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On the Story

A look at Democratic Presidential Race; Haiti's on Verge of Anarchy

Aired February 21, 2004 - 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.


KELLY WALLACE, CNN ANCHOR, ON THE STORY: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Kelly Wallace, ON THE STORY of the Democratic presidential race and why, with John Kerry so far ahead, John Edwards is still smiling.
DANA BASH, CNN ANCHOR, ON THE STORY: I'm Dana Bash, ON THE STORY of the president and his team getting their political act together and changing their line on jobs.

JOSIE BURKE, CNN ANCHOR, ON THE STORY: I'm Josie Burke in Boulder, Colorado, ON THE STORY of a sex scandal at the University of Colorado; rape allegations and a football coach fighting for his job.

GERRI WILLIS, CNN ANCHOR, ON THE STORY: And I'm Gerri Willis, ON THE STORY of how this week's big cell phone deal tolls for you and me.

And we'll go to CNN's Lucia Newman in Haiti, being a country on the verge of anarchy and how that can mean waves of refugee boats U.S.-bound.

We'll listen to the president's weekly radio address at the end of the hour. And we'll talk about the final episode this weekend of a popular TV series, "Sex and the City."

E-mail us at onthestory@cnn.com. Now straight to Kelly Wallace and the presidential race.

(BEGIN VIDEO CLIP)

JOHN KERRY (D), PRESIDENTIAL CANDIDATE: My friends, tonight I say to all of America, get ready. A new day is on the way.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Wisconsin sent a clear message. The message was this, objects in your mirror may be closer than they appear.

(END VIDEO CLIP)

WALLACE: And that was the line of the night Tuesday night. John Edwards. He can joke about being closer than he appears. But the big question, is he close enough to beat front-runner John Kerry? We will have to wait, it seems, to find out that answer. The Super Tuesday states,10 states in all, just about 10 days and counting from now. (CROSS TALK)

BURKE: Kelly, you spent all this time with the campaign (AUDIO GAP) sit with John Kerry?

WALLACE: Josie, can you ask your question again? I'm sorry. I did not hear the top of it.

BURKE: You spend all this time with the Kerry campaign. This race is now being characterized as a two-man race. But how does that sit with the Kerry folks?

WALLACE: Josie, they don't like it at all. And they've been sending us e-mails to say this is not a two-man race. They say, look, John Kerry has a record of 16 wins and two losses. They say John Edwards has won only one state, South Carolina, where he was born.

That being said, John Edwards had a stronger finish than anyone expected in Wisconsin. The Kerry people would have preferred if John Edwards did not do so well so that this race would be almost -- the nomination would be almost his.

Now they have to spend a little more time, more resources, and battle it out a little bit with John Edwards.

BASH: Not only that, but it's interesting because they're essentially fighting a two-front war here. Because Kerry had already pivoted towards, what, towards the president, towards attacking the president. Now it seems he has to do that and watch his back on Edwards at the same time.

WALLACE: And they say they're so frustrated. They say they have it from both sides. Not only do they have to work on the other Democratic candidates, but they are getting attacks, they say, from the Republicans. And we know it has really been heating up over the past few days. Every time John Kerry is out there, you have the Republicans responding in some way.

John Edwards, though, has made this a fairly positive campaign and he is challenging himself because he can't really defer from that. So what he is doing is trying to challenge John Kerry on debate, encouraging him to have more forums. They are frustrated, they're getting it from both sides, they say, but that's the life a front- runner.

WILLIS: And the life of a front-runner, Kerry, of course, doesn't have as much money, as say President Bush, but Edwards could actually push him to spend lots and lots of money.

WALLACE: It's making it a little bit more of a combative race. He'll have to spend more money, spend more time. You know it was interesting, because originally today, Saturday, it was going to be a non-travel day for John Kerry. Now he is traveling.

He is heading to Georgia later today. He'll be there. He'll be in Georgia tomorrow, he'll be in New York. He has to spend a little bit more time, a little bit more money. He'll have a debate on Thursday night, a CNN/"L.A. Times" debate where he'll have to know that John Edwards will try to use that forum to try and score some points. So it makes it more competitive. Most analysts think it is a huge climb for John Edwards to try and pull this nomination away from John Kerry, but look at this race, anything's possible, right?

BASH: That's for sure.

BURKE: Kelly is John Edwards going to keep hammering Kerry on his NAFTA vote and try to draw the line in the sand, differentiating between their two voices there?

WALLACE: He definitely is, Josie. Because that is one issue, he says he was not in the Senate at the time, but if he had been in the Senate he would vote against that. Many people believe the North American Free Trade Agreement has cost thousands of jobs in manufacturing states like Ohio and New York and Georgia.

We've seen an interesting twist though from the Kerry campaign this week, though. They are trying to say, well, if John Edwards was so against NAFTA, why didn't he say anything about it in '93, '94, '95? The first time he really said anything was during the Senate race in 1998. They're trying to say he's not so passionate about it, only because it's now an election issue.

BASH: If we all listen very carefully, we can probably hear the chant from the White House and from the Bush campaign in Virginia, "Go Nader, Go Nader!"

WALLACE: Nader!

(LAUGHTER)

BASH: They obviously are -- would be thrilled if Ralph Nader got into the race. Democrats, Kelly, are panicked.

WALLACE: They are so crazed right now. Because we know Ralph Nader has scheduled an appearance on "Meet the Press" on Sunday, and that is where he says he will announce if he's going to run or not.

Terry McAuliffe on CNN's air, an interview with Wolf Blitzer, we were talking about this yesterday, he has had lunch with Ralph Nader. He's the Democratic Party chairman.

BASH: Wined him and dined him.

WALLACE: He has wined him and dined him, to try to keep him out of the race. Saying that Democrats are so united now, in trying to defeat President Bush, the worse thing that could happen would be for Ralph Nader to come in and be what many believe he was in 2000, a spoiler, take votes away from the Democrat and allow the president to win re-election.

So, we don't know what is going on behind the scenes. But just the sentiment seems that Ralph Nader could get in and Democrats are freaking out. WILLIS: Well, you know, I'm going to keep hammering on this money issue. Howard Dean getting out of the race after we talked about it for weeks and weeks and weeks, right? He had a real campaign war chest. He can really raise money. Will he be able to turn some of this over to other people?

WALLACE: The big question now is, will he, A, throw his official report behind either John Edwards or John Kerry? We don't know the answer to that -- but the sentiment is, at least some Kerry people -- they don't think it would come to John Kerry. So could, if he does anything, it could go behind John Edwards.

That being said, does he then -- do all his supporters follow him and follow his lead? It's a big question, also. But it does seem, if they go to someone, there might be more of an appeal to a John Edwards' candidacy as opposed to a John Kerry .

John Edwards had been running a little bit on the Washington outsider. That he had only been in Washington for three and a half, or a little more than that. But John Kerry's been in Washington for 20 year. So you could make the argument that the supporters could go to John Edwards. But we just don't know the answer to that.

BURKE: Kelly, now that Dean's out of the race, is there any legacy that he's left behind?

WALLACE: The big legacy, Josie, is how he has changed the other Democrat candidates. Many people think by Howard Dean challenging the president on the war, on the economy, on No Child Left Behind Act, he has kind of strengthened these other Democrat candidates not to be worried to challenge the president; John Kerry , John Edwards, even, Dick Gephardt, when he was in the race.

Many people think he has solidified the Democratic Party and his anger with President Bush and that his legacy could be because of Howard Dean, maybe Democrats have a better chance of defeating President Bush in November.

BASH: Well, Kelly, on the Republican side, they are watching, and waiting, and are beginning to get their own campaign house in order. I'm back ON THE STORY on that, right after this.

ANNOUNCER: Dana Bash is a CNN White House correspondent. Previously she was a Capitol Hill producer for CNN. The National Press Foundation gave her its Dirksen Award in 2002 for distinguished reporting on Congress. She graduated Cum Laude from George Washington University.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

QUESTION: Given the importance of this jobs issue in this election, is it a mistake to make that prediction?

UNIDENTIFIED MALE: Again, that's something that is done every year in the Annual Economic Report. You're trying to get in here to get me to answer questions that are trying to trap me into certain things.

(END VIDEO CLIP)

BASH: Of course, none of us at the White House was trying to trap anyone at Wednesday's briefing. We just wanted to know if the president was backing away from the prediction, about 2.6 million jobs being found this coming year, 2004, the election year.

