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On the Story

Prison-Abuse Scandal Widens; President's Poll Number Slip to Lowest Levels of His Presidency

Aired May 15, 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.


SOPHIA CHOI, CNN ANCHOR: I'm Sophia Choi with what's happening at this hour.
We take you first to Jordan, for the beginning of the World Economic Forum, a three-day conference. King Abdullah is speaking right now. Iraq and Arab relations the priority. Secretary of State Colin Powell is there, too, representing American interests.

Also, today's military debriefing in Baghdad, coalition officials report a relative calm overnight in the battle for Najaf, but officials restated their intention to bring outlaw cleric Muqtada al- Sadr to justice.

Five soldiers from the U.S. 1st Armored Division have died in Iraq. There were killed in separate attacks, one was killed when his vehicle overturned and the fifth soldier was found unconscious, then later died in the hospital.

Evangelist Billy Graham is hospitalized in North Carolina after a fall at his home. The 85-year-old Graham had been recovering at home from a partial hip replacement early this year.

And in Brazil, radio reports say rescue crews have found no survivors from a plane crash in the dense Amazon jungle. The plane went down with 33 people on aboard near the city of Manaus Friday evening.

Those are the top stories this hour. I'm Sophia Choi. ON THE STORY begins right now.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week.

I'm Barbara Starr, ON THE STORY of the prisoner-abuse scandal. More pictures, more courts-martial, and more questions about what happened and why.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace in New York, ON THE STORY of how events in Iraq hit home on the campaign trail for both President Bush and John Kerry.

MARIA HINOJOSA, CNN URBAN AFFAIRS CORRESPONDENT: I'm Maria Hinojosa in New York ON THE STORY of the brutal murder of Nicholas Berg, what happened, what his friends and family have to say. SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And I'm Suzanne Malveaux, ON THE STORY of President Bush pledging the U.S. will complete its mission in Iraq, despite distractions this week.

Also coming up, we'll -- we'll go to Iraq and talk to our Jane Arraf about what's happening in Najaf right now.

We'll talk about how a former president and his book will be a factor in campaign 2004.

And our Michelle Bonner's on today's big sports story, the Preakness, and why it can turn the Kentucky Derby on its head.

E-mail us at onthestory@cnn.com.

Now, straight to Barbara and the prisoner-abuse scandal.

(BEGIN VIDEO CLIP)

SEN. JOHN WARNER ( R), VIRGINIA: In simple words, your own soldier's language, how did this happen?

MAJOR GENERAL ANTONIO TAGUBA, U.S. ARMY: Failure in leadership, sir, from the brigade commander on down, lack of discipline, no training, whatsoever, and no supervision. Supervisory omission was rampant.

(END VIDEO CLIP)

STARR: Major General Antonio Taguba telling Senator John Warner what went wrong at Abu Ghraib prison. That Tuesday hearing was just one installment in this fast-breaking story, including more pictures shown to lawmakers and even a visit to the prison by Defense Secretary Donald Rumsfeld on Thursday.

MALVEAUX: Now Barbara, already there's some fallout from this. I mean, you have -- the rules are now changed when it comes to interrogations.

I saw -- I saw the testimony from Pace, from Wolfowitz and other people. Did the U.S. violate international law and who's responsible? What is happening now?

STARR: Well, there's two categories of things that are being dealt with here.

Clearly, the criminal behavior by the soldiers who are facing the legal military justice system. No one condones that. That is off to the side. That is being pursued as a legal criminal matter.

The question about U.S. interrogation practices, however is perhaps a much deeper issue right now. Congress very questioning, very critical of these interrogation practices, albeit we learned that they were never used, things like sensory deprivation, sleep deprivation, putting prisoners in stress positions. The controversy becoming so great, that yesterday the Pentagon finally said, OK, we're taking all of it on the table -- off the table. Not even -- we're just not going to do it at all. They contend it all would have been within the Geneva Convention. But clearly, an awful lot of people in Congress think not so.

WALLACE: Barbara, take us behind the scenes. Whose idea was it to send Secretary of Defense Donald Rumsfeld to that surprise trip to Baghdad? And did it boost the morale of troops or perhaps boost the morale of the defense secretary?

STARR: Well, probably a bit of both, Kelly.

By all accounts this came up when the president came to the Pentagon on Monday to give that endorsement of Don Rumsfeld. And it was quite a week, because at the beginning of week an awful lot of questions about would he stay, would he go, would his head be chopped off, politically?

By the end of the week, he's in Baghdad, and he's talking about how he is going to essentially stay on the job.

I think we have a sound bite from one of the statements he made in Baghdad where he -- he gave the troops a boost and he gave himself a boost. Let's listen for a minute.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, U.S. SECRETARY OF DEFENSE: I've stopped reading the newspapers.

(APPLAUSE)

RUMSFELD: It's a fact. I'm a survivor.

(END VIDEO CLIP)

STARR: So Don Rumsfeld giving a big hint that, at least, he plans to stay on the job.

HINOJOSA: You know, Barbara, one of the things that's interesting is I read someplace that the soldiers were saying, You know, these soldiers are working 18 hours a day. They're exhausted. They're in horrible conditions. There's that element.

And the other thing, Barbara, front page of The New York Post, huge headline, "Sex Scandal in this Prison." I mean it goes beyond just the prisoner abuse. What was going on with these troops, that they were having essentially voyeuristic sex going on in the prison? I mean, there's a point where you just say, Oh, my god, it was totally out of control.

STARR: Well, it's very interesting that you say that, Maria, because one of the most unnoticed statements this was by General Richard Myers, the chairman of the Joint Chiefs. He said this reflected, indeed, a breakdown of military discipline -- that this military police unit had a pretty appalling record. It's going to sound very nitpicky, but he gave some examples: that they weren't wearing uniforms properly, that they were carrying weapons when they were in civilian clothes. And he said even that they weren't particularly interested in saluting.

Now, to all of us in the civilian world, maybe that doesn't sound like a big deal. But in the military, when you are in a combat environment, there are very strict rules about how you conduct yourself, and this was some real indication of a breakdown in discipline in a military unit. And a lot of questions about how does that happen in the U.S. military, in the year 2004? It's not supposed to happen.

MALVEAUX: But, Barbara, what about policy? I mean, beyond, kind of, this particular regiment, this troop here? I mean, it seems to me as if you had questions about the tone that was set, because there was some discussion, at least in Iraq, it was under the Geneva Conventions, whereas in Guantanamo Bay, those prisoners, it was consistent with the Geneva Conventions.

What is the distinction in terms of how are these prisoners treated? What is considered acceptable to the administration?

STARR: Well there really shouldn't be a distinction by all legal accounts.

Now, in Guantanamo Bay, these are people who have been detained on a battlefield in an undeclared war who are not fighting on behalf of a declared power or state, people who don't wear uniforms.

MALVEAUX: Right.

STARR: So the decision was very early on, apply the Geneva Convention, but they don't fall under it per se because they are not technically prisoners of war.

In Iraq, quite a different situation. A declared combat situation, now a declared military occupation. But, clearly, a lot of questions emerging on Capitol Hill from human-rights organizations, from the international committee of the Red Cross, Amnesty International about whether the situation at Guantanamo Bay were perhaps a little looser, and, of course, al-Qaeda detainees being detained in Afghanistan and at those undisclosed locations around the world. Nobody really knows what's happening to them. Did that lay a climate?

MALVEAUX: Can we expect to see changes there, in Cuba?

