly, that it was strategically wise for Senator Kerry to make more of an issue of this. They're preposterous and they're not factual.

And I guess if I were John Kerry, I would have said, "Why is it that the president and his allies are talking about something that happened in Vietnam 35 years ago? Because they don't want to talk about what's happening in America here today."

And they do happen every cycle, at least every cycle that George W. Bush or his father participates in.

We remember the Willie Horton ad. We remember when Mike Dukakis was accused of being mentally ill. We remember when John McCain was trashed. This happens every time that George W. Bush runs.

CARLSON: Well, it's funny. What people forget about the Willie Horton had -- Willie Horton ad, I just can't resist saying it, it was 100 percent true, OK? So...

BEGALA: The execution of it was very racially inflammatory.

CARLSON: Look, the ad was true. And the fact is...

BEGALA: It was. Of course it was true. This ad -- These ads are not, however.

CARLSON: The new spot up by these guys is much more effective than the one I think they had up a couple of days ago. And the new one just interposes testimony that Kerry gave in the early 1970s, saying, look, Vietnam veterans committed all these war crimes, all these atrocities.

And then, it has these veterans saying, you know, that basically hurt my feelings when he said that. There's no way to argue with that. It's true. It's a valid point of view.

BEGALA: The problem is all of this makes President Bush look like a bit of a gutless wonder. If these are legitimate attacks, he should raise them. If they're not, if they're unfair and untrue, as I believe they are, and Senator McCain believes they are, he should disavow them.

Instead he sits back, like some sort of passive patsy, unable to decide whether he's for or against these attacks.

ZAHN: All right.

BEGALA: If they were legitimate attacks, they'd launch them...

ZAHN: As you know, White House press secretary Scott McClellan came out swinging today, basically saying that John Kerry is fielding these kinds of ads. That he wants it both ways.

BEGALA: The questions for ads ought to be are they fair and factual. Are they based on the public record?

And there are a lot of legitimate criticisms of Senator Kerry, and a lot of legitimate criticisms of President Bush. I just wish they would get the election on to issues that actually might affect my life.

ZAHN: I have one more ad I want the two of you to react to. And this is the Olympic ad that's creating some controversy.

(BEGIN VIDEO CLIP)

ANNOUNCER: Freedom is spreading throughout the world like a sunrise. And this Olympics, there will be two more free nations and two fewer terrorist regimes.

(END VIDEO CLIP)

ZAHN: Do you think, Tucker, the administration is guilty of politicizing these games?

CARLSON: In my view, there aren't too many great things to come out of the war in Iraq, but this is definitely one. The Bush administration is looking for successes. Again, this is indisputably a success. I don't have any problem with it at all.

But this idea that Democrats are shocked that you would politicize the Olympic games, the whole thing is a political spectacle by definition. Please, wake up.

BEGALA: Absolutely.

ZAHN: All right, Paul, you get the last word.

BEGALA: What I'm shocked by is that the president's team did such a poor job advancing the issue. That is, they raised it and now the members of the Iraqi soccer team, exercising their newfound rights of free speech, have told President Bush to go buzz off and not use them in his ads.

But you'd think before the president used their country and their status in his ads they would have checked with them first. And he didn't. It's a huge staff error on the part of the president's campaign.

CARLSON: Run it by the soccer team. Focus group with the soccer players.

BEGALA: Well, before you start taking credit for the soccer players, you ought to make sure that maybe they're OK with it.

CARLSON: Good point.

ZAHN: All right. We've got to end on that note tonight. Gentlemen, Tucker Carlson, Paul Begala, always great to see you. Thanks so much for your time.

BEGALA: Thanks, Paula.

CARLSON: Thanks.

ZAHN: And the battle other campaign ads highlights just how close this election is expected to be. And that undecided voters could hold the key to victory.

This week, we brought undecided voters in the battleground state of Ohio face to face with representatives of both of Bush and Kerry campaigns to ask about the issues they care about.

If you missed our town hall meeting, you'll get a chance to see it again this weekend. Our special edition of PAULA ZAHN NOW airs tomorrow night at 8 and at 11 p.m. Eastern and then again on Sunday at 5 p.m. Eastern. And we'd like for you to watch it all three times, frankly.

Still ahead a familiar combination. In an election year, the economy and the voters.

(COMMERCIAL BREAK)

ZAHN: Well, expect the U.S. economy to slow down in the second half of the year and inflation to rise somewhat. That is the world today in a Federal Reserve survey of 30 economic forecasters.

Still, the report says a slowdown should not mean more people will necessarily be out of work. So what does it mean for the presidential race?

If the catch phrase in 1992 was "It's the economy stupid," in 2004, it's more like, "It's the economy, stupid, sort of."

Here's our Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Ask any two voters how the American economy is doing, and chances are you will get widely different answers, depending on where the people live and what they do for a living.

The chief economist for "BusinessWeek" is Michael Mandel.

MICHAEL MANDEL, CHIEF ECONOMIST, "BUSINESSWEEK": Most of the country is actually doing well, but there's enough fear out there that you can sort of point to a couple places doing poorly and say, "You know, you could be going that way, too."

FOREMAN: Consider the battleground state of Ohio with its huge manufacturing base. Two hundred thirty-five thousand jobs have been lost here in the past few years, something John Kerry likes to point out.

KERRY: Don't tell us that some worker in Ohio has to not only lose their job, but they have to unbolt their own equipment, crate it up, ship it to China, and train somebody else for their job.

FOREMAN: The situation, however, is complex. The Timken Company in Canton, for example, is planning to eliminate 1,300 jobs in its precision bearings division.

But Timken will still be the area's largest employer. It's hired 170 workers in other divisions and it has 120 job openings.

Company officials say the cuts will keep them competitive.

JIM GRIFFITH, PRESIDENT & CEO, TIMKEN COMPANY: That's evolution. That's part of business. That's what makes our living standard go up year after year after year.

FOREMAN: Not far away in Youngstown this high tech firm started a few years ago and has been expanding ever since. It now employs 19 people.

These companies are springing up everywhere in Ohio, but they don't grab headlines like a big layoff.

ANDY DOEHREL, OHIO CHAMBER OF COMMERCE: When you're talking high tech, you're usually not talking about a thousand jobs. You're looking at more intensive small business types of areas, which is where most of the jobs are coming from. So it's a little bit harder to see.

FOREMAN: Plenty of people who are still deciding how to vote clearly remain worried about the high cost of gas, healthcare, and undeniably slow job growth.

RICK FARMER, UNIVERSITY OF AKRON: It's literally going to depend on how they feel about can I pay the bills? What's the price of gasoline? What's the price of milk? How's my rent coming?

FOREMAN (on camera): So can a president win reelection when voters in critical states are unsure if the economy is good or bad?

(voice-over): Well, there was a year that was shockingly like this one, according to Michael Mandel.

MANDEL: You can barely tell the two economies apart. It's astounding.

FOREMAN: And that was 1996, when Bill Clinton held on to the White House.

(END VIDEOTAPE)

ZAHN: That was Tom Foreman.

Joining us now from Washington, "New Republic" editor Peter Beinart.

And with me here in New York, John Fund of the "Wall Street Journal".

