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On the Story

War in Iraq Fires Up Political Fights Back Home; Iraq in Transition; U.S. Military Continues Search for Iraqi WMDs

Aired May 10, 2003 - 10:00   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.


SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on what we covered this week.
I'm Suzanne Malveaux, on the story of how the end of the war in Iraq has fired up political fights back home.

JANE ARRAF, CNN CORRESPONDENT: I'm Jane Arraf in Baghdad, where the story is Iraq in transition, trying to come up with a new Iraq.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr, on the story of the search for hidden weapons in Iraq and how the U.S. military views what its next challenge could be.

JOSIE KARP, CNN SPORTS CORRESPONDENT: I'm Josie Karp, on how the common refrain in the sports world was "You're out of here" to college coaches and even Michael Jordan.

CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: And I'm Christine Romans, on the story of how a quick war has inspired a spring rally. But will the economy follow?

We'll be talking about all these stories. We'll go to Israel to talk to Kelly Wallace about the Israeli missile attack she witnessed in Gaza and Secretary Powell's arrival today.

We'll talk to Whitney Casey about the hazing of Chicago high- school girls turning violent, sending some to the hospital, and may end in criminal convictions.

And we'll talk about mothers and daughters on the eve of Mother's Day.

And we want to hear from you at onthestory@cnn.com.

And we'll hear from the president in his weekly radio address at the bottom of the hour, but first, what's happening right now, from CNN headquarters in Atlanta.

(NEWSBREAK)

(BEGIN VIDEO CLIP)

LIEUTENANT GENERAL DAVID MCKEIRNAN, COMMANDER OF OPERATIONS: There is a lot of work still to be done to create the right environment of safety and security within Iraq. There is still crime. There's still looting.

(END VIDEO CLIP)

STARR: Lieutenant General David McKeirnan, commander of operations for allied forces, speaking in Iraq this week about the country still in turmoil.

Welcome back. We're "On the Story."

Well, Iraq still, remarkably, of course, a very dangerous place. Major combat may be over, but when we were in Iraq last week with Defense Secretary Donald Rumsfeld, he said that U.S. forces are still encountering pockets of resistance. And sources there told us that the U.S. forces are hauling something like 40 truckloads a day of ammunition and weapons out of Baghdad.

But, Jane, you would know the most about all of that, compared to us. You're on the ground there. You see an awful lot going on.

ARRAF: Absolutely, Barbara. There's an immense amount going on. So much, it's hard to keep track of it.

But I was talking to a general this morning, and he calls this a power vacuum, which is essentially what we're seeing. Now, there's an immense frustration from people on the ground, and from soldiers as well. And I'd love to get your view later on whether this frustration is felt at the Pentagon.

But here on the ground, when night falls, it is a very scary place. In many parts of the city, there's no electricity. People are locked up in their homes. They're really afraid.

And they're really afraid of what's going to come next. And it's a huge worry, not just to the Iraqis but to the military as well.

STARR: And of course, right now, it seems like the story is Iran inside Iraq, as much as anything else, the Iranian influences that are emerging.

ARRAF: Now, this is an amazing thing, because it's really all about what happens to the whole rest of the region now that there is such dramatic and sudden changes in Iraq.

As you know, Barbara, this is the Iranian opposition, the mujahedeen, which for years was propped up by Saddam Hussein. They have armed camps here. And right now, there is a standoff at their camps near the Iranian border. The U.S. military has told them they have to disarm, they have to surrender. It considers them a terrorist organization.

And there are thousands of them, and where do they go? I'm not sure if there are answers in Washington to this, but it's one of those little bits of a huge, complex problem that will have repercussions further down the road.

STARR: And there are issues emerging right now about the return of some of these Shia religious leaders into southern Iraq and what that may do to contribute to additional instability.

ARRAF: That's another thing, you're absolutely right. Now that the lid has been opened on political parties, on different factions, on religious freedom in Iraq, we're seeing all of these competing interests.

There's a very dramatic story with one of the major Shia clerics who has returned to Iraq after 20 years in exile in Iran. He's very slowly making his way to the holy city of Najaf, where he should arrive on Monday.

But that's just one small faction of the Shias. I think people tend to think of them as monolithic, but there are different competing factions. In fact, one of them was assassinated quite recently.

I mean, here on the ground, the bottom line is, it's really almost unbelievable how much this place has changed. And it's really very much still shaking out with all of these interests.

And, Barbara, I'd love to ask you, what is the view from Washington? Do people there believe that it's working here?

STARR: Well, I think the key leaders do. The politicians certainly do. You do hear from soldiers, though, a lot of concern. You know, it was just the other day a young trooper was shot in Baghdad by a sniper. He was standing duty at a traffic checkpoint, and a sniper tragically shot him and killed him.

So the fact that the Bush administration says major combat is over, that may be the case broadly speaking. But on the ground, there are still tremendous individual problems.

When we were with Secretary Rumsfeld in Baghdad, security people said that the convoy took three shots at the front at one point. They couldn't see where that gunfire was coming from. When we were at Baghdad International Airport, there was gunfire. Jane, I know you hear gunfire literally every day in Baghdad.

I think major combat is over unless a bullet is coming at you, and then major combat is coming at you.

MALVEAUX: Barbara and Jane, I guess, how is Garner doing? I mean, I understand that he is going to be really number-two now, that you have somebody, former diplomat, Bremer, who is going to be moving in.

Is there a sense that he hasn't really done his job or he hasn't done a good enough job?

ARRAF: I think there's really a sense that there -- a lot of people were caught unprepared by what happened. Now, I think we have to say this could have been a much worse -- this could have been a disaster, really. There could have been people starving. There could be even more looting. There could have been a lot more casualties. There weren't. But the fact remains that, a month after the war, really there is nothing in place. There is no system of government. There is very little electricity. There are long lines for gasoline.

And the feeling has been that perhaps the administration and the military, to some extent, focused too much on those emergency preparations, preparing for waves of refugees, which didn't happen, and didn't really focus enough on reconstruction, which has to happen really pretty quickly. So that may have been part of it.

But he is a very optimistic guy. I mean, he appears quite frequently. He's very warm and fuzzy. And he keeps saying that he believes that this actually is working, and he believes he still has a role to play, which I suppose you have to.

But this is an immense task, isn't it? I mean, it's really the first time this has been attempted in a country with no government since World War II. And I wonder if people really take that into account.

Certainly here on the ground, there is an intense impatience. But...

ROMANS: Jane, you said there is a power vacuum there in Baghdad. I'm wondering, you know, are you going to start to see some of these towns start to, you know, elect or delegate some officials?

I know in Mosul you had some amazing pieces about, you know, starting to get some things under way, and some other towns.

ARRAF: Mosul was so interesting, because really that -- in the space of two weeks, that went from absolute lawlessness, basically the law of the wild West. We drove into there immediately almost after the Iraqi forces withdrew, when there was nobody. There were no Kurdish forces. There were no American forces. And shortly after that, one of the leaders in exile proclaimed himself governor, which led to gunfights and about a dozen people killed. And that's the kind of thing that is really the danger.

Now, they went from that to, two weeks later, holding somewhat civilized local elections. And they now have a government. But Mosul is sort of a model city in some respects. This part of it is going to be much trickier.

MALVEAUX: Well, from the war in Iraq to the political fallout back home, and why a smooth landing on a aircraft carrier is churning up political turbulence days later.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: War is not theater. Victory is not a campaign slogan.

(END VIDEO CLIP) (BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The 5,000 sailors on that ship recognize this for what it was, the president going out there to say thank you to those who risked their lives.

(END VIDEO CLIP)

MALVEAUX: The controversy continues over what some called the mother of all photo-ops, President Bush flying on the deck of the aircraft carrier USS Abraham Lincoln.

Welcome back. We are ON THE STORY.

This was -- it just generated -- it snowballed. Hour by hour, day by day, this just got bigger. We heard people saying we want an accounting, not only for the cost of this but we want our money back for taxpayers. Some Democrats saying it cost anywhere -- you know, a million dollars extra to make this landing.

Now, what happened was is that the president will admit, and as well as his aides say, yes, he did not have to use that jet. He could have used the helicopter. He wanted to go in like the other Navy pilots do. But at the same time, no, it did not cost extra.

