Return to Transcripts main page

On the Story

U.S. Moves To Protect Trains, Buses; Iraq Massacre Tests Resolve, Raises Questions; Bush, Kerry Spar Over Economy's Health; U.N. Backs Iraq Oil-For-Food Probe

Aired April 03, 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.


CATHERINE CALLAWAY, CNN ANCHOR: Hello, everyone. I'm Catherine Callaway. Here's the headlines.
Supporters of an influential Shiite cleric in Baghdad are protesting the detention of the cleric's deputy by coalition forces. The arrest came a day after the deputy offered active support to Hamas and Hezbollah.

And opposition protesters are keeping up on pressure on the Taiwan government. Thousands are in the streets today demanding a recount of ballots in the razor-thin election of President Chen Shui- bian two weeks ago.

Those are the top stories now at this hour. ON THE STORY continues after a quick break.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Good morning, and welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories that we covered this week.

I'm Kelli Arena, ON THE STORY of the latest terrorism warnings about possible attacks on U.S. cities and transportation.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr, ON THE STORY of nine American lives lost in one day this week in Iraq, and the pictures of U.S. bodies dragged through the streets.

LIZ NEISLOSS, CNN SENIOR U.N. PRODUCER: I'm Liz Neisloss in New York, ON THE STORY of how a pre-war United Nations program meant to help the Iraqi people lined Saddam Hussein's pocket. Now questions are also growing on who else may have profited.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash, ON THE STORY of a White House reversal and a date next week to hear national security adviser Condoleezza Rice testify about September 11.

Also coming up, we'll talk about OPEC and how prices at the pump spill into the political debate.

Elaine Quijano will talk about meeting a 14-year-old soccer phenom, Freddy Adu. His first pro-game is this afternoon.

And Diana Muriel has the buzz from London. Why all the fuss over the pictures of the prince and the girlfriend?

E-mail us at onthestory@cnn.com.

Now straight-ahead to Kelli Arena and stopping terrorists.

(BEGIN VIDEO CLIP)

DONNA BUCELLA, TERRORIST SCREENING CENTER: We now have a single database, which is updated daily.

(END VIDEO CLIP)

ARENA: Daily updates to the new watch list at every U.S. border post, says Donna Bucella of the Terrorist Screening Center. Two and a half years since September 11 and now another effort to stop the bad guys before they enter the country.

And now, this week, new warnings of possible terror attack on U.S. targets.

Welcome back. We're ON THE STORY.

So we have the new terrorist warnings about possible attacks against buses and trains here in the United States, but very general and uncorroborated.

NEISLOSS: You know, there's no one who has been watching these Madrid bombings that isn't, in the United States, looking at them and absolutely terrified that this is so possible in the U.S. You know how easy it is to get on a train.

So what -- not just the assurances that you're hearing, but can you say anything about the kinds of real steps that the feds are taking to really try to screen out potential terrorists?

ARENA: Well, obviously, intelligence is one. I mean, the terror watch list is something that has just finally been put together. It is a compilation of all the various names. As Barbara know, the defense, intelligence and State Department and FBI, CIA, everyone combining all of their intelligence together, putting all those names together in one list so that at least everyone knows what they know. I mean, let's start from ground one.

And as far as your trains and buses and mass transit is concerned, FBI and Homeland Security sent out a whole list of proposals, recommendations, for industry to put in place. Moving trash receptacles and screening -- doing random screening of passengers, and having sniffing dogs around. And just really beefing up security. But a lot of that was done way before this new warning even took place. And Liz, very prescient, it happened right after Madrid.

BASH: I want to ask you more about the terror watch list. This is finally happening, and this is the thing that all of the sort of post-9/11 analysis has said was absolutely needed before 9/1; it didn't exist.

Tell us more -- a little bit about them.

ARENA: Well, it's still not done, which is the bottom line.

Where the criticism comes in is it was very difficult because the spelling for one -- I mean, it sounds very simple. But you have so many different variations of spelling on as name, as Barbara knows as well as I do. You look at this and it says, you know, "also known as," "also known as," and it's an "h," added or an "i" added or an "e" added. And so, very difficult.

Another thing that they wanted to be sure of was that they had identifying features along with those names. And it just wasn't Barbara Starr on the terrorism list, but it was Barbara Starr offering her height, her age, possibly occupation -- anything that they knew, any intelligence that they had to add that they could add to that list to make sure that they were dealing with the right person. Because as we saw over the holidays, you had some young children, some grandmothers, that were pulled aside because they had names that were on those terror list. Of course, it was those identifying factors that were missing.

STARR: Now Kelli, on this new warning, if you will, about transportation in the United States, uncorroborated. So what's different, number one, about all the warnings that we've seen over the last several months, and why not raise that color threat level back up again?

ARENA: Well, they're really trying very hard not to raise the national threat level. And the new approach is to try to target the information at the relevant officials and authorities that need to know. So in this case, they sent out this warning to the Department of Transportation, all of the trains and buses and rail systems in the United States. It's more of a targeted warning. It's a two-tier system.

Rather than have everyone go -- the entire nation go -- which costs a lot of money. State and local governments were screaming about the financial burden that put on them. So this is more of a targeted approach and this warning was not supposed to be publicly decimated. It was supposed to be quiet. It was in the form of an INLET, which is an in-house advisory to state and local officials, not to general public.

NEISLOSS: You know, Kelli, when you talk about those lists, those terror lists, I have to say, that at the United Nations, they have been under a lot of criticism. They are trying to put together al Qaeda watch lists, global lists, and that is clearly taking a long time. They're having a lot of similar problems with confusing names or matching names.

Where is the international cooperation on the U.S. list? Are you hearing how that is going at all in terms of getting the information that needs to be, you know, handed over by other countries?

ARENA: Cooperation on this list is like cooperation in intelligence gathering. It's inconsistent. Depends on the countries that you're dealing with. There are some privacy issues also that come into play. You know, people -- these are -- some of these names are not necessarily terrorists. They are suspected terrorists. They are people who have possible links to terrorism. So there is some sensitivity that goes along with exactly how much information -- and the one thing that there have been assurances on across the board is that the information that will be immediately available is not classified information. It's publicly available information that will be on these lists.

But, Liz, it's sketchy, all across the board.

BASH: Kelli, on the threat to the trains, people watching, they hear your reporting, you say it's uncorroborated.

Explain what that means and what that means for just the real level of potential fear that people should have, or whether or not it's really sort of unclear how serious this threat -- that law enforcement thinks this threat might be.

ARENA: Right. Well, this is the new world. Uncorroborated means you have it from one source and it has not been matched by another intelligence source. It doesn't mean that it's not credible, though. And so obviously, they believe that the way that they got this information was credible enough to pass it on.

The problem is that, you know, is something being talked about? Is something actually in the planning stages? That's where the intelligence gathering comes in. But I think that the advice that I'm following -- and I talk to these people in intelligence and law enforcement every day, is be alert. I mean, if you see a bag on a train that's unattended, if somebody comes and drops off something and, you know, high tails it, you know, down the platform, you know that there's something unusual about that.

So there really is -- it's not just a catch phrase to say, "beware of suspicious behavior." It's got to be part of the public mentality.

STARR: Kelli, let's turn to another story that you covered on your beat this week, the developing story about -- on the legal front about abortions, late-term abortions.

ARENA: Yes, very intense legal battle going on right now.

The Partial Birth Abortion Ban Act that was signed by the president, put into law, immediately challenged, legally, in three different states. The Justice Department has finally gone into court on that issue and basically, the question is, is that ban constitutional or not? A very intense legal battle going on, very graphic descriptions of this procedure being heard in the courtroom. The whole concept of whether or not this causes pain to the fetus has been admitted into the courtroom.

This is expected to be a several-weeks long process. And whatever the outcome, you can guarantee there will be an appeal. NEISLOSS: Kelli, another legal story for you. Lots of money obviously went down the drain for the federal government this week on the Tyco trial.

ARENA: Yes, hello.

NEISLOSS: What are you hearing about the repercussions from that? What does it mean if they try and go round two?

ARENA: Right.

Well, you know, more than the whole issue of corporate corruption and what this does to this case is the larger issue of what this will mean to public access to jury proceedings and to trials in general. I mean, if you -- if you listen to the many sources that have been quoted in the press that there was a letter that was allegedly sent to Juror No. 4. This is the juror who allegedly gave the OK sign, which is in some dispute.

This woman reportedly got a letter, received a letter that was negative somehow -- and we don't know, the letter has not been publicly released or talked about. And so that outside influence caused this mistrial. And some legal experts are saying that's because some members of the press -- not CNN, but some members of the press did reveal her name.

And it's sort of been a gentlemen's agreement among the press not to reveal juror's names during deliberations. Afterwards, it's fair game. But during, nobody's done that. And so, when her name came out -- someone apparently saw it, wrote her a letter, and there was an issue.

So this -- this is expected to be, if the legal experts are right, cited by some judges in the future when it comes to what kind of access the media may get, not to mention the fact that this was a six-month process...

BASH: Six months down the drain.

ARENA: Six months of taxpayer dollars -- good-bye.

STARR: Well, from the domestic issues to international policymakers, we all saw pictures from Iraq this week, a mob dragging American bodies through the street of Fallujah.

I'm back on that story in a moment.