Good to see both of you.

All right, John, how vulnerable is President Bush in the states of Ohio, Pennsylvania, and Michigan if the economies don't pick up there?

JOHN FUND, "WALL STREET JOURNAL": There have been a lot of manufacturing jobs lost, and certainly there's a vulnerability.

However, there's also been a lot of small business formation. Nationwide, when President Clinton was running for election in July 1996, the unemployment rate was 5.4 percent. Today, nationwide, it's 5.5 percent.

It is hurting, in particular, states that you mentioned. But you go to a state like Wisconsin, you go to a state like Minnesota, which were states that Al Gore carried, the economy is doing very, very well.

ZAHN: So what about that, Peter? Did John just mention two states where the economy is functioning better than those other swing states? Doesn't that make it harder for John Kerry to carry his message of economic growth?

PETER BEINART, EDITOR, "NEW REPUBLIC": I think the key fact of this election is that if George W. Bush loses Ohio, he loses the election.

John Kerry's had a consistent and a sometimes sizable lead in Michigan and Pennsylvania. Right now, it looks very unlikely he's going to lose those states, which George W. Bush lost in 2000.

If Bush loses Ohio, as well, I think he's going to lose this race. And in Ohio, as in Pennsylvania and Michigan, the economy is really in trouble.

ZAHN: Well, we know that no Republican president has ever won the presidency without taking Ohio.

FUND: They used to say the same thing about Missouri, and then Missouri changed. If you add Wisconsin and Minnesota together...

BEINART: Kerry's leading both those states.

FUND: ... those are more electoral votes than are in Ohio.

BEINART: But Kerry's leading in both those states.

FUND: Peter, we have a campaign. That's why we have 65 day, 75 days between now in which we can have polls which might change.

BEINART: Sure, but there's no evidence that -- those are states that Al Gore won, and right now, Kerry has a lead in those states, sometimes outside the margin of error. So...

FUND: Sometimes outside the margin of error.

BEINART: ... of course, things could change. Yes, but poll after poll after poll shows him with the lead. Sure, things could change. But right now, if -- right now, the way it looks, if George W. Bush loses Ohio, even if he wins Florida, as he well may, I think he's going to lose this race.

FUND: Peter, the very latest poll in "Hotline" today shows Bush with the lead in Ohio. Just so you know.

ZAHN: What could change between now and election day in any appreciable way?

FUND: Unemployment claims have just gone down again for the third week in a row. The economy is still improving. They're not improving as much as people might want, but I am telling you, this is a recovery, the perception of which is negative, not the actual numbers. Talk to the Federal Reserve board. ZAHN: Peter, do you think John Kerry has been effective, in these states where he may have a razor lead, in trying to explain to people in Ohio and Pennsylvania, what he would do to save their jobs?

BEINART: The truth of the matter is there's not very much John Kerry can do in the short-term to create jobs. But he can lay out a critique of why George W. Bush's economic policies have not been fair and have not been good for most Americans. He doesn't do that terribly well. If he did he would have an even bigger lead in some of these states.

ZAHN: So Peter, you agree with a bunch of Democrats who are saying that he made a tactical error by talking so much about national security at the convention, and he should have focused more on these narrower economic issues?

BEINART: No, I would put it somewhat differently. I don't think it's that John Kerry doesn't speak enough about the economy. On the stump, he speaks about it a lot.

I just don't think -- he still has not crystallized a pointed, cogent critique in the way that John Edwards had in the primaries, one that really resonated with a lot of people. It's not the amount of time he talks about the economy; it's what he says.

ZAHN: Gentlemen , we've got to leave there it. John Fund, Peter Beinart, always good to see you. Have a good weekend.

BEINART: Thanks.

ZAHN: When we come back, we'll head to court for a round up of the latest developments in some very high profile trials. Right after this.

(COMMERCIAL BREAK)

ZAHN: Check out that wall of fame there.

A courtroom show of solidarity by Michael Jackson's family this week, that's just one of the noteworthy events this week in three closely watched criminal case.

Joining me from Los Angeles, Steve Cron, a criminal defense lawyer and professor of law at Pepperdine University.

Welcome. Good to have you with us.

STEVE CRON, CRIMINAL DEFENSE LAWYER: Thank you, Paula. Nice to be here.

ZAHN: Thank you.

So we all observed this wonderful Jackson family love-fest, followed -- or not followed by, in addition to an appearance by Michael Jackson at a church. Is this repackaging of Michael Jackson going to fly with the jury? CRON: I don't think the jury's really going to care.

I think they're going to do whatever they can to make him look more human, more interested in the community, show his family support and all that.

But I think at the end of the day, when this case goes before a jury, months from now, I don't think they're really going to care.

Michael Jackson's image is indelibly marked on the psyche of the American population. And I don't think anything that he does in the next few days or weeks or months is going to change that.

ZAHN: There was an interesting development in court this week, though, when a judge granted him permission to make a statement. And in that, he said, quote, "I personally have suffered through many hurtful lies and references to me as Wacko Jacko."

Why would the judge let him break the gag order? And what does this mean?

CRON: Well, I think what happened is that there has been some negative publicity that has come out about Michael Jackson, such as the fact that the sheriff's report about the allegations that the sheriffs manhandled him was released by the attorney general's office, saying that he was not manhandled.

There have been some other things that have come out that have been negative towards Michael Jackson. And I think the judge felt in order to level the playing field, he would allow him to make that one brief statement.

He wasn't allowed to address the facts. He wasn't able to talk about the case. But he's able to say, "I'm not the Wacko Jacko person that you all think I am. I'm just a regular kind of guy."

ZAHN: Did that work for you?

CRON: It didn't impact me at all. I mean, I know who Michael Jackson is. I don't know whether he's guilty of this offense or not, but I have an image of who Michael Jackson is. And for to him stand up and say, "I'm not Wacko Jacko," what else would you expect him to say?

ZAHN: Let's talk a little bit about the testimony. We also heard about police potentially exceeding the mandate of the search warrant. Is this a critical issue?

CRON: It could be. If -- And everything's been sealed, as you know. So we don't know what the police found at Neverland.

But if they found something that was important and the judge found -- makes a finding that the police exceeded what the judge allowed them to be looking for or the terms in which the search was to be conducted, he could, theoretically, rule that some of the evidence they found at Neverland would not be admissible in court, because it was a result of an illegal search and seizure.

Again we don't know how important that is, because we don't know what's been found there. And most of the time, judges will say that when the police go in with a search warrant, may not be perfect, but generally, the rule is that it's good enough. And it's rare that judges will exclude evidence based upon an illegal search and seizure.

ZAHN: Want to move you on now to the issue of the Kobe Bryant trial, which is supposed to get underway next week. Do you think it will be?

CRON: No. I don't think so. I've been saying for well over a year now that I didn't think this case would ever go to trial.

And when the judge finally issued that ruling, allowing the defense to go into the accuser's sexual history for the 72 hours before and after the allegations were made, I think that was a death blow to the prosecution. I think they're now scrambling around, trying to figure out how to save face.