KARP: Suzanne, is this, though, one of those controversies where you're hearing either publicly or privately the Republicans saying, bring it on, we like this, we want the story to live as long as humanly possible?

MALVEAUX: Absolutely. You talk to people, and they're like, "Just keep showing us those pictures. The more you see the pictures, the more people are looking at him as commander in chief with the sailors."

But one thing they say is, it's comparable to landing with a helicopter. You're talking about $5,000 an hour. He could have landed with the helicopter. He chose the jet. And why not? I mean, this is a historic moment. It's a moment that a lot of Democrats, if you talk to them as well, they are -- they're envious. They're, "Why didn't we think of this?"

ROMANS: Well, the Democrats say, listen, that Karl Rove and the Republicans are stage-managing this for the upcoming political season. But, I mean, news flash: Politics is full of stage-managed -- and he's the president of the United States. I mean, obviously it takes a lot of coordination, right, and security. And, you know, I mean, stage management in this sort of presidential arena is not unusual.

MALVEAUX: Absolutely. And there was one point, too, when you talk about the logistics, the coordination of all of this. The Democrats were saying, well, because the president spent the night on the aircraft carrier and it slowed down because -- that somehow they were delaying these sailors from reuniting with their families.

The White House says, look -- and Navy officials, as you know, Barbara, say, if you say May 2nd is the day that they're going to arrive, that they're going to dock, you don't change that, whether or not it's the president slowing it down, speeding it up, because of the logistics to have that aircraft carrier come in, and also because of the families. I mean, they've rearranged their lives to welcome, you know, welcome their family members, the sailors.

ARRAF: Suzanne, here in Baghdad, all the Iraqis pay incredible attention, of course, to what goes on in Washington. I'm just wondering if the start of the political season means anything, has implications for Iraq policy, and whether they're going to be focusing on it so much?

MALVEAUX: Well, you know, the Bush administration -- I mean, first of all, we're going to see commander in chief, that role, being played over and over and over again.

But at the same time, what's really important, as well, is the economy. I mean, that is something that they are focusing on. And we see the president more and more addressing his jobs, his stimulus package, that that -- the tax-cut package. So you're going to see a combination of the two.

But don't be surprised if you do see these pictures from the USS Lincoln with the sailors in political ads. And the Democrats would admit, quietly, privately, they would do it too.

STARR: Are we going to start seeing Dick Cheney start coming out more in public now? He was awfully absent during the war. Is he going to reemerge?

MALVEAUX: Well, what's interesting is that this week it became official that he is the president's running mate. And it's something that had been speculated for some time.

And I guess there are two points, really. People didn't know what was going to happen, A, because of his health. Four heart attacks in the past, none as vice president, but some concern. And his office, as well, as the vice president, said that's not an issue, he has the doctor 24 hours a day, he's in fine health. And he went ahead and accepted that role.

The other thing is about Halliburton, and that seems to be a controversy that keeps reemerging here.

ROMANS: And this is the company that he once ran and then left the company and sold his stake in the company before he went to Washington again, right?

MALVEAUX: Right, right. And there's some Democrats, particularly Congressman Henry Waxman and others, who are saying -- accusing the Bush administration, because of its close ties with Halliburton, of getting that lucrative contract, that subsidiary that got that contract in Iraq to put out the oil fires and their emergency, as well as perhaps even pumping the oil, that it's unfair, that they're engaging in favoritism. And the vice president says clearly -- I spoke with his aides -- that he has no role in actually the bidding the contracts, the White House doesn't. And Halliburton has been in the business for some 60 years. They feel that they earned it.

KARP: We're going to move on now. We first have to say goodbye to Jane Arraf. She has to get back on the story in Baghdad.

And, Jane, what's on your agenda today?

ARRAF: All kinds of things. Essentially Saddam Hussein again, a letter reported to have been written by him. News that the Iraqi Central Bank vaults are going to be opened in just a few days, and we'll find out exactly how much money there in there. And a really dramatic press conference we just came from, where the acting minister for the health ministry, appointed by the U.S., refused to denounce the Baath Party.

Now, all of these have implications for security, for all sorts of things. And we're going to be following those up and a lot more in this new Iraq in transition. So we'll be talking more about that.

KARP: Thanks, Jane.

There is one political drama unfolding over there. And over here, there were juicy political dramas all over Washington, but the one that probably generated the most attention starred a basketball icon, of all things, Michael Jordon. He was sent packing by the Washington Wizards.

I am back on the story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LARRY EUSTACHY, IOWA STATE BASKETBALL COACH: Obviously, I was out of control.

(END VIDEO CLIP)

KARP: That's Larry Eustachy, Iowa State basketball coach. He's just one big name in the world of sports suddenly out of the game and on the sidelines.

Welcome back. We're ON THE STORY.

Eustachy was photographed drinking beer and kissing a young woman at a party, and the photos ended up in the newspaper. He was out. He wasn't the only one this week. There were a rash of events. Mike Price, the head coach of the football team at the University of Alabama, also out.

And the difference here, we are used to, it's sad to say, seeing coaches fired for recruiting violations, NCAA violations, things like that. When it comes to the personal side of things, there's normally a little leeway. Not this week. Both guys, personal indiscretions cost them their jobs.

ROMANS: I have to talk about Larry Eustachy first. I went to Iowa State. I used to work with the Des Moines Register, which first published the photographs. So you can imagine that I was watching this story quite aggressively.

And he's the highest-paid state employee in Iowa. Some people would say that perhaps, you know, we're being too puritanical, you know. The guy's maybe got an alcohol problem, maybe he just showed some bad judgment, and he lost this big job.

But you could also say, he is a public figure, and is he bound in his contract by good conduct?

KARP: In most contracts, when you have these guys at these high- profile schools with these huge jobs, making, like Eustachy, over a million dollars a year, there are clauses in there that say, if you bring disrespect on the school, you have the chance to be fired. So that's a cause for termination. And I think one of the things that people were really debating across the country this week was whether the punishment in both these instances was too harsh. Mike Price down in Alabama, he wasn't necessarily conducting university business. He went down to Florida on a golf trip, ended up at a strip joint, ended up with a woman back in his hotel room, ordering one of everything on the menu from room service. That came out; that's why he lost his job. He came out and said, what happened to getting a second chance in life?

Two things with these guys. One, Mike Price hadn't coached a game at Alabama yet. He had a contract still on the table that he hadn't signed.

ROMANS: A $10 million contract, right?

KARP: A $10 million contact.

Eustachy, he hadn't had any good seasons in a couple years.

So these guys were disposable, because they hadn't really entrenched themselves with this winning tradition yet. And maybe things would have been different, people speculate, had Eustachy come off a Final Four appearance or had Mike Price had a chance to win a national title at Alabama. Then it would've been a lot harder for these university presidents and these athletic directors to get rid of them.

ROMANS: I'm a big basketball fan, big Michael Jordan fan. I was destroyed when I heard what happened. What happened with Michael Jordan?

KARP: That's what a lot of people are asking. I mean, Michael Jordan, we can all agree, best basketball player right now, best basketball player ever. Everyone holds him up as a basketball god.

But Abe Pollin, the owner of the Washington Wizards, called him in for a meeting. Jordan thought that he was going to discuss the possibility of returning to the front office after he played for two years, up to age 40, for this struggling franchise. Abe Pollin, in less than five minutes, said, "You know what, Mike, thanks very much, but we don't need you anymore."

And that is why there's been so much controversy with this decision, I really believe, because Michael Jordan, a lot of people think, deserved a little more respect because of the fact that he's Michael Jordan.

And he came out himself and expressed -- he used the word "shocked" to express how he felt.

STARR: What was really behind all of this though?

KARP: Well, there are a couple things. One, you can point to Michael Jordan's record when he was president of basketball operations. He had the opportunity to recreate an entirely different team. He got rid of all but one player, and those are the guys that he ended up playing with for two years. And they were terrible. Even with Michael Jordan on the team, the two years that he played, they couldn't win more than 37 games.

He drafted a high schooler with the first pick in the 2001 draft. That kid has looked like he's really going to struggle, isn't going to pan out. So his decision-making is one thing.

And the other thing is there had been a lot of dissension in the team, the way that he related to the other players. He came out and publicly crucified them, really went off on a lot of the guys, talked about how they had no desire, no desire especially compared to a 40- year-old guy out there on the court.