Welcome back. We are ON THE STORY.

WILLIS: Dana, of course, you know, you'd have to find those jobs. Because the economy just has not been creating jobs at the rate people thought. Where did this economic report come from? Did the politicians look at it? How did this come out?

BASH: That's a very good question. I have a prop. This is the report we're talking about, the economic report here. I'll hold it up.

This is a report that the president has to do every year, it's required as part of the budget process. It has all kinds of projections and predictions in it.

However, yes -- it's done by economists, but there usually are some people are political sensibility, particularly in an election year, who review it. Talked to a number of administration officials who conceded in rare moments of candor that they didn't give it enough of a once-over, twice-over, as they should have, because first of all this jobs figure in here, saying it will create 2.6 million new jobs, that's a give me from the Democrats.

You know, Kelly, they jumped on it right away.

WALLACE: Softball!

BASH: Right away. Not only that, it's was the outsourcing issue, the fact that it says that maybe outsourcing is not such a bad thing. And that was repeated by one of the president's top economic advisers. That, of course, was another give me for the Democrats.

So, it has definitely been a big headache for the White House. But I talked to one official who said, look, we just had to essentially back away from this, step away from it now, because it was a short-term headache, but for a long-term gain.

WALLACE: But, Dana, take us behind the scenes. This is normally a very disciplined White House, always on message, always in charge of the message, always playing offense, not defense. What is going on? Do they have too much coming at them and they're making mistakes like this one?

BASH: That's a possibility. You know, it's been really -- Kelly, you know, you've covered the Bush White House. It's been interesting to watch the atmospherics. As you mentioned, it's been the jobs issue, which has been going on for a couple of weeks. It's the National Guard issue, you know, the whole question of whether or not the president's military record was, as he said it was. Whether he served in the National Guard the way he should have.

And then, of course, the big -- the mother of all issues for the White House, which is Iraq and WMD and why they haven't been found. So there certainly has been a sense they have been on the defensive.

When you talk to Republicans on Capitol Hill, when I talked to some Republicans who are sort of outside the administration, they're definitely not panicking, but they're worried. And they're looking at this and they're saying what is going on? This is a team that's not on their game and they should be.

When you ask the campaign, they say, look, here's the problem. People have been focused on what Kelly Wallace is reporting from the Democratic campaign trail. The Democrats are running the story line right now, which by definition puts us on the defensive.

WALLACE: So they have to be reactive.

BURKE: But, Dana, is it starting to feel more like a campaign around the White House these days?

BASH: Absolutely. There's no question. If you just sort of look at the briefings, the kinds of things we're talking about. There's no question that it's feeling like that. For the president -- it's interesting, he has not been out there as much as a candidate. He's been doing a lot of trips around the country to very important states like Ohio and Florida. And he has been talking about the number one issue for him domestically, which is the economy.

But there are a lot of people who -- again, who I've talked to outside the administration, who want him to get out more, try to get out of the bubble, which is very hard for any incumbent. But get out and be among the people a lot more like you see John Kerry and the Democrats.

It's very, very hard for him. But on the campaign side, the campaign team, which is across the river of course, not in the White House, you definitely are getting a sense from them that things are heating up. This week, there was almost a palpable shift. You saw them on TV more, hitting John Kerry more. We got a lot more e-mails...

WALLACE: Inundating our e-mailboxes.

BASH: You got them as well. In our inboxes, the minute John Kerry would say something, or do something, get an endorsement, like he did from the AFL-CIO, three e-mails right away about why John Kerry and labor don't really fit, and why actually he has been against many labor issues. So you saw a lot of that happening this week, much more heated up.

BURKE: Dana, the world of politics seem positively mundane compared to the world of college football this week, particularly here at the University of Colorado where serious and shock allegations surfaced on an almost daily basis. I'm back ON THE STORY in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BESTY HOFFMAN, PRESIDENT, UNIV. OF COLORADO: Our decision was based on Coach Barnett's recent remarks about former student Katie Hnida's athletic abilities. His remarks about her were extremely inappropriate and insensitive.

(END VIDEO CLIP)

BURKE: University of Colorado President Betsy Hoffman, suspending football Coach Gary Barnett after he criticizes the on- field performance of a player who says she was raped by a teammate. There is a major scandal here at the University of Colorado, new things cropping up everyday. This just threatens to get bigger and bigger.

Welcome back to ON THE STORY.

WALLACE: Josie, a question for you, put this in some context for us. We have the remarks of the coach. There have been other things. That police report as well, indicating that possibly led to him being placed on administrative leave. What was that about?

BURKE: This is what the president of the university said. She said she'd made up her mind they were going to put Gary Barnett on paid administrative leave, essentially suspension with pay, because of what he said after the rape allegations came out about that former player.

But on that same day and just hours before she was going to make that announcement, a police report was released where it -- according to a woman who is accusing a football player of rape, shortly after the alleged incident, she had a meeting where Barnett was present. And at that time, according to the police report, the girl told investigators, that he said, if she were to move forward in the criminal process, he would back his player 100 percent.

The one thing that Hoffman said, she was going to do it before because of the insensitive comments this police report just hastened the decision.

WILLIS: Of course, Josie, now we've got a bunch of probes, right? A number of probes into all of this. I know there are concerns out there that maybe there's not enough time to do all the investigation necessary. What's up with that?

BURKE: Well, there's an internal investigation and there's also investigation -- the Colorado board of regents has appointed a seven- member panel. They have until April 30 to try to get to the bottom of all of these allegation. They're not having their first meeting until March 2. Number one, there are a lot of people who think that's not necessarily enough time.

Unfortunately, they're familiar with scandals of this sort in this state. You don't have to look very far, going into the Air Force Academy out in Colorado Springs. They were worried in that situation there wasn't enough time. And here, there's a very short time frame to try to get all of the facts.

BASH: Josie, big controversy this week about the fact that Coach Barnett talked about the abilities of this player. When the question is about an allegation of rape. Talk to us about that. Put this in context. You've been out there.

BURKE: One thing I think we all have to keep in mind is when Gary Barnett called Katie Hnida, awful, terrible, said she couldn't put the ball through uprights it wasn't in response to a question of what do you think of her rape allegation.

It was in response to a question about her abilities. And what the president of the university said, bottom line, she thinks that he should have said, that's an inappropriate question, and not answered it.

WALLACE: Josie, you spent time, you told us, earlier in the week Coach Barnett. Describe his attitude about all this, his demeanor, his sense of -- if anyone, he believes, committed any wrongdoing.

BURKE: I spent about an hour with him on Monday. He seemed upset, distraught, but he was also defiant. What he told me then was he felt like he was going to be forced to change the program, but he didn't think he should have to because he still thinks these are numerous allegations, nothing has been proven. He has come out and he has said he thinks he'll be vindicated in all of this.

WILLIS: Josie, I think there's a broader question here. How often, across the country at other campuses, do these types of things happen? I think parents out there are really worried.

BURKE: Well, there is no question, the things that allegedly went on here, or alleged to go on, all across the country. You don't have to look very far to see evidence of that because the NCAA, after what went on here in Colorado with all the allegations, they've started their own investigation. Not into this program necessarily, but into recruiting in general.

This is not just college football, rah-rah, fun-fun, this is a high-stakes business. People out there trying to figure out how to get the best jump, how to get the best player in and everyone now wanting to know if part of gaining an advantage is selling sex, and selling alcoholic or drugs?

BASH: Josie, just turning to the world of baseball, I heard somebody describe what happened this week as the Beatles getting Elvis. Tell us about A-Rod.

BURKE: That is so apt. I mean, the New York Yankees, 26 World Championships, seeming to be stacked again for another run at a title. And they go out and get arguably the best player in the game. Alex Rodriguez was traded from the Texas Rangers to the New York Yankees this week.

He's the reigning AL MVP. Here he comes, a couple years ago, signs this huge contract. A quarter of a billion dollars. Now the Rangers are paying part of his salary. So it appears line the Yankees are actually getting him on the cheap. This is a huge story in baseball.

WALLACE: Five seconds, Josie, what does this mean for the Boston Red Sox?

(LAUGHTER)

BURKE: Misery, agony, pain.

BASH: So, it's all the same.

WALLACE: So, it's all the same. The curse continues, all right.

Well, we'll go from sports to a very serious and developing international story. Haiti, a country dangerously out of control. Our colleague Lucia Newman is ON THE STORY after a check of the hour's top stories.