I don't think this case will ever go to trial in a criminal court. It's possible it could be in a civil case. But my prediction is that it will never go to a criminal jury and there will be a civil settlement outside of the court proceedings so that it will never be made public. He will pay her a lump sum of money and that will be the end of it.

ZAHN: Steve, I can only get you 30 seconds for the final answer on what you predict for the Scott Peterson case next week when Amber Frey is cross-examined by the defense.

CRON: I think it will be a brief cross-examination, focusing on the fact that she was trying to get Scott Peterson to say something to incriminate himself. That's what the police, that's what Gloria Allred wanted her to do.

And he repeatedly denied having anything to do with Laci Peterson's death. That's, I think, as much as they're going to get out of her.

ZAHN: Thank you for your discipline and brevity there, Stephen Cron.

CRON: My pleasure.

ZAHN: You ought to be an attorney. Thanks for joining us.

We'll be right back.

(COMMERCIAL BREAK)

ZAHN: Once again, a quick programming note for you. You can see our exciting town hall special even again this weekend. Undecided voters in the battleground state of Ohio taking on representatives of both the Bush and Kerry campaigns. Our special edition of PAULA ZAHN NOW airs tomorrow night at 8 and 11 Eastern time, and then again on Sunday at 5 p.m. eastern. So if you will, join us then.

Thanks again for being with us tonight. On Monday, the fate of four more American soldiers hangs in the balance as the military begins pretrial hearings in the Abu Ghraib prison abuse scandal.

That's it for us tonight. Have a great weekend. Thanks again for dropping by this evening. "LARRY KING LIVE" is next.

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


Aired August 20, 2004 - 20:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Tonight, the secret no-fly list. If your name's on it, you're grounded, whether you're a terrorist or a senator or just some guy named Dave Nelson.
DAVE NELSON, NEW YORK RESIDENT: I'm Dave Nelson.

DAVE NELSON, CHICAGO: No, my name is Dave Nelson.

DAVE NELSON, NEW YORK: No, I'm the real Dave Nelson.

(BEGIN AUDIO CLIP)

EMINEM: So won't the real Slim Shady please stand up...

(END AUDIO CLIP)

ZAHN: Will the real Dave Nelson please step out of the line?

And the black box inside your car. It knows how fast you drive, it knows if you buckle up, and you may not even know it's watching you. Tonight, your safety versus your privacy.

Good evening. Welcome. Glad to have you with us tonight as we wrap up the week here.

In this age of terrorism, everyone agrees extra security precautions, especially at airports, are a necessary inconvenience. Sometimes, however, the inconvenience can become a nightmare.

Tonight, cases of mistaken identity. It happens to people you'd think would never be questioned in a million years.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): Would anyone really confuse this man with a terrorist?

SEN. TED KENNEDY (D), MASSACHUSETTS: I got on the watch list last April.

ZAHN: During a Senate committee hearing this week, Senator Ted Kennedy of Massachusetts, surely one of the most recognizable public figures in the country, told Department of Homeland Security officials his story.

KENNEDY: I was taking a plane to Boston, and I get out to the U.S. Air, and I come up the corridor, and I want my ticket. They said we can't give it to you. I said, well, wait a minute here. I say, a visa -- I'll -- there must have been a mixup, and the person behind the gate said I can't sell it to you. You can't buy a ticket to go on the airline to Boston. I said, well, why not? We just -- we can't tell you.

ZAHN: Kennedy says it happened a number of times this spring. Airline agents wouldn't sell him a ticket because his name apparently was similar to a name on a secret government list of people who were not allowed to fly, a precaution taken after the September 11 hijackings.

KENNEDY: I tried to get on the plane back to Washington. You can't get on the plane. I went up to the desk. I said I've been getting on this plane, you know, for 42 years, and why can't I get on the plane back to Boston -- back to Washington? They said you can't get on the plane back to Washington. So my administrative assistant talked to the Department of Homeland Security, and they said there's some mistake.

ZAHN: The American Civil Liberties Union has filed lawsuits over this issue in San Francisco and Seattle demanding that the government explain how wrongly flagged travelers can get off the list.

Kennedy isn't the only prominent figure whose name has been flagged. Georgia Congressman John Lewis today said it's also happened to him and says an airline official told him, once you're on the list, there is no way to get off it.

Not true, according to Homeland Security Undersecretary Asa Hutchinson.

ASA HUTCHINSON, UNDERSECRETARY, DEPARTMENT OF HOMELAND SECURITY: It is important for the average citizen to know the process that they can call our TSA ombudsman, who will take the information down, verify that they -- their name is not the same as what's confusingly similar on the list, and we can actually enter into the database that they have been cleared so that that should be prevented in the future.

ZAHN: Yet in Ted Kennedy's case, even a personal call from Homeland Security Secretary Tom Ridge failed to straighten it out the first time.

KENNEDY: It happened three more times, and, finally, Secretary Ridge called to apologize on it. It happened even after he called to apologize because they couldn't -- my name was on the list at the airports and with the airlines and the Homeland Security. He couldn't get my name off the list.

(END VIDEOTAPE)

ZAHN: All right. So you see what Senator Ted Kennedy went through.

So why would a guy named Dave Nelson end up on the federal no-fly list. Well, apparently, there is one Dave Nelson who may well deserve to be on that list, but there are some 5,000 other Dave Nelsons who do not. And we're about to talk to two of them who, like the rest of us, know fighting that the war on terror is certainly a serious business.

That aside, the Dave Nelson dilemma has inspired comedians to write this: "They call me David Nelson, and my name has been besmirched. When I fly across the country, I will always be strip- searched. Somewhere a David Nelson is allegedly quite mean, and the TSA ain't able to declare my persona clean. I missed my flight from Texas, and I missed my flight from Spain. You'd think my second cousin was a Tikriti named Hussein. I am scrutinized and sanitized by security, and then the next time that I fly, they have to do it all again."

And I am seeing double tonight and not just because it's Friday night, because we do, indeed, have both Dave Nelsons here.

Welcome. Good to see both of you.

Dave in New York, I'm going to start with you first. How big of a hassle has this been for you? What's happened to you.

DAVE NELSON, NEW YORK: Well, it not a huge hassle, I have to say, but it's a repeated and regular hassle. Usually, you go to the ticketing agent, and you give them your I.D. If you have a reservation, they punch it into the computer, and, immediately, you'll get sort of a quizzical look on the person's face, and they'll pick up a red phone and make a call, and you stand there sort of hanging around, and then, eventually, you get cleared, and you go through.

ZAHN: How many times did this happen before you realized there was a pattern in?

DAVE NELSON, NEW YORK: Oh, I think, by the third time, I recognized there was something going on.

ZAHN: And what were you told then, when you were on to it?

DAVE NELSON, NEW YORK: I wasn't told anything. I -- one of the recent times, I asked one of the Port Authority policemen, and he said well, we're stopping people with -- who have usual or normal last names. I don't know what he meant by that, but...

ZAHN: But, at one point, the FBI was actually involved in your case?

DAVE NELSON, NEW YORK: That's true.

ZAHN: How did that come about?

DAVE NELSON, NEW YORK: I was stopped in the airport in San Diego, and they called the local police, who came to the terminal, checked me out, and then they tried to punch me through, they got stopped again, and they had to call the FBI. So I was there for about an hour.