ROMANS: Could he take his personnel skills or what he has learned, or the mistakes that he's made I guess, at the Wizards and parlay that somewhere else? There must be a lot of franchises that would be very -- I mean, aren't the Bucs looking for someone?

KARP: The Bucs are looking for somebody down in Charlotte, North Carolina. There's an expansion team that's set to get under way in 2004. The owner of that team has already come out and said he wants Michael Jordan in any capacity that Michael Jordan wants to come.

There's even been talk about him going back to Chicago, although that looks a little bit more unlikely.

There's going to be a market for Michael Jordan, and you can bet that Michael Jordan will want to jump back in and prove Abe Pollin wrong, because the one thing that he loves is a challenge.

STARR: And, Josie, in the world of golf, more news this week?

KARP: Well, more news coming up in the next 10 days. The biggest story in the entire sports world, undoubtedly, will be Annika Sorenstam, the best player on the LPGA, who's going down to Texas next week to play in the PGA tournament, the Colonial. She's the first woman in half a century to play against the men in a PGA tournament. And this is...

ROMANS: A lot of pressure. Isn't that a lot of pressure for all women golfers?

KARP: For all women golfers and for Annika Sorenstam. I mean, that's the thing she's said. She isn't shying away from the fact that it is a lot of pressure. She'll say it's going to be like all four women's majors rolled up into one in one week.

And that's really going to determine how well she plays. People already wondering if it's getting to her though. She won 13 tournaments last year, worldwide. She has only won one so far this year. She was leading at the end of the day in Japan yesterday in a tournament, but she had her worst finish of the season the last tournament she played.

So it looks like there's a chance the pressure's already getting her. But she's one of those athletes who has always been able to combat the nerves and the pressure. And it will be the biggest challenge, as she said, of her life.

MALVEAUX: Well, one of the longest-running games of the diplomatic and geopolitical variety is playing out this week in the Middle East. Kelly Wallace is with us in a moment from Jerusalem, on the story of how violence and peace talks coexist.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FLEISCHER: It's very important for the Israelis, for the Palestinians, for the Arabs, to recognize that this is now a moment to seize. And the secretary is going to the Middle East to help them to seize it.

(END VIDEO CLIP)

KELLY WALLACE, CNN CORRESPONDENT: White House Press Secretary Ari Fleischer on Thursday, sending a signal to the longtime enemies in the Middle East.

Welcome back. I'm Kelly Wallace, on the story in Jerusalem, where Secretary of State Colin Powell will be in just a little more than an hour from now. It is his first visit to the region in more than a year, the start of an in-depth push by the Bush White House to try and bring the Israelis and the Palestinians back to the peace table.

But even before the secretary left, he said this is not going to be easy. His immediate challenge is trying to get both sides to take steps now to try and build some trust.

And I can tell you, there's a great deal of skepticism in the region, whether the secretary will be able to achieve any breakthrough on this visit. STARR: Kelly, as Powell arrives there, what is the role now for Yasser Arafat? Is he behind the scenes, or is he completely out of the picture?

WALLACE: Well, Barbara, the secretary's going to want to find that out. He will be meeting on Sunday with the new Palestinian prime minister, Mahmoud Abbas, but Secretary Powell will not be meeting with Yasser Arafat.

And what the secretary will want to do is try to find out from Mahmoud Abbas and from other Palestinians, what kind of role is Yasser Arafat still playing behind the scenes? Because there is still some skepticism from Israelis and some American officials that Yasser Arafat is still trying to assert some power. And so that is something the secretary will try and find out during his meetings on Sunday.

MALVEAUX: Kelly, what did you see in Gaza?

WALLACE: It was pretty incredible. We were there in the Gaza Strip, trying to do a story on whether Mahmoud Abbas will be able to rein in groups like Hamas. And then all of a sudden we heard an explosion. Thanks to my fabulous photo journalist, Margaret Moth (ph), who kept shooting the whole time, we could then see in the sky two Israeli Apache helicopters firing missiles. Down below, the target a car.

The results, the death of a senior Hamas military commander. And we went to the scene, and you found hundreds of Palestinians around that car, chanting calls for revenge, chanting support for Hamas. And some Palestinians we talked to on the scene, one man saying, "Look, look what's happening here. This is what Israel thinks of that so- called road map for Middle East peace."

So, some concern from Palestinians that this attack came two days before Secretary Powell's visit and could complicate efforts for the secretary to get the two sides talking to one another again.

MALVEAUX: And, Kelly, there have been so many concerns and people ask questions, European allies, Arab allies, whether or not the Bush administration really is serious this time about moving this process forward.

Do you get a sense from both sides, the Palestinians, the Israelis, that the United States really is committed this time around to, like, move to push the ball forward?

WALLACE: That is certainly the key question. And both sides say they're sort of watching and waiting to see exactly what will come from the Bush White House.

Both sides seem to say that the president and his team are saying the right things. You saw President Bush, of course, saying just yesterday that Secretary Powell comes here with his personal commitment, that the U.S. will work without tiring, to bring forward a Palestinian state alongside a secure Israel. But many Palestinians behind the scenes are somewhat skeptical that this president will put, ultimately, the pressure needed to be put on Israel, especially, of course, as you come upon a presidential election. And concern that he might alienate some pro-Israeli voters if he tries to put pressure on Israel and makes Israel take some steps that some believe might compromise its security.

So that's an open question right now. Both sides waiting to see the answer to it.

KARP: Kelly, we've seen some examples, just very recently, of the very real danger that journalists are in, covering this conflict. Can you maybe go over a little bit what the dangers are, real, and then how the Israeli government may use that to limit what journalists get to cover from here on out?

WALLACE: Well, Josie, yes, we have seen two cameramen, a British cameraman and a Palestinian cameraman, killed. One in the Gaza Strip, James Miller, and a Palestinian cameraman killed in the West Bank, during a two-week time period. So a lot of concerns journalists are having about what is going on in the West Bank and the Gaza Strip.

And just yesterday, the Israeli defense forces announcing that any journalist, people like myself, anyone who goes into the Gaza Strip will now have to sign a waiver, basically saying that we understand the risks of going into that region, that we will then not call on the IDF to take responsibility.

So a number of concerns there about limitations on journalists covering what's happening.

ROMANS: All right, thanks, Kelly Wallace.

Coming up, uncertainty over the Mideast and the world at large is one factor holding down consumer confidence here. Up next, on the story of what may be coming for investors and the economy.

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(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The unemployment rate is now at 6 percent. The news ought to serve as a clear signal to members of the United States Congress that we need a bold economic recovery plan.

(END VIDEO CLIP)

ROMANS: President Bush, this week, pointing the finger at Congress for an economy that limps along.

Welcome back. We're ON THE STORY.

A recovery, yes, but a mild recovery overall. A lot of folks hoping that the next second half of this year is going to be when you start to see the numbers improve. The stock market is already predicting that. Technically, a stock market usually, six months ahead of an economic recovery, starts moving higher, doing better, expecting that things will turn around.

We've had a 16 percent rally in the S&P 500 just in the past couple of months. If you measure the NASDAQ, from back in October, which was a five-year low, it's up 35 percent.

So while we've all been looking at international events, the markets have been recovering here. And there's been a pretty good return for investors who bought lows last year.

Jobs is the...

(CROSSTALK)

MALVEAUX: ... percent unemployment.

ROMANS: Yes.

MALVEAUX: And even people who say they've dropped out of the job market altogether.

ROMANS: The single most important thing that I'm hearing people talk about, both anecdotally, on the trading floor. You've got a stock market that's doing better, but the jobs market is really in trouble.

They're calling this a jobless recovery. And we've had so many jobs lost, 2 million, 2.5 million jobs lost just over the past few years. And we continue to see the jobless rate creep up about 6 percent right now.

We're going to get some weekly-jobless-claims data this week. You know, how long is the unemployment line. It's really important to see that line start to shorten. But so far, you know, it has been a very tough go.

All of us know somebody who's been out of a job for a very long time. And that keeps your neighbors from buying a new car, or it keeps, you know -- it dampens consumer confidence a lot.

WALLACE: Christine, you know, the Israeli and Palestinian economies right now are in terrible shape and certainly could get a boost if the American economy improves.