STARR: No one really knows yet. And you're certainly -- we're never going to hear about whether there's going to be changes in interrogation practices for the people that the CIA and the intelligence committee is holding at undisclosed locations around the world. A lot of this still exists in that very black world of secrecy.

Unclear, for example, whether anything would have changed at Abu Ghraib if the photographs hadn't come out.

HINOJOSA: Exactly. Well, speaking about photograph, perhaps the most disturbing were the pictures of Nicholas Berg moments before he was about to be beheaded. I'm on that story when we come back.

(BEGIN VIDEOTAPE)

ANNOUNCER: ....is CNN urban affairs correspondent. She won a Robert F. Kennedy Award and was twice named by Hispanic Business magazine as one of the most influential Latinos in the country. She's written two books.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHAEL BERG, NICHOLAS BERG'S FATHER: The al Qaeda that killed my son didn't know what they were doing. They killed their best friend. Nick was there to build Iraq, not to tear it down. He was there to help people, not to -- not to hurt anyone.

(END VIDEO CLIP)

HINOJOSA: The father of Nicholas Berg, Michael Berg, speaking out about the brutal, public execution of his son, his anger and his pain.

Welcome back. We're ON THE STORY.

STARR: Now, Maria, there's been constant controversy this week. Was Nicholas Berg ever in U.S. custody? Yes or no? What's the real answer here?

HINOJOSA: Look, if you believe the family and all of the information that they have, and if you believe the words that Nicholas Berg was telling the friends that he saw when he was in Iraq, he was in U.S. custody. And even CNN has spoken to the Mosul police chief, that says, We took him into custody, we held him for a couple hours, we handed him over to the U.S. military. The U.S. government insisting, still, up until yesterday, he was never in U.S. custody. You've also got a U.S. consular official sending an e-mail to the family saying, the U.S. military has your son in custody.

So I think this is a point that the family is going to continue to push, and the U.S. government is obviously going to try to stay on message on this. But it looks like he was in U.S. custody.

MALVEAUX: Maria, what was it like to be there? I know you've been talking with family and with friends. And one of the questions I have, too is, how do they see the media's role in all this? I mean, their son's beheaded, everyone gets a chance to see that, and then you've got trucks that are camped outside their house.

What is going on there? What is it like? HINOJOSA: You know what? It was such a difficult story, Suzanne. You have a family that, they find out that their son has been murdered. And then, Tuesday morning, they find out that it's out there in the public. His father falls down in the front lawn. There are pictures of that. And then, 55 live trucks come and park in the middle of a suburban community, and essentially take over. This is a family in tremendous amount of trauma. And added to that, all of the questions from the media. It was a very, very painful situation for everyone to be in.

But personally, I mean, for this particular family, it's like they wanted to talk, but there was conflicts internally. We know that the father wanted to say things, but he says my wife doesn't want me to talk. They told the neighbors not to talk. So a really, really difficult situation.

Just, you know, personally as a reporter, extremely painful, just because we're there, we want the story, and yet you don't really want to bother this family, you want to give them their privacy, and yet it's an international story.

WALLACE: Maria, impossible to comprehend what that family is going through. It's interesting, as you were talking, we saw the father, Michael Berg. He put out a sign on his lawn that said, "War is not the answer." In his comments, he's fiercely against this war in Iraq.

I'm wondering, did his son Nicholas share some of those same feelings about the war?

HINOJOSA: Not at all, and that's what makes this story so fascinating. Because you've got a father and son -- you've got an American family, essentially, divided over politics, which is nothing unusual. It's just that this particular young man decide to take it to the next level. He wanted to go and help President Bush, essentially, in what he believed was the rebuilding of Iraq. Father and mother didn't want him to go. He believed in this strongly, and he went.

But the father, his pain -- I mean, to come out and say what he said, "My son died for the sins of President Bush and Donald Rumsfeld," is huge. A lot of people saying, Well, he's just in a moment of pain. This is not a father who is just in a moment of pain. This is a father that sued the U.S. government, sued Donald Rumsfeld, once he had found out that his son, as he believes, was in U.S. custody, sued them in federal court on April 5. And, on April 6, Nicholas Berg was released in Iraq.

STARR: And Maria, there was another sort of bizarre twist with this terrorist connection, years ago in Oklahoma.

HINOJOSA: Right. It is. It doesn't get any stranger.

Nick Berg went to school in Oklahoma for about a semester or two, used to travel to this off-site campus. On one of those trips from the campus to an off-site campus, there was a guy sitting next to him -- this is all according to his father and according to the FBI -- basically, they cleared Nick Berg.

Anyway, he's sitting next to this guy and gives him his computer and his password. Password ends up in the hands of Moussaoui. It's kind of consistent with Nick Berg being entirely naive, just thinking the best of people. What kind of a person gives their password to a stranger? What kind of a person goes to Iraq at this moment and basically walks around without any kind of protection, without a guide, without a translator? One of his friends said, Oh, Nick walked around Baghdad as if he was in Washington, D.C. He was a kid, as his friends and family say, who really wanted to see the best in everybody. But perhaps it was just totally blinding for him.

MALVEAUX: Maria, do you think this has become political in some ways? Because I had heard that Senator Kerry spoke with the father of Berg. We know that Bush has at least publicly expressed condolences.

Is there a sense that there are players here who are using this tragic death for their own gain?

HINOJOSA: I don't know if you can go so far as to say that. I mean, Kerry -- there was some confusion there, whether or not he made the initial attempt to speak to Mike Berg or if Michael Berg made the attempt to call him. There is some confusion there.

President Bush has not called the Berg family to say -- to make a phone call and offer condolences. He did that publicly. This is a family -- or certainly a father who is very much against President Bush. So I suppose it wouldn't be expected that he would pick up the phone and call.

I don't get the feeling just now that there are the political players trying to use this. But will the death of Nick Berg become part of the overall discussion in terms of what's happening in terms of this war? Absolutely.

WALLACE: And, Maria, we saw that this week, really, some discussion on the campaign trail of this tragedy, involving Nicholas Berg as well as the ongoing Iraqi prisoner-abuse scandal. I am on that story when we come back.

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

WALLACE: ...saying on your last point, Suzanne, still a bit of confusion, because John Kerry was in Arkansas, he was talking in an interview to a Little Rock reporter and he volunteered the information that he had spoken to Michael Berg in conveying his outrage about what happened to his son.

Later, the national press corps was following up and asking John Kerry about that. He said, No, no, no, it's private, I'm not going to talk about it. A reporter said, But you just talked about it in an interview. He said, No, it's private.

And later, a spokesman saying -- a spokesman for John Kerry saying, It is private, but indicating he thought that Michael Berg or the family reached out to John Kerry. So we don't really know the answer there.

What we do know is John Kerry is sort of maneuvering through somewhat of a dilemma. How much does he react? How much does he talk about events in Iraq, and how much might that take him away from his own domestic message? Aides say, Look, they're going to take it on a case-by-case basis, react where and when it's appropriate. But they don't want to get into this sort of day-to-day commentary about events overseas. They want to sort of stick to their agenda and help -- have the senator define his own agenda, not outside events.

HINOJOSA: Except, Kerry (sic), the fact is, is that because of -- because of the fact that he's not talking about it, then it becomes an issue. It's kind of like, Make a decision, do something. It seems like people are still feeling like he's not on message.

And what is that message? I mean, do you get that sense within the Kerry campaign that they're just kind of flustered about it, or do you think that they're very clear that they're just not going to get -- insert themselves?

WALLACE: Well, Maria, I heard someone say you're sort of damned if you do and damned if you don't on this one. And that's sort of what some campaign advisers feel.