(BEGIN VIDEOTAPE)

ANNOUNCER: Barbara Starr is CNN's Pentagon correspondent. She worked for ABC News and Businessweek. She is a former Washington bureau chief of Jane's Defense Weekly.

(END VIDEOTAPE)

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

BRIGADIER-GENERAL MARK KIMMIT, DEPUTY DIRECTOR OF OPERATIONS FOR THE US OCCUPATION FORCES IN IRAQ: That isn't going to stop us from doing our mission. In fact it would be disgracing the deaths of these people if we were to stop our missions.

(END VIDEO CLIP)

STARR: Brigadier-General Mark Kimmit reacting to a very bloody Wednesday in Iraq. That one day saw five U.S. soldiers killed by an explosion and four American civilian contractors killed in an ambush and their bodies mutilated and hanged by the mob.

In addition to the "we shall carry on" statement of the general and others, new questions about what may lay ahead.

Now, of course, General Kimmit's remarks getting a lot of attention around the world. He basically drew the line in the sand himself. He said, this will not stand , essentially, that there will be retaliation by the U.S. military, that they will retake Fallujah.

BASH: And Barbara, one of the very first questions right after this happened in the White House briefing room to Scott McClellan the White House spokesman, was, is this a Mogadishu moment? That is obviously a big fear in the administration. I would imagine a bigger one in the Pentagon.

STARR: Well, that is the concern. You know, the pictures, the absolutely horrifying pictures, not shown by some U.S. news outlets, of those bodies being desecrated and mutilated. Memories of Mogadishu coming back.

But militarily, is it Mogadishu? Certainly not. Mogadishu was a humanitarian relief operation. This is a long-term occupation of another country.

But General Kimmit used a very interesting word. He talked about pacification. He said, we will pacify Fallujah. That set off just shivers throughout the pentagon. The U.S. military of course is still essentially run at the top by the Vietnam generation. And to talk about...

(CROSSTALK)

STARR: ....pacification brings back memories that have all sorts of connotations, that raise all sorts of issues, that I would suggest, Dana, the Bush administration, doesn't really want to deal with in Iraq.

They -- you know, what do they do if this military action in Fallujah begins and the dead bodies start coming out?

BASH: Right, right. That's the last thing they want right now.

ARENA: Barbara, you know, I heard a lot of people make a distinct with the fact this was Fallujah. This was, you know -- that this was somehow separate from the rest of Iraq.

I mean, give me a reality check on that front.

STARR: Well, of course, what the military has said, what the administration, the coalition have said, is there are these trouble spots across Iraq, these so-called Sunni Triangle, places in Baghdad. But that on the whole, the rest of Iraq is reconstructing, moving along, moving ahead.

That's true, some days of the week. Unless you're somewhere in Iraq where a car bomb goes off or a suicide bomber attacks. There have certainly been a series of attacks throughout the country. We have seen trouble in Basra in the south, which is supposed to be relatively calm. We see trouble in Baghdad. We see trouble in the north.

So the question, one could suppose that's on the table, is, are the insurgents actually gathering steam? The military says no. But trouble keeps erupting.

ARENA: Right.

NEISLOSS: And trouble is probably going to erupt again in Fallujah or near Fallujah.

And Barbara, I want to ask you, there are a lot of Marines stationed right near Fallujah. And this is on the question of the bodies, the contractor's bodies. Isn't there some sort of Marine motto, Never leave a man behind, that sort thing?

If it had been a marine, would you think they have -- this is obviously a hypothetical -- but would they have gone in, would they have risked inciting the mob just to get their man? Is this a different case because it's a civilian?

STARR: You know, it's so tough to answer, because as -- exactly, Liz, that's what they're doing right now. They're trying to investigate what really happened in that town. How did the mob form so quickly? Was there some indication that there was going to be trouble on the streets? There's lots of indication that a lot of people knew something was about to happen. Maybe they didn't know what.

It's hard to know. The Marines, by all accounts, were on the outside of the town. That's part of the current military strategy. But what about the Iraqi security forces? Why didn't they respond? By all accounts, they -- they left as quickly as they could because they felt overwhelmed by the mob. And it was only several hours later when things calmed down, that people could come back, some of the Iraqi security forces, and begin to recover these bodies.

One of the questions, as you say Liz, that comes right out on the table, if American security forces, American military, are going to be outside of Iraqi towns and that's the strategy -- let the Iraqi security forces be on the front lines, what kind of security does the U.S. military than provide when, by all accounts, the Iraqi security forces, by their own accounts -- they don't have the equipment, they don't have the training, they don't have the vehicles -- a lot of very good-hearted Iraqi security forces are getting discouraged. They want to be able to do a better job.

BASH: Particularly because we're three months away from the date that the United States is supposed to get out of there and the Iraqis are really supposed to have true control over their country.

STARR: The clock is ticking. Less than 100 days. In some places, the transition -- some of the ministries, the Iraqis have begun to take over.

But no agreed -- I think as you understand, Liz, from the U.N. perch, no absolutely agreed plan. Less than 100 days...

ARENA: Right. Who are we turning it over to?

STARR: Who is Iraq being turned over to?

NEISLOSS: And doesn't seem there's a lot of interest in talking about it just yet. It may come soon, but no, nothing really on the table.

STARR: Exactly right.

So the insurgents, at least, see an opening in this -- you know, tick down, if you will, to the 100 days. The fear, the concern, is that they see an opening.

But General Abizaid, in a senior meeting, inside the Pentagon this week told Secretary Rumsfeld "we must stick with the plan." By all accounts, people I've spoken to say General Abizaid is determined, they will stick to turning it over to Iraqi security forces, because the U.S. has to be seen as moving ahead. They cannot let the Fallujah attack, in their view, as bad as it was, have any impetus for moving backwards.

So, word from the military, the word from the politicians, full steam ahead.

ARENA: Well, Barbara, I know that, you know, you and I talk to a lot of people from the intelligence community. And what I keep hearing is, is that the expectation is, is that it will get bloodier and more violent, the closer we get -- as you said, the clock is ticking down -- the closer you get to that turnover date.

The goal is to cause as much destruction as you possibly can. I mean, is there any -- what is the strategy to deal with that or even protecting civilians?

STARR: Well, that is really the rub of it all. Because the attacks are now coming against the so-called soft targets that we hear so much about. Private contractors, private companies, news media, Iraqi civilians, Iraqi security forces. All of the people who don't have the protection that the U.S. military can afford itself.

So what is going to happen is going to be very tough road ahead.

ARENA: Oh, you bet. Well, Iraq is not the only challenge. Another reminder this week that one thing any administration cannot control is world oil supplies. Diana Muriel is back ON THE STORY after this, talking about OPEC.

And also, the latest episode of the royals versus the press.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If it keeps going up like that, folks, Dick Cheney and President Bush are going to have to carpool to work together.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATE: Some in the other party in Washington would like to raise gas taxes. I think it would be wrong. I think it would be damaging to the economy, not positive to the economy.

(END VIDEO CLIP)

BASH: Presidential campaign back-and-forth this week over gas prices and gas taxes.

Welcome back. We're ON THE STORY

When OPEC, the cartel of oil-producing countries, voted to turn down supplies, it sent shockwaves around the world.

Our London bureau now, covering this OPEC story is CNN's Diana Muriel.

Diana, certainly, this was a bit of an embarrassment for the Bush administration here, who had hoped that OPEC would change its mind. But how surprising was it that they didn't?

DIANA MURIEL, CNN CORRESPONDENT: Well, the short answer is that it wasn't any surprise at all.

The OPEC cartel had flagged this up at a meeting in Algiers back on the 10th of February. They said then they were going to cut by a million barrels per day. And they went ahead and did that.

The cut came into effect on April 1, never an auspicious date. But this particular move has caused outrage and anger internationally, particularly amongst -- in the U.S., with the U.S. administration that's looking ahead to an election and doesn't need high gas prices right at this time.

ARENA: Diana, how big of a deal does OPEC remain? I mean, obviously, you have countries like Russia, you know, pumping oil. Does it hold as much sway as it used to?

MURIEL: Much less sway than it used to. It does still produce around a third of the world's oil and, as such, is very important. And it's an 11-strong cartel, representing some very key countries. The most notable, perhaps, is Saudi Arabia. And traditionally, there have been strong relations between Saudi Arabia and the United States. And Saudi Arabia has, in the past, has listened quite carefully to the discussions that the United States has had with it over the way in which oil prices should move.

But in this particular instance, Saudi Arabia very much wanted to see this cut come for its own domestic economic agenda. And despite the pressure that was brought to bear on it by the United States, much more subtle than perhaps than in the past. In the past, Bill Richardson, the former energy secretary, used to call up and interrupt meetings, I understand from one source, which didn't go down particularly well with the OPEC leaders. But it was rather a more subtle approach this time. But still it came to nothing.

The United States, of course, has got one eye on what Russia is doing. Russia, of course, becoming increasingly important as the provider oil, with the deregulation in its markets there. And of course, it's outside the cartel and acts as something of a countermeasure to OPEC.

NEISLOSS: But we all focus a lot on OPEC, and they are certainly synonymous with the price control.

But is it justified, though, to blame just OPEC for the price increases? Are there other factors that are really tinkering with the pricing picture right now?