ZAHN: And what did the FBI tell you? DAVE NELSON, NEW YORK: The FBI didn't tell me anything. Apparently, they told them that, you know, I wasn't going to blow the plane up or anything.

ZAHN: When you went through this, were you insulted by it, or do you understand in this post-9/11 environment why this happens?

DAVE NELSON, NEW YORK: Yes, I mean, I have a pretty thick skin, and, you know, it -- they haven't made me miss any flights, so I'm not -- I mean, it's a pain, but it's not -- you know, it's not something that I get too upset over.

ZAHN: And, Dave Nelson in Chicago, you're approaching this maybe in a more serious way. You've actually filed a lawsuit. It has been a huge inconvenience to you, hasn't it?

DAVE NELSON, CHICAGO: Well, that's right. The ACLU on my behalf has filed a lawsuit for me and for all the Dave Nelsons, including the one in New York.

ZAHN: How much trouble has it been for you to finally board flights?

DAVE NELSON, CHICAGO: Really it's not about inconvenience. It's ultimately about security, of course. Every minute spent looking at me or another Dave Nelson, such as the one in New York, is a minute spent away from the real important job of finding terrorists.

ZAHN: So what's the point of suing the government?

DAVE NELSON, CHICAGO: Well, first and foremost, it would be terrific if the government were to create a process where Dave Nelsons can be told that they're on a list and then explain to the government who they are and get off of that list so that we're not delayed and so the government can concentrate or focus its efforts more efficiently on finding the terrorists.

ZAHN: Now, Dave, you think things have actually gotten a little better. How so?

DAVE NELSON, NEW YORK: They have, the frequency of the delays. It's only been my experience that the frequency of the delays and the duration of the delays has definitely, in the last six, 12 months, gone down.

ZAHN: Did you ever think your personal situation would inspire a bunch of comedians to make jokes about what you and the other fellow Dave Nelsons have faced here over the last several months?

DAVE NELSON, NEW YORK: No, I've been an inspiration to many, unwittingly so.

ZAHN: Did you think you were going to be comedy fare, Dave Nelson in Chicago?

DAVE NELSON, CHICAGO: I wouldn't have anticipated it, but I'm thrilled that it's happening.

ZAHN: OK. Final question to the two of you. I know you feel a little less hassled than Dave Nelson in Chicago, but, bottom line, Dave in Chicago, do you understand the challenge the TSA is up against in this post-9/11 environment?

DAVE NELSON, CHICAGO: Sure I understand the political pressure, I understand the importance of communicating to the public that the airways are safe, and I'm behind that effort 100 percent. Indeed, our effort in this lawsuit and away from the lawsuit is to help with that process.

ZAHN: And how do you see this fight?

DAVE NELSON, NEW YORK: Sure. I mean, I understand what they're facing, but you have to think that they could go about it a different way, perhaps a more effective way.

ZAHN: Well, we appreciate both of your sharing your stories with us tonight. Dave Nelson, Chicago. Dave Nelson here in the New York studio. Thanks. Good luck traveling.

DAVE NELSON, NEW YORK: Thanks.

DAVE NELSON, CHICAGO: Thanks a lot.

ZAHN: And coming up, from terror watch list to the invisible passenger watching you behind the wheel. The box that has been keeping tabs on your driving. That story when we come back.

(COMMERCIAL BREAK)

ZAHN: Chances are you don't know it, but your car may be spying on you. There is a computer inside many cars that works in some ways like the flight data recorder on an airplane, and the information it saves can be used against you in court if you get into an accident. It raises some very important questions about your privacy versus your safety.

Here's Technology Correspondent Daniel Sieberg.

(BEGIN VIDEOTAPE)

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT (voice-over): A mother was driving this SUV on an open highway in broad daylight when the crash occurred. There were no other cars involved in the accident and road conditions were perfect. Two children died in the crash.

The Georgia State Patrol's special collision unit was called in to figure out what happened. A silent, unbiased passenger in the car will provide them with accurate information about the vehicle's performance just seconds before the crash. It's not a human witness. It's an event data recorder -- or, for lack of a better term, a black box.

(on camera): Now what information are you hoping to get from the device?

SGT. WADE CHAFFIN, GEORGIA STATE PATROL: Well, actually, my current cable reading in the software tells me that this car will give us pre-crash graphs, which will give us its vehicle speed five seconds prior to impact. It will gives us the brake switch circuit status.

SIEBERG (voice-over): Speed, braking, whether seat belts are buckled -- they're among the dozens of readings measured by the more sophisticated black boxes. Unlike flight recorders on the airplane which are recording constantly, the device in your car wakes up when a crash may be imminent, sensing a sudden change in speed.

Of course, it's not the only information investigators will use. They'll also consider human factors like fatigue or alcohol levels and road condition.

CHAFFIN: This is just piece of the puzzle. Just a piece and -- but it's a good piece. It's a key piece.

SIEBERG: The troopers still don't know exactly why this accident happened, but say they suspect driver error. Still, the box may provide clues. It's one of the reasons the National Transportation Safety Board is now recommending that all cars have the device.

The technology was originally designed to control and monitor air bags. Variations have been in some cars since the 1970s, but they raise a serious personal privacy issue, according to constitutional law attorney Mark Rasch.

MARK RASCH, CONSTITUTIONAL LAW ATTORNEY: The black box is in our car to protect the automobile manufacturer from liability for product -- defective product liability. It's not there to gather evidence for law enforcement, and most people don't even know that the box is there or what it's doing.

So we have a box that's collecting personal data about us, without our knowledge, without our consent, without our ability to control it.

SIEBERG: In court, either side can use the data, and one tragic case illustrates its influence in swaying a jury.

(on camera): It was the middle of the night in this South Florida suburb, August of 2002, when 16-year-old Jamie Maier was backing out of this driveway. Another car driven by Edwin Matos coming from this direction was on a collision course. Both Maier and another passenger died in the accident.

ROBERT STANZIALE, ATTORNEY FOR EDWIN MATOS: He was not going an excessive speed!

SIEBERG (voice-over): Matos said he was driving 50 miles per hour, but the event data recorder in his car told a different story.

STANZIALE: He was very surprised. He had no idea that there was a -- you know, a device which was allegedly recording information, you know, from his vehicle that could subsequently be used against him in court.

SIEBERG: The black box indicated Matos was traveling more than a hundred miles per hour when he slammed into the teenager's vehicle, He was convicted of two counts of vehicular homicide and sentenced to 30 years in prison.

In California, a new law makes the data property of the car's owner, unless there's a court order. But, in other states, black box data is an illegal gray area. In the case of the Georgia SUV accident, troopers got a signed warrant -- just in case -- before downloading the data.

CPL. JIM WICKER, GEORGIA STATE PATROL: To cover ourselves, we go ahead and obtain the search warrant for this information. That way, we can get this introduced into court, we feel, without any problems, and we've not violated anybody's rights.

STANZIALE: People don't realize that you have something in your vehicle every day, as you drive down the road, that ultimately could testify against you.