You do feel from some Democrats within the party -- they want to see John Kerry getting out there more on issues such as Iraq, on the prisoner-abuse scandal. They think that this is a vulnerability for president bush.

At the same time, we have -- you have seen Republicans accusing John Kerry of playing politics with this. So there's sort of this -- this sort of delicate dance that he had to kind of push forward. What they will say, Maria, is they believe he is getting a message out, that he is -- this whole week he was talking about health care. And while the national press corps is focusing on the prisoner-abuse story, events in Iraq, Nicholas Berg, if you look at the local press, local newspaper coverage, local television coverage, it's all about John Kerry's visit, John Kerry talking about health care. So they think they are getting that message out to people that matter, the people in these some 17 battleground states.

STARR: And Kelly what about the progress on a vice-presidential candidate? Is there any realistic prospect we're going to see a Kerry/McCain team?

WALLACE: Oh, how we love to talk about this one. It's the cover of the New York Times today. And McCain keeps saying no, no, no. How many other ways can I say no?

But privately, when you talk to some other people, they say if John Kerry asked john McCain and said, Please do this. Will you do it for me? You never know. He could decide this is sort of his only chance to really serve his country in this way and he could step forward. What we're hearing from sources is, don't expect a decision or an announcement this month. John Kerry, who is with another man, who's viewed as a possible contender, Wesley Clark, in Little Rock, was asked, Could Wesley Clark be the man? And John Kerry just said, look, I'll make me decision before the convection. He said, That's my story and I'm sticking to it.

So there's a number of people who are currently being looked at. They're looking into their backgrounds. But no clear sense of if John Kerry has made his mind up just yet.

MALVEAUX: Any word on John Edwards? Is he still in the picture on the short list?

WALLACE: He is still in the picture.

You know, I interviewed someone this week who said, John Kerry's not someone who's quite the crooner on the campaign trail. He doesn't have a lot of music, doesn't have a lot of zest. So if you want someone to help in that regard, North Carolina Senator John Edwards is on the top of the list.

He is certainly out there campaigning heavily for John Kerry. He is viewed as someone who is being looked at, who is definitely being vetted. His background is being looked into.

But this is such a tough one, you guys, because the only people that know, John Kerry's closest advisers, and ultimately it will come down to an idiosyncratic personal feeling -- what does John Kerry want to do at that moment?

HINOJONOSA: Well, probably another person who's got a good sense of that might be his wife, Teresa.

Let's talk a little bit -- I was very interested because two weeks ago, Teresa came out and was speaking Spanish. This is part of Kerry's attempt to reach out to the Latino community. She speaks Spanish phenomenally well. But she's getting out there a little bit more. Also, information of her releasing her tax information, her income information.

What's this -- what's happening with her and her presence in the campaign?

WALLACE: We are seeing her here more, Maria. She's definitely getting out there more, doing more interviews. Sat down with Barbara Walters for "20/20" not too long ago.

And then this issue -- it was becoming somewhat of an issue about releasing -- at least some information her tax return. She has filed an extension so she's not going to actually file her returns until October. But there was a lot of question about, Shouldn't she put this forward? Maybe there's something to hide.

She went ahead and released sort of a summary of her 2003 information. And she said her only concern was sort of separating her assets from those of her sons to protect her -- the privacy of her sons. It was becoming a bit of an issue. It does seem that by releasing this summary information, that has sort of calmed down the controversy. You don't really hear too many Republicans right now saying, Where's -- you know, what's in there and why won't you release the information?

And I -- it seems we're starting to see her more and more out on the trail, doing national interviews. Aides say that will be something we'll see more and more in the weeks ahead.

STARR: Kelly, you were saying a minute ago that John Kerry had been in Arkansas. And I think when he was in Arkansas -- am I right? There was a flash of humor that perhaps we hadn't seen before?

WALLACE: Well, who else can we think of that was from Arkansas? None other than the former President Bill Clinton. So there's John Kerry, running for office, running for president, imitating the former president.

Let's hear it.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Bill Clinton said to me, You gotta listen, you gotta watch those Razorbacks.

(END VIDEO CLIP)

WALLACE: OK, he's hoping for some Clinton magic in Arkansas and elsewhere. But, you know, of course Bill Clinton's book will be coming out, it looks like the end of June. There will be a lot of buzz about that, 900 handwritten pages. Democrats are hoping a lot of attention on this book will rub off on John Kerry.

MALVEAUX: Well, more on the campaign and how President Bush is fighting back in a moment. First, we go to Atlanta for a check on what's making headlines at this hour.

CHOI: I'm Sophia Choi, and here's what's happening that the hour:

The U.S. coalition in Iraq reports skirmishes in Karbala with the militia of radical cleric Muqtada al-Sadr. Coalition spokesman Dan Senor said al-Sadr must face charges in connection with the killing of a rival cleric, and he must disband and disarm his militia.

Diplomacy in Jordan. Secretary of State Powell met today with the Palestinian Prime Minister Ahmed Qorei, to talk about the Mid East peace process. You're looking at low -- live now, speaking. Powell is in Jordan for the World Economic Forum, focusing on reforms in the Arab world.

President bush says it's been a difficult week in Iraq. But in his weekly radio address, the president promised to stay the course and not leave Iraq at the mercy of those he called thugs and murderers. (BEGIN AUDIO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Their barbarism cannot be appeased, and their hatred cannot be satisfied. There is only one way to deal with terror; we must confront the enemy and stay on the offensive until these killers are defeated.

(END AUDIO CLIP)

CHOI: Mr. Bush also said the U.S. presence in Iraq will continue after the transfer of sovereignty on June 30.

And those are the top stories at this hour. I'm Sophia Choi. ON THE STORY returns after a quick break, with a live report from Najaf.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'd rather be out here, you know, with a known enemy, than having some coward trying to blow me up on the side of the road, myself. I mean, you know, these people are fighting me face-to-face, for the most part.

(END VIDEO CLIP)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: That was specialist Michael Perry from 2nd Battalion, 37th Armored Division, talking about a different kind of fighting than they've been used to in Baghdad the past year. This fighting, face-to-face.

I'm Jane Arraf in Najaf. Welcome back to ON THE STORY.

HINOJOSA: Jane, I want to tell -- I want to show -- I want to just to ask you, set the scene for us. The last time I saw you on television, you were wearing a helmet, you had a flack jacket, you had sandbags behind you.

What's the story, and how are you feeling right now seeing this kind of combat for yourself?

ARRAF: It's kind of a really interesting rollercoaster ride here. We're on this base, you can probably see behind me the sandbags are still.

But it's been quiet the past couple of nights. Now, quiet means that we're not getting mortared. Huge mortar shells landing here. And they make this amazing, loud crash. Now that's been happening on a regular basis. Instead of the mortars, though, the past couple of nights, there's been fighting outside of the city of Najaf, including taking over the police station.

We're still going out with the troops. We're actually embedded here with the 2nd Armored Cavalry Regiment. And we're going out on patrols, on all sorts of things. And they are still encountering clashes pretty well every time they go out. You would have thought it would have died down by now, but it just hasn't.

STARR: Now, Jane, how are the soldiers actually going through the city? Is this really house-to-house, street-to-street fight, and how are they dealing with the holy sites in Najaf?

ARRAF: Very, very carefully. They're going through the city essentially on selected routes, although last night what we saw for the first time was an incursion if you will, of U.S. forces into the cemetery.