MURIEL: Well, OPEC, in particular Saudi Arabia, has turned the argument back and said that the reason that we're seeing oil prices so high -- and we're seeing them at 13-year highs at the moment, with the oil price in New York closing up 15 cents on Friday, at just over $38 a barrel.

They are saying that the reason this is happening is because of speculation in the market. They say because of the poor performance of the world's stock market stock markets, a lot of investors are turned into commodity markets to see a greater return on their investment.

A market they like in particular is oil. Given the geopolitical environment and the Iraqi war in particular, this has looked for a good investment for a lot of investors and that's why we're seeing this dramatic rise in the price of oil.

OPEC itself set a range for the oil price of between $22 and $28 a barrel. Now, it's way outside that and it's been outside that for a long, long time. And the -- some analysts are saying that we could even see oil prices hit $40 a barrel if we do get another cut, production cut, from OPEC, which they have said they might do at the end of April, although that is under review at the moment.

STARR: Diana, quick question -- how is all this going over in Europe? What are gasoline prices looking like in England, for example, right now?

MURIEL: Well, I have to tell you, Barbara, that here in Europe, we're protected -- we've been rather protected. That's really because we've seen this very sharp fall in the dollar. And because oil is traded in dollars, the net-net effect has been minimal here in Europe.

Anywhere Europeans pay much higher prices for their gas -- in Europe, we pay an average of $5 a gallon. In America, it's $1.74. And in England, we pay a great deal more than that. Eighty percent of what we pay for our gas is, in fact, tax.

So the Europeans really have been sheltered from the storm on this because of the dollar.

BASH: Well, Diana, I want to completely shift gears and talk about something that is certainly on all the tabloids there in London, and everyone is talking about, and that is the new pictures of the prince and his girlfriend. Tell us what's going on there.

MURIEL: That's right.

Well, we had a royal coup, if you like, from The Sun newspaper, which is Britain's leading tabloid daily. The Sun printed photographs of Prince William with, as they described her, first real girlfriend, 21-year-old Kate Middleton, who is a student at (UNINTELLIGIBLE) with Prince William. In fact, she shares a house with other students with the prince, and she was studying alongside him, history of art, until he switched to geography last year.

They're said to be very close friends. They've been seen together in many places. But the point about this story is that the press have a gentlemen's agreement with the royal family that they will not take pictures of Prince William or Prince Harry while they remain in full- time education. In return, they get three pictures of the prince three times a year. Royal photographs, which are issued by Clarence House, which is the office of his father, Prince Charles. And they have to be satisfied with that.

But it seems that the gloves are off now.

ARENA: Well, Diana, I mean, he is -- what is he? -- 21, 22 years old? And so he is an adult. And she has not exactly been the -- you know, the shy, you know, type, that has kept out of the press either.

MURIEL: Indeed not. She was seen at a fashion show wearing at (UNINTELLIGIBLE) wearing a see-through dress, with rather large underwear underneath, I should say, and apparently Prince William bought a ringside seat for that particular exhibition.

So no, she has been photographed before. And I think a lot of press are getting tired with this agreement and they want to see more of William and it may well be that we do see a lot more of William, much to the consternation of the royal family who are displeased, or shall I say, unamused, by this whole episode.

BASH: Diana Muriel, our thanks to you. Tell us, before you go, what's ON THE STORY for you in the coming days.

MURIEL: I'm working on a story which is looking at the Internet and terrorism. A lot of experts and analysts saying with the closure of the terrorist training camps in Afghanistan, al Qaeda has migrated from real bases to Internet bases, virtual bases, on the Internet. They're very wired and they know how to use this technology to their advantage.

BASH: Very interesting. We'll be watching that for sure.

Well, back here in the United States, National Security Adviser Condoleezza Rice goes before the September 11 commission next week. I'm back ON THE STORY in a moment.

But first, a check on what's make the headlines at this hour.

CALLAWAY: Hello, everyone. I'm Catherine Callaway, ant this is just in to CNN: two emergency medical workers, a man and woman, have been shot to death in Edwardsville, Kansas. The emergency medical technician and the paramedic were found dead in the Edwardsville fire station. Their bodies found shortly after midnight when the pair did not respond to a call from the metropolitan ambulance service.

Here's what the police had to say just moments ago about the incident.

(BEGIN VIDEO CLIP)

CAPT. MICHAEL KOBE, KANSAS CITY POLICE: We have a report of two people who were the victims of a homicide located at this station. Upon investigation, their bodies were discovered inside the fire station.

(END VIDEO CLIP)

CALLWAY: Once again, an EMT and paramedic shot to death in Edwardsville, Kansas.

In other news at this hour, supporters of an influential Shiite cleric in Baghdad are protesting the detention of the cleric's deputy by coalition forces. That arrest came a day after the deputy offered active support to Hamas and Hezbollah.

And police in the Basque region of southwestern France have arrested three people and seized four bombs. The three are suspected of being members of the militant separatist group ETA. No apparent link to other recent terror incidents in Spain.

Those are the top stories. I'm Catherine Callaway, and ON THE STORY will continue in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I have informed the commission on terrorist attacks against the united states that my national security adviser, Dr. Condoleezza Rice, will provide public testimony.

(END VIDEO CLIP)

BASH: President Bush, announcing a dramatic change of course as perceptions mounted that he had something to hide. After weeks of saying no to requests for Condoleezza Rice to appear in public before the 9/11 Commission, she will now testify next week.

Welcome back. We're ON THE STORY.

ARENA: Dana, I get that there was a lot of bad press for this White House. But this is a complete 180.

BASH: A complete 180.

And basically what happened was it was a classic Washington story where it just got to the boiling point, as one person described it, and it's a perfect way to describe it.

Last weekend, all of the talk shows -- it was blanketed with the discussion of why won't she, why won't she, why won't she testify? We are told that the president doesn't tend to read newspapers or watch TV. However, a senior official did say that he was aware of the coverage and the fact that he really thought that, as he put it, the process was taking over the substance, which really means the political pressure was on, particularly from Republicans.

That is really what the breaking point was. Democrats scream all they want and they have been screaming for weeks and weeks. But when Republicans, even on the commission, started say, the White House is making a big political blunder here. This is September 11; this is not your average even criminal issue. This is huge. You've got to have the president's top adviser out. They said OK.

The other thing is, they understand have that she is somebody who is their best (AUDIO GAP) on national security issues and they got absolutely slammed by Richard Clarke. So they decide that they really wanted to get her out there, even though it might have executive privilege issue, which is why she wasn't out there to begin with.

NEISLOSS: But the privilege issue aside, I mean, are -- is there any sense she's got some substance to talk about that will be damaging to the Bush administration, or will really contribute to learning more about the Bush administration's approach to al Qaeda and terrorism? Is there anything that we should really be expecting? Or is there anyone talking about that?

BASH: Sure. Well, she's going to be testifying for about two and a half hours next Thursday. And they certainly are hoping at the White House that she can contribute substance, if you will, or probably the better way that they would see it, is to really try to rebut what Richard Clarke said, particularly the big question of whether or not the administration really was paying attention, whether they really got it that al Qaeda was a really big threat, and whether or not they did drag their heels, as Clarke said, for all of those months while they were coming up with this plan, or whether or not they did continue -- in an aggressive way -- the Clinton administration's policy, and even sort of turn up the heat, not swatted flies, as the president says.

STARR: So Dana, while at the beginning of the week, the White House was taking hits on the 9/11 controversy, by yesterday, they had good news they say, on the jobs issue. A big plus for the president.

BASH: A huge plus.

And I have to tell you -- a funny story on this. Every -- the first Friday of every month we get the jobs numbers. And every month, they have been dismal for the White House. Jobs, obviously, is the top political issue. And I have this sort of thing with this senior administration official, well, I send him an e-mail in the morning when we get the numbers, and they're bad, and say, How are you going to spin this one? And I'll sort of get a message back with sort of how they're going to explain that they're not satisfied and they that understand they're bad and they'll keep plugging along.

Well, I didn't send an e-mail on Friday because the spin was kind of obvious, 308,000 new job, and it was more than anybody expected. So I got a message that he wanted to know why I wasn't asking what the spin was.

But they were very, very happy. The president himself came right out. He was in West Virginia. Let's listen what he had to say.

(BEGIN VIDEO CLIP)

BUSH: The economy is growing and people are finding work. Today, the statistics show that we added 308,000 jobs for the month of March.

(END VIDEO CLIP)

BASH: Now this is a president who has really spent the last couple of weeks going around, talking about the economy, talking about housing starts being up, talk about the stock market being up. Because he doesn't have anything good to say on jobs.

Well, now he did and obviously the White House is probably dancing in the hallways, if we could -- actually were allowed to walk in the hallways and witness it ourselves.

ARENA: Are they allowed to dance in the hallways (UNINTELLIGIBLE)?

Here's my question for you. Let's talk about President Bush as campaigner, you know, versus, obviously John Kerry. I mean, what is the latest there? In the polls, I mean, all of a sudden we're seeing a little (UNINTELLIGIBLE)

BASH: Well, it's really interesting. This week, as you said, Barbara, the -- you know, last week was not a good week for the White House, with the Richard Clarke, you know, blanket coverage talking about how they weren't prepared for 9/11. Well, the polls -- our poll, CNN/USA Today poll this week showed President Bush actually now leading Senator Kerry, his approval ratings up. By and large, his numbers were better.