But I want to ask you, does what's happening here, Secretary Powell's visit, optimism possibly for some progress in this region between the Israelis and Palestinians, does that have any impact at all on the markets and the American economy?

ROMANS: It's interesting, Kelly, because what happens is it all fits into an international puzzle that is looking pretty good so far. You've got a war over in Iraq. You've got the United States saying, at least, that it is dedicated to finding some sort of solution or helping, you know, facilitate a solution in the Middle East. You've also got a curious absence of worries about terrorism at the moment.

And so the international -- they call it exogenous shocks in Wall Street speak -- but the exogenous shocks is not what people are worried about now. Instead, they're hoping that in the second half of this year, there will be a recovery, a better recovery in the U.S. economy.

STARR: What does the market think, though, it's going to take to bring the jobs sector back?

ROMANS: Business spending. CEOs are worried about what monster lies underneath their bed. So they're not building new plants, they're not hiring new workers, they're really not investing aggressively in finding new products because they're just sort of, with the covers over their head, waiting for this to pass.

Soon as you get the CEOs in this country starting to spend money again to upgrade plant, to hire new workers -- when you hire new workers, that will help the job situation. When you have a new job, you're going to go out and buy some more products, and then it all follows from that.

STARR: Well, our thanks to Kelly Wallace. We know you're on the story today of the Powell visit.

If you make the wrong guess on Wall Street, it can cost you. And some high school students in Illinois and their parents are paying for the mistakes they made Sunday. Just ahead, Whitney Casey on the story of when a tradition went too far and when hazing sent teenage girls to the hospital and could send their parents to court.

(COMMERCIAL BREAK)

ROMANS: We're back. We're on the story of the hazing of high school girls in Northbrook, Illinois, a suburb of Chicago, bringing humiliation, injury, and the possibility of criminal charges.

CNN correspondent Whitney Casey is on the story, joins us now from Chicago.

This is an amazing story. These pictures are quite compelling. And this must be a parent's worst nightmare. Whitney?

WHITNEY CASEY, CNN CORRESPONDENT: Yes, that's what a lot of parents have said. But, you know, some of the kids, too, they don't want to see their school represented like this.

This school is in a very affluent area of Chicago. It's a suburb. Ninety seven percent of the graduating class here will go off to college. They have been heralded as one of the top schools around the country, consistently.

And so this is the picture of their school going out internationally. This is what we've been running all week.

So, you know, they're a little disconcerted. But, you know, it's warranted.

KARP: We've heard so much about all the details, in terms of what happened. Is this something they always do and now it's just getting some attention? Or is it what they always do and it get out of control, and that's why it's getting the attention?

CASEY: What you just said, Josie. It's what they've always done, and this year it got out of control. And what police are saying is the reason it got out of control, the reason it was exacerbated, was because of the alcohol. There was a pre-party keg party that the seniors -- and those are the girls in the yellow jerseys that you're seeing -- had. And now police are investigating whether parents were the ones that provided those kegs.

MALVEAUX: How old are these girls? Could they be charged as well?

CASEY: Yes. I mean, the girls are 16, 17. Those are the juniors. Some of the seniors are 18. And police are looking at criminal charges, and the school has said they support any sort of prosecution, because the school can't suspend these kids. It happened off campus. It was not school-sanctioned, and so they have no jurisdiction. All they can do is take them away from their extracurricular activities, so they are very limited in what they can do to these kids. Plus, it's the end of the year.

STARR: Whitney, even though it was off-campus, were there any faculty members? Were there any parents present? Did anybody try and stop it once it got going?

CASEY: Well, we don't know if there were actually parents present, but we know faculty wasn't there.

But what is also sort of upsetting some of the parents here is that these kids, those jerseys that they have on, apparently they wear them to school the Friday before the game. This is almost two decades' worth of tradition here. It used to be a school-sanctioned event back in the late '70s. But since then, it got a little bit too raucous, so they canceled it. And now kids have been -- it's been student generated. Kids have been doing this. And they wear these jerseys to school, so parents say that school officials should have known.

School officials say that because of the Internet and instant massaging, that the kids basically -- it's so covert that only an hour before the game actually takes place do kids really even know where to go.

ROMANS: I want to ask you about the alcohol. Do they think the parents provided this alcohol? Clearly these kids aren't old enough to buy beer. And, you know, what is the school going to do to address what could be an alcohol situation there?

CASEY: Well, the school says they, again, have very limited jurisdiction. They have classes on, you know, substance abuse, and they're also talking with some of these kids. But in terms of the parents, yes, police are pursuing criminal charges if indeed a parent did provide these kegs. And what they're doing is going around to the liquor stores in the area. And if you rent a keg in Illinois, you have to sign for it and you also have to leave your ID. So they say if a parent did indeed rent these that they will get to the bottom of it.

KARP: Whitney, what are the girls saying, if anything?

CASEY: Well, interestingly, I talked to one of the girls that -- a junior who was actually there. She says that she was a captain of the team. And she has been really conflicted all week, because, as I said, they weren't suspended. So these kids went back to school together. These juniors, who were hazed by the seniors -- and they've been watching this video, of course, all week -- they had to go to school with them. And they said they haven't talked with them. Even the girls -- five girls had to go to the hospital. One girl had 10 stitches. Another girl broke her ankle. They're all back at school.

They're not talking to -- and they're really not talking about this, because there are so many lawsuits out there. We've heard that over 60 lawyers in the area have been hired to handle these cases.

ROMANS: All right. Mother's Day weekend. Our "On the Story" question this week, what my mother taught me. A fine example in the magazine, "Real Simple," a picture of our very own Suzanne Malveaux and her mother. Says Suzanne in the magazine, quote, "Mom taught me purely by example. She universally treats people the same. So now I approach the president of the United States the same way I approach someone I meet on street. You treat everyone with the same degree of respect."

MALVEAUX: My partner in crime.

KARP: Well put.

MALVEAUX: My mother.

ROMANS: Suzanne's mom.

OK, great. Thanks to my colleagues. Thanks for watching "On the Story." We'll be back next week.

Still ahead, "People in the News," focusing this week on Osama bin Laden. At 12:00 noon Eastern, CNN "Live Saturday." And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, "In the Money."

Coming up at the top of the hour, a news alert, but first the president's weekly radio address.

(BEGIN AUDIOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good morning.

This week, with a vote in the House of Representatives, Congress took a positive step toward passage of my jobs and growth proposals. The plan I submitted would create more than a million jobs by the end of next year through immediate tax relief for American families and businesses.

Since I sent my plan to Congress in January, the need for action on the economy has become even more urgent. The unemployment rate last month reached 6 percent, as many employers continue to hold back on the kinds of investments that lead to new jobs.

The bill that passed the House of Representatives this week includes all the elements of my plan: cuts in income tax rates this year, reduction of the marriage penalty and increase in the child credit from $600 to $1,000, an increase in the expensive provision for small-business investment in new equipment and action to reduce the double taxation of dividend income.

These reforms would bring immediate help throughout our economy. They would leave more money in the hands of families who need it to make purchases and to pay the bills. And this tax relief would give employers greater incentives and resources to invest in new equipment. The result will be more jobs, and that is our goal.

We're also making progress on passing tax relief in the Senate. The Senate Finance Committee has approved legislation that includes important aspects of my proposal. I urge the Senate to complete its work next week so the House and Senate can work out their different versions and get a tax-relief bill to my desk as soon as possible.

This week's progress demonstrates that both houses of Congress and both political parties agree that tax relief will help this economy. Now the discussion is about how much tax relief the American people need and deserve.

We need at least $550 billion in tax relief over the next decade -- big enough to make a real difference in the paychecks of American workers, big enough to help entrepreneurs create more jobs, and big enough to give our economy the boost it needs.

This past week I met a small-business owner named Luke Brindley (ph). Luke and his family started their Virginia business less than two years ago with five employees, and now they are up to 25. Here's what Luke says: "Any break we get encourages us to hire more people and buy more equipment."

Next week I will travel to New Mexico, Nebraska and Indiana to address the nation's hardworking small-business owners, families and investors. My message to them will be simple: The surest way to grow this economy and create jobs is to leave more money in the hands of the people who earn it.

I urge every citizen to participate in this important debate and to make your voice heard. Explain to your local representative or your senators what tax relief would mean to your family and your business. And please tell the members of Congress why our economy needs that relief now.