Now this is one of the biggest cemeteries in the world, around the Imam Ali Shrine, and it's considered part of the holy site. They were ambushed from there. In fact, U.S. officials say that the Mehdi army is actually keeping weapons in the crypt. So they were ambushed from the cemetery. They went on to the cemetery with Humvees, and then withdrew. But we have seen fighting in some of -- on the edge, essentially, of the holy city.

But other than that, they're very, very careful here. It's a very complicated delicate and explosive situation.

MALVEAUX: Jane, as you know, of course, the two really big stories here in the united states, are the prison abuse scandal, as well as the beheading of that American.

How is that playing where you are?

ARRAF: It's really interesting. We are, as I said, embedded, which means we are essentially living with these soldiers. And it's -- it's a really interesting insight into how people who have been here for this long think of the country they're in and the people they're with.

On one hand, it took a long time for this news to filter through. People here, soldiers here are pretty isolated. This is a forward- operating base, so there isn't a lot of Internet. There's no television, there are no newspapers. And it took a while until soldiers learned about what had happened and the reaction.

And the reaction of most of them is they would never do anything like that, but at the same time, some of them do understand the frustration, the stress, the fear, all sorts of different reactions. But essentially, especially on the more senior level, there's absolute horror that this happened, and absolute dismay that it happened now, because it makes their job here, trying to convince Iraqis, especially in holy cities, that they're not hostile forces, so much more difficult.

WALLACE: Jane, is it affecting their morale as they've learned more and more about the extent of the scandal, how much play it's getting in the United States and around the world? Is it affecting their morale on a day-to-day basis, the American forces?

ARRAF: You know, you probably know, soldiers are pretty, sort of focused, and focused on themselves, really, understandably. We're talking about young men, for the most part, from all sorts of places in the United States. And what they really -- what's affecting their morale essentially is that they're still here. And that they believe -- we have to remember, these are the troops who were in Baghdad, spent a year in Baghdad, felt like what they thought was very good work, cleaned it up, did public projects, had kids waving to them.

And then all of this pops up the Mehdi army. And what they're seeing is Baghdad, in their minds, falling apart again. It's as if, some of them say, that the last year was wasted. Now here, their morale is kept, I think, because they do -- as we heard from that specialist, feel that they have an enemy, somebody who will fight them face-to-face. And you hear a lot of comments like, I'm doing this so my 2-year-old son doesn't have to come back and do it some day.

So their morale is OK, regarding the mission, but they're very, very tired and longing to go home would not be an overstatement.

HINOJOSA: Jane, wondering whether or not you've been able to have any contact at all with the Iraqis to get a sense of their reaction to the beheading of Michael Berg?

And also, just an insight. I mean, Jane, you're out there with the Iraqi people. Most of the time you're talking, now you're embedded. What's going on with you, inside, as you're dealing with these both sides?

ARRAF: Regarding the beheading, we do see Iraqis and talk to them when we're out there in the streets. And most people are horrified.

But at the same time, I think something that we have to remember that we don't remind ourselves often enough, is that there is a vast reservoir of anger in this country and in this region anyway against the United States. And it's sad to say, but that is the truth. And it underpins a lot of things here. So it means there's not necessarily as much sympathy for such horrific acts, as you might expect.

MALVEAUX: Well, Jane, thank you so much, as always. You're doing an excellent job.

Tell us what's ON THE STORY for you in the next couple of days.

ARRAF: Well, we're going to keep going out with the soldiers from the 2nd Armored Cavalry regiment as they either get closer into the holy city here, or as there's some political progress made.

Now, there's a new governor here, a new police chief. The police station keeps coming under attack, mind you. Nothing here is easy. But we're following all of those military and political developments to see what happens in this most important of Shia cities.

MALVEAUX: Well, events in Iraq of course dominated the agenda here in Washington and the White House this week.

I'm back on that story after this.

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

BUSH: Their intention is to shake our will. Their intention is to shake our confidence. We will complete our mission. We will complete our task.

(END VIDEO CLIP)

MALVEAUX: We will complete the task, says President Bush Wednesday, reacting to the pictures of the Nicholas Berg beheading.

Welcome back, we're on that story.

WALLACE: Suzanne, of course, we know this White House says it never focuses on the polls. Yet we know some new numbers have come out. Dramatic slippage for the president when it come to handling Iraq. And this one, handling terrorism, under 50 percent.

How concerned are White House officials behind the scenes?

MALVEAUX: Honestly, White House officials are concerned about these number, because these are not -- these are not good number. Historically, when you look at these numbers and it dips below 50 percent, at this stage of the game, then you're in trouble, essentially.

But they do feel that there is a chance they can turn things around. They're looking at the June 30 deadline, the transfer of power to the Iraqi people, as saying this could be a turning point. It's going to take an international face here. This is something that we are not going to necessarily have responsibility over. Perhaps we'll see those numbers go up.

But very significant here. We are talking about 46 percent approval rating. That is the lowest in his presidency. We are also talking about very interesting numbers when you look at Kerry. There have been polls that now show Kerry at 51 percent, to Bush, you know, hovering somewhere around 40-something. That does not bode well for this administration.

HINOJOSA: So, Suzanne, is there a sense of scrambling in the White House? I mean, you've got Laura Bush out there, who's now on this new Internet campaign. And then you've got Condi Rice and Colin Powell out there doing their public-relations tours.

So are they scrambling and just kind of trying to send these people out and see if that works?

MALVEAUX: Well, there's definitely a strategy. There's a very aggressive strategy taking place here.

I mean, first of all, what you have is that there have been conservative Republicans who have come forward, very publicly -- quietly, they've been complaining to the White House for the last couple of weeks. But now publicly, they're come out and saying, Look, we are still with you here, but things are not working with this administration when it comes to Iraq policy. We need to make some adjustments, some changes. Those are voices that the administration is listening to at this time.

STARR: Now, Suzanne, he -- the president also still is trying to hit the domestic issues on the campaign trail if you will, going out, constantly during every week, talking about education, talking about jobs.

Is he making any headway there?

MALVEAUX: Well, you know, he had three education events this week. He was traveling, and really nobody -- I mean, it got buried for all of the bad news in Iraq. One thing that is happening that you had mentioned before is that Laura Bush, they're now putting her out there more often. There's even -- there's an Internet site, she's on Yahoo! and Shopping Network, Food Network, these kind of things, to attract the female vote, women voters out there.

They are trying to -- they're in a situation here where it's difficult for them, because they're trying to focus -- shift the focus on the domestic agenda. But this is an administration that said, This is a wartime president. Look at his record as commander in chief. When the news is bad, it reflects badly on the administration. So they really are in a very delicate situation here.

They're not giving up. They still think they can turn things around. But a very precarious situation after such a damaging week.

WALLACE: And, Suzanne, how worried are they about John Kerry in the context of -- as he talks more and more about Iraq, the prisoner- abuse scandal? Because I understand -- I think, Karl Rove, one of the president's top political advisers, going out this weekend drumming up or -- you know, increasing the charge that John Kerry's playing politics on Iraq.

How much is that a strategy to put the focus on Kerry and take it away from the president?

MALVEAUX: Well, one thing that they're doing is that they're essentially saying that people are overplaying a lot of what's happening here. They talk about Kerry doing that, they talk about some of the very powerful Democratic senators that were call for Rumsfeld's resignation, saying, you are overreaching here, that this is becoming a political situation.

That is a -- that's an indication here of some concern from the administration that, yes, that could have an impact. What they are seeing, and what they say, however, is that if you look at this week's events, that is the reason why these polls are dipping as they are. They don't believe that Kerry necessarily is the reason why he is losing popularity and approval.