Now, the administration and the Bush campaign in particular, they have been running ads against Senator Kerry. They feel like they are working. They feel in some ways that there has been a little bit too much play to the fact that their negative ads, or their contrast ads, as they'd like to put them -- because they, of course, don't run negative ads -- are working. Because they feel like -- and their sort of spin is -- that they are doing a lot of work on the ground. That they are doing a lot of local radio, they have their people out talking to important people, getting their message out in the key swing states. And that has had an effect -- they call it the echo- chamber effect.

But it's interesting to see the way the polls are, and it really didn't match the news of last week. And now, particularly, with -- as you mentioned, Barbara, the jobs news. They are certainly much happier over at the Bush campaign.

NEISLOSS: Well, from some potentially good news for the Bush administration to some bad news at the United Nations, I'm back ON THE STORY of allegations of fraud and corruption and maybe billions of dollars going to Saddam in the Oil for Food program that preceded the war.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

L. PAUL BREMER, U.S. CIVIL ADMINISTRATOR IN IRAQ: Almost a year after the liberation, we are just beginning to understand the outline of the theft and corruption, which was behind the Oil for Food program.

(END VIDEO CLIP)

NEISLOSS: U.S. administrator in Iraq, Paul Bremer, talking about theft and corruption in a U.N.-run program that was designed to help Iraq pay for food, medical, and other humanitarian supplies. But the so-called Oil for Food plan was what diplomats called an open secret when it came to kickbacks and schemes that Saddam Hussein's oil billions invited. Now Iraqi documents may be surfacing and an investigation will look for any U.N. wrongdoing.

Welcome back. We're ON THE STORY.

STARR: Liz, this is something that's very complicated. What really happened here and how did it happen?

NEISLOSS: Well, from the very start, Barbara, this has always been described by the United Nations and by all officials who were familiar with it -- it was very well known. This was a highly political program. As one insider from the U.N. Oil for Food program told me, it was an ugly political program that is now getting even uglier.

And the problem was the rules of the game. The United Nations agreed to, and member states of the United Nations, including the U.S., agreed to allow Saddam Hussein to decide who he could buy and sell his oil to and who he could sell oil to and who he could buy consumer goods from. So the fact that those contracts could be done by Saddam Hussein meant that the U.S. and the United Nations really were shut out of a lot of potential corruption.

ARENA: What was the role of U.N. employees in this?

NEISLOSS: Well, that's really what remains to be seen.

Now there were at least 3,000 U.N. employees. It's a very massive program. The United Nations says they are going to have an independent, outside investigation. Kofi Annan, the secretary general, says he is going to appoint a panel next week. He will name those individuals.

But the fact is, no one really knows exactly who, among all those employees and all the potential in the chain and billions of dollars at stake who would have taken a payoff here and there. That will all be looked into, including potentially questions about Kofi Annan's son, which have been raised.

ARENA: Right, that's what I was going to ask you about, Liz. What are those allegations?

I mean, well, first of all, is Kofi Annan a suspect here of any wrongdoing? I mean, is anybody pointing a finger at him? And then, what is it about his son that -- I mean, I keep hearing his name pop up.

NEISLOSS: Well, as far as Kofi Annan goes there are no serious allegations against him. You are certainly seeing plenty of allegations in editorial pages. No documentation, no prior allegations have come up. I think the real issue is he's he is at the helm of the organization, and there's a question of responsibility for the organization.

As far as his son goes, these are not necessarily new charges, although that doesn't diminish potentially the credibility of the charges. But diplomats have been telling me that this is -- as one British official just told me this past week, he said, This is a red herring. There have been no documents surfaced. And I contacted the company this week that hired Kojo Annan, Kofi Annan's son, and they have basically issued a statement, saying, Look, he did not work for us when he had this particular contract. The U.N. is stepping in line, saying the same thing.

So it remains to be seen if more documents can be surfaced that do prove some sort of link.

STARR: And Liz, another issue on the table at the U.N. this week, the investigation into the deadly blast, U.N. headquarters in Baghdad last summer. A lot of controversy may be brewing there. NEISLOSS: Well, a lot of controversy really has come out already. The U.N. -- this was basically what they call an accountability report. It had already been established that there was lax security that led up to this bombing.

But this week, the U.N. went public with an accountability report. And they said that there was never a proper security check done before the U.N. rushed back in. They were under a lot of political pressure to go back in -- that there was never the proper work done. The assessment that was led by a head of global security -- that man was fired. But the assessment went up the United Nations chain.

Now, U.N. staff are extremely angry about this. They think that one person fired is not enough, and there are higher-ups who really should answer for the deaths of 22 people and a lot of injuries.

BASH: And Liz, some recent news from last night, Colin Powell, the secretary of state, told reporters on his plane that the sources really didn't back up what he said in that dramatic testimony before the U.N.

You were there. That, of course, was leading up to the war, trying to make the case for war. A lot of people at the U.N., I would imagine, aren't going to be that surprised to hear what Powell said.

NEISLOSS: The reaction will simply be, "Tell us something new."

Basically, I had heard from many different former weapons inspectors over the years. This was something they were looking for. In some recent report, Iraqis did turn over some photos that did look like to weapons inspectors, that did look like mobile labs. They contained fermenters, things that would be needed for production.

But a lot of experts were saying a long time when the U.S. presented their information, that these are potentially really more for weather balloon, hydrogen production purposes, that the mobile labs didn't look like biological trucks to them.

BASH: Well, this is certainly something that we will keep reporting on and keep focusing on in the days to come.

And if you're looking for a distraction perhaps from the news of the war in Iraq, look maybe to the soccer field today where the 14- year-old star makes his professional debut.

We'll check in with Elaine Quijano, back ON THE STORY, right after this.

(COMMERCIAL BREAK)

STARR: Welcome back. We're ON THE STORY.

CNN's Elaine Quijano is following the budding career of soccer phenom Freddy Adu.

Elaine, what can you tell us about this very young man?

ELAINE QUIJANO, CNN CORRESPONDENT: Well, Barbara, Freddy Adu, 14 years old, already being compared to the Brazilian soccer legend Pele.

He is really being looked at, Freddy Adu as, the future of American soccer perhaps. A lot of fans in this country look to him to perhaps be sort of the Michael Jordan that will raise the popularity of the sport here in America. Certainly all over the world, football as they call it in every other country, besides the U.S., is quite popular.

Freddie Adu is already a known quantity among soccer fans. But, you know, he signed as a first-round draft pick with the D.C. United, getting paid half a million dollars for that contract alone. Add to that he's also signed for a million-dollar contract with Nike. And then Pepsi also has landed a deal with him as well. He's going to be appearing in commercials with Pele. Again, the person that a lot of people in this country say could be sort of the heir apparent to that throne, of this soccer legend worldwide.

ARENA: That's all well and good, Elaine, but I'm a mother. What about school? Is this kid going to school?

QUIJANO: No, it's so funny you mention that.

You know what, Kelli? The thing is he actually got -- Freddy got an offer when he was 10 years old -- he emigrated, first of all, from Ghana. He and his family -- this is a story within itself -- won a visa lottery. The State Department holds these visas lottery. Well, they won. They came here from Ghana. And when he was 10 years old, he got an offer to play, OK? Try and wrap your brain around this -- for $750,000, to play for an Italian team. His mother insisted that he stay here. Why? Because she wanted him to get an education.

And, in fact, when I sat down and talked with him, that's what he said. He said, you know, my mom wanted me to stay here. My mom really wanted me to get an education. And I am so glad that she did.

And you know what? He went on to say -- he was so sweet when he told me this -- you know, he said she is an angel.

BASH: But what's he like? I mean, is he grounded? Is he somebody who seems like he's a 14-year-old kid -- or does he seem much older?

QUIJANO: You know what, he is? It's funny because a lot of the guys tease him on the team. And at the same time, they take a very protective role, as far as sort of shielding him. He's got a lot of media attention -- really, I mean, when we were there, I can tell you, there were cameras from all over the world there.

But he still plays video games. He likes to hang out. I asked him if he had a girlfriend. And he said no.

But he certainly still...

ARENA: Sure. QUIJANO: ....still a kid at heart.

That's right, I know. I did press him on that. I don't know he would appreciate if I shared all those details with you right now.

But, you know, what I will say is that he takes a lot of his cues from his family, from his mother in particular. And he kept saying that he loves her greatly, he appreciates the sacrifice she made. And, in fact, she used to work two jobs when they first got here. And so now, he says, she doesn't have to work; I bought her a house. She doesn't have to work. She can live her life and enjoy herself.

ARENA: Yes. I hope my children are listening, Elaine.

I hope you get to go to the game.

We're back ON THE STORY right after this.

(BEGIN VIDEOTAPE)

ANNOUNCER: A high school basketball player made headlines this week. What's her story? More after the break.

(END VIDEOPTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Candace Parker. What's her story? The 17-year-old made headlines this week when she beat out the boys in the McDonald's All-American Slam Dunk Contest in Oklahoma City. The Tennessee recruit says it's her dream that 10 years from now, it won't be unusual for girls to enter and wint he contest.

McDonald's named the 6-foot-3 Parker National High School Basketball Player of the Year.

(END VIDEOTAPE)

ARENA: Well, I'd like to thank my colleagues and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS," focusing this week on Donald Trump and Kevin Spacey.

At 12 noon, 9 a.m. Pacific, "CNN LIVE SATURDAY."