(COMMERCIAL BREAK)

(AT THIS HOUR)

(BEGIN VIDEO CLIP)

FOLEY: We will not recognize any government in Haiti that comes to power by force of arms.

(END VIDEO CLIP)

BASH: U.S. Ambassador to Haiti, James Foley. But force of arms calls for more than most things in Haiti today, and uncertainty is growing about what lays ahead for the country.

CNN's Lucia Newman is on the phone from the presidential palace in Port-au-Prince.

Lucia, tell us what the latest is on the ground there.

LUCIA NEWMAN, HAVANA BUREAU CHIEF: Hello, Dana. At this very moment being a international delegation is arriving at the palace to speak to President Aristide, to present a proposal for a negotiated settlement for this chaos here. There's a tremendous sense of urgency that this must be reached soon, before the country falls into chaos. Really there is no law and order at this point. Among proposal, gangs on both side, which have been burning homes and terrorizing people, must be disarmed. Yesterday, Dana, pro Aristide thugs with pistols machetes and rocks attacked a peaceful demonstration of student and journalists who were covering the story.

WALLACE: Lucia, it's Kelly Wallace. What's the sense of whether President Aristide will accept the proposal, and is the multi-national team bringing anything to the table to encourage him, or almost force him, really, to accept this?

NEWMAN: I'll tell you, what's not on the table is demand that he resign, and that's good news for President Aristide. But he obviously make concessions, The real question now is whether the opposition will go along with this proposal, which does not call for the president's resignation as they are demanding. Some of the things they talk about is name a new prime minister that will be acceptable to both side, a multi-party cabinet and of course guarantees for fair, new election, Kelly.

WALLACE: Lucia Newman, thank you so much. We will be watching this reporting on the developing story in the days ahead. Thanks again, Lucia.

Now we turn to another international story. We're joined by CNN's Baghdad bureau chief Jane Arraf in Baghdad.

Jane, you can tell us the latest. We understand the International Red Cross has visited with Iraqi leader Saddam Hussein for the first time since his capture.

What did they find out?

JANE ARRAF, BAGHDAD BUREAU CHIEF: What they were going to do is figure out whether he was being treated properly, on the most basic level. That mean, that he's not being tortured, that he's being given enough food and water. Now the reason the International Committee of the Red Cross has been able to operate for so many decades is it is extremely discreet. So they are not revealing details of what they found. But the key thing is they were able to get two of their staff members in to see him for, they said, as much time as they needed. And that included time to give him a health check, to talk to him out of ear shot of American officials and American guards, and to give him the ability to write a message to his family member, which he did. So, they confirmed they were able to see him, under the Geneva Convention, something that should be fairly simple, but has taken about two month of negotiation.

WALLACE: Now, we're hearing now elections won't be held for at least a year in Iraq.

What kind of reaction have you gotten from people there?

How is it sitting with them?

ARRAF: Well, we were out in the street, asking people about this yesterday, and it's really interesting. One man waved some money in front of us. He was -- actually, he had a little tea shop and was being handed money for the food that he was handing over. He said this is what really counts. That's sort of basically what really count, the ability to make a living. That's so much more basic than elections and that idea of democracy that people are really focusing on the more basic things. If they don't get elections in what they consider a reasonable time -- now, that is going to be a problem. But what we are hearing on street certainly is, that apart from some protests over the delay in election, most people are focused on the whole package, having their whole lives improved, not just being able to vote.

WILLIS: Jane, again, a quick question about the Red Cross.

Why did it take more than two months for the Red Cross to get in to see Saddam Hussein?

ARRAF: You know, that's a really interesting one. Maybe someone there has some insight into this. There was some opposition on the side of American authorities. Now, part of it may have been a hesitancy as to -- if they let the ITRC, the International Red Cross, see him that could pave the way for other things. But in fact, it doesn't change anything. He was classified as a prisoner of war, as you'll remember, about a month ago, and that put into place certain thing the International Committee of The Red Cross was obligated to do under the Geneva Convention, which obviously the U.S. has signed, and that's would to see him. So it seems to have been a bureaucratic political delay. With some many players in here, the State Department, the Pentagon, all sorts of other people, it's maybe not so surprising it took so long.

WILLIS: Well, Jane Arraf from Baghdad, thanks so much for that. Tell us what you'll be working on in the next several days.

ARRAF: Thanks so much. We'll certainly be following what has happened to Saddam Hussein and other high-level detainee. A really interesting thing that should come together in the next few days, which is what is the United States going to hand over to on June 30 when it hand back power?

Some ideas being tossed around as to what form of transitional government, but that's going to be really key.

WILLIS: We'll be watching and listening to all of your report, Jane, thanks.

From the international to the domestic front, how about that wireless phone deal this week?

What's that mean for you and me, I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the economy's growing. And I think it's going to get stronger. I do think there are some things we need to do.

(END VIDEO CLIP) WILLIS: President Bush this week, hinting that the economic recovery is a work in progress. From the White House to our house, some of the same questions about what's going to happen down the road. Welcome back. We're "ON THE STORY."

BURKE: Gerri, we know jobs are not looking all that great. But are there signs the White House would like us to believe that the economy is actually getting better?

WILLIS: I think it's undeniable there are economic signal out there the economy's improving. Interest rates are low. Mortgages are low. People are starting to get new jobs. The job market is starting to turn ahead. There are all kinds of signals that businesses are starting to buy again. But, you know, the bottom line for a lot of people is are jobs picking up in a growth rate they normally would be in a recovery, and the answer is no.

BASH: Politically, that's all that matters, jobs, jobs, jobs. The president has been talking about that talking about in the housing start, talking about, of course, the stock market, picking up that the economy is getting better. And the question is, does that really matter, and are you hearing from folks on Wall Street that they are seeing signs that perhaps it won't be 2.6 million jobs this year, but there will be an actual pick up of jobs?

WILLIS: Right. On Wall Street, the economists projecting that, the increase in jobs might be something on the order of 1.8 million rather than 2.6. that's certainly less. But to your point about how consumers view it how voters view it. People are thinking about outsourcing, that's one of the things really touching off a lot of anger out there. I'm not getting the job, but somebody in India is getting the job. Dana, you look at the real numbers on this that I see from Forester Research and others, it's just not that many people.

Three million people expected to lose job in the next 13 years because of outsourcing. Compare that to the number of total job in the economy, 130 million, it's just not that meaningful.

WALLACE: So what is it then, we go out, travel with the Democratic candidate, we talk to people, and they, almost all voter will say they're concerned about the economy, they don't feel better off -- that important phrase -- than they were three years ago. So is it perception?

What is it, because you're talking to people who say things are just not getting better for us.

WILLIS: I think it is a conflict of information coming in to people. People see earnings going up on Wall Street. They see Ken Lay, still out on the street, and they think, what's in this for me? I'm not really getting an advantage here.

In fact, though, you look at some of the very basic things the consumers are getting out of this economy, look at house, housing's been incredibly strong. And, in fact in this country, numbers of people who own their own home, higher than it's ever been before, almost 69 percent.

BURKE: Gerri with that huge deal announced this week, Cingular buying AT&T, is there a bottom line?

What are consumers going to see different if anything at all, associated with those two companies?

WILLIS: Well, I think what's so interesting about this is these two companies had some of the lowest ratings in a recent consumer reports study in term of performance.

When you pick up that phone, does it actually work?

Now, the companies themselves saying that this is not going to raise prices because there's enough competition in this country for low rates to continue. But I think while the short-term impact for Cingular customers is going to be great, because they'll have better service, the long-term impact could eventually lead to higher rates for consumer. Just to remind people, now there are going to be five companies in the country who actually give this service. Consider a company like India where there are 15 wireless carriers, lot of people in that business there lot of competition, low rates.

WALLACE: You mentioned Ken Lay -- you covered economics, but essentially you're covering the crime beat lately because of Jeff Skilling this week, taking the perp walk and, of course, the drama in the Martha Stewart trial. Tell us a little bit about those two stories.

WILLIS: Well, quickly, you know what's so astonishing really is the coverage Martha's getting over Jeff Skilling. I think the Enron case has affected so many more people, so much more deeply. Employees of Enron lost their 401ks, lost their employment, their job. And of course, you saw the war of words between the Justice Department and Skilling's attorney. Dramatic statements. Jeff Skilling's attorney saying, you know, he is -- here we see Skilling right there, he's being used as a scapegoat in this case. Certainly a lot of people in Houston thinking not the case. Justice department saying we have an iron-clad case here. But think the takeaway here and what people were talking about behind the scenes, when does this hit Ken Lay?