So they feel like they have Kerry in a place where they want him. He's somewhat in a box. But at the same time, they have got to turn things around in Iraq. HINOJOSA: So, Suzanne, you see him every day, up close. Have you noticed any kind of shift, any kind of frustration from the president, just through your eyes?

MALVEAUX: That's a very good question. We get up close sometimes.

There -- I can tell you, over the last month or so, he goes on the road a lot and he's dealing with people. He make a lot of jokes. He's very comfortable with audiences. There have been some occasions where it does seem that he is out of step. That is something that people are looking at, they're watching they're observing. I think, in general, there is a frustration here that people are not paying attention to the domestic agenda, to that message, that so much of it is negative.

The strategy here is, is to emphasize and to say, look, this is the exception, the prison-abuse scandal. We're going to get over this beheading. Things are going to get better. But it has become more difficult for the president.

STARR: Well, looking for a distraction from the front page? What about the sports page? We're ON THE STORY of horse racing and back in a moment.

(COMMERCIAL BREAK)

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

Joining us in Atlanta, sports correspondent Michelle Bonner. And today, one of the big events of the sports year, the Preakness -- the next stop after the Kentucky Derby in the race for the Triple Crown.

Michelle, not all of us are horse racing experts, but tell us about this race and who about Smarty Jones?

MICHELLE BONNER, CNN SPORTS CORRESPONDENT: Well, I'll tell you this is the second leg of the Triple Crown, the 129th running of the Preakness. And Smarty Jones is the 8-5 morning favorite.

Obviously, he's the favorite because he won the Derby. This was an unknown horse two weeks ago that comes in and wins the Derby. And, of course, this is a legitimate chance for a horse to win the first Triple Crown since 1978, since Affirmed did it 26 years ago.

MALVEAUX: So tell us what it's like. I mean, what is the atmosphere? What is the sense of the day?

BONNER: The sense of the day is people would love to see this horse -- and I mentioned that it was a relative unknown.

It's such a great story with a little bit of tragedy mixed in. You know, the owners of this horse, they are a -- separated mother of two, you know, 28 years ago, divorced father of three. They're recovering alcoholics who meet through a common friend at their 12- step program. And then in 1986 I believe -- '84, '86, you know, they buy this farm. They call it Someday Farm. And through a little bit of tragedy, their original trainer and his wife was murdered by the trainer's wife's son over a money dispute. And then they have this horse on February 28, 2001, that they name -- which was a nickname of the owners, Pat Chapman -- the owner, her mother, it was her mother's nickname once. So they name this horse Smarty Jones, who was also born on the same day that Pat Chapman's mother was born on.

This horse nearly dies, they say, in getting into a starting gate last July, bangs his head in the starting gate, kind of throws his head up. And the doctors say that when they arrived at the hospital, you know, part of the tissue from his eye is hanging off, and that they weren't sure if his eye socket was still attached.

So this is such a remarkable story about this particular horse. The owners, a relative unknown trainer and jockey. And here's this horse, who is the first undefeated Derby winner since Seattle Slew back in '77. So it is a great story. People would love to see this horse be the first in 26 years to win the Triple Crown.

WALLACE: And Michelle, that's incredible story, rags to riches, really.

How has life changed for Smarty Jones and all the people around him since the surprise win in the Derby?

BONNER: You know, that's a great question, because the owner -- the trainer, John Servis, yesterday was so surprised to see how many people showed up for, you know, an interview.

I mean, these were relative unknowns. They come from modest -- and you talk about rags to riches -- you know, they were racing on a fairly modest level, compared to some of the big names in this race, like Imperialism. This is a horse that no one ever expected to be doing the things that it is doing right now.

Now some of the downside to this is that it has had so many starts this year that the trainer, John Servis, also didn't -- was contemplating not running this horse. He said that if he saw anything over the last two weeks that could even remotely damage this horse, that he wasn't going to run him in this particular race. If he doesn't win the Preakness, I should say, then they're not going to run him in the Belmont in three weeks.

HINOJOSA: So, Michelle, unlike me, you go to a lot of sports event. So just put it into context.

Do you love horse racing? How does it compare to, like, a basketball game, hockey? I mean, what -- is it, like, fabulous and wonderful and you love it, or is it -- just doesn't compare?

BONNER: Well, you know, it's funny, because it's the fastest two minutes in sports. But when you have these big races, when you have the Derby -- the Kentucky Derby two weeks ago, the Preakness, and then in three weeks, the Belmont Stakes. And when you have the idea of a horse, one horse winning all three races, that's exciting. But horse racing throughout the year, most people will tell you they do not watch your average horse racing on TV.

But I'll tell you what, the numbers for the Derby this year were phenomenal. And people do watch it. It's only, you know, two minutes, but they do tune in for it.

MALVEAUX: Well, Michelle, enjoy the two minutes there, and you'll have to fill us in on how it goes.

BONNER: I will.

MALVEAUX: Thanks a lot, Michelle Bonner. We'll be watching the race with new understanding, thank to her.

And more ON THE STORY coming up.

(BEGIN VIDEOTAPE)

ANNOUNCER: A member of a political dynasty is in the news this week, Sonia Gandhi. What's her story? More when we come back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Sonia Gandhi. What's her story? The Italian-born heir to the Gandhi political dynasty is now set to become prime minister of India. Her India National Congress Party and their allies captured a slim majority of seats in parliament Thursday, forcing the current prime minister to resign.

The victory marks the latest return of the Gandhi family, a political force since the country's independence in 1947. Gandhi is the widow of slain Indian leader Rajeed Gandhi, and daughter-in-law of Indian leader Indira Gandhi, who served for 15 years before her assassination in 1984. India's general election was scheduled over three weeks to accommodate more than 670 million voters.

(END VIDEOTAPE)

STARR: Thanks to my colleagues and thank you for watching ON THE STORY. We'll be next week.

Kelly Wallace will be anchoring "INSIDE POLITICS SUNDAY" right here.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Howard Stern and Alanis Morissettte.

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

And at 1:00 p.m. Eastern, 10 a.m. Pacific, CNN's "IN THE MONEY."

Coming up right now, a check of the top stories.

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Aired May 15, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOPHIA CHOI, CNN ANCHOR: I'm Sophia Choi with what's happening at this hour.
We take you first to Jordan, for the beginning of the World Economic Forum, a three-day conference. King Abdullah is speaking right now. Iraq and Arab relations the priority. Secretary of State Colin Powell is there, too, representing American interests.

Also, today's military debriefing in Baghdad, coalition officials report a relative calm overnight in the battle for Najaf, but officials restated their intention to bring outlaw cleric Muqtada al- Sadr to justice.

Five soldiers from the U.S. 1st Armored Division have died in Iraq. There were killed in separate attacks, one was killed when his vehicle overturned and the fifth soldier was found unconscious, then later died in the hospital.

Evangelist Billy Graham is hospitalized in North Carolina after a fall at his home. The 85-year-old Graham had been recovering at home from a partial hip replacement early this year.

And in Brazil, radio reports say rescue crews have found no survivors from a plane crash in the dense Amazon jungle. The plane went down with 33 people on aboard near the city of Manaus Friday evening.

Those are the top stories this hour. I'm Sophia Choi. ON THE STORY begins right now.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week.

I'm Barbara Starr, ON THE STORY of the prisoner-abuse scandal. More pictures, more courts-martial, and more questions about what happened and why.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace in New York, ON THE STORY of how events in Iraq hit home on the campaign trail for both President Bush and John Kerry.