And at 1 p.m. Eastern, 10 a.m. CNN's "IN THE MONEY."

Coming up right now, a check at the top stories at this hour.

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


Aired April 3, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: Hello, everyone. I'm Catherine Callaway. Here's the headlines.
Supporters of an influential Shiite cleric in Baghdad are protesting the detention of the cleric's deputy by coalition forces. The arrest came a day after the deputy offered active support to Hamas and Hezbollah.

And opposition protesters are keeping up on pressure on the Taiwan government. Thousands are in the streets today demanding a recount of ballots in the razor-thin election of President Chen Shui- bian two weeks ago.

Those are the top stories now at this hour. ON THE STORY continues after a quick break.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Good morning, and welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories that we covered this week.

I'm Kelli Arena, ON THE STORY of the latest terrorism warnings about possible attacks on U.S. cities and transportation.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: I'm Barbara Starr, ON THE STORY of nine American lives lost in one day this week in Iraq, and the pictures of U.S. bodies dragged through the streets.

LIZ NEISLOSS, CNN SENIOR U.N. PRODUCER: I'm Liz Neisloss in New York, ON THE STORY of how a pre-war United Nations program meant to help the Iraqi people lined Saddam Hussein's pocket. Now questions are also growing on who else may have profited.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash, ON THE STORY of a White House reversal and a date next week to hear national security adviser Condoleezza Rice testify about September 11.

Also coming up, we'll talk about OPEC and how prices at the pump spill into the political debate.

Elaine Quijano will talk about meeting a 14-year-old soccer phenom, Freddy Adu. His first pro-game is this afternoon.

And Diana Muriel has the buzz from London. Why all the fuss over the pictures of the prince and the girlfriend?

E-mail us at onthestory@cnn.com.

Now straight-ahead to Kelli Arena and stopping terrorists.

(BEGIN VIDEO CLIP)

DONNA BUCELLA, TERRORIST SCREENING CENTER: We now have a single database, which is updated daily.

(END VIDEO CLIP)

ARENA: Daily updates to the new watch list at every U.S. border post, says Donna Bucella of the Terrorist Screening Center. Two and a half years since September 11 and now another effort to stop the bad guys before they enter the country.

And now, this week, new warnings of possible terror attack on U.S. targets.

Welcome back. We're ON THE STORY.

So we have the new terrorist warnings about possible attacks against buses and trains here in the United States, but very general and uncorroborated.

NEISLOSS: You know, there's no one who has been watching these Madrid bombings that isn't, in the United States, looking at them and absolutely terrified that this is so possible in the U.S. You know how easy it is to get on a train.

So what -- not just the assurances that you're hearing, but can you say anything about the kinds of real steps that the feds are taking to really try to screen out potential terrorists?

ARENA: Well, obviously, intelligence is one. I mean, the terror watch list is something that has just finally been put together. It is a compilation of all the various names. As Barbara know, the defense, intelligence and State Department and FBI, CIA, everyone combining all of their intelligence together, putting all those names together in one list so that at least everyone knows what they know. I mean, let's start from ground one.

And as far as your trains and buses and mass transit is concerned, FBI and Homeland Security sent out a whole list of proposals, recommendations, for industry to put in place. Moving trash receptacles and screening -- doing random screening of passengers, and having sniffing dogs around. And just really beefing up security. But a lot of that was done way before this new warning even took place. And Liz, very prescient, it happened right after Madrid.

BASH: I want to ask you more about the terror watch list. This is finally happening, and this is the thing that all of the sort of post-9/11 analysis has said was absolutely needed before 9/1; it didn't exist.

Tell us more -- a little bit about them.

ARENA: Well, it's still not done, which is the bottom line.

Where the criticism comes in is it was very difficult because the spelling for one -- I mean, it sounds very simple. But you have so many different variations of spelling on as name, as Barbara knows as well as I do. You look at this and it says, you know, "also known as," "also known as," and it's an "h," added or an "i" added or an "e" added. And so, very difficult.

Another thing that they wanted to be sure of was that they had identifying features along with those names. And it just wasn't Barbara Starr on the terrorism list, but it was Barbara Starr offering her height, her age, possibly occupation -- anything that they knew, any intelligence that they had to add that they could add to that list to make sure that they were dealing with the right person. Because as we saw over the holidays, you had some young children, some grandmothers, that were pulled aside because they had names that were on those terror list. Of course, it was those identifying factors that were missing.

STARR: Now Kelli, on this new warning, if you will, about transportation in the United States, uncorroborated. So what's different, number one, about all the warnings that we've seen over the last several months, and why not raise that color threat level back up again?

ARENA: Well, they're really trying very hard not to raise the national threat level. And the new approach is to try to target the information at the relevant officials and authorities that need to know. So in this case, they sent out this warning to the Department of Transportation, all of the trains and buses and rail systems in the United States. It's more of a targeted warning. It's a two-tier system.

Rather than have everyone go -- the entire nation go -- which costs a lot of money. State and local governments were screaming about the financial burden that put on them. So this is more of a targeted approach and this warning was not supposed to be publicly decimated. It was supposed to be quiet. It was in the form of an INLET, which is an in-house advisory to state and local officials, not to general public.

NEISLOSS: You know, Kelli, when you talk about those lists, those terror lists, I have to say, that at the United Nations, they have been under a lot of criticism. They are trying to put together al Qaeda watch lists, global lists, and that is clearly taking a long time. They're having a lot of similar problems with confusing names or matching names.

Where is the international cooperation on the U.S. list? Are you hearing how that is going at all in terms of getting the information that needs to be, you know, handed over by other countries?

ARENA: Cooperation on this list is like cooperation in intelligence gathering. It's inconsistent. Depends on the countries that you're dealing with. There are some privacy issues also that come into play. You know, people -- these are -- some of these names are not necessarily terrorists. They are suspected terrorists. They are people who have possible links to terrorism. So there is some sensitivity that goes along with exactly how much information -- and the one thing that there have been assurances on across the board is that the information that will be immediately available is not classified information. It's publicly available information that will be on these lists.

But, Liz, it's sketchy, all across the board.

BASH: Kelli, on the threat to the trains, people watching, they hear your reporting, you say it's uncorroborated.

Explain what that means and what that means for just the real level of potential fear that people should have, or whether or not it's really sort of unclear how serious this threat -- that law enforcement thinks this threat might be.

ARENA: Right. Well, this is the new world. Uncorroborated means you have it from one source and it has not been matched by another intelligence source. It doesn't mean that it's not credible, though. And so obviously, they believe that the way that they got this information was credible enough to pass it on.

The problem is that, you know, is something being talked about? Is something actually in the planning stages? That's where the intelligence gathering comes in. But I think that the advice that I'm following -- and I talk to these people in intelligence and law enforcement every day, is be alert. I mean, if you see a bag on a train that's unattended, if somebody comes and drops off something and, you know, high tails it, you know, down the platform, you know that there's something unusual about that.

So there really is -- it's not just a catch phrase to say, "beware of suspicious behavior." It's got to be part of the public mentality.

STARR: Kelli, let's turn to another story that you covered on your beat this week, the developing story about -- on the legal front about abortions, late-term abortions.

ARENA: Yes, very intense legal battle going on right now.

The Partial Birth Abortion Ban Act that was signed by the president, put into law, immediately challenged, legally, in three different states. The Justice Department has finally gone into court on that issue and basically, the question is, is that ban constitutional or not? A very intense legal battle going on, very graphic descriptions of this procedure being heard in the courtroom. The whole concept of whether or not this causes pain to the fetus has been admitted into the courtroom.

This is expected to be a several-weeks long process. And whatever the outcome, you can guarantee there will be an appeal. NEISLOSS: Kelli, another legal story for you. Lots of money obviously went down the drain for the federal government this week on the Tyco trial.

ARENA: Yes, hello.

NEISLOSS: What are you hearing about the repercussions from that? What does it mean if they try and go round two?

ARENA: Right.

Well, you know, more than the whole issue of corporate corruption and what this does to this case is the larger issue of what this will mean to public access to jury proceedings and to trials in general. I mean, if you -- if you listen to the many sources that have been quoted in the press that there was a letter that was allegedly sent to Juror No. 4. This is the juror who allegedly gave the OK sign, which is in some dispute.

This woman reportedly got a letter, received a letter that was negative somehow -- and we don't know, the letter has not been publicly released or talked about. And so that outside influence caused this mistrial. And some legal experts are saying that's because some members of the press -- not CNN, but some members of the press did reveal her name.

And it's sort of been a gentlemen's agreement among the press not to reveal juror's names during deliberations. Afterwards, it's fair game. But during, nobody's done that. And so, when her name came out -- someone apparently saw it, wrote her a letter, and there was an issue.

So this -- this is expected to be, if the legal experts are right, cited by some judges in the future when it comes to what kind of access the media may get, not to mention the fact that this was a six-month process...

BASH: Six months down the drain.

ARENA: Six months of taxpayer dollars -- good-bye.

STARR: Well, from the domestic issues to international policymakers, we all saw pictures from Iraq this week, a mob dragging American bodies through the street of Fallujah.

I'm back on that story in a moment.

(BEGIN VIDEOTAPE)

ANNOUNCER: Barbara Starr is CNN's Pentagon correspondent. She worked for ABC News and Businessweek. She is a former Washington bureau chief of Jane's Defense Weekly.