Thank you for listening. (END AUDIOTAPE)

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




Transition; U.S. Military Continues Search for Iraqi WMDs>


Aired May 10, 2003 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on what we covered this week.
I'm Suzanne Malveaux, on the story of how the end of the war in Iraq has fired up political fights back home.

JANE ARRAF, CNN CORRESPONDENT: I'm Jane Arraf in Baghdad, where the story is Iraq in transition, trying to come up with a new Iraq.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr, on the story of the search for hidden weapons in Iraq and how the U.S. military views what its next challenge could be.

JOSIE KARP, CNN SPORTS CORRESPONDENT: I'm Josie Karp, on how the common refrain in the sports world was "You're out of here" to college coaches and even Michael Jordan.

CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: And I'm Christine Romans, on the story of how a quick war has inspired a spring rally. But will the economy follow?

We'll be talking about all these stories. We'll go to Israel to talk to Kelly Wallace about the Israeli missile attack she witnessed in Gaza and Secretary Powell's arrival today.

We'll talk to Whitney Casey about the hazing of Chicago high- school girls turning violent, sending some to the hospital, and may end in criminal convictions.

And we'll talk about mothers and daughters on the eve of Mother's Day.

And we want to hear from you at onthestory@cnn.com.

And we'll hear from the president in his weekly radio address at the bottom of the hour, but first, what's happening right now, from CNN headquarters in Atlanta.

(NEWSBREAK)

(BEGIN VIDEO CLIP)

LIEUTENANT GENERAL DAVID MCKEIRNAN, COMMANDER OF OPERATIONS: There is a lot of work still to be done to create the right environment of safety and security within Iraq. There is still crime. There's still looting.

(END VIDEO CLIP)

STARR: Lieutenant General David McKeirnan, commander of operations for allied forces, speaking in Iraq this week about the country still in turmoil.

Welcome back. We're "On the Story."

Well, Iraq still, remarkably, of course, a very dangerous place. Major combat may be over, but when we were in Iraq last week with Defense Secretary Donald Rumsfeld, he said that U.S. forces are still encountering pockets of resistance. And sources there told us that the U.S. forces are hauling something like 40 truckloads a day of ammunition and weapons out of Baghdad.

But, Jane, you would know the most about all of that, compared to us. You're on the ground there. You see an awful lot going on.

ARRAF: Absolutely, Barbara. There's an immense amount going on. So much, it's hard to keep track of it.

But I was talking to a general this morning, and he calls this a power vacuum, which is essentially what we're seeing. Now, there's an immense frustration from people on the ground, and from soldiers as well. And I'd love to get your view later on whether this frustration is felt at the Pentagon.

But here on the ground, when night falls, it is a very scary place. In many parts of the city, there's no electricity. People are locked up in their homes. They're really afraid.

And they're really afraid of what's going to come next. And it's a huge worry, not just to the Iraqis but to the military as well.

STARR: And of course, right now, it seems like the story is Iran inside Iraq, as much as anything else, the Iranian influences that are emerging.

ARRAF: Now, this is an amazing thing, because it's really all about what happens to the whole rest of the region now that there is such dramatic and sudden changes in Iraq.

As you know, Barbara, this is the Iranian opposition, the mujahedeen, which for years was propped up by Saddam Hussein. They have armed camps here. And right now, there is a standoff at their camps near the Iranian border. The U.S. military has told them they have to disarm, they have to surrender. It considers them a terrorist organization.

And there are thousands of them, and where do they go? I'm not sure if there are answers in Washington to this, but it's one of those little bits of a huge, complex problem that will have repercussions further down the road.

STARR: And there are issues emerging right now about the return of some of these Shia religious leaders into southern Iraq and what that may do to contribute to additional instability.

ARRAF: That's another thing, you're absolutely right. Now that the lid has been opened on political parties, on different factions, on religious freedom in Iraq, we're seeing all of these competing interests.

There's a very dramatic story with one of the major Shia clerics who has returned to Iraq after 20 years in exile in Iran. He's very slowly making his way to the holy city of Najaf, where he should arrive on Monday.

But that's just one small faction of the Shias. I think people tend to think of them as monolithic, but there are different competing factions. In fact, one of them was assassinated quite recently.

I mean, here on the ground, the bottom line is, it's really almost unbelievable how much this place has changed. And it's really very much still shaking out with all of these interests.

And, Barbara, I'd love to ask you, what is the view from Washington? Do people there believe that it's working here?

STARR: Well, I think the key leaders do. The politicians certainly do. You do hear from soldiers, though, a lot of concern. You know, it was just the other day a young trooper was shot in Baghdad by a sniper. He was standing duty at a traffic checkpoint, and a sniper tragically shot him and killed him.

So the fact that the Bush administration says major combat is over, that may be the case broadly speaking. But on the ground, there are still tremendous individual problems.

When we were with Secretary Rumsfeld in Baghdad, security people said that the convoy took three shots at the front at one point. They couldn't see where that gunfire was coming from. When we were at Baghdad International Airport, there was gunfire. Jane, I know you hear gunfire literally every day in Baghdad.

I think major combat is over unless a bullet is coming at you, and then major combat is coming at you.

MALVEAUX: Barbara and Jane, I guess, how is Garner doing? I mean, I understand that he is going to be really number-two now, that you have somebody, former diplomat, Bremer, who is going to be moving in.

Is there a sense that he hasn't really done his job or he hasn't done a good enough job?

ARRAF: I think there's really a sense that there -- a lot of people were caught unprepared by what happened. Now, I think we have to say this could have been a much worse -- this could have been a disaster, really. There could have been people starving. There could be even more looting. There could have been a lot more casualties. There weren't. But the fact remains that, a month after the war, really there is nothing in place. There is no system of government. There is very little electricity. There are long lines for gasoline.

And the feeling has been that perhaps the administration and the military, to some extent, focused too much on those emergency preparations, preparing for waves of refugees, which didn't happen, and didn't really focus enough on reconstruction, which has to happen really pretty quickly. So that may have been part of it.

But he is a very optimistic guy. I mean, he appears quite frequently. He's very warm and fuzzy. And he keeps saying that he believes that this actually is working, and he believes he still has a role to play, which I suppose you have to.

But this is an immense task, isn't it? I mean, it's really the first time this has been attempted in a country with no government since World War II. And I wonder if people really take that into account.

Certainly here on the ground, there is an intense impatience. But...

ROMANS: Jane, you said there is a power vacuum there in Baghdad. I'm wondering, you know, are you going to start to see some of these towns start to, you know, elect or delegate some officials?

I know in Mosul you had some amazing pieces about, you know, starting to get some things under way, and some other towns.

ARRAF: Mosul was so interesting, because really that -- in the space of two weeks, that went from absolute lawlessness, basically the law of the wild West. We drove into there immediately almost after the Iraqi forces withdrew, when there was nobody. There were no Kurdish forces. There were no American forces. And shortly after that, one of the leaders in exile proclaimed himself governor, which led to gunfights and about a dozen people killed. And that's the kind of thing that is really the danger.

Now, they went from that to, two weeks later, holding somewhat civilized local elections. And they now have a government. But Mosul is sort of a model city in some respects. This part of it is going to be much trickier.

MALVEAUX: Well, from the war in Iraq to the political fallout back home, and why a smooth landing on a aircraft carrier is churning up political turbulence days later.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: War is not theater. Victory is not a campaign slogan.

(END VIDEO CLIP) (BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The 5,000 sailors on that ship recognize this for what it was, the president going out there to say thank you to those who risked their lives.

(END VIDEO CLIP)

MALVEAUX: The controversy continues over what some called the mother of all photo-ops, President Bush flying on the deck of the aircraft carrier USS Abraham Lincoln.

Welcome back. We are ON THE STORY.

This was -- it just generated -- it snowballed. Hour by hour, day by day, this just got bigger. We heard people saying we want an accounting, not only for the cost of this but we want our money back for taxpayers. Some Democrats saying it cost anywhere -- you know, a million dollars extra to make this landing.

Now, what happened was is that the president will admit, and as well as his aides say, yes, he did not have to use that jet. He could have used the helicopter. He wanted to go in like the other Navy pilots do. But at the same time, no, it did not cost extra.

KARP: Suzanne, is this, though, one of those controversies where you're hearing either publicly or privately the Republicans saying, bring it on, we like this, we want the story to live as long as humanly possible?