Everybody wants to know if he's next. And of course, he is still under investigation, not named this week, as you know.

WALLACE: But Martha, Martha, Martha. Some of us can't quite get enough of this story. Put it in big context for us now, it does seem like the prosecution is close to if not resting, its case. Big picture, how does it look for the government to be a be able to prosecute Martha Stewart on this?

WILLIS: These are very difficult cases to prosecute. She's not charged with insider trading. This is a cover-up that is alleged. So, that' very difficult to prove. But I've got to tell you, it was a bad week for her. One of her best friend, friend of 20 year, talking about the conversation she had had with Martha as she was selling that stock, saying how great it was to have a broker who would give her this kind of information, inside information. Of course later she retracted that statement, so it's been confusing. It's been, really dramatic. I've got to say there is enough media in downtown New York covering this story -- it's shocking.

BASH: Well, Gerri, we're going to go from the national economy and Martha to the small screen and how Sunday nights may seem a little darker, a little more tame, after tomorrow. We'll be back on that story right after this.

(COMMERCIAL BREAK)

WALLACE: We hate to tell you this, but the HBO series "Sex and The City" will have its final episode tomorrow. Of course, we have to mention also that HBO is a sister company of CNN.

What will our Sunday nights be like without "Sex and The City"?

BASH: Well, you know, of course we think a lot, all day, about the debate over who the next leader of the free world will be. But the big question from today until tomorrow will be, will Carrie go with Mr. Big or not -- that's the question.

WALLACE: What I loved is having people talk about this. Will she go with Mr. Big, will she go with -- what's the character's name that she's dating now?

BASH: The Russian.

WILLIS: The Russian.

WALLACE: The Russian. But I love analysts who say she should go with neither, that she should end up single and that would really show the show, true to its form, about single women not necessarily having a fairy tail romantic life.

BURKE: I have to jump in here. I have to say, I only watch the show -- one season I had cable, one season I didn't. So I wasn't there the whole way. But, I think it's undeniable the influence these ladies have had on our vocabulary and fashion. I mean, now I can say Monola Blahnik (ph) and I think I'm actually pronouncing it right, though but I know I can't afford it.

WILLIS: Well, I've got to say, you know, I've watched this show a lot and I have to tell you, women in New York will not know how to dress. They'll have no idea how to accessorize, what shoes to wear. It will be a big open question.

WALLACE: The funniest thing for designers. Any designer who could get his or her product on "Sex and the City," bam, sales would go up, whether it be a purse, whether it be a skirt, whether it be a scarf, whether it be a boots -- I don't know.

BASH: I don't know if you've been watch the last season, but it's definitely taken a turn. It's not as racy, it's more serious. They're sort of come to the conclusion with a lot of characters that got issues like breast cancer, and infertility. It's definitely a different feel this year. You still have that sort of, sense of, you know, women trying to make it and having this relationship that people didn't really talk about before this show was on.

WALLACE: How much did you and your friends sometimes watch and be like, that is just so not our lives, right?

I don't know...

BASH: Especially Samantha.

WILLIS: Well, that's a whole other topic.

BURKE: I was just recently -- I was just recently living in New York and I was single and I would watch those times when I could and say, I've never experienced anything like that. But can you imagine what it's going to be like guys in the next couple of months when "Friends" goes off the air, with all the furor that we're now having with "Sex and the City?"

WILLIS: Well, I've got to say too, have you seen so many fabulous men on "Sex and the City, " They're all warm, they're all loving. I think the women are the ones now who are, you know, less attractive.

WALLACE: It is interesting and you did see that the Sarah Jessica Parker, others who have been interviewed about this are sort of like, why is it going?

It's been such a ratings hit, why is it going?

And they sort of said, A, go out while things are good. But B, it's a little bit of what you raised, Dana, the characters are getting older. I mean, you can't non stop -- year after, year after, year. At some point, you're getting a little older, maybe you don't want to stay out as late, maybe your lifestyle changes. SO, it sounds look the show, in a way, maybe it's going through middle age and so it's gracefully leaving off while it can.

BASH: Well, the only good news -- the only good news I think for me, this series ending, is that I have a little more room on my TiVo now, that's it.

But that's it. Back to the real world and President Bush who gets his say in the weekly radio address, ON THE STORY right after this.

ANNOUNCER: An Afghan teen made headlines this week. What's her story -- more after this.

(COMMERCIAL BREAK)

ANNOUNCER: Marina Golbahari was in the news this week. What's her story? The 13-year-old Afghan star in the title role in the movie "Osama" about a young girl pretending to be a boy in a man's world after the Taliban banned women from work. The movie's director found the teenager in Kabul, where she lives with her parents and seven siblings. The first Afghan film since the rise and fall of the Taliban has won numerous award, including the Golden Globe for best foreign film.

WALLACE: And thanks to my colleagues. As you can see, all renaissance women covering everything from pop culture to politic. And thank you for watching ON THE STORY. We'll be back next week. Still ahead on CNN -- PEOPLE IN THE NEWS focusing this week on Russell Crowe.

At 12:00 p.m. Eastern, 9:00 a.m. Pacific, "CNN LIVE SATURDAY."

And at 1:00 p.m. Eastern, CNN's "IN THE MONEY."

At the top of the hour be a check of the hour's top stories. But first, the president's weekly radio address.

(BEGIN AUDIO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good morning. This week I traveled to Fort Poke in Louisiana to visit with family members of soldiers who are giving vital service on the war on terror. Fort Poke is home to some of the army's oldest and finest units. Since September 11, 2001, fort Polk has trained and deployed more than 10,000 troops to fight the terrorist enemy worldwide, including Afghanistan and Iraq. Thanks to their bravery and skill, America's waging this fight with focus and determination. Over last 29 months, many terrorists have learned the meaning of justice. Nearly two-third of al Qaeda's known leaders have been captured or killed. The terrorists are on the run with good reason to fear what the night might bring.

Success in the war on terror also require we confront regimes that might arm terrorists with the ultimate weapon. America's determined to meet this danger and to deny terrorists and dangerous regimes the ability to threaten us with the world's most deadly weapons. For 12 years, the former dictator of Iraq defy the international community. He refused to disarm or account for his illegal weapons and programs. My administration looked at the intelligence information and we saw a threat. Member of Congress looked at the intelligence and they saw a threat. The United Nations Security Council looked at the intelligence and it saw a threat. All of us knew Saddam Hussein's history. He waged aggressive wars against neighboring countries and he aspired to dominate the Middle East.

He cultivated ties to terrorists. He built weapons of mass destruction. He hid those weapons, and he used chemical weapons against thousand of Iraqis and Iranians. Saddam Hussein doubted our resolve to enforce our word. Now he sits in a prison cell, while his country moves toward a democratic future. Today in Iraq, our coalition faces deadly attacks from a remnant of Saddam's supporters, joined by foreign terrorist. Recently, we intercepted a letter send by an al Qaeda associate name Zarqawi to one of Osama bin Laden's top lieutenant. The letter describes a terrorist strategy to tear Iraq a part with ethnic violence to undermine security force, to demoralize our coalition and to prevent the rise of a sovereign democratic government. This terrorist outlines his efforts to recruit and train suicide bomber and boast of 25 attack on innocent Iraqi and coalition personnel, and he urges al Qaeda members to join him in waging war on coalition and the people Iraq. Zarqawi and other like him have made Iraq the central front in the war on terror. The terrorists know that the emergence of a free Iraq will be a major blow against the worldwide terrorist movement. In this, they are correct. But we have seen this enemy before and we know how to deal with him. Fighting alongside the people of Afghanistan we are defeating the terrorists in that country. And fighting alongside the people of Iraq, we will defeat the terrorists there as well. Iraq, like Afghanistan, will be free. Our coalition is working with Iraq's governing council to draft a basic law with a Bill of Rights.

We're working with Iraq's and the United Nations to prepare the transition of full Iraqi sovereignty. The establishment of a free Iraq will be a watershed event in the history of the Middle East, helping to advance liberty throughout that vital region. As freedom take hold in the Middle East, the people of the region will find new home and America will be more secure. Two 1/2 year ago on a clear September morning, the enemy of America brought a new kind of war to our shores. Three days hearing a stood in the rubble of the twin tower. My resolve today is the same as it was then. I will not relent until the terrorist threat to America is removed. Thank you for listening.