SEIBERG: If you don't know whether you have an event data recorder if your car, well, you can always refer to the owner's manual. But if you're thinking about ripping it out, think again. It's also the brains for your air bag system, and, without it, the air bags won't deploy in the event of an accident.

(END VIDEOTAPE)

ZAHN: So you don't want to think about yanking them out.

Joining us now from Washington, two people who come at this from very different sides: Ellen Engelman Conners, chairman of the National Transportation Safety Board, and David Sobel, co-founder and general counsel of the Electronic Privacy Information Center.

Good to see both of you. Welcome.

David, I'm going to start with you this evening. To put this into perspective, you have some 30 million cars and trucks in America that now have the most basic of these black boxes. What is it that you're afraid of?

DAVID SOBEL, ELECTRONIC PRIVACY INFORMATION CENTER: Well, first of all, I don't think there's a real problem with the technology itself if it's used properly in a limited way -- for accident reconstruction purposes, for instance.

But I think the real problem that we're seeing is that the technology is widely deployed in millions of cars, and, for the most part, the drivers have no idea that this technology is in their car. They don't know what kind of information is collected, and they don't how much of the information is collected, and they don't know what rules, if any, apply to who can get their hands on that information.

So it's really a question of a lack of information when this technology is being very quickly deployed and the legal structure that really is going to control how that information is going to be used hasn't been developed yet, with the exception of the law in California. So it's...

ZAHN: So, Ellen, what...

SOBEL: It's really a question of information.

ZAHN: And, in California -- we should make it clear -- they have a law there that helps determine who has ownership of this information that actually is saved in these little black boxes.

Ellen, what is it that consumers should be aware of that is being tracked by these black boxes and the potential for abuse down the road?

ELLEN ENGLEMAN CONNERS, CHAIRMAN, NTSB: Well, I think it's very important to understand that we're measuring vehicle data. This isn't a reality TV show with a camera and a microphone on the driver doing 24-7 surveillance.

It's measuring speed. It's measuring velocity upon impact. It's measuring if the brakes are on or off during an event. And that's critical to understand. We're talking about event data during an accident, not a seven-day-a-week tape that will run continuously.

ZAHN: But who could potentially use that information, Ellen, down the road?

ENGLEMAN CONNERS: Well, we want to use it for safety purposes. We have 42,000 people dying every year on the highway. During your show tonight, Paula, five more people will die in highway accidents.

So we want to be able to get factual data, objective data, not guess, not supposition, not a witness that thinks a car was going so fast or not, but objective, non-human data so that we can do safety reconstruction, design better vehicles and design safer highways.

ZAHN: So, David, in your estimation, given where this technology is going, is there a way you can balance the safety concerns that Ellen has here this evening with some of your concerns about this technology being abused or misused?

SOBEL: I think we can, and, certainly, as I say, it starts with getting information in the hands of the consumers who have this technology in their cars, and that's a necessary first step. Then it's a question of how the technology is deployed, and I think we need some legal protections in place, for instance, to make sure that only five seconds of driving information is collected, rather than five minutes' worth or five hours of information.

Keep in mind that with storage media becoming so inexpensive, I think there's going to be a tendency, as this technology develops, to collect more and more of this information.

ZAHN: So... SOBEL: Also, you know, cars increasingly have location capabilities, GPS technology on board. So, over time, there's going to be some pressure to begin collecting location information about where cars have been at particular times. So we need...

ZAHN: All right. So...

SOBEL: We need to have controls in place.

ZAHN: I hear what you're saying, David.

So, Chairman, I guess my question to you, in closing here tonight, is how can you assure the American consumer who have these black boxes in their cars and trucks that the information in these black boxes will not be used against them, that their vehicles won't be used against them in court?

ENGLEMAN CONNERS: The Safety Board is an independent agency for safety investigations. We're not a regulatory agency. But we're very aware and concerned about the privacy issues and feel that with proper regulation, proper data protection, we can focus on safety, use the tools of technology that we can develop today and implement today, in order to help start saving those 42,000 lives that we lose every year.

ZAHN: I thank you both. You've have said a lot tonight to make us all think. David Sobel, Ellen Engelman Conners, thank you.

SOBEL: Thank you, Paula.

ENGLEMAN CONNERS: Thank you.

ZAHN: Coming up next, we turn to Iraq and what could finally be the end of a bloody battle for a sacred holy site.

Plus, clues to the fate of an American hostage.

(COMMERCIAL BREAK)

ZAHN: U.S. military officials tell CNN tonight that they are suspending combat operations in the Iraqi City of Najaf so the Iraqi interim government can negotiate with militant cleric Muqtada al Sadr.

Also, one of al Sadr's senior aides says the militant leader has promised to hand over the Ali mosque to Iraq's highest Shiite leader, the Grand Ayatollah Ali Sistani. Those are the latest statements in a day of back-and-forth assertions about the siege of one of Shiite Islams' holiest shrines.

Also today, an aide to al Sadr told CNN that he has been assured that American journalist Micah Garen would be released sometime Friday or Saturday. Garen and his Iraqi translator were taken captive a week ago by a group calling itself the Martyrs Brigade.

Our John Vause joins us in Baghdad, and he joins us live to bring us up to date on what is going on there. John, we'd love for you to clear up some of the confusion here. There have been lots of reports and retractions all day long about the Iraqi military actually going into the shrine in Najaf. Did that actually happen?

JOHN VAUSE, CNN CORRESPONDENT: Well, Paula, there's no way to independently confirm that Iraqi police or Iraqi security forces ever entered the Imam Ali Mosque at any time today. From the Pentagon all the way down to our own CNN crew on the ground in Najaf, they're all saying that there's no hard evidence to suggest that they actually went into the mosque.

U.S. Marines on the ground in Najaf do have a theory. It's only speculation, but what they're saying is that, early Friday, there was a three-hour cease-fire in place to observe Friday prayers. The Marines are speculating that during that cease-fire, possibly one or two or a handful of Iraqi policemen or security forces may have entered the mosque then.

Now, from that, it appears that the interior ministry here in Baghdad has got these erroneous reports that the mosque was -- that the standoff was over, that the police were in control. But, certainly, no evidence to suggest that Iraqi police or any Iraqi security forces went into the mosque en masse.

ZAHN: So who is in control of the mosque tonight?

VAUSE: Everyone's working on the assumption that Muqtada al Sadr is still in control of the mosque. Late today, there are reports from Najaf that his militia are outside the mosque.

When they're going into the Imam Ali Mosque, they're, in fact, leaving their weapons outside, only to reclaim them once they leave the mosque later on.

We're also told that there are a number of women and children inside the mosque as well. And, at this stage, everyone is assuming that it is still Muqtada al Sadr who is inside the mosque. It is one of the biggest mosques in all of the Middle East. He is somewhere inside that mosque, calling the shots.

ZAHN: He did not deliver his normal Friday sermon, though, did he?

VAUSE: That's right, and there is a lot of speculation to find out where he actually is. He did not turn up to the Kufa mosque which is just outside Najaf. He, obviously, physically couldn't get there, but we have not seen Muqtada al Sadr in days. There's been no public statements.

The U.S. military is saying it has no hard intelligence on his exact whereabouts. And we were told by al Sadr's spokesmen and his aides within the last 24 hours -- they're insisting that the cleric is not inside the Imam Ali Mosque, and they won't tell us where he is, Paula.