MALVEAUX: Absolutely. You talk to people, and they're like, "Just keep showing us those pictures. The more you see the pictures, the more people are looking at him as commander in chief with the sailors."

But one thing they say is, it's comparable to landing with a helicopter. You're talking about $5,000 an hour. He could have landed with the helicopter. He chose the jet. And why not? I mean, this is a historic moment. It's a moment that a lot of Democrats, if you talk to them as well, they are -- they're envious. They're, "Why didn't we think of this?"

ROMANS: Well, the Democrats say, listen, that Karl Rove and the Republicans are stage-managing this for the upcoming political season. But, I mean, news flash: Politics is full of stage-managed -- and he's the president of the United States. I mean, obviously it takes a lot of coordination, right, and security. And, you know, I mean, stage management in this sort of presidential arena is not unusual.

MALVEAUX: Absolutely. And there was one point, too, when you talk about the logistics, the coordination of all of this. The Democrats were saying, well, because the president spent the night on the aircraft carrier and it slowed down because -- that somehow they were delaying these sailors from reuniting with their families.

The White House says, look -- and Navy officials, as you know, Barbara, say, if you say May 2nd is the day that they're going to arrive, that they're going to dock, you don't change that, whether or not it's the president slowing it down, speeding it up, because of the logistics to have that aircraft carrier come in, and also because of the families. I mean, they've rearranged their lives to welcome, you know, welcome their family members, the sailors.

ARRAF: Suzanne, here in Baghdad, all the Iraqis pay incredible attention, of course, to what goes on in Washington. I'm just wondering if the start of the political season means anything, has implications for Iraq policy, and whether they're going to be focusing on it so much?

MALVEAUX: Well, you know, the Bush administration -- I mean, first of all, we're going to see commander in chief, that role, being played over and over and over again.

But at the same time, what's really important, as well, is the economy. I mean, that is something that they are focusing on. And we see the president more and more addressing his jobs, his stimulus package, that that -- the tax-cut package. So you're going to see a combination of the two.

But don't be surprised if you do see these pictures from the USS Lincoln with the sailors in political ads. And the Democrats would admit, quietly, privately, they would do it too.

STARR: Are we going to start seeing Dick Cheney start coming out more in public now? He was awfully absent during the war. Is he going to reemerge?

MALVEAUX: Well, what's interesting is that this week it became official that he is the president's running mate. And it's something that had been speculated for some time.

And I guess there are two points, really. People didn't know what was going to happen, A, because of his health. Four heart attacks in the past, none as vice president, but some concern. And his office, as well, as the vice president, said that's not an issue, he has the doctor 24 hours a day, he's in fine health. And he went ahead and accepted that role.

The other thing is about Halliburton, and that seems to be a controversy that keeps reemerging here.

ROMANS: And this is the company that he once ran and then left the company and sold his stake in the company before he went to Washington again, right?

MALVEAUX: Right, right. And there's some Democrats, particularly Congressman Henry Waxman and others, who are saying -- accusing the Bush administration, because of its close ties with Halliburton, of getting that lucrative contract, that subsidiary that got that contract in Iraq to put out the oil fires and their emergency, as well as perhaps even pumping the oil, that it's unfair, that they're engaging in favoritism. And the vice president says clearly -- I spoke with his aides -- that he has no role in actually the bidding the contracts, the White House doesn't. And Halliburton has been in the business for some 60 years. They feel that they earned it.

KARP: We're going to move on now. We first have to say goodbye to Jane Arraf. She has to get back on the story in Baghdad.

And, Jane, what's on your agenda today?

ARRAF: All kinds of things. Essentially Saddam Hussein again, a letter reported to have been written by him. News that the Iraqi Central Bank vaults are going to be opened in just a few days, and we'll find out exactly how much money there in there. And a really dramatic press conference we just came from, where the acting minister for the health ministry, appointed by the U.S., refused to denounce the Baath Party.

Now, all of these have implications for security, for all sorts of things. And we're going to be following those up and a lot more in this new Iraq in transition. So we'll be talking more about that.

KARP: Thanks, Jane.

There is one political drama unfolding over there. And over here, there were juicy political dramas all over Washington, but the one that probably generated the most attention starred a basketball icon, of all things, Michael Jordon. He was sent packing by the Washington Wizards.

I am back on the story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LARRY EUSTACHY, IOWA STATE BASKETBALL COACH: Obviously, I was out of control.

(END VIDEO CLIP)

KARP: That's Larry Eustachy, Iowa State basketball coach. He's just one big name in the world of sports suddenly out of the game and on the sidelines.

Welcome back. We're ON THE STORY.

Eustachy was photographed drinking beer and kissing a young woman at a party, and the photos ended up in the newspaper. He was out. He wasn't the only one this week. There were a rash of events. Mike Price, the head coach of the football team at the University of Alabama, also out.

And the difference here, we are used to, it's sad to say, seeing coaches fired for recruiting violations, NCAA violations, things like that. When it comes to the personal side of things, there's normally a little leeway. Not this week. Both guys, personal indiscretions cost them their jobs.

ROMANS: I have to talk about Larry Eustachy first. I went to Iowa State. I used to work with the Des Moines Register, which first published the photographs. So you can imagine that I was watching this story quite aggressively.

And he's the highest-paid state employee in Iowa. Some people would say that perhaps, you know, we're being too puritanical, you know. The guy's maybe got an alcohol problem, maybe he just showed some bad judgment, and he lost this big job.

But you could also say, he is a public figure, and is he bound in his contract by good conduct?

KARP: In most contracts, when you have these guys at these high- profile schools with these huge jobs, making, like Eustachy, over a million dollars a year, there are clauses in there that say, if you bring disrespect on the school, you have the chance to be fired. So that's a cause for termination. And I think one of the things that people were really debating across the country this week was whether the punishment in both these instances was too harsh. Mike Price down in Alabama, he wasn't necessarily conducting university business. He went down to Florida on a golf trip, ended up at a strip joint, ended up with a woman back in his hotel room, ordering one of everything on the menu from room service. That came out; that's why he lost his job. He came out and said, what happened to getting a second chance in life?

Two things with these guys. One, Mike Price hadn't coached a game at Alabama yet. He had a contract still on the table that he hadn't signed.

ROMANS: A $10 million contract, right?

KARP: A $10 million contact.

Eustachy, he hadn't had any good seasons in a couple years.

So these guys were disposable, because they hadn't really entrenched themselves with this winning tradition yet. And maybe things would have been different, people speculate, had Eustachy come off a Final Four appearance or had Mike Price had a chance to win a national title at Alabama. Then it would've been a lot harder for these university presidents and these athletic directors to get rid of them.

ROMANS: I'm a big basketball fan, big Michael Jordan fan. I was destroyed when I heard what happened. What happened with Michael Jordan?

KARP: That's what a lot of people are asking. I mean, Michael Jordan, we can all agree, best basketball player right now, best basketball player ever. Everyone holds him up as a basketball god.

But Abe Pollin, the owner of the Washington Wizards, called him in for a meeting. Jordan thought that he was going to discuss the possibility of returning to the front office after he played for two years, up to age 40, for this struggling franchise. Abe Pollin, in less than five minutes, said, "You know what, Mike, thanks very much, but we don't need you anymore."

And that is why there's been so much controversy with this decision, I really believe, because Michael Jordan, a lot of people think, deserved a little more respect because of the fact that he's Michael Jordan.

And he came out himself and expressed -- he used the word "shocked" to express how he felt.

STARR: What was really behind all of this though?

KARP: Well, there are a couple things. One, you can point to Michael Jordan's record when he was president of basketball operations. He had the opportunity to recreate an entirely different team. He got rid of all but one player, and those are the guys that he ended up playing with for two years. And they were terrible. Even with Michael Jordan on the team, the two years that he played, they couldn't win more than 37 games.

He drafted a high schooler with the first pick in the 2001 draft. That kid has looked like he's really going to struggle, isn't going to pan out. So his decision-making is one thing.

And the other thing is there had been a lot of dissension in the team, the way that he related to the other players. He came out and publicly crucified them, really went off on a lot of the guys, talked about how they had no desire, no desire especially compared to a 40- year-old guy out there on the court.