(END VIDEOTAPE)

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

BRIGADIER-GENERAL MARK KIMMIT, DEPUTY DIRECTOR OF OPERATIONS FOR THE US OCCUPATION FORCES IN IRAQ: That isn't going to stop us from doing our mission. In fact it would be disgracing the deaths of these people if we were to stop our missions.

(END VIDEO CLIP)

STARR: Brigadier-General Mark Kimmit reacting to a very bloody Wednesday in Iraq. That one day saw five U.S. soldiers killed by an explosion and four American civilian contractors killed in an ambush and their bodies mutilated and hanged by the mob.

In addition to the "we shall carry on" statement of the general and others, new questions about what may lay ahead.

Now, of course, General Kimmit's remarks getting a lot of attention around the world. He basically drew the line in the sand himself. He said, this will not stand , essentially, that there will be retaliation by the U.S. military, that they will retake Fallujah.

BASH: And Barbara, one of the very first questions right after this happened in the White House briefing room to Scott McClellan the White House spokesman, was, is this a Mogadishu moment? That is obviously a big fear in the administration. I would imagine a bigger one in the Pentagon.

STARR: Well, that is the concern. You know, the pictures, the absolutely horrifying pictures, not shown by some U.S. news outlets, of those bodies being desecrated and mutilated. Memories of Mogadishu coming back.

But militarily, is it Mogadishu? Certainly not. Mogadishu was a humanitarian relief operation. This is a long-term occupation of another country.

But General Kimmit used a very interesting word. He talked about pacification. He said, we will pacify Fallujah. That set off just shivers throughout the pentagon. The U.S. military of course is still essentially run at the top by the Vietnam generation. And to talk about...

(CROSSTALK)

STARR: ....pacification brings back memories that have all sorts of connotations, that raise all sorts of issues, that I would suggest, Dana, the Bush administration, doesn't really want to deal with in Iraq.

They -- you know, what do they do if this military action in Fallujah begins and the dead bodies start coming out?

BASH: Right, right. That's the last thing they want right now.

ARENA: Barbara, you know, I heard a lot of people make a distinct with the fact this was Fallujah. This was, you know -- that this was somehow separate from the rest of Iraq.

I mean, give me a reality check on that front.

STARR: Well, of course, what the military has said, what the administration, the coalition have said, is there are these trouble spots across Iraq, these so-called Sunni Triangle, places in Baghdad. But that on the whole, the rest of Iraq is reconstructing, moving along, moving ahead.

That's true, some days of the week. Unless you're somewhere in Iraq where a car bomb goes off or a suicide bomber attacks. There have certainly been a series of attacks throughout the country. We have seen trouble in Basra in the south, which is supposed to be relatively calm. We see trouble in Baghdad. We see trouble in the north.

So the question, one could suppose that's on the table, is, are the insurgents actually gathering steam? The military says no. But trouble keeps erupting.

ARENA: Right.

NEISLOSS: And trouble is probably going to erupt again in Fallujah or near Fallujah.

And Barbara, I want to ask you, there are a lot of Marines stationed right near Fallujah. And this is on the question of the bodies, the contractor's bodies. Isn't there some sort of Marine motto, Never leave a man behind, that sort thing?

If it had been a marine, would you think they have -- this is obviously a hypothetical -- but would they have gone in, would they have risked inciting the mob just to get their man? Is this a different case because it's a civilian?

STARR: You know, it's so tough to answer, because as -- exactly, Liz, that's what they're doing right now. They're trying to investigate what really happened in that town. How did the mob form so quickly? Was there some indication that there was going to be trouble on the streets? There's lots of indication that a lot of people knew something was about to happen. Maybe they didn't know what.

It's hard to know. The Marines, by all accounts, were on the outside of the town. That's part of the current military strategy. But what about the Iraqi security forces? Why didn't they respond? By all accounts, they -- they left as quickly as they could because they felt overwhelmed by the mob. And it was only several hours later when things calmed down, that people could come back, some of the Iraqi security forces, and begin to recover these bodies.

One of the questions, as you say Liz, that comes right out on the table, if American security forces, American military, are going to be outside of Iraqi towns and that's the strategy -- let the Iraqi security forces be on the front lines, what kind of security does the U.S. military than provide when, by all accounts, the Iraqi security forces, by their own accounts -- they don't have the equipment, they don't have the training, they don't have the vehicles -- a lot of very good-hearted Iraqi security forces are getting discouraged. They want to be able to do a better job.

BASH: Particularly because we're three months away from the date that the United States is supposed to get out of there and the Iraqis are really supposed to have true control over their country.

STARR: The clock is ticking. Less than 100 days. In some places, the transition -- some of the ministries, the Iraqis have begun to take over.

But no agreed -- I think as you understand, Liz, from the U.N. perch, no absolutely agreed plan. Less than 100 days...

ARENA: Right. Who are we turning it over to?

STARR: Who is Iraq being turned over to?

NEISLOSS: And doesn't seem there's a lot of interest in talking about it just yet. It may come soon, but no, nothing really on the table.

STARR: Exactly right.

So the insurgents, at least, see an opening in this -- you know, tick down, if you will, to the 100 days. The fear, the concern, is that they see an opening.

But General Abizaid, in a senior meeting, inside the Pentagon this week told Secretary Rumsfeld "we must stick with the plan." By all accounts, people I've spoken to say General Abizaid is determined, they will stick to turning it over to Iraqi security forces, because the U.S. has to be seen as moving ahead. They cannot let the Fallujah attack, in their view, as bad as it was, have any impetus for moving backwards.

So, word from the military, the word from the politicians, full steam ahead.

ARENA: Well, Barbara, I know that, you know, you and I talk to a lot of people from the intelligence community. And what I keep hearing is, is that the expectation is, is that it will get bloodier and more violent, the closer we get -- as you said, the clock is ticking down -- the closer you get to that turnover date.

The goal is to cause as much destruction as you possibly can. I mean, is there any -- what is the strategy to deal with that or even protecting civilians?

STARR: Well, that is really the rub of it all. Because the attacks are now coming against the so-called soft targets that we hear so much about. Private contractors, private companies, news media, Iraqi civilians, Iraqi security forces. All of the people who don't have the protection that the U.S. military can afford itself.

So what is going to happen is going to be very tough road ahead.

ARENA: Oh, you bet. Well, Iraq is not the only challenge. Another reminder this week that one thing any administration cannot control is world oil supplies. Diana Muriel is back ON THE STORY after this, talking about OPEC.

And also, the latest episode of the royals versus the press.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If it keeps going up like that, folks, Dick Cheney and President Bush are going to have to carpool to work together.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATE: Some in the other party in Washington would like to raise gas taxes. I think it would be wrong. I think it would be damaging to the economy, not positive to the economy.

(END VIDEO CLIP)

BASH: Presidential campaign back-and-forth this week over gas prices and gas taxes.

Welcome back. We're ON THE STORY

When OPEC, the cartel of oil-producing countries, voted to turn down supplies, it sent shockwaves around the world.

Our London bureau now, covering this OPEC story is CNN's Diana Muriel.

Diana, certainly, this was a bit of an embarrassment for the Bush administration here, who had hoped that OPEC would change its mind. But how surprising was it that they didn't?

DIANA MURIEL, CNN CORRESPONDENT: Well, the short answer is that it wasn't any surprise at all.

The OPEC cartel had flagged this up at a meeting in Algiers back on the 10th of February. They said then they were going to cut by a million barrels per day. And they went ahead and did that.

The cut came into effect on April 1, never an auspicious date. But this particular move has caused outrage and anger internationally, particularly amongst -- in the U.S., with the U.S. administration that's looking ahead to an election and doesn't need high gas prices right at this time.

ARENA: Diana, how big of a deal does OPEC remain? I mean, obviously, you have countries like Russia, you know, pumping oil. Does it hold as much sway as it used to?

MURIEL: Much less sway than it used to. It does still produce around a third of the world's oil and, as such, is very important. And it's an 11-strong cartel, representing some very key countries. The most notable, perhaps, is Saudi Arabia. And traditionally, there have been strong relations between Saudi Arabia and the United States. And Saudi Arabia has, in the past, has listened quite carefully to the discussions that the United States has had with it over the way in which oil prices should move.

But in this particular instance, Saudi Arabia very much wanted to see this cut come for its own domestic economic agenda. And despite the pressure that was brought to bear on it by the United States, much more subtle than perhaps than in the past. In the past, Bill Richardson, the former energy secretary, used to call up and interrupt meetings, I understand from one source, which didn't go down particularly well with the OPEC leaders. But it was rather a more subtle approach this time. But still it came to nothing.

The United States, of course, has got one eye on what Russia is doing. Russia, of course, becoming increasingly important as the provider oil, with the deregulation in its markets there. And of course, it's outside the cartel and acts as something of a countermeasure to OPEC.

NEISLOSS: But we all focus a lot on OPEC, and they are certainly synonymous with the price control.

But is it justified, though, to blame just OPEC for the price increases? Are there other factors that are really tinkering with the pricing picture right now?

MURIEL: Well, OPEC, in particular Saudi Arabia, has turned the argument back and said that the reason that we're seeing oil prices so high -- and we're seeing them at 13-year highs at the moment, with the oil price in New York closing up 15 cents on Friday, at just over $38 a barrel.