ZAHN: Let's turn to the issue of this journalist taken who was taken hostage, Micah Garen. There have been reports all day long that he would either be released today or tomorrow. Obviously, that hasn't happened here, Friday, at this hour, in the states. What do you know about his situation?

VAUSE: Well, what we were told -- that when he was initially kidnapped, they gave a deadline of 48 hours. We're not too sure when that deadline was started, when the deadline was. But what we are being told by a senior al Sadr aide is that they are now involved in negotiating his release. They're saying that that release is imminent and that Garen is still in good health.

This is a positive sign, Paula, because this is the same aide who was involved in the release of James Brandon. He was a British journalist who was kidnapped from a hotel room in Basra about a week or so, and he was released within just a few hours.

Now al Sadr has come out and publicly condemned these type of kidnappings, calling them un-Islamic. So the signs -- while nothing positive yet, it's still -- it's looking encouraging that he -- that Garen could be released soon.

ZAHN: It may be encouraging, but a lot of us back here saying we'll believe it when we see it.

John Vause, thank you so much.

Coming up next, on to the presidential campaign. You might expect the war in Iraq to be a red hot topic. But Vietnam is still generating a lot of heat. That's coming up.

(COMMERCIAL BREAK)

ZAHN: The John Kerry campaign has filed a complaint tonight with the Federal Election Commission, claiming that ads attacking his Vietnam War record are being illegally coordinated with the Bush/Cheney campaign and the Republican National Committee.

The complaint is based on federal law that require groups like Swift Boat Veterans for the Truth, which can collect unrestricted donations, to operate separately from campaign organizations.

The Bush campaign calls the complaint frivolous and false. The veterans' group began its attack with an ad accusing Kerry about his action in combat.

CNN political analyst Bill Schneider has more.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): The ad ran for eight days in three states.

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

UNIDENTIFIED MALE: He's lying about his record.

SCHNEIDER: The ad was run by a group of Vietnam War veterans who call themselves Swift Boat Veterans for Truth. Questions have emerged about inconsistencies in their testimony.

For instance, former Rear Admiral Roy Hoffman says in the ad...

REAR ADMIRAL ROY HOFFMAN, U.S. NAVY (RET.): John Kerry has not been honest.

SCHNEIDER: But last year, Hoffman told the "Boston Globe" that he corroborated the actions that won Kerry a Silver Star.

"It took guts, and I admire that," Hoffman said.

George Elliot and Adrian Lonsdale, who also appear in the ad, showed up in at a news conference in Boston during Kerry's 1996 Senate campaign, where they also backed up Kerry's version of events.

Now, the Kerry campaign has released an ad making this counter- charge.

UNIDENTIFIED MALE: The people attacking John Kerry's war record are funded by Bush's big money supporters.

SCHNEIDER: There's Texas real estate developer, Bob Perry, one former Governor George W. Bush's biggest backers, who contributed $200,000 to the swift boat veterans group.

"New York Times" reporter Kate Zernike, who has been following this story calls Perry...

KATE ZERNIKE, REPORTER, "NEW YORK TIMES": The biggest donor in Texas, a huge Bush donor.

SCHNEIDER: There's public relations executive Merrie Spaeth, another Bush contributor who helped organize the swift boat veterans.

ZERNIKE: A woman who has done their P.R., works in the Reagan White House and coached President Bush's father for his debate with Geraldine Ferraro.

SCHNEIDER: Next week, Swift Boat Veterans for Truth plans to release a second ad. This one uses excerpts from Kerry's 1971 testimony before the Senate Foreign Relations Committee.

KERRY: They had personally raped, cut off ears, cut off heads.

UNIDENTIFIED MALE: The accusations that John Kerry made against the veterans who served in Vietnam was just devastating.

SCHNEIDER: But in his testimony, Kerry was actually quoting statements made by other veterans.

KERRY: Several months ago in Detroit we had an investigation at which over 150 honorably discharged and many very highly decorated veterans testified to war crimes committed in Southeast Asia.

SCHNEIDER: Kerry's actual statement was, "They told the stories at times they had personally raped, cut off ears, cut off heads." Earlier this year, Kerry said this about his 1971 testimony.

KERRY: I think the way I characterized it at that time was mostly the voice of the young, angry person who wanted to end the war.

(END VIDEOTAPE)

ZAHN: And that was Bill Schneider. Joining us now to square off over these campaign ads are "CROSSFIRE" co-hosts Tucker Carlson and Paul Begala. All fired up on a Friday night.

Welcome, gentlemen.

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Yes.

PAUL BEGALA, CO-HOST, "CROSSFIRE": Thanks, Paula.

ZAHN: Tucker, we just had the White House today again repeating that it had nothing to do with these ads. Yet in Bill Schneider's piece, he talked about the web of connections that exist between the people who financed these ads and two different Bush administrations.

What do you make of that?

CARLSON: Well, it's not surprising. I mean, they're anti-Kerry ads, you know, they're designed to defeat John Kerry's attempt to become president.

It turns out that a lot of well-connected, prominent Republicans in Texas know each other. That's true for Republicans across country. I'm sure the Bush campaign, especially coming after the polls that show these ads hurt Kerry among veterans, secretly approves of the ads. I mean, this is -- talk about news from nowhere.

You've got to admit, though, that Kerry has run his presidential campaign on this idea that he's a war hero and you're not. He's a war hero; you're not. You're not allowed to criticize him because of that. If you run your campaign on something, it's just not surprising that people attack you on it.

ZAHN: Paul, why did John Kerry wait so long to blast the president for, in his estimation, allowing these to run?

BEGALA: I think he should have waited longer. I don't think, frankly, that it was strategically wise for Senator Kerry to make more of an issue of this. They're preposterous and they're not factual.

And I guess if I were John Kerry, I would have said, "Why is it that the president and his allies are talking about something that happened in Vietnam 35 years ago? Because they don't want to talk about what's happening in America here today."

And they do happen every cycle, at least every cycle that George W. Bush or his father participates in.

We remember the Willie Horton ad. We remember when Mike Dukakis was accused of being mentally ill. We remember when John McCain was trashed. This happens every time that George W. Bush runs.

CARLSON: Well, it's funny. What people forget about the Willie Horton had -- Willie Horton ad, I just can't resist saying it, it was 100 percent true, OK? So...

BEGALA: The execution of it was very racially inflammatory.

CARLSON: Look, the ad was true. And the fact is...

BEGALA: It was. Of course it was true. This ad -- These ads are not, however.

CARLSON: The new spot up by these guys is much more effective than the one I think they had up a couple of days ago. And the new one just interposes testimony that Kerry gave in the early 1970s, saying, look, Vietnam veterans committed all these war crimes, all these atrocities.

And then, it has these veterans saying, you know, that basically hurt my feelings when he said that. There's no way to argue with that. It's true. It's a valid point of view.

BEGALA: The problem is all of this makes President Bush look like a bit of a gutless wonder. If these are legitimate attacks, he should raise them. If they're not, if they're unfair and untrue, as I believe they are, and Senator McCain believes they are, he should disavow them.