ROMANS: Could he take his personnel skills or what he has learned, or the mistakes that he's made I guess, at the Wizards and parlay that somewhere else? There must be a lot of franchises that would be very -- I mean, aren't the Bucs looking for someone?

KARP: The Bucs are looking for somebody down in Charlotte, North Carolina. There's an expansion team that's set to get under way in 2004. The owner of that team has already come out and said he wants Michael Jordan in any capacity that Michael Jordan wants to come.

There's even been talk about him going back to Chicago, although that looks a little bit more unlikely.

There's going to be a market for Michael Jordan, and you can bet that Michael Jordan will want to jump back in and prove Abe Pollin wrong, because the one thing that he loves is a challenge.

STARR: And, Josie, in the world of golf, more news this week?

KARP: Well, more news coming up in the next 10 days. The biggest story in the entire sports world, undoubtedly, will be Annika Sorenstam, the best player on the LPGA, who's going down to Texas next week to play in the PGA tournament, the Colonial. She's the first woman in half a century to play against the men in a PGA tournament. And this is...

ROMANS: A lot of pressure. Isn't that a lot of pressure for all women golfers?

KARP: For all women golfers and for Annika Sorenstam. I mean, that's the thing she's said. She isn't shying away from the fact that it is a lot of pressure. She'll say it's going to be like all four women's majors rolled up into one in one week.

And that's really going to determine how well she plays. People already wondering if it's getting to her though. She won 13 tournaments last year, worldwide. She has only won one so far this year. She was leading at the end of the day in Japan yesterday in a tournament, but she had her worst finish of the season the last tournament she played.

So it looks like there's a chance the pressure's already getting her. But she's one of those athletes who has always been able to combat the nerves and the pressure. And it will be the biggest challenge, as she said, of her life.

MALVEAUX: Well, one of the longest-running games of the diplomatic and geopolitical variety is playing out this week in the Middle East. Kelly Wallace is with us in a moment from Jerusalem, on the story of how violence and peace talks coexist.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FLEISCHER: It's very important for the Israelis, for the Palestinians, for the Arabs, to recognize that this is now a moment to seize. And the secretary is going to the Middle East to help them to seize it.

(END VIDEO CLIP)

KELLY WALLACE, CNN CORRESPONDENT: White House Press Secretary Ari Fleischer on Thursday, sending a signal to the longtime enemies in the Middle East.

Welcome back. I'm Kelly Wallace, on the story in Jerusalem, where Secretary of State Colin Powell will be in just a little more than an hour from now. It is his first visit to the region in more than a year, the start of an in-depth push by the Bush White House to try and bring the Israelis and the Palestinians back to the peace table.

But even before the secretary left, he said this is not going to be easy. His immediate challenge is trying to get both sides to take steps now to try and build some trust.

And I can tell you, there's a great deal of skepticism in the region, whether the secretary will be able to achieve any breakthrough on this visit. STARR: Kelly, as Powell arrives there, what is the role now for Yasser Arafat? Is he behind the scenes, or is he completely out of the picture?

WALLACE: Well, Barbara, the secretary's going to want to find that out. He will be meeting on Sunday with the new Palestinian prime minister, Mahmoud Abbas, but Secretary Powell will not be meeting with Yasser Arafat.

And what the secretary will want to do is try to find out from Mahmoud Abbas and from other Palestinians, what kind of role is Yasser Arafat still playing behind the scenes? Because there is still some skepticism from Israelis and some American officials that Yasser Arafat is still trying to assert some power. And so that is something the secretary will try and find out during his meetings on Sunday.

MALVEAUX: Kelly, what did you see in Gaza?

WALLACE: It was pretty incredible. We were there in the Gaza Strip, trying to do a story on whether Mahmoud Abbas will be able to rein in groups like Hamas. And then all of a sudden we heard an explosion. Thanks to my fabulous photo journalist, Margaret Moth (ph), who kept shooting the whole time, we could then see in the sky two Israeli Apache helicopters firing missiles. Down below, the target a car.

The results, the death of a senior Hamas military commander. And we went to the scene, and you found hundreds of Palestinians around that car, chanting calls for revenge, chanting support for Hamas. And some Palestinians we talked to on the scene, one man saying, "Look, look what's happening here. This is what Israel thinks of that so- called road map for Middle East peace."

So, some concern from Palestinians that this attack came two days before Secretary Powell's visit and could complicate efforts for the secretary to get the two sides talking to one another again.

MALVEAUX: And, Kelly, there have been so many concerns and people ask questions, European allies, Arab allies, whether or not the Bush administration really is serious this time about moving this process forward.

Do you get a sense from both sides, the Palestinians, the Israelis, that the United States really is committed this time around to, like, move to push the ball forward?

WALLACE: That is certainly the key question. And both sides say they're sort of watching and waiting to see exactly what will come from the Bush White House.

Both sides seem to say that the president and his team are saying the right things. You saw President Bush, of course, saying just yesterday that Secretary Powell comes here with his personal commitment, that the U.S. will work without tiring, to bring forward a Palestinian state alongside a secure Israel. But many Palestinians behind the scenes are somewhat skeptical that this president will put, ultimately, the pressure needed to be put on Israel, especially, of course, as you come upon a presidential election. And concern that he might alienate some pro-Israeli voters if he tries to put pressure on Israel and makes Israel take some steps that some believe might compromise its security.

So that's an open question right now. Both sides waiting to see the answer to it.

KARP: Kelly, we've seen some examples, just very recently, of the very real danger that journalists are in, covering this conflict. Can you maybe go over a little bit what the dangers are, real, and then how the Israeli government may use that to limit what journalists get to cover from here on out?

WALLACE: Well, Josie, yes, we have seen two cameramen, a British cameraman and a Palestinian cameraman, killed. One in the Gaza Strip, James Miller, and a Palestinian cameraman killed in the West Bank, during a two-week time period. So a lot of concerns journalists are having about what is going on in the West Bank and the Gaza Strip.

And just yesterday, the Israeli defense forces announcing that any journalist, people like myself, anyone who goes into the Gaza Strip will now have to sign a waiver, basically saying that we understand the risks of going into that region, that we will then not call on the IDF to take responsibility.

So a number of concerns there about limitations on journalists covering what's happening.

ROMANS: All right, thanks, Kelly Wallace.

Coming up, uncertainty over the Mideast and the world at large is one factor holding down consumer confidence here. Up next, on the story of what may be coming for investors and the economy.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The unemployment rate is now at 6 percent. The news ought to serve as a clear signal to members of the United States Congress that we need a bold economic recovery plan.

(END VIDEO CLIP)

ROMANS: President Bush, this week, pointing the finger at Congress for an economy that limps along.

Welcome back. We're ON THE STORY.

A recovery, yes, but a mild recovery overall. A lot of folks hoping that the next second half of this year is going to be when you start to see the numbers improve. The stock market is already predicting that. Technically, a stock market usually, six months ahead of an economic recovery, starts moving higher, doing better, expecting that things will turn around.

We've had a 16 percent rally in the S&P 500 just in the past couple of months. If you measure the NASDAQ, from back in October, which was a five-year low, it's up 35 percent.

So while we've all been looking at international events, the markets have been recovering here. And there's been a pretty good return for investors who bought lows last year.

Jobs is the...

(CROSSTALK)

MALVEAUX: ... percent unemployment.

ROMANS: Yes.

MALVEAUX: And even people who say they've dropped out of the job market altogether.

ROMANS: The single most important thing that I'm hearing people talk about, both anecdotally, on the trading floor. You've got a stock market that's doing better, but the jobs market is really in trouble.

They're calling this a jobless recovery. And we've had so many jobs lost, 2 million, 2.5 million jobs lost just over the past few years. And we continue to see the jobless rate creep up about 6 percent right now.

We're going to get some weekly-jobless-claims data this week. You know, how long is the unemployment line. It's really important to see that line start to shorten. But so far, you know, it has been a very tough go.

All of us know somebody who's been out of a job for a very long time. And that keeps your neighbors from buying a new car, or it keeps, you know -- it dampens consumer confidence a lot.

WALLACE: Christine, you know, the Israeli and Palestinian economies right now are in terrible shape and certainly could get a boost if the American economy improves.

But I want to ask you, does what's happening here, Secretary Powell's visit, optimism possibly for some progress in this region between the Israelis and Palestinians, does that have any impact at all on the markets and the American economy?