(END AUDIO CLIP)

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




of Anarchy>


Aired February 21, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KELLY WALLACE, CNN ANCHOR, ON THE STORY: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Kelly Wallace, ON THE STORY of the Democratic presidential race and why, with John Kerry so far ahead, John Edwards is still smiling.
DANA BASH, CNN ANCHOR, ON THE STORY: I'm Dana Bash, ON THE STORY of the president and his team getting their political act together and changing their line on jobs.

JOSIE BURKE, CNN ANCHOR, ON THE STORY: I'm Josie Burke in Boulder, Colorado, ON THE STORY of a sex scandal at the University of Colorado; rape allegations and a football coach fighting for his job.

GERRI WILLIS, CNN ANCHOR, ON THE STORY: And I'm Gerri Willis, ON THE STORY of how this week's big cell phone deal tolls for you and me.

And we'll go to CNN's Lucia Newman in Haiti, being a country on the verge of anarchy and how that can mean waves of refugee boats U.S.-bound.

We'll listen to the president's weekly radio address at the end of the hour. And we'll talk about the final episode this weekend of a popular TV series, "Sex and the City."

E-mail us at onthestory@cnn.com. Now straight to Kelly Wallace and the presidential race.

(BEGIN VIDEO CLIP)

JOHN KERRY (D), PRESIDENTIAL CANDIDATE: My friends, tonight I say to all of America, get ready. A new day is on the way.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Wisconsin sent a clear message. The message was this, objects in your mirror may be closer than they appear.

(END VIDEO CLIP)

WALLACE: And that was the line of the night Tuesday night. John Edwards. He can joke about being closer than he appears. But the big question, is he close enough to beat front-runner John Kerry? We will have to wait, it seems, to find out that answer. The Super Tuesday states,10 states in all, just about 10 days and counting from now. (CROSS TALK)

BURKE: Kelly, you spent all this time with the campaign (AUDIO GAP) sit with John Kerry?

WALLACE: Josie, can you ask your question again? I'm sorry. I did not hear the top of it.

BURKE: You spend all this time with the Kerry campaign. This race is now being characterized as a two-man race. But how does that sit with the Kerry folks?

WALLACE: Josie, they don't like it at all. And they've been sending us e-mails to say this is not a two-man race. They say, look, John Kerry has a record of 16 wins and two losses. They say John Edwards has won only one state, South Carolina, where he was born.

That being said, John Edwards had a stronger finish than anyone expected in Wisconsin. The Kerry people would have preferred if John Edwards did not do so well so that this race would be almost -- the nomination would be almost his.

Now they have to spend a little more time, more resources, and battle it out a little bit with John Edwards.

BASH: Not only that, but it's interesting because they're essentially fighting a two-front war here. Because Kerry had already pivoted towards, what, towards the president, towards attacking the president. Now it seems he has to do that and watch his back on Edwards at the same time.

WALLACE: And they say they're so frustrated. They say they have it from both sides. Not only do they have to work on the other Democratic candidates, but they are getting attacks, they say, from the Republicans. And we know it has really been heating up over the past few days. Every time John Kerry is out there, you have the Republicans responding in some way.

John Edwards, though, has made this a fairly positive campaign and he is challenging himself because he can't really defer from that. So what he is doing is trying to challenge John Kerry on debate, encouraging him to have more forums. They are frustrated, they're getting it from both sides, they say, but that's the life a front- runner.

WILLIS: And the life of a front-runner, Kerry, of course, doesn't have as much money, as say President Bush, but Edwards could actually push him to spend lots and lots of money.

WALLACE: It's making it a little bit more of a combative race. He'll have to spend more money, spend more time. You know it was interesting, because originally today, Saturday, it was going to be a non-travel day for John Kerry. Now he is traveling.

He is heading to Georgia later today. He'll be there. He'll be in Georgia tomorrow, he'll be in New York. He has to spend a little bit more time, a little bit more money. He'll have a debate on Thursday night, a CNN/"L.A. Times" debate where he'll have to know that John Edwards will try to use that forum to try and score some points. So it makes it more competitive. Most analysts think it is a huge climb for John Edwards to try and pull this nomination away from John Kerry, but look at this race, anything's possible, right?

BASH: That's for sure.

BURKE: Kelly is John Edwards going to keep hammering Kerry on his NAFTA vote and try to draw the line in the sand, differentiating between their two voices there?

WALLACE: He definitely is, Josie. Because that is one issue, he says he was not in the Senate at the time, but if he had been in the Senate he would vote against that. Many people believe the North American Free Trade Agreement has cost thousands of jobs in manufacturing states like Ohio and New York and Georgia.

We've seen an interesting twist though from the Kerry campaign this week, though. They are trying to say, well, if John Edwards was so against NAFTA, why didn't he say anything about it in '93, '94, '95? The first time he really said anything was during the Senate race in 1998. They're trying to say he's not so passionate about it, only because it's now an election issue.

BASH: If we all listen very carefully, we can probably hear the chant from the White House and from the Bush campaign in Virginia, "Go Nader, Go Nader!"

WALLACE: Nader!

(LAUGHTER)

BASH: They obviously are -- would be thrilled if Ralph Nader got into the race. Democrats, Kelly, are panicked.

WALLACE: They are so crazed right now. Because we know Ralph Nader has scheduled an appearance on "Meet the Press" on Sunday, and that is where he says he will announce if he's going to run or not.

Terry McAuliffe on CNN's air, an interview with Wolf Blitzer, we were talking about this yesterday, he has had lunch with Ralph Nader. He's the Democratic Party chairman.

BASH: Wined him and dined him.

WALLACE: He has wined him and dined him, to try to keep him out of the race. Saying that Democrats are so united now, in trying to defeat President Bush, the worse thing that could happen would be for Ralph Nader to come in and be what many believe he was in 2000, a spoiler, take votes away from the Democrat and allow the president to win re-election.

So, we don't know what is going on behind the scenes. But just the sentiment seems that Ralph Nader could get in and Democrats are freaking out. WILLIS: Well, you know, I'm going to keep hammering on this money issue. Howard Dean getting out of the race after we talked about it for weeks and weeks and weeks, right? He had a real campaign war chest. He can really raise money. Will he be able to turn some of this over to other people?

WALLACE: The big question now is, will he, A, throw his official report behind either John Edwards or John Kerry? We don't know the answer to that -- but the sentiment is, at least some Kerry people -- they don't think it would come to John Kerry. So could, if he does anything, it could go behind John Edwards.

That being said, does he then -- do all his supporters follow him and follow his lead? It's a big question, also. But it does seem, if they go to someone, there might be more of an appeal to a John Edwards' candidacy as opposed to a John Kerry .

John Edwards had been running a little bit on the Washington outsider. That he had only been in Washington for three and a half, or a little more than that. But John Kerry's been in Washington for 20 year. So you could make the argument that the supporters could go to John Edwards. But we just don't know the answer to that.

BURKE: Kelly, now that Dean's out of the race, is there any legacy that he's left behind?

WALLACE: The big legacy, Josie, is how he has changed the other Democrat candidates. Many people think by Howard Dean challenging the president on the war, on the economy, on No Child Left Behind Act, he has kind of strengthened these other Democrat candidates not to be worried to challenge the president; John Kerry , John Edwards, even, Dick Gephardt, when he was in the race.

Many people think he has solidified the Democratic Party and his anger with President Bush and that his legacy could be because of Howard Dean, maybe Democrats have a better chance of defeating President Bush in November.

BASH: Well, Kelly, on the Republican side, they are watching, and waiting, and are beginning to get their own campaign house in order. I'm back ON THE STORY on that, right after this.

ANNOUNCER: Dana Bash is a CNN White House correspondent. Previously she was a Capitol Hill producer for CNN. The National Press Foundation gave her its Dirksen Award in 2002 for distinguished reporting on Congress. She graduated Cum Laude from George Washington University.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

QUESTION: Given the importance of this jobs issue in this election, is it a mistake to make that prediction?

UNIDENTIFIED MALE: Again, that's something that is done every year in the Annual Economic Report. You're trying to get in here to get me to answer questions that are trying to trap me into certain things.

(END VIDEO CLIP)

BASH: Of course, none of us at the White House was trying to trap anyone at Wednesday's briefing. We just wanted to know if the president was backing away from the prediction, about 2.6 million jobs being found this coming year, 2004, the election year.

Welcome back. We are ON THE STORY.