Instead he sits back, like some sort of passive patsy, unable to decide whether he's for or against these attacks.

ZAHN: All right.

BEGALA: If they were legitimate attacks, they'd launch them...

ZAHN: As you know, White House press secretary Scott McClellan came out swinging today, basically saying that John Kerry is fielding these kinds of ads. That he wants it both ways.

BEGALA: The questions for ads ought to be are they fair and factual. Are they based on the public record?

And there are a lot of legitimate criticisms of Senator Kerry, and a lot of legitimate criticisms of President Bush. I just wish they would get the election on to issues that actually might affect my life.

ZAHN: I have one more ad I want the two of you to react to. And this is the Olympic ad that's creating some controversy.

(BEGIN VIDEO CLIP)

ANNOUNCER: Freedom is spreading throughout the world like a sunrise. And this Olympics, there will be two more free nations and two fewer terrorist regimes.

(END VIDEO CLIP)

ZAHN: Do you think, Tucker, the administration is guilty of politicizing these games?

CARLSON: In my view, there aren't too many great things to come out of the war in Iraq, but this is definitely one. The Bush administration is looking for successes. Again, this is indisputably a success. I don't have any problem with it at all.

But this idea that Democrats are shocked that you would politicize the Olympic games, the whole thing is a political spectacle by definition. Please, wake up.

BEGALA: Absolutely.

ZAHN: All right, Paul, you get the last word.

BEGALA: What I'm shocked by is that the president's team did such a poor job advancing the issue. That is, they raised it and now the members of the Iraqi soccer team, exercising their newfound rights of free speech, have told President Bush to go buzz off and not use them in his ads.

But you'd think before the president used their country and their status in his ads they would have checked with them first. And he didn't. It's a huge staff error on the part of the president's campaign.

CARLSON: Run it by the soccer team. Focus group with the soccer players.

BEGALA: Well, before you start taking credit for the soccer players, you ought to make sure that maybe they're OK with it.

CARLSON: Good point.

ZAHN: All right. We've got to end on that note tonight. Gentlemen, Tucker Carlson, Paul Begala, always great to see you. Thanks so much for your time.

BEGALA: Thanks, Paula.

CARLSON: Thanks.

ZAHN: And the battle other campaign ads highlights just how close this election is expected to be. And that undecided voters could hold the key to victory.

This week, we brought undecided voters in the battleground state of Ohio face to face with representatives of both of Bush and Kerry campaigns to ask about the issues they care about.

If you missed our town hall meeting, you'll get a chance to see it again this weekend. Our special edition of PAULA ZAHN NOW airs tomorrow night at 8 and at 11 p.m. Eastern and then again on Sunday at 5 p.m. Eastern. And we'd like for you to watch it all three times, frankly.

Still ahead a familiar combination. In an election year, the economy and the voters.

(COMMERCIAL BREAK)

ZAHN: Well, expect the U.S. economy to slow down in the second half of the year and inflation to rise somewhat. That is the world today in a Federal Reserve survey of 30 economic forecasters.

Still, the report says a slowdown should not mean more people will necessarily be out of work. So what does it mean for the presidential race?

If the catch phrase in 1992 was "It's the economy stupid," in 2004, it's more like, "It's the economy, stupid, sort of."

Here's our Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Ask any two voters how the American economy is doing, and chances are you will get widely different answers, depending on where the people live and what they do for a living.

The chief economist for "BusinessWeek" is Michael Mandel.

MICHAEL MANDEL, CHIEF ECONOMIST, "BUSINESSWEEK": Most of the country is actually doing well, but there's enough fear out there that you can sort of point to a couple places doing poorly and say, "You know, you could be going that way, too."

FOREMAN: Consider the battleground state of Ohio with its huge manufacturing base. Two hundred thirty-five thousand jobs have been lost here in the past few years, something John Kerry likes to point out.

KERRY: Don't tell us that some worker in Ohio has to not only lose their job, but they have to unbolt their own equipment, crate it up, ship it to China, and train somebody else for their job.

FOREMAN: The situation, however, is complex. The Timken Company in Canton, for example, is planning to eliminate 1,300 jobs in its precision bearings division.

But Timken will still be the area's largest employer. It's hired 170 workers in other divisions and it has 120 job openings.

Company officials say the cuts will keep them competitive.

JIM GRIFFITH, PRESIDENT & CEO, TIMKEN COMPANY: That's evolution. That's part of business. That's what makes our living standard go up year after year after year.

FOREMAN: Not far away in Youngstown this high tech firm started a few years ago and has been expanding ever since. It now employs 19 people.

These companies are springing up everywhere in Ohio, but they don't grab headlines like a big layoff.

ANDY DOEHREL, OHIO CHAMBER OF COMMERCE: When you're talking high tech, you're usually not talking about a thousand jobs. You're looking at more intensive small business types of areas, which is where most of the jobs are coming from. So it's a little bit harder to see.

FOREMAN: Plenty of people who are still deciding how to vote clearly remain worried about the high cost of gas, healthcare, and undeniably slow job growth.

RICK FARMER, UNIVERSITY OF AKRON: It's literally going to depend on how they feel about can I pay the bills? What's the price of gasoline? What's the price of milk? How's my rent coming?

FOREMAN (on camera): So can a president win reelection when voters in critical states are unsure if the economy is good or bad?

(voice-over): Well, there was a year that was shockingly like this one, according to Michael Mandel.

MANDEL: You can barely tell the two economies apart. It's astounding.

FOREMAN: And that was 1996, when Bill Clinton held on to the White House.

(END VIDEOTAPE)

ZAHN: That was Tom Foreman.

Joining us now from Washington, "New Republic" editor Peter Beinart.

And with me here in New York, John Fund of the "Wall Street Journal".

Good to see both of you.

All right, John, how vulnerable is President Bush in the states of Ohio, Pennsylvania, and Michigan if the economies don't pick up there?

JOHN FUND, "WALL STREET JOURNAL": There have been a lot of manufacturing jobs lost, and certainly there's a vulnerability.

However, there's also been a lot of small business formation. Nationwide, when President Clinton was running for election in July 1996, the unemployment rate was 5.4 percent. Today, nationwide, it's 5.5 percent.

It is hurting, in particular, states that you mentioned. But you go to a state like Wisconsin, you go to a state like Minnesota, which were states that Al Gore carried, the economy is doing very, very well.

ZAHN: So what about that, Peter? Did John just mention two states where the economy is functioning better than those other swing states? Doesn't that make it harder for John Kerry to carry his message of economic growth?

PETER BEINART, EDITOR, "NEW REPUBLIC": I think the key fact of this election is that if George W. Bush loses Ohio, he loses the election.

John Kerry's had a consistent and a sometimes sizable lead in Michigan and Pennsylvania. Right now, it looks very unlikely he's going to lose those states, which George W. Bush lost in 2000.

If Bush loses Ohio, as well, I think he's going to lose this race. And in Ohio, as in Pennsylvania and Michigan, the economy is really in trouble.

ZAHN: Well, we know that no Republican president has ever won the presidency without taking Ohio.

FUND: They used to say the same thing about Missouri, and then Missouri changed. If you add Wisconsin and Minnesota together...