ROMANS: It's interesting, Kelly, because what happens is it all fits into an international puzzle that is looking pretty good so far. You've got a war over in Iraq. You've got the United States saying, at least, that it is dedicated to finding some sort of solution or helping, you know, facilitate a solution in the Middle East. You've also got a curious absence of worries about terrorism at the moment.

And so the international -- they call it exogenous shocks in Wall Street speak -- but the exogenous shocks is not what people are worried about now. Instead, they're hoping that in the second half of this year, there will be a recovery, a better recovery in the U.S. economy.

STARR: What does the market think, though, it's going to take to bring the jobs sector back?

ROMANS: Business spending. CEOs are worried about what monster lies underneath their bed. So they're not building new plants, they're not hiring new workers, they're really not investing aggressively in finding new products because they're just sort of, with the covers over their head, waiting for this to pass.

Soon as you get the CEOs in this country starting to spend money again to upgrade plant, to hire new workers -- when you hire new workers, that will help the job situation. When you have a new job, you're going to go out and buy some more products, and then it all follows from that.

STARR: Well, our thanks to Kelly Wallace. We know you're on the story today of the Powell visit.

If you make the wrong guess on Wall Street, it can cost you. And some high school students in Illinois and their parents are paying for the mistakes they made Sunday. Just ahead, Whitney Casey on the story of when a tradition went too far and when hazing sent teenage girls to the hospital and could send their parents to court.

(COMMERCIAL BREAK)

ROMANS: We're back. We're on the story of the hazing of high school girls in Northbrook, Illinois, a suburb of Chicago, bringing humiliation, injury, and the possibility of criminal charges.

CNN correspondent Whitney Casey is on the story, joins us now from Chicago.

This is an amazing story. These pictures are quite compelling. And this must be a parent's worst nightmare. Whitney?

WHITNEY CASEY, CNN CORRESPONDENT: Yes, that's what a lot of parents have said. But, you know, some of the kids, too, they don't want to see their school represented like this.

This school is in a very affluent area of Chicago. It's a suburb. Ninety seven percent of the graduating class here will go off to college. They have been heralded as one of the top schools around the country, consistently.

And so this is the picture of their school going out internationally. This is what we've been running all week.

So, you know, they're a little disconcerted. But, you know, it's warranted.

KARP: We've heard so much about all the details, in terms of what happened. Is this something they always do and now it's just getting some attention? Or is it what they always do and it get out of control, and that's why it's getting the attention?

CASEY: What you just said, Josie. It's what they've always done, and this year it got out of control. And what police are saying is the reason it got out of control, the reason it was exacerbated, was because of the alcohol. There was a pre-party keg party that the seniors -- and those are the girls in the yellow jerseys that you're seeing -- had. And now police are investigating whether parents were the ones that provided those kegs.

MALVEAUX: How old are these girls? Could they be charged as well?

CASEY: Yes. I mean, the girls are 16, 17. Those are the juniors. Some of the seniors are 18. And police are looking at criminal charges, and the school has said they support any sort of prosecution, because the school can't suspend these kids. It happened off campus. It was not school-sanctioned, and so they have no jurisdiction. All they can do is take them away from their extracurricular activities, so they are very limited in what they can do to these kids. Plus, it's the end of the year.

STARR: Whitney, even though it was off-campus, were there any faculty members? Were there any parents present? Did anybody try and stop it once it got going?

CASEY: Well, we don't know if there were actually parents present, but we know faculty wasn't there.

But what is also sort of upsetting some of the parents here is that these kids, those jerseys that they have on, apparently they wear them to school the Friday before the game. This is almost two decades' worth of tradition here. It used to be a school-sanctioned event back in the late '70s. But since then, it got a little bit too raucous, so they canceled it. And now kids have been -- it's been student generated. Kids have been doing this. And they wear these jerseys to school, so parents say that school officials should have known.

School officials say that because of the Internet and instant massaging, that the kids basically -- it's so covert that only an hour before the game actually takes place do kids really even know where to go.

ROMANS: I want to ask you about the alcohol. Do they think the parents provided this alcohol? Clearly these kids aren't old enough to buy beer. And, you know, what is the school going to do to address what could be an alcohol situation there?

CASEY: Well, the school says they, again, have very limited jurisdiction. They have classes on, you know, substance abuse, and they're also talking with some of these kids. But in terms of the parents, yes, police are pursuing criminal charges if indeed a parent did provide these kegs. And what they're doing is going around to the liquor stores in the area. And if you rent a keg in Illinois, you have to sign for it and you also have to leave your ID. So they say if a parent did indeed rent these that they will get to the bottom of it.

KARP: Whitney, what are the girls saying, if anything?

CASEY: Well, interestingly, I talked to one of the girls that -- a junior who was actually there. She says that she was a captain of the team. And she has been really conflicted all week, because, as I said, they weren't suspended. So these kids went back to school together. These juniors, who were hazed by the seniors -- and they've been watching this video, of course, all week -- they had to go to school with them. And they said they haven't talked with them. Even the girls -- five girls had to go to the hospital. One girl had 10 stitches. Another girl broke her ankle. They're all back at school.

They're not talking to -- and they're really not talking about this, because there are so many lawsuits out there. We've heard that over 60 lawyers in the area have been hired to handle these cases.

ROMANS: All right. Mother's Day weekend. Our "On the Story" question this week, what my mother taught me. A fine example in the magazine, "Real Simple," a picture of our very own Suzanne Malveaux and her mother. Says Suzanne in the magazine, quote, "Mom taught me purely by example. She universally treats people the same. So now I approach the president of the United States the same way I approach someone I meet on street. You treat everyone with the same degree of respect."

MALVEAUX: My partner in crime.

KARP: Well put.

MALVEAUX: My mother.

ROMANS: Suzanne's mom.

OK, great. Thanks to my colleagues. Thanks for watching "On the Story." We'll be back next week.

Still ahead, "People in the News," focusing this week on Osama bin Laden. At 12:00 noon Eastern, CNN "Live Saturday." And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, "In the Money."

Coming up at the top of the hour, a news alert, but first the president's weekly radio address.

(BEGIN AUDIOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good morning.

This week, with a vote in the House of Representatives, Congress took a positive step toward passage of my jobs and growth proposals. The plan I submitted would create more than a million jobs by the end of next year through immediate tax relief for American families and businesses.

Since I sent my plan to Congress in January, the need for action on the economy has become even more urgent. The unemployment rate last month reached 6 percent, as many employers continue to hold back on the kinds of investments that lead to new jobs.

The bill that passed the House of Representatives this week includes all the elements of my plan: cuts in income tax rates this year, reduction of the marriage penalty and increase in the child credit from $600 to $1,000, an increase in the expensive provision for small-business investment in new equipment and action to reduce the double taxation of dividend income.

These reforms would bring immediate help throughout our economy. They would leave more money in the hands of families who need it to make purchases and to pay the bills. And this tax relief would give employers greater incentives and resources to invest in new equipment. The result will be more jobs, and that is our goal.

We're also making progress on passing tax relief in the Senate. The Senate Finance Committee has approved legislation that includes important aspects of my proposal. I urge the Senate to complete its work next week so the House and Senate can work out their different versions and get a tax-relief bill to my desk as soon as possible.

This week's progress demonstrates that both houses of Congress and both political parties agree that tax relief will help this economy. Now the discussion is about how much tax relief the American people need and deserve.

We need at least $550 billion in tax relief over the next decade -- big enough to make a real difference in the paychecks of American workers, big enough to help entrepreneurs create more jobs, and big enough to give our economy the boost it needs.

This past week I met a small-business owner named Luke Brindley (ph). Luke and his family started their Virginia business less than two years ago with five employees, and now they are up to 25. Here's what Luke says: "Any break we get encourages us to hire more people and buy more equipment."

Next week I will travel to New Mexico, Nebraska and Indiana to address the nation's hardworking small-business owners, families and investors. My message to them will be simple: The surest way to grow this economy and create jobs is to leave more money in the hands of the people who earn it.

I urge every citizen to participate in this important debate and to make your voice heard. Explain to your local representative or your senators what tax relief would mean to your family and your business. And please tell the members of Congress why our economy needs that relief now.

Thank you for listening. (END AUDIOTAPE)

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