WILLIS: Dana, of course, you know, you'd have to find those jobs. Because the economy just has not been creating jobs at the rate people thought. Where did this economic report come from? Did the politicians look at it? How did this come out?

BASH: That's a very good question. I have a prop. This is the report we're talking about, the economic report here. I'll hold it up.

This is a report that the president has to do every year, it's required as part of the budget process. It has all kinds of projections and predictions in it.

However, yes -- it's done by economists, but there usually are some people are political sensibility, particularly in an election year, who review it. Talked to a number of administration officials who conceded in rare moments of candor that they didn't give it enough of a once-over, twice-over, as they should have, because first of all this jobs figure in here, saying it will create 2.6 million new jobs, that's a give me from the Democrats.

You know, Kelly, they jumped on it right away.

WALLACE: Softball!

BASH: Right away. Not only that, it's was the outsourcing issue, the fact that it says that maybe outsourcing is not such a bad thing. And that was repeated by one of the president's top economic advisers. That, of course, was another give me for the Democrats.

So, it has definitely been a big headache for the White House. But I talked to one official who said, look, we just had to essentially back away from this, step away from it now, because it was a short-term headache, but for a long-term gain.

WALLACE: But, Dana, take us behind the scenes. This is normally a very disciplined White House, always on message, always in charge of the message, always playing offense, not defense. What is going on? Do they have too much coming at them and they're making mistakes like this one?

BASH: That's a possibility. You know, it's been really -- Kelly, you know, you've covered the Bush White House. It's been interesting to watch the atmospherics. As you mentioned, it's been the jobs issue, which has been going on for a couple of weeks. It's the National Guard issue, you know, the whole question of whether or not the president's military record was, as he said it was. Whether he served in the National Guard the way he should have.

And then, of course, the big -- the mother of all issues for the White House, which is Iraq and WMD and why they haven't been found. So there certainly has been a sense they have been on the defensive.

When you talk to Republicans on Capitol Hill, when I talked to some Republicans who are sort of outside the administration, they're definitely not panicking, but they're worried. And they're looking at this and they're saying what is going on? This is a team that's not on their game and they should be.

When you ask the campaign, they say, look, here's the problem. People have been focused on what Kelly Wallace is reporting from the Democratic campaign trail. The Democrats are running the story line right now, which by definition puts us on the defensive.

WALLACE: So they have to be reactive.

BURKE: But, Dana, is it starting to feel more like a campaign around the White House these days?

BASH: Absolutely. There's no question. If you just sort of look at the briefings, the kinds of things we're talking about. There's no question that it's feeling like that. For the president -- it's interesting, he has not been out there as much as a candidate. He's been doing a lot of trips around the country to very important states like Ohio and Florida. And he has been talking about the number one issue for him domestically, which is the economy.

But there are a lot of people who -- again, who I've talked to outside the administration, who want him to get out more, try to get out of the bubble, which is very hard for any incumbent. But get out and be among the people a lot more like you see John Kerry and the Democrats.

It's very, very hard for him. But on the campaign side, the campaign team, which is across the river of course, not in the White House, you definitely are getting a sense from them that things are heating up. This week, there was almost a palpable shift. You saw them on TV more, hitting John Kerry more. We got a lot more e-mails...

WALLACE: Inundating our e-mailboxes.

BASH: You got them as well. In our inboxes, the minute John Kerry would say something, or do something, get an endorsement, like he did from the AFL-CIO, three e-mails right away about why John Kerry and labor don't really fit, and why actually he has been against many labor issues. So you saw a lot of that happening this week, much more heated up.

BURKE: Dana, the world of politics seem positively mundane compared to the world of college football this week, particularly here at the University of Colorado where serious and shock allegations surfaced on an almost daily basis. I'm back ON THE STORY in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BESTY HOFFMAN, PRESIDENT, UNIV. OF COLORADO: Our decision was based on Coach Barnett's recent remarks about former student Katie Hnida's athletic abilities. His remarks about her were extremely inappropriate and insensitive.

(END VIDEO CLIP)

BURKE: University of Colorado President Betsy Hoffman, suspending football Coach Gary Barnett after he criticizes the on- field performance of a player who says she was raped by a teammate. There is a major scandal here at the University of Colorado, new things cropping up everyday. This just threatens to get bigger and bigger.

Welcome back to ON THE STORY.

WALLACE: Josie, a question for you, put this in some context for us. We have the remarks of the coach. There have been other things. That police report as well, indicating that possibly led to him being placed on administrative leave. What was that about?

BURKE: This is what the president of the university said. She said she'd made up her mind they were going to put Gary Barnett on paid administrative leave, essentially suspension with pay, because of what he said after the rape allegations came out about that former player.

But on that same day and just hours before she was going to make that announcement, a police report was released where it -- according to a woman who is accusing a football player of rape, shortly after the alleged incident, she had a meeting where Barnett was present. And at that time, according to the police report, the girl told investigators, that he said, if she were to move forward in the criminal process, he would back his player 100 percent.

The one thing that Hoffman said, she was going to do it before because of the insensitive comments this police report just hastened the decision.

WILLIS: Of course, Josie, now we've got a bunch of probes, right? A number of probes into all of this. I know there are concerns out there that maybe there's not enough time to do all the investigation necessary. What's up with that?

BURKE: Well, there's an internal investigation and there's also investigation -- the Colorado board of regents has appointed a seven- member panel. They have until April 30 to try to get to the bottom of all of these allegation. They're not having their first meeting until March 2. Number one, there are a lot of people who think that's not necessarily enough time.

Unfortunately, they're familiar with scandals of this sort in this state. You don't have to look very far, going into the Air Force Academy out in Colorado Springs. They were worried in that situation there wasn't enough time. And here, there's a very short time frame to try to get all of the facts.

BASH: Josie, big controversy this week about the fact that Coach Barnett talked about the abilities of this player. When the question is about an allegation of rape. Talk to us about that. Put this in context. You've been out there.

BURKE: One thing I think we all have to keep in mind is when Gary Barnett called Katie Hnida, awful, terrible, said she couldn't put the ball through uprights it wasn't in response to a question of what do you think of her rape allegation.

It was in response to a question about her abilities. And what the president of the university said, bottom line, she thinks that he should have said, that's an inappropriate question, and not answered it.

WALLACE: Josie, you spent time, you told us, earlier in the week Coach Barnett. Describe his attitude about all this, his demeanor, his sense of -- if anyone, he believes, committed any wrongdoing.

BURKE: I spent about an hour with him on Monday. He seemed upset, distraught, but he was also defiant. What he told me then was he felt like he was going to be forced to change the program, but he didn't think he should have to because he still thinks these are numerous allegations, nothing has been proven. He has come out and he has said he thinks he'll be vindicated in all of this.

WILLIS: Josie, I think there's a broader question here. How often, across the country at other campuses, do these types of things happen? I think parents out there are really worried.

BURKE: Well, there is no question, the things that allegedly went on here, or alleged to go on, all across the country. You don't have to look very far to see evidence of that because the NCAA, after what went on here in Colorado with all the allegations, they've started their own investigation. Not into this program necessarily, but into recruiting in general.

This is not just college football, rah-rah, fun-fun, this is a high-stakes business. People out there trying to figure out how to get the best jump, how to get the best player in and everyone now wanting to know if part of gaining an advantage is selling sex, and selling alcoholic or drugs?

BASH: Josie, just turning to the world of baseball, I heard somebody describe what happened this week as the Beatles getting Elvis. Tell us about A-Rod.

BURKE: That is so apt. I mean, the New York Yankees, 26 World Championships, seeming to be stacked again for another run at a title. And they go out and get arguably the best player in the game. Alex Rodriguez was traded from the Texas Rangers to the New York Yankees this week.

He's the reigning AL MVP. Here he comes, a couple years ago, signs this huge contract. A quarter of a billion dollars. Now the Rangers are paying part of his salary. So it appears line the Yankees are actually getting him on the cheap. This is a huge story in baseball.

WALLACE: Five seconds, Josie, what does this mean for the Boston Red Sox?

(LAUGHTER)

BURKE: Misery, agony, pain.

BASH: So, it's all the same.

WALLACE: So, it's all the same. The curse continues, all right.

Well, we'll go from sports to a very serious and developing international story. Haiti, a country dangerously out of control. Our colleague Lucia Newman is ON THE STORY after a check of the hour's top stories.