MARIA HINOJOSA, CNN URBAN AFFAIRS CORRESPONDENT: I'm Maria Hinojosa in New York ON THE STORY of the brutal murder of Nicholas Berg, what happened, what his friends and family have to say. SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And I'm Suzanne Malveaux, ON THE STORY of President Bush pledging the U.S. will complete its mission in Iraq, despite distractions this week.

Also coming up, we'll -- we'll go to Iraq and talk to our Jane Arraf about what's happening in Najaf right now.

We'll talk about how a former president and his book will be a factor in campaign 2004.

And our Michelle Bonner's on today's big sports story, the Preakness, and why it can turn the Kentucky Derby on its head.

E-mail us at onthestory@cnn.com.

Now, straight to Barbara and the prisoner-abuse scandal.

(BEGIN VIDEO CLIP)

SEN. JOHN WARNER ( R), VIRGINIA: In simple words, your own soldier's language, how did this happen?

MAJOR GENERAL ANTONIO TAGUBA, U.S. ARMY: Failure in leadership, sir, from the brigade commander on down, lack of discipline, no training, whatsoever, and no supervision. Supervisory omission was rampant.

(END VIDEO CLIP)

STARR: Major General Antonio Taguba telling Senator John Warner what went wrong at Abu Ghraib prison. That Tuesday hearing was just one installment in this fast-breaking story, including more pictures shown to lawmakers and even a visit to the prison by Defense Secretary Donald Rumsfeld on Thursday.

MALVEAUX: Now Barbara, already there's some fallout from this. I mean, you have -- the rules are now changed when it comes to interrogations.

I saw -- I saw the testimony from Pace, from Wolfowitz and other people. Did the U.S. violate international law and who's responsible? What is happening now?

STARR: Well, there's two categories of things that are being dealt with here.

Clearly, the criminal behavior by the soldiers who are facing the legal military justice system. No one condones that. That is off to the side. That is being pursued as a legal criminal matter.

The question about U.S. interrogation practices, however is perhaps a much deeper issue right now. Congress very questioning, very critical of these interrogation practices, albeit we learned that they were never used, things like sensory deprivation, sleep deprivation, putting prisoners in stress positions. The controversy becoming so great, that yesterday the Pentagon finally said, OK, we're taking all of it on the table -- off the table. Not even -- we're just not going to do it at all. They contend it all would have been within the Geneva Convention. But clearly, an awful lot of people in Congress think not so.

WALLACE: Barbara, take us behind the scenes. Whose idea was it to send Secretary of Defense Donald Rumsfeld to that surprise trip to Baghdad? And did it boost the morale of troops or perhaps boost the morale of the defense secretary?

STARR: Well, probably a bit of both, Kelly.

By all accounts this came up when the president came to the Pentagon on Monday to give that endorsement of Don Rumsfeld. And it was quite a week, because at the beginning of week an awful lot of questions about would he stay, would he go, would his head be chopped off, politically?

By the end of the week, he's in Baghdad, and he's talking about how he is going to essentially stay on the job.

I think we have a sound bite from one of the statements he made in Baghdad where he -- he gave the troops a boost and he gave himself a boost. Let's listen for a minute.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, U.S. SECRETARY OF DEFENSE: I've stopped reading the newspapers.

(APPLAUSE)

RUMSFELD: It's a fact. I'm a survivor.

(END VIDEO CLIP)

STARR: So Don Rumsfeld giving a big hint that, at least, he plans to stay on the job.

HINOJOSA: You know, Barbara, one of the things that's interesting is I read someplace that the soldiers were saying, You know, these soldiers are working 18 hours a day. They're exhausted. They're in horrible conditions. There's that element.

And the other thing, Barbara, front page of The New York Post, huge headline, "Sex Scandal in this Prison." I mean it goes beyond just the prisoner abuse. What was going on with these troops, that they were having essentially voyeuristic sex going on in the prison? I mean, there's a point where you just say, Oh, my god, it was totally out of control.

STARR: Well, it's very interesting that you say that, Maria, because one of the most unnoticed statements this was by General Richard Myers, the chairman of the Joint Chiefs. He said this reflected, indeed, a breakdown of military discipline -- that this military police unit had a pretty appalling record. It's going to sound very nitpicky, but he gave some examples: that they weren't wearing uniforms properly, that they were carrying weapons when they were in civilian clothes. And he said even that they weren't particularly interested in saluting.

Now, to all of us in the civilian world, maybe that doesn't sound like a big deal. But in the military, when you are in a combat environment, there are very strict rules about how you conduct yourself, and this was some real indication of a breakdown in discipline in a military unit. And a lot of questions about how does that happen in the U.S. military, in the year 2004? It's not supposed to happen.

MALVEAUX: But, Barbara, what about policy? I mean, beyond, kind of, this particular regiment, this troop here? I mean, it seems to me as if you had questions about the tone that was set, because there was some discussion, at least in Iraq, it was under the Geneva Conventions, whereas in Guantanamo Bay, those prisoners, it was consistent with the Geneva Conventions.

What is the distinction in terms of how are these prisoners treated? What is considered acceptable to the administration?

STARR: Well there really shouldn't be a distinction by all legal accounts.

Now, in Guantanamo Bay, these are people who have been detained on a battlefield in an undeclared war who are not fighting on behalf of a declared power or state, people who don't wear uniforms.

MALVEAUX: Right.

STARR: So the decision was very early on, apply the Geneva Convention, but they don't fall under it per se because they are not technically prisoners of war.

In Iraq, quite a different situation. A declared combat situation, now a declared military occupation. But, clearly, a lot of questions emerging on Capitol Hill from human-rights organizations, from the international committee of the Red Cross, Amnesty International about whether the situation at Guantanamo Bay were perhaps a little looser, and, of course, al-Qaeda detainees being detained in Afghanistan and at those undisclosed locations around the world. Nobody really knows what's happening to them. Did that lay a climate?

MALVEAUX: Can we expect to see changes there, in Cuba?

STARR: No one really knows yet. And you're certainly -- we're never going to hear about whether there's going to be changes in interrogation practices for the people that the CIA and the intelligence committee is holding at undisclosed locations around the world. A lot of this still exists in that very black world of secrecy.

Unclear, for example, whether anything would have changed at Abu Ghraib if the photographs hadn't come out.

HINOJOSA: Exactly. Well, speaking about photograph, perhaps the most disturbing were the pictures of Nicholas Berg moments before he was about to be beheaded. I'm on that story when we come back.

(BEGIN VIDEOTAPE)

ANNOUNCER: ....is CNN urban affairs correspondent. She won a Robert F. Kennedy Award and was twice named by Hispanic Business magazine as one of the most influential Latinos in the country. She's written two books.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHAEL BERG, NICHOLAS BERG'S FATHER: The al Qaeda that killed my son didn't know what they were doing. They killed their best friend. Nick was there to build Iraq, not to tear it down. He was there to help people, not to -- not to hurt anyone.

(END VIDEO CLIP)

HINOJOSA: The father of Nicholas Berg, Michael Berg, speaking out about the brutal, public execution of his son, his anger and his pain.

Welcome back. We're ON THE STORY.

STARR: Now, Maria, there's been constant controversy this week. Was Nicholas Berg ever in U.S. custody? Yes or no? What's the real answer here?