They are saying that the reason this is happening is because of speculation in the market. They say because of the poor performance of the world's stock market stock markets, a lot of investors are turned into commodity markets to see a greater return on their investment.

A market they like in particular is oil. Given the geopolitical environment and the Iraqi war in particular, this has looked for a good investment for a lot of investors and that's why we're seeing this dramatic rise in the price of oil.

OPEC itself set a range for the oil price of between $22 and $28 a barrel. Now, it's way outside that and it's been outside that for a long, long time. And the -- some analysts are saying that we could even see oil prices hit $40 a barrel if we do get another cut, production cut, from OPEC, which they have said they might do at the end of April, although that is under review at the moment.

STARR: Diana, quick question -- how is all this going over in Europe? What are gasoline prices looking like in England, for example, right now?

MURIEL: Well, I have to tell you, Barbara, that here in Europe, we're protected -- we've been rather protected. That's really because we've seen this very sharp fall in the dollar. And because oil is traded in dollars, the net-net effect has been minimal here in Europe.

Anywhere Europeans pay much higher prices for their gas -- in Europe, we pay an average of $5 a gallon. In America, it's $1.74. And in England, we pay a great deal more than that. Eighty percent of what we pay for our gas is, in fact, tax.

So the Europeans really have been sheltered from the storm on this because of the dollar.

BASH: Well, Diana, I want to completely shift gears and talk about something that is certainly on all the tabloids there in London, and everyone is talking about, and that is the new pictures of the prince and his girlfriend. Tell us what's going on there.

MURIEL: That's right.

Well, we had a royal coup, if you like, from The Sun newspaper, which is Britain's leading tabloid daily. The Sun printed photographs of Prince William with, as they described her, first real girlfriend, 21-year-old Kate Middleton, who is a student at (UNINTELLIGIBLE) with Prince William. In fact, she shares a house with other students with the prince, and she was studying alongside him, history of art, until he switched to geography last year.

They're said to be very close friends. They've been seen together in many places. But the point about this story is that the press have a gentlemen's agreement with the royal family that they will not take pictures of Prince William or Prince Harry while they remain in full- time education. In return, they get three pictures of the prince three times a year. Royal photographs, which are issued by Clarence House, which is the office of his father, Prince Charles. And they have to be satisfied with that.

But it seems that the gloves are off now.

ARENA: Well, Diana, I mean, he is -- what is he? -- 21, 22 years old? And so he is an adult. And she has not exactly been the -- you know, the shy, you know, type, that has kept out of the press either.

MURIEL: Indeed not. She was seen at a fashion show wearing at (UNINTELLIGIBLE) wearing a see-through dress, with rather large underwear underneath, I should say, and apparently Prince William bought a ringside seat for that particular exhibition.

So no, she has been photographed before. And I think a lot of press are getting tired with this agreement and they want to see more of William and it may well be that we do see a lot more of William, much to the consternation of the royal family who are displeased, or shall I say, unamused, by this whole episode.

BASH: Diana Muriel, our thanks to you. Tell us, before you go, what's ON THE STORY for you in the coming days.

MURIEL: I'm working on a story which is looking at the Internet and terrorism. A lot of experts and analysts saying with the closure of the terrorist training camps in Afghanistan, al Qaeda has migrated from real bases to Internet bases, virtual bases, on the Internet. They're very wired and they know how to use this technology to their advantage.

BASH: Very interesting. We'll be watching that for sure.

Well, back here in the United States, National Security Adviser Condoleezza Rice goes before the September 11 commission next week. I'm back ON THE STORY in a moment.

But first, a check on what's make the headlines at this hour.

CALLAWAY: Hello, everyone. I'm Catherine Callaway, ant this is just in to CNN: two emergency medical workers, a man and woman, have been shot to death in Edwardsville, Kansas. The emergency medical technician and the paramedic were found dead in the Edwardsville fire station. Their bodies found shortly after midnight when the pair did not respond to a call from the metropolitan ambulance service.

Here's what the police had to say just moments ago about the incident.

(BEGIN VIDEO CLIP)

CAPT. MICHAEL KOBE, KANSAS CITY POLICE: We have a report of two people who were the victims of a homicide located at this station. Upon investigation, their bodies were discovered inside the fire station.

(END VIDEO CLIP)

CALLWAY: Once again, an EMT and paramedic shot to death in Edwardsville, Kansas.

In other news at this hour, supporters of an influential Shiite cleric in Baghdad are protesting the detention of the cleric's deputy by coalition forces. That arrest came a day after the deputy offered active support to Hamas and Hezbollah.

And police in the Basque region of southwestern France have arrested three people and seized four bombs. The three are suspected of being members of the militant separatist group ETA. No apparent link to other recent terror incidents in Spain.

Those are the top stories. I'm Catherine Callaway, and ON THE STORY will continue in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I have informed the commission on terrorist attacks against the united states that my national security adviser, Dr. Condoleezza Rice, will provide public testimony.

(END VIDEO CLIP)

BASH: President Bush, announcing a dramatic change of course as perceptions mounted that he had something to hide. After weeks of saying no to requests for Condoleezza Rice to appear in public before the 9/11 Commission, she will now testify next week.

Welcome back. We're ON THE STORY.

ARENA: Dana, I get that there was a lot of bad press for this White House. But this is a complete 180.

BASH: A complete 180.

And basically what happened was it was a classic Washington story where it just got to the boiling point, as one person described it, and it's a perfect way to describe it.

Last weekend, all of the talk shows -- it was blanketed with the discussion of why won't she, why won't she, why won't she testify? We are told that the president doesn't tend to read newspapers or watch TV. However, a senior official did say that he was aware of the coverage and the fact that he really thought that, as he put it, the process was taking over the substance, which really means the political pressure was on, particularly from Republicans.

That is really what the breaking point was. Democrats scream all they want and they have been screaming for weeks and weeks. But when Republicans, even on the commission, started say, the White House is making a big political blunder here. This is September 11; this is not your average even criminal issue. This is huge. You've got to have the president's top adviser out. They said OK.

The other thing is, they understand have that she is somebody who is their best (AUDIO GAP) on national security issues and they got absolutely slammed by Richard Clarke. So they decide that they really wanted to get her out there, even though it might have executive privilege issue, which is why she wasn't out there to begin with.

NEISLOSS: But the privilege issue aside, I mean, are -- is there any sense she's got some substance to talk about that will be damaging to the Bush administration, or will really contribute to learning more about the Bush administration's approach to al Qaeda and terrorism? Is there anything that we should really be expecting? Or is there anyone talking about that?

BASH: Sure. Well, she's going to be testifying for about two and a half hours next Thursday. And they certainly are hoping at the White House that she can contribute substance, if you will, or probably the better way that they would see it, is to really try to rebut what Richard Clarke said, particularly the big question of whether or not the administration really was paying attention, whether they really got it that al Qaeda was a really big threat, and whether or not they did drag their heels, as Clarke said, for all of those months while they were coming up with this plan, or whether or not they did continue -- in an aggressive way -- the Clinton administration's policy, and even sort of turn up the heat, not swatted flies, as the president says.

STARR: So Dana, while at the beginning of the week, the White House was taking hits on the 9/11 controversy, by yesterday, they had good news they say, on the jobs issue. A big plus for the president.

BASH: A huge plus.

And I have to tell you -- a funny story on this. Every -- the first Friday of every month we get the jobs numbers. And every month, they have been dismal for the White House. Jobs, obviously, is the top political issue. And I have this sort of thing with this senior administration official, well, I send him an e-mail in the morning when we get the numbers, and they're bad, and say, How are you going to spin this one? And I'll sort of get a message back with sort of how they're going to explain that they're not satisfied and they that understand they're bad and they'll keep plugging along.

Well, I didn't send an e-mail on Friday because the spin was kind of obvious, 308,000 new job, and it was more than anybody expected. So I got a message that he wanted to know why I wasn't asking what the spin was.

But they were very, very happy. The president himself came right out. He was in West Virginia. Let's listen what he had to say.

(BEGIN VIDEO CLIP)

BUSH: The economy is growing and people are finding work. Today, the statistics show that we added 308,000 jobs for the month of March.

(END VIDEO CLIP)

BASH: Now this is a president who has really spent the last couple of weeks going around, talking about the economy, talking about housing starts being up, talk about the stock market being up. Because he doesn't have anything good to say on jobs.

Well, now he did and obviously the White House is probably dancing in the hallways, if we could -- actually were allowed to walk in the hallways and witness it ourselves.

ARENA: Are they allowed to dance in the hallways (UNINTELLIGIBLE)?

Here's my question for you. Let's talk about President Bush as campaigner, you know, versus, obviously John Kerry. I mean, what is the latest there? In the polls, I mean, all of a sudden we're seeing a little (UNINTELLIGIBLE)

BASH: Well, it's really interesting. This week, as you said, Barbara, the -- you know, last week was not a good week for the White House, with the Richard Clarke, you know, blanket coverage talking about how they weren't prepared for 9/11. Well, the polls -- our poll, CNN/USA Today poll this week showed President Bush actually now leading Senator Kerry, his approval ratings up. By and large, his numbers were better.