(COMMERCIAL BREAK)

(AT THIS HOUR)

(BEGIN VIDEO CLIP)

FOLEY: We will not recognize any government in Haiti that comes to power by force of arms.

(END VIDEO CLIP)

BASH: U.S. Ambassador to Haiti, James Foley. But force of arms calls for more than most things in Haiti today, and uncertainty is growing about what lays ahead for the country.

CNN's Lucia Newman is on the phone from the presidential palace in Port-au-Prince.

Lucia, tell us what the latest is on the ground there.

LUCIA NEWMAN, HAVANA BUREAU CHIEF: Hello, Dana. At this very moment being a international delegation is arriving at the palace to speak to President Aristide, to present a proposal for a negotiated settlement for this chaos here. There's a tremendous sense of urgency that this must be reached soon, before the country falls into chaos. Really there is no law and order at this point. Among proposal, gangs on both side, which have been burning homes and terrorizing people, must be disarmed. Yesterday, Dana, pro Aristide thugs with pistols machetes and rocks attacked a peaceful demonstration of student and journalists who were covering the story.

WALLACE: Lucia, it's Kelly Wallace. What's the sense of whether President Aristide will accept the proposal, and is the multi-national team bringing anything to the table to encourage him, or almost force him, really, to accept this?

NEWMAN: I'll tell you, what's not on the table is demand that he resign, and that's good news for President Aristide. But he obviously make concessions, The real question now is whether the opposition will go along with this proposal, which does not call for the president's resignation as they are demanding. Some of the things they talk about is name a new prime minister that will be acceptable to both side, a multi-party cabinet and of course guarantees for fair, new election, Kelly.

WALLACE: Lucia Newman, thank you so much. We will be watching this reporting on the developing story in the days ahead. Thanks again, Lucia.

Now we turn to another international story. We're joined by CNN's Baghdad bureau chief Jane Arraf in Baghdad.

Jane, you can tell us the latest. We understand the International Red Cross has visited with Iraqi leader Saddam Hussein for the first time since his capture.

What did they find out?

JANE ARRAF, BAGHDAD BUREAU CHIEF: What they were going to do is figure out whether he was being treated properly, on the most basic level. That mean, that he's not being tortured, that he's being given enough food and water. Now the reason the International Committee of the Red Cross has been able to operate for so many decades is it is extremely discreet. So they are not revealing details of what they found. But the key thing is they were able to get two of their staff members in to see him for, they said, as much time as they needed. And that included time to give him a health check, to talk to him out of ear shot of American officials and American guards, and to give him the ability to write a message to his family member, which he did. So, they confirmed they were able to see him, under the Geneva Convention, something that should be fairly simple, but has taken about two month of negotiation.

WALLACE: Now, we're hearing now elections won't be held for at least a year in Iraq.

What kind of reaction have you gotten from people there?

How is it sitting with them?

ARRAF: Well, we were out in the street, asking people about this yesterday, and it's really interesting. One man waved some money in front of us. He was -- actually, he had a little tea shop and was being handed money for the food that he was handing over. He said this is what really counts. That's sort of basically what really count, the ability to make a living. That's so much more basic than elections and that idea of democracy that people are really focusing on the more basic things. If they don't get elections in what they consider a reasonable time -- now, that is going to be a problem. But what we are hearing on street certainly is, that apart from some protests over the delay in election, most people are focused on the whole package, having their whole lives improved, not just being able to vote.

WILLIS: Jane, again, a quick question about the Red Cross.

Why did it take more than two months for the Red Cross to get in to see Saddam Hussein?

ARRAF: You know, that's a really interesting one. Maybe someone there has some insight into this. There was some opposition on the side of American authorities. Now, part of it may have been a hesitancy as to -- if they let the ITRC, the International Red Cross, see him that could pave the way for other things. But in fact, it doesn't change anything. He was classified as a prisoner of war, as you'll remember, about a month ago, and that put into place certain thing the International Committee of The Red Cross was obligated to do under the Geneva Convention, which obviously the U.S. has signed, and that's would to see him. So it seems to have been a bureaucratic political delay. With some many players in here, the State Department, the Pentagon, all sorts of other people, it's maybe not so surprising it took so long.

WILLIS: Well, Jane Arraf from Baghdad, thanks so much for that. Tell us what you'll be working on in the next several days.

ARRAF: Thanks so much. We'll certainly be following what has happened to Saddam Hussein and other high-level detainee. A really interesting thing that should come together in the next few days, which is what is the United States going to hand over to on June 30 when it hand back power?

Some ideas being tossed around as to what form of transitional government, but that's going to be really key.

WILLIS: We'll be watching and listening to all of your report, Jane, thanks.

From the international to the domestic front, how about that wireless phone deal this week?

What's that mean for you and me, I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the economy's growing. And I think it's going to get stronger. I do think there are some things we need to do.

(END VIDEO CLIP) WILLIS: President Bush this week, hinting that the economic recovery is a work in progress. From the White House to our house, some of the same questions about what's going to happen down the road. Welcome back. We're "ON THE STORY."

BURKE: Gerri, we know jobs are not looking all that great. But are there signs the White House would like us to believe that the economy is actually getting better?

WILLIS: I think it's undeniable there are economic signal out there the economy's improving. Interest rates are low. Mortgages are low. People are starting to get new jobs. The job market is starting to turn ahead. There are all kinds of signals that businesses are starting to buy again. But, you know, the bottom line for a lot of people is are jobs picking up in a growth rate they normally would be in a recovery, and the answer is no.

BASH: Politically, that's all that matters, jobs, jobs, jobs. The president has been talking about that talking about in the housing start, talking about, of course, the stock market, picking up that the economy is getting better. And the question is, does that really matter, and are you hearing from folks on Wall Street that they are seeing signs that perhaps it won't be 2.6 million jobs this year, but there will be an actual pick up of jobs?

WILLIS: Right. On Wall Street, the economists projecting that, the increase in jobs might be something on the order of 1.8 million rather than 2.6. that's certainly less. But to your point about how consumers view it how voters view it. People are thinking about outsourcing, that's one of the things really touching off a lot of anger out there. I'm not getting the job, but somebody in India is getting the job. Dana, you look at the real numbers on this that I see from Forester Research and others, it's just not that many people.

Three million people expected to lose job in the next 13 years because of outsourcing. Compare that to the number of total job in the economy, 130 million, it's just not that meaningful.

WALLACE: So what is it then, we go out, travel with the Democratic candidate, we talk to people, and they, almost all voter will say they're concerned about the economy, they don't feel better off -- that important phrase -- than they were three years ago. So is it perception?

What is it, because you're talking to people who say things are just not getting better for us.

WILLIS: I think it is a conflict of information coming in to people. People see earnings going up on Wall Street. They see Ken Lay, still out on the street, and they think, what's in this for me? I'm not really getting an advantage here.

In fact, though, you look at some of the very basic things the consumers are getting out of this economy, look at house, housing's been incredibly strong. And, in fact in this country, numbers of people who own their own home, higher than it's ever been before, almost 69 percent.

BURKE: Gerri with that huge deal announced this week, Cingular buying AT&T, is there a bottom line?

What are consumers going to see different if anything at all, associated with those two companies?

WILLIS: Well, I think what's so interesting about this is these two companies had some of the lowest ratings in a recent consumer reports study in term of performance.

When you pick up that phone, does it actually work?

Now, the companies themselves saying that this is not going to raise prices because there's enough competition in this country for low rates to continue. But I think while the short-term impact for Cingular customers is going to be great, because they'll have better service, the long-term impact could eventually lead to higher rates for consumer. Just to remind people, now there are going to be five companies in the country who actually give this service. Consider a company like India where there are 15 wireless carriers, lot of people in that business there lot of competition, low rates.

WALLACE: You mentioned Ken Lay -- you covered economics, but essentially you're covering the crime beat lately because of Jeff Skilling this week, taking the perp walk and, of course, the drama in the Martha Stewart trial. Tell us a little bit about those two stories.

WILLIS: Well, quickly, you know what's so astonishing really is the coverage Martha's getting over Jeff Skilling. I think the Enron case has affected so many more people, so much more deeply. Employees of Enron lost their 401ks, lost their employment, their job. And of course, you saw the war of words between the Justice Department and Skilling's attorney. Dramatic statements. Jeff Skilling's attorney saying, you know, he is -- here we see Skilling right there, he's being used as a scapegoat in this case. Certainly a lot of people in Houston thinking not the case. Justice department saying we have an iron-clad case here. But think the takeaway here and what people were talking about behind the scenes, when does this hit Ken Lay?