HINOJOSA: Look, if you believe the family and all of the information that they have, and if you believe the words that Nicholas Berg was telling the friends that he saw when he was in Iraq, he was in U.S. custody. And even CNN has spoken to the Mosul police chief, that says, We took him into custody, we held him for a couple hours, we handed him over to the U.S. military. The U.S. government insisting, still, up until yesterday, he was never in U.S. custody. You've also got a U.S. consular official sending an e-mail to the family saying, the U.S. military has your son in custody.

So I think this is a point that the family is going to continue to push, and the U.S. government is obviously going to try to stay on message on this. But it looks like he was in U.S. custody.

MALVEAUX: Maria, what was it like to be there? I know you've been talking with family and with friends. And one of the questions I have, too is, how do they see the media's role in all this? I mean, their son's beheaded, everyone gets a chance to see that, and then you've got trucks that are camped outside their house.

What is going on there? What is it like? HINOJOSA: You know what? It was such a difficult story, Suzanne. You have a family that, they find out that their son has been murdered. And then, Tuesday morning, they find out that it's out there in the public. His father falls down in the front lawn. There are pictures of that. And then, 55 live trucks come and park in the middle of a suburban community, and essentially take over. This is a family in tremendous amount of trauma. And added to that, all of the questions from the media. It was a very, very painful situation for everyone to be in.

But personally, I mean, for this particular family, it's like they wanted to talk, but there was conflicts internally. We know that the father wanted to say things, but he says my wife doesn't want me to talk. They told the neighbors not to talk. So a really, really difficult situation.

Just, you know, personally as a reporter, extremely painful, just because we're there, we want the story, and yet you don't really want to bother this family, you want to give them their privacy, and yet it's an international story.

WALLACE: Maria, impossible to comprehend what that family is going through. It's interesting, as you were talking, we saw the father, Michael Berg. He put out a sign on his lawn that said, "War is not the answer." In his comments, he's fiercely against this war in Iraq.

I'm wondering, did his son Nicholas share some of those same feelings about the war?

HINOJOSA: Not at all, and that's what makes this story so fascinating. Because you've got a father and son -- you've got an American family, essentially, divided over politics, which is nothing unusual. It's just that this particular young man decide to take it to the next level. He wanted to go and help President Bush, essentially, in what he believed was the rebuilding of Iraq. Father and mother didn't want him to go. He believed in this strongly, and he went.

But the father, his pain -- I mean, to come out and say what he said, "My son died for the sins of President Bush and Donald Rumsfeld," is huge. A lot of people saying, Well, he's just in a moment of pain. This is not a father who is just in a moment of pain. This is a father that sued the U.S. government, sued Donald Rumsfeld, once he had found out that his son, as he believes, was in U.S. custody, sued them in federal court on April 5. And, on April 6, Nicholas Berg was released in Iraq.

STARR: And Maria, there was another sort of bizarre twist with this terrorist connection, years ago in Oklahoma.

HINOJOSA: Right. It is. It doesn't get any stranger.

Nick Berg went to school in Oklahoma for about a semester or two, used to travel to this off-site campus. On one of those trips from the campus to an off-site campus, there was a guy sitting next to him -- this is all according to his father and according to the FBI -- basically, they cleared Nick Berg.

Anyway, he's sitting next to this guy and gives him his computer and his password. Password ends up in the hands of Moussaoui. It's kind of consistent with Nick Berg being entirely naive, just thinking the best of people. What kind of a person gives their password to a stranger? What kind of a person goes to Iraq at this moment and basically walks around without any kind of protection, without a guide, without a translator? One of his friends said, Oh, Nick walked around Baghdad as if he was in Washington, D.C. He was a kid, as his friends and family say, who really wanted to see the best in everybody. But perhaps it was just totally blinding for him.

MALVEAUX: Maria, do you think this has become political in some ways? Because I had heard that Senator Kerry spoke with the father of Berg. We know that Bush has at least publicly expressed condolences.

Is there a sense that there are players here who are using this tragic death for their own gain?

HINOJOSA: I don't know if you can go so far as to say that. I mean, Kerry -- there was some confusion there, whether or not he made the initial attempt to speak to Mike Berg or if Michael Berg made the attempt to call him. There is some confusion there.

President Bush has not called the Berg family to say -- to make a phone call and offer condolences. He did that publicly. This is a family -- or certainly a father who is very much against President Bush. So I suppose it wouldn't be expected that he would pick up the phone and call.

I don't get the feeling just now that there are the political players trying to use this. But will the death of Nick Berg become part of the overall discussion in terms of what's happening in terms of this war? Absolutely.

WALLACE: And, Maria, we saw that this week, really, some discussion on the campaign trail of this tragedy, involving Nicholas Berg as well as the ongoing Iraqi prisoner-abuse scandal. I am on that story when we come back.

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

WALLACE: ...saying on your last point, Suzanne, still a bit of confusion, because John Kerry was in Arkansas, he was talking in an interview to a Little Rock reporter and he volunteered the information that he had spoken to Michael Berg in conveying his outrage about what happened to his son.

Later, the national press corps was following up and asking John Kerry about that. He said, No, no, no, it's private, I'm not going to talk about it. A reporter said, But you just talked about it in an interview. He said, No, it's private.

And later, a spokesman saying -- a spokesman for John Kerry saying, It is private, but indicating he thought that Michael Berg or the family reached out to John Kerry. So we don't really know the answer there.

What we do know is John Kerry is sort of maneuvering through somewhat of a dilemma. How much does he react? How much does he talk about events in Iraq, and how much might that take him away from his own domestic message? Aides say, Look, they're going to take it on a case-by-case basis, react where and when it's appropriate. But they don't want to get into this sort of day-to-day commentary about events overseas. They want to sort of stick to their agenda and help -- have the senator define his own agenda, not outside events.

HINOJOSA: Except, Kerry (sic), the fact is, is that because of -- because of the fact that he's not talking about it, then it becomes an issue. It's kind of like, Make a decision, do something. It seems like people are still feeling like he's not on message.

And what is that message? I mean, do you get that sense within the Kerry campaign that they're just kind of flustered about it, or do you think that they're very clear that they're just not going to get -- insert themselves?

WALLACE: Well, Maria, I heard someone say you're sort of damned if you do and damned if you don't on this one. And that's sort of what some campaign advisers feel.

You do feel from some Democrats within the party -- they want to see John Kerry getting out there more on issues such as Iraq, on the prisoner-abuse scandal. They think that this is a vulnerability for president bush.

At the same time, we have -- you have seen Republicans accusing John Kerry of playing politics with this. So there's sort of this -- this sort of delicate dance that he had to kind of push forward. What they will say, Maria, is they believe he is getting a message out, that he is -- this whole week he was talking about health care. And while the national press corps is focusing on the prisoner-abuse story, events in Iraq, Nicholas Berg, if you look at the local press, local newspaper coverage, local television coverage, it's all about John Kerry's visit, John Kerry talking about health care. So they think they are getting that message out to people that matter, the people in these some 17 battleground states.

STARR: And Kelly what about the progress on a vice-presidential candidate? Is there any realistic prospect we're going to see a Kerry/McCain team?

WALLACE: Oh, how we love to talk about this one. It's the cover of the New York Times today. And McCain keeps saying no, no, no. How many other ways can I say no?

But privately, when you talk to some other people, they say if John Kerry asked john McCain and said, Please do this. Will you do it for me? You never know. He could decide this is sort of his only chance to really serve his country in this way and he could step forward. What we're hearing from sources is, don't expect a decision or an announcement this month. John Kerry, who is with another man, who's viewed as a possible contender, Wesley Clark, in Little Rock, was asked, Could Wesley Clark be the man? And John Kerry just said, look, I'll make me decision before the convection. He said, That's my story and I'm sticking to it.