BEINART: Kerry's leading both those states.

FUND: ... those are more electoral votes than are in Ohio.

BEINART: But Kerry's leading in both those states.

FUND: Peter, we have a campaign. That's why we have 65 day, 75 days between now in which we can have polls which might change.

BEINART: Sure, but there's no evidence that -- those are states that Al Gore won, and right now, Kerry has a lead in those states, sometimes outside the margin of error. So...

FUND: Sometimes outside the margin of error.

BEINART: ... of course, things could change. Yes, but poll after poll after poll shows him with the lead. Sure, things could change. But right now, if -- right now, the way it looks, if George W. Bush loses Ohio, even if he wins Florida, as he well may, I think he's going to lose this race.

FUND: Peter, the very latest poll in "Hotline" today shows Bush with the lead in Ohio. Just so you know.

ZAHN: What could change between now and election day in any appreciable way?

FUND: Unemployment claims have just gone down again for the third week in a row. The economy is still improving. They're not improving as much as people might want, but I am telling you, this is a recovery, the perception of which is negative, not the actual numbers. Talk to the Federal Reserve board. ZAHN: Peter, do you think John Kerry has been effective, in these states where he may have a razor lead, in trying to explain to people in Ohio and Pennsylvania, what he would do to save their jobs?

BEINART: The truth of the matter is there's not very much John Kerry can do in the short-term to create jobs. But he can lay out a critique of why George W. Bush's economic policies have not been fair and have not been good for most Americans. He doesn't do that terribly well. If he did he would have an even bigger lead in some of these states.

ZAHN: So Peter, you agree with a bunch of Democrats who are saying that he made a tactical error by talking so much about national security at the convention, and he should have focused more on these narrower economic issues?

BEINART: No, I would put it somewhat differently. I don't think it's that John Kerry doesn't speak enough about the economy. On the stump, he speaks about it a lot.

I just don't think -- he still has not crystallized a pointed, cogent critique in the way that John Edwards had in the primaries, one that really resonated with a lot of people. It's not the amount of time he talks about the economy; it's what he says.

ZAHN: Gentlemen , we've got to leave there it. John Fund, Peter Beinart, always good to see you. Have a good weekend.

BEINART: Thanks.

ZAHN: When we come back, we'll head to court for a round up of the latest developments in some very high profile trials. Right after this.

(COMMERCIAL BREAK)

ZAHN: Check out that wall of fame there.

A courtroom show of solidarity by Michael Jackson's family this week, that's just one of the noteworthy events this week in three closely watched criminal case.

Joining me from Los Angeles, Steve Cron, a criminal defense lawyer and professor of law at Pepperdine University.

Welcome. Good to have you with us.

STEVE CRON, CRIMINAL DEFENSE LAWYER: Thank you, Paula. Nice to be here.

ZAHN: Thank you.

So we all observed this wonderful Jackson family love-fest, followed -- or not followed by, in addition to an appearance by Michael Jackson at a church. Is this repackaging of Michael Jackson going to fly with the jury? CRON: I don't think the jury's really going to care.

I think they're going to do whatever they can to make him look more human, more interested in the community, show his family support and all that.

But I think at the end of the day, when this case goes before a jury, months from now, I don't think they're really going to care.

Michael Jackson's image is indelibly marked on the psyche of the American population. And I don't think anything that he does in the next few days or weeks or months is going to change that.

ZAHN: There was an interesting development in court this week, though, when a judge granted him permission to make a statement. And in that, he said, quote, "I personally have suffered through many hurtful lies and references to me as Wacko Jacko."

Why would the judge let him break the gag order? And what does this mean?

CRON: Well, I think what happened is that there has been some negative publicity that has come out about Michael Jackson, such as the fact that the sheriff's report about the allegations that the sheriffs manhandled him was released by the attorney general's office, saying that he was not manhandled.

There have been some other things that have come out that have been negative towards Michael Jackson. And I think the judge felt in order to level the playing field, he would allow him to make that one brief statement.

He wasn't allowed to address the facts. He wasn't able to talk about the case. But he's able to say, "I'm not the Wacko Jacko person that you all think I am. I'm just a regular kind of guy."

ZAHN: Did that work for you?

CRON: It didn't impact me at all. I mean, I know who Michael Jackson is. I don't know whether he's guilty of this offense or not, but I have an image of who Michael Jackson is. And for to him stand up and say, "I'm not Wacko Jacko," what else would you expect him to say?

ZAHN: Let's talk a little bit about the testimony. We also heard about police potentially exceeding the mandate of the search warrant. Is this a critical issue?

CRON: It could be. If -- And everything's been sealed, as you know. So we don't know what the police found at Neverland.

But if they found something that was important and the judge found -- makes a finding that the police exceeded what the judge allowed them to be looking for or the terms in which the search was to be conducted, he could, theoretically, rule that some of the evidence they found at Neverland would not be admissible in court, because it was a result of an illegal search and seizure.

Again we don't know how important that is, because we don't know what's been found there. And most of the time, judges will say that when the police go in with a search warrant, may not be perfect, but generally, the rule is that it's good enough. And it's rare that judges will exclude evidence based upon an illegal search and seizure.

ZAHN: Want to move you on now to the issue of the Kobe Bryant trial, which is supposed to get underway next week. Do you think it will be?

CRON: No. I don't think so. I've been saying for well over a year now that I didn't think this case would ever go to trial.

And when the judge finally issued that ruling, allowing the defense to go into the accuser's sexual history for the 72 hours before and after the allegations were made, I think that was a death blow to the prosecution. I think they're now scrambling around, trying to figure out how to save face.

I don't think this case will ever go to trial in a criminal court. It's possible it could be in a civil case. But my prediction is that it will never go to a criminal jury and there will be a civil settlement outside of the court proceedings so that it will never be made public. He will pay her a lump sum of money and that will be the end of it.

ZAHN: Steve, I can only get you 30 seconds for the final answer on what you predict for the Scott Peterson case next week when Amber Frey is cross-examined by the defense.

CRON: I think it will be a brief cross-examination, focusing on the fact that she was trying to get Scott Peterson to say something to incriminate himself. That's what the police, that's what Gloria Allred wanted her to do.

And he repeatedly denied having anything to do with Laci Peterson's death. That's, I think, as much as they're going to get out of her.

ZAHN: Thank you for your discipline and brevity there, Stephen Cron.

CRON: My pleasure.

ZAHN: You ought to be an attorney. Thanks for joining us.

We'll be right back.

(COMMERCIAL BREAK)

ZAHN: Once again, a quick programming note for you. You can see our exciting town hall special even again this weekend. Undecided voters in the battleground state of Ohio taking on representatives of both the Bush and Kerry campaigns. Our special edition of PAULA ZAHN NOW airs tomorrow night at 8 and 11 Eastern time, and then again on Sunday at 5 p.m. eastern. So if you will, join us then.

Thanks again for being with us tonight. On Monday, the fate of four more American soldiers hangs in the balance as the military begins pretrial hearings in the Abu Ghraib prison abuse scandal.

That's it for us tonight. Have a great weekend. Thanks again for dropping by this evening. "LARRY KING LIVE" is next.

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