Everybody wants to know if he's next. And of course, he is still under investigation, not named this week, as you know.

WALLACE: But Martha, Martha, Martha. Some of us can't quite get enough of this story. Put it in big context for us now, it does seem like the prosecution is close to if not resting, its case. Big picture, how does it look for the government to be a be able to prosecute Martha Stewart on this?

WILLIS: These are very difficult cases to prosecute. She's not charged with insider trading. This is a cover-up that is alleged. So, that' very difficult to prove. But I've got to tell you, it was a bad week for her. One of her best friend, friend of 20 year, talking about the conversation she had had with Martha as she was selling that stock, saying how great it was to have a broker who would give her this kind of information, inside information. Of course later she retracted that statement, so it's been confusing. It's been, really dramatic. I've got to say there is enough media in downtown New York covering this story -- it's shocking.

BASH: Well, Gerri, we're going to go from the national economy and Martha to the small screen and how Sunday nights may seem a little darker, a little more tame, after tomorrow. We'll be back on that story right after this.

(COMMERCIAL BREAK)

WALLACE: We hate to tell you this, but the HBO series "Sex and The City" will have its final episode tomorrow. Of course, we have to mention also that HBO is a sister company of CNN.

What will our Sunday nights be like without "Sex and The City"?

BASH: Well, you know, of course we think a lot, all day, about the debate over who the next leader of the free world will be. But the big question from today until tomorrow will be, will Carrie go with Mr. Big or not -- that's the question.

WALLACE: What I loved is having people talk about this. Will she go with Mr. Big, will she go with -- what's the character's name that she's dating now?

BASH: The Russian.

WILLIS: The Russian.

WALLACE: The Russian. But I love analysts who say she should go with neither, that she should end up single and that would really show the show, true to its form, about single women not necessarily having a fairy tail romantic life.

BURKE: I have to jump in here. I have to say, I only watch the show -- one season I had cable, one season I didn't. So I wasn't there the whole way. But, I think it's undeniable the influence these ladies have had on our vocabulary and fashion. I mean, now I can say Monola Blahnik (ph) and I think I'm actually pronouncing it right, though but I know I can't afford it.

WILLIS: Well, I've got to say, you know, I've watched this show a lot and I have to tell you, women in New York will not know how to dress. They'll have no idea how to accessorize, what shoes to wear. It will be a big open question.

WALLACE: The funniest thing for designers. Any designer who could get his or her product on "Sex and the City," bam, sales would go up, whether it be a purse, whether it be a skirt, whether it be a scarf, whether it be a boots -- I don't know.

BASH: I don't know if you've been watch the last season, but it's definitely taken a turn. It's not as racy, it's more serious. They're sort of come to the conclusion with a lot of characters that got issues like breast cancer, and infertility. It's definitely a different feel this year. You still have that sort of, sense of, you know, women trying to make it and having this relationship that people didn't really talk about before this show was on.

WALLACE: How much did you and your friends sometimes watch and be like, that is just so not our lives, right?

I don't know...

BASH: Especially Samantha.

WILLIS: Well, that's a whole other topic.

BURKE: I was just recently -- I was just recently living in New York and I was single and I would watch those times when I could and say, I've never experienced anything like that. But can you imagine what it's going to be like guys in the next couple of months when "Friends" goes off the air, with all the furor that we're now having with "Sex and the City?"

WILLIS: Well, I've got to say too, have you seen so many fabulous men on "Sex and the City, " They're all warm, they're all loving. I think the women are the ones now who are, you know, less attractive.

WALLACE: It is interesting and you did see that the Sarah Jessica Parker, others who have been interviewed about this are sort of like, why is it going?

It's been such a ratings hit, why is it going?

And they sort of said, A, go out while things are good. But B, it's a little bit of what you raised, Dana, the characters are getting older. I mean, you can't non stop -- year after, year after, year. At some point, you're getting a little older, maybe you don't want to stay out as late, maybe your lifestyle changes. SO, it sounds look the show, in a way, maybe it's going through middle age and so it's gracefully leaving off while it can.

BASH: Well, the only good news -- the only good news I think for me, this series ending, is that I have a little more room on my TiVo now, that's it.

But that's it. Back to the real world and President Bush who gets his say in the weekly radio address, ON THE STORY right after this.

ANNOUNCER: An Afghan teen made headlines this week. What's her story -- more after this.

(COMMERCIAL BREAK)

ANNOUNCER: Marina Golbahari was in the news this week. What's her story? The 13-year-old Afghan star in the title role in the movie "Osama" about a young girl pretending to be a boy in a man's world after the Taliban banned women from work. The movie's director found the teenager in Kabul, where she lives with her parents and seven siblings. The first Afghan film since the rise and fall of the Taliban has won numerous award, including the Golden Globe for best foreign film.

WALLACE: And thanks to my colleagues. As you can see, all renaissance women covering everything from pop culture to politic. And thank you for watching ON THE STORY. We'll be back next week. Still ahead on CNN -- PEOPLE IN THE NEWS focusing this week on Russell Crowe.

At 12:00 p.m. Eastern, 9:00 a.m. Pacific, "CNN LIVE SATURDAY."

And at 1:00 p.m. Eastern, CNN's "IN THE MONEY."

At the top of the hour be a check of the hour's top stories. But first, the president's weekly radio address.

(BEGIN AUDIO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good morning. This week I traveled to Fort Poke in Louisiana to visit with family members of soldiers who are giving vital service on the war on terror. Fort Poke is home to some of the army's oldest and finest units. Since September 11, 2001, fort Polk has trained and deployed more than 10,000 troops to fight the terrorist enemy worldwide, including Afghanistan and Iraq. Thanks to their bravery and skill, America's waging this fight with focus and determination. Over last 29 months, many terrorists have learned the meaning of justice. Nearly two-third of al Qaeda's known leaders have been captured or killed. The terrorists are on the run with good reason to fear what the night might bring.

Success in the war on terror also require we confront regimes that might arm terrorists with the ultimate weapon. America's determined to meet this danger and to deny terrorists and dangerous regimes the ability to threaten us with the world's most deadly weapons. For 12 years, the former dictator of Iraq defy the international community. He refused to disarm or account for his illegal weapons and programs. My administration looked at the intelligence information and we saw a threat. Member of Congress looked at the intelligence and they saw a threat. The United Nations Security Council looked at the intelligence and it saw a threat. All of us knew Saddam Hussein's history. He waged aggressive wars against neighboring countries and he aspired to dominate the Middle East.

He cultivated ties to terrorists. He built weapons of mass destruction. He hid those weapons, and he used chemical weapons against thousand of Iraqis and Iranians. Saddam Hussein doubted our resolve to enforce our word. Now he sits in a prison cell, while his country moves toward a democratic future. Today in Iraq, our coalition faces deadly attacks from a remnant of Saddam's supporters, joined by foreign terrorist. Recently, we intercepted a letter send by an al Qaeda associate name Zarqawi to one of Osama bin Laden's top lieutenant. The letter describes a terrorist strategy to tear Iraq a part with ethnic violence to undermine security force, to demoralize our coalition and to prevent the rise of a sovereign democratic government. This terrorist outlines his efforts to recruit and train suicide bomber and boast of 25 attack on innocent Iraqi and coalition personnel, and he urges al Qaeda members to join him in waging war on coalition and the people Iraq. Zarqawi and other like him have made Iraq the central front in the war on terror. The terrorists know that the emergence of a free Iraq will be a major blow against the worldwide terrorist movement. In this, they are correct. But we have seen this enemy before and we know how to deal with him. Fighting alongside the people of Afghanistan we are defeating the terrorists in that country. And fighting alongside the people of Iraq, we will defeat the terrorists there as well. Iraq, like Afghanistan, will be free. Our coalition is working with Iraq's governing council to draft a basic law with a Bill of Rights.

We're working with Iraq's and the United Nations to prepare the transition of full Iraqi sovereignty. The establishment of a free Iraq will be a watershed event in the history of the Middle East, helping to advance liberty throughout that vital region. As freedom take hold in the Middle East, the people of the region will find new home and America will be more secure. Two 1/2 year ago on a clear September morning, the enemy of America brought a new kind of war to our shores. Three days hearing a stood in the rubble of the twin tower. My resolve today is the same as it was then. I will not relent until the terrorist threat to America is removed. Thank you for listening.

(END AUDIO CLIP)

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