Now, the administration and the Bush campaign in particular, they have been running ads against Senator Kerry. They feel like they are working. They feel in some ways that there has been a little bit too much play to the fact that their negative ads, or their contrast ads, as they'd like to put them -- because they, of course, don't run negative ads -- are working. Because they feel like -- and their sort of spin is -- that they are doing a lot of work on the ground. That they are doing a lot of local radio, they have their people out talking to important people, getting their message out in the key swing states. And that has had an effect -- they call it the echo- chamber effect.

But it's interesting to see the way the polls are, and it really didn't match the news of last week. And now, particularly, with -- as you mentioned, Barbara, the jobs news. They are certainly much happier over at the Bush campaign.

NEISLOSS: Well, from some potentially good news for the Bush administration to some bad news at the United Nations, I'm back ON THE STORY of allegations of fraud and corruption and maybe billions of dollars going to Saddam in the Oil for Food program that preceded the war.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

L. PAUL BREMER, U.S. CIVIL ADMINISTRATOR IN IRAQ: Almost a year after the liberation, we are just beginning to understand the outline of the theft and corruption, which was behind the Oil for Food program.

(END VIDEO CLIP)

NEISLOSS: U.S. administrator in Iraq, Paul Bremer, talking about theft and corruption in a U.N.-run program that was designed to help Iraq pay for food, medical, and other humanitarian supplies. But the so-called Oil for Food plan was what diplomats called an open secret when it came to kickbacks and schemes that Saddam Hussein's oil billions invited. Now Iraqi documents may be surfacing and an investigation will look for any U.N. wrongdoing.

Welcome back. We're ON THE STORY.

STARR: Liz, this is something that's very complicated. What really happened here and how did it happen?

NEISLOSS: Well, from the very start, Barbara, this has always been described by the United Nations and by all officials who were familiar with it -- it was very well known. This was a highly political program. As one insider from the U.N. Oil for Food program told me, it was an ugly political program that is now getting even uglier.

And the problem was the rules of the game. The United Nations agreed to, and member states of the United Nations, including the U.S., agreed to allow Saddam Hussein to decide who he could buy and sell his oil to and who he could sell oil to and who he could buy consumer goods from. So the fact that those contracts could be done by Saddam Hussein meant that the U.S. and the United Nations really were shut out of a lot of potential corruption.

ARENA: What was the role of U.N. employees in this?

NEISLOSS: Well, that's really what remains to be seen.

Now there were at least 3,000 U.N. employees. It's a very massive program. The United Nations says they are going to have an independent, outside investigation. Kofi Annan, the secretary general, says he is going to appoint a panel next week. He will name those individuals.

But the fact is, no one really knows exactly who, among all those employees and all the potential in the chain and billions of dollars at stake who would have taken a payoff here and there. That will all be looked into, including potentially questions about Kofi Annan's son, which have been raised.

ARENA: Right, that's what I was going to ask you about, Liz. What are those allegations?

I mean, well, first of all, is Kofi Annan a suspect here of any wrongdoing? I mean, is anybody pointing a finger at him? And then, what is it about his son that -- I mean, I keep hearing his name pop up.

NEISLOSS: Well, as far as Kofi Annan goes there are no serious allegations against him. You are certainly seeing plenty of allegations in editorial pages. No documentation, no prior allegations have come up. I think the real issue is he's he is at the helm of the organization, and there's a question of responsibility for the organization.

As far as his son goes, these are not necessarily new charges, although that doesn't diminish potentially the credibility of the charges. But diplomats have been telling me that this is -- as one British official just told me this past week, he said, This is a red herring. There have been no documents surfaced. And I contacted the company this week that hired Kojo Annan, Kofi Annan's son, and they have basically issued a statement, saying, Look, he did not work for us when he had this particular contract. The U.N. is stepping in line, saying the same thing.

So it remains to be seen if more documents can be surfaced that do prove some sort of link.

STARR: And Liz, another issue on the table at the U.N. this week, the investigation into the deadly blast, U.N. headquarters in Baghdad last summer. A lot of controversy may be brewing there. NEISLOSS: Well, a lot of controversy really has come out already. The U.N. -- this was basically what they call an accountability report. It had already been established that there was lax security that led up to this bombing.

But this week, the U.N. went public with an accountability report. And they said that there was never a proper security check done before the U.N. rushed back in. They were under a lot of political pressure to go back in -- that there was never the proper work done. The assessment that was led by a head of global security -- that man was fired. But the assessment went up the United Nations chain.

Now, U.N. staff are extremely angry about this. They think that one person fired is not enough, and there are higher-ups who really should answer for the deaths of 22 people and a lot of injuries.

BASH: And Liz, some recent news from last night, Colin Powell, the secretary of state, told reporters on his plane that the sources really didn't back up what he said in that dramatic testimony before the U.N.

You were there. That, of course, was leading up to the war, trying to make the case for war. A lot of people at the U.N., I would imagine, aren't going to be that surprised to hear what Powell said.

NEISLOSS: The reaction will simply be, "Tell us something new."

Basically, I had heard from many different former weapons inspectors over the years. This was something they were looking for. In some recent report, Iraqis did turn over some photos that did look like to weapons inspectors, that did look like mobile labs. They contained fermenters, things that would be needed for production.

But a lot of experts were saying a long time when the U.S. presented their information, that these are potentially really more for weather balloon, hydrogen production purposes, that the mobile labs didn't look like biological trucks to them.

BASH: Well, this is certainly something that we will keep reporting on and keep focusing on in the days to come.

And if you're looking for a distraction perhaps from the news of the war in Iraq, look maybe to the soccer field today where the 14- year-old star makes his professional debut.

We'll check in with Elaine Quijano, back ON THE STORY, right after this.

(COMMERCIAL BREAK)

STARR: Welcome back. We're ON THE STORY.

CNN's Elaine Quijano is following the budding career of soccer phenom Freddy Adu.

Elaine, what can you tell us about this very young man?

ELAINE QUIJANO, CNN CORRESPONDENT: Well, Barbara, Freddy Adu, 14 years old, already being compared to the Brazilian soccer legend Pele.

He is really being looked at, Freddy Adu as, the future of American soccer perhaps. A lot of fans in this country look to him to perhaps be sort of the Michael Jordan that will raise the popularity of the sport here in America. Certainly all over the world, football as they call it in every other country, besides the U.S., is quite popular.

Freddie Adu is already a known quantity among soccer fans. But, you know, he signed as a first-round draft pick with the D.C. United, getting paid half a million dollars for that contract alone. Add to that he's also signed for a million-dollar contract with Nike. And then Pepsi also has landed a deal with him as well. He's going to be appearing in commercials with Pele. Again, the person that a lot of people in this country say could be sort of the heir apparent to that throne, of this soccer legend worldwide.

ARENA: That's all well and good, Elaine, but I'm a mother. What about school? Is this kid going to school?

QUIJANO: No, it's so funny you mention that.

You know what, Kelli? The thing is he actually got -- Freddy got an offer when he was 10 years old -- he emigrated, first of all, from Ghana. He and his family -- this is a story within itself -- won a visa lottery. The State Department holds these visas lottery. Well, they won. They came here from Ghana. And when he was 10 years old, he got an offer to play, OK? Try and wrap your brain around this -- for $750,000, to play for an Italian team. His mother insisted that he stay here. Why? Because she wanted him to get an education.

And, in fact, when I sat down and talked with him, that's what he said. He said, you know, my mom wanted me to stay here. My mom really wanted me to get an education. And I am so glad that she did.

And you know what? He went on to say -- he was so sweet when he told me this -- you know, he said she is an angel.

BASH: But what's he like? I mean, is he grounded? Is he somebody who seems like he's a 14-year-old kid -- or does he seem much older?

QUIJANO: You know what, he is? It's funny because a lot of the guys tease him on the team. And at the same time, they take a very protective role, as far as sort of shielding him. He's got a lot of media attention -- really, I mean, when we were there, I can tell you, there were cameras from all over the world there.

But he still plays video games. He likes to hang out. I asked him if he had a girlfriend. And he said no.

But he certainly still...

ARENA: Sure. QUIJANO: ....still a kid at heart.

That's right, I know. I did press him on that. I don't know he would appreciate if I shared all those details with you right now.

But, you know, what I will say is that he takes a lot of his cues from his family, from his mother in particular. And he kept saying that he loves her greatly, he appreciates the sacrifice she made. And, in fact, she used to work two jobs when they first got here. And so now, he says, she doesn't have to work; I bought her a house. She doesn't have to work. She can live her life and enjoy herself.

ARENA: Yes. I hope my children are listening, Elaine.

I hope you get to go to the game.

We're back ON THE STORY right after this.

(BEGIN VIDEOTAPE)

ANNOUNCER: A high school basketball player made headlines this week. What's her story? More after the break.

(END VIDEOPTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Candace Parker. What's her story? The 17-year-old made headlines this week when she beat out the boys in the McDonald's All-American Slam Dunk Contest in Oklahoma City. The Tennessee recruit says it's her dream that 10 years from now, it won't be unusual for girls to enter and wint he contest.

McDonald's named the 6-foot-3 Parker National High School Basketball Player of the Year.

(END VIDEOTAPE)

ARENA: Well, I'd like to thank my colleagues and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS," focusing this week on Donald Trump and Kevin Spacey.

At 12 noon, 9 a.m. Pacific, "CNN LIVE SATURDAY."

And at 1 p.m. Eastern, 10 a.m. CNN's "IN THE MONEY."

Coming up right now, a check at the top stories at this hour.

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