So there's a number of people who are currently being looked at. They're looking into their backgrounds. But no clear sense of if John Kerry has made his mind up just yet.

MALVEAUX: Any word on John Edwards? Is he still in the picture on the short list?

WALLACE: He is still in the picture.

You know, I interviewed someone this week who said, John Kerry's not someone who's quite the crooner on the campaign trail. He doesn't have a lot of music, doesn't have a lot of zest. So if you want someone to help in that regard, North Carolina Senator John Edwards is on the top of the list.

He is certainly out there campaigning heavily for John Kerry. He is viewed as someone who is being looked at, who is definitely being vetted. His background is being looked into.

But this is such a tough one, you guys, because the only people that know, John Kerry's closest advisers, and ultimately it will come down to an idiosyncratic personal feeling -- what does John Kerry want to do at that moment?

HINOJONOSA: Well, probably another person who's got a good sense of that might be his wife, Teresa.

Let's talk a little bit -- I was very interested because two weeks ago, Teresa came out and was speaking Spanish. This is part of Kerry's attempt to reach out to the Latino community. She speaks Spanish phenomenally well. But she's getting out there a little bit more. Also, information of her releasing her tax information, her income information.

What's this -- what's happening with her and her presence in the campaign?

WALLACE: We are seeing her here more, Maria. She's definitely getting out there more, doing more interviews. Sat down with Barbara Walters for "20/20" not too long ago.

And then this issue -- it was becoming somewhat of an issue about releasing -- at least some information her tax return. She has filed an extension so she's not going to actually file her returns until October. But there was a lot of question about, Shouldn't she put this forward? Maybe there's something to hide.

She went ahead and released sort of a summary of her 2003 information. And she said her only concern was sort of separating her assets from those of her sons to protect her -- the privacy of her sons. It was becoming a bit of an issue. It does seem that by releasing this summary information, that has sort of calmed down the controversy. You don't really hear too many Republicans right now saying, Where's -- you know, what's in there and why won't you release the information?

And I -- it seems we're starting to see her more and more out on the trail, doing national interviews. Aides say that will be something we'll see more and more in the weeks ahead.

STARR: Kelly, you were saying a minute ago that John Kerry had been in Arkansas. And I think when he was in Arkansas -- am I right? There was a flash of humor that perhaps we hadn't seen before?

WALLACE: Well, who else can we think of that was from Arkansas? None other than the former President Bill Clinton. So there's John Kerry, running for office, running for president, imitating the former president.

Let's hear it.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Bill Clinton said to me, You gotta listen, you gotta watch those Razorbacks.

(END VIDEO CLIP)

WALLACE: OK, he's hoping for some Clinton magic in Arkansas and elsewhere. But, you know, of course Bill Clinton's book will be coming out, it looks like the end of June. There will be a lot of buzz about that, 900 handwritten pages. Democrats are hoping a lot of attention on this book will rub off on John Kerry.

MALVEAUX: Well, more on the campaign and how President Bush is fighting back in a moment. First, we go to Atlanta for a check on what's making headlines at this hour.

CHOI: I'm Sophia Choi, and here's what's happening that the hour:

The U.S. coalition in Iraq reports skirmishes in Karbala with the militia of radical cleric Muqtada al-Sadr. Coalition spokesman Dan Senor said al-Sadr must face charges in connection with the killing of a rival cleric, and he must disband and disarm his militia.

Diplomacy in Jordan. Secretary of State Powell met today with the Palestinian Prime Minister Ahmed Qorei, to talk about the Mid East peace process. You're looking at low -- live now, speaking. Powell is in Jordan for the World Economic Forum, focusing on reforms in the Arab world.

President bush says it's been a difficult week in Iraq. But in his weekly radio address, the president promised to stay the course and not leave Iraq at the mercy of those he called thugs and murderers. (BEGIN AUDIO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Their barbarism cannot be appeased, and their hatred cannot be satisfied. There is only one way to deal with terror; we must confront the enemy and stay on the offensive until these killers are defeated.

(END AUDIO CLIP)

CHOI: Mr. Bush also said the U.S. presence in Iraq will continue after the transfer of sovereignty on June 30.

And those are the top stories at this hour. I'm Sophia Choi. ON THE STORY returns after a quick break, with a live report from Najaf.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'd rather be out here, you know, with a known enemy, than having some coward trying to blow me up on the side of the road, myself. I mean, you know, these people are fighting me face-to-face, for the most part.

(END VIDEO CLIP)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: That was specialist Michael Perry from 2nd Battalion, 37th Armored Division, talking about a different kind of fighting than they've been used to in Baghdad the past year. This fighting, face-to-face.

I'm Jane Arraf in Najaf. Welcome back to ON THE STORY.

HINOJOSA: Jane, I want to tell -- I want to show -- I want to just to ask you, set the scene for us. The last time I saw you on television, you were wearing a helmet, you had a flack jacket, you had sandbags behind you.

What's the story, and how are you feeling right now seeing this kind of combat for yourself?

ARRAF: It's kind of a really interesting rollercoaster ride here. We're on this base, you can probably see behind me the sandbags are still.

But it's been quiet the past couple of nights. Now, quiet means that we're not getting mortared. Huge mortar shells landing here. And they make this amazing, loud crash. Now that's been happening on a regular basis. Instead of the mortars, though, the past couple of nights, there's been fighting outside of the city of Najaf, including taking over the police station.

We're still going out with the troops. We're actually embedded here with the 2nd Armored Cavalry Regiment. And we're going out on patrols, on all sorts of things. And they are still encountering clashes pretty well every time they go out. You would have thought it would have died down by now, but it just hasn't.

STARR: Now, Jane, how are the soldiers actually going through the city? Is this really house-to-house, street-to-street fight, and how are they dealing with the holy sites in Najaf?

ARRAF: Very, very carefully. They're going through the city essentially on selected routes, although last night what we saw for the first time was an incursion if you will, of U.S. forces into the cemetery.

Now this is one of the biggest cemeteries in the world, around the Imam Ali Shrine, and it's considered part of the holy site. They were ambushed from there. In fact, U.S. officials say that the Mehdi army is actually keeping weapons in the crypt. So they were ambushed from the cemetery. They went on to the cemetery with Humvees, and then withdrew. But we have seen fighting in some of -- on the edge, essentially, of the holy city.

But other than that, they're very, very careful here. It's a very complicated delicate and explosive situation.

MALVEAUX: Jane, as you know, of course, the two really big stories here in the united states, are the prison abuse scandal, as well as the beheading of that American.

How is that playing where you are?

ARRAF: It's really interesting. We are, as I said, embedded, which means we are essentially living with these soldiers. And it's -- it's a really interesting insight into how people who have been here for this long think of the country they're in and the people they're with.

On one hand, it took a long time for this news to filter through. People here, soldiers here are pretty isolated. This is a forward- operating base, so there isn't a lot of Internet. There's no television, there are no newspapers. And it took a while until soldiers learned about what had happened and the reaction.

And the reaction of most of them is they would never do anything like that, but at the same time, some of them do understand the frustration, the stress, the fear, all sorts of different reactions. But essentially, especially on the more senior level, there's absolute horror that this happened, and absolute dismay that it happened now, because it makes their job here, trying to convince Iraqis, especially in holy cities, that they're not hostile forces, so much more difficult.

WALLACE: Jane, is it affecting their morale as they've learned more and more about the extent of the scandal, how much play it's getting in the United States and around the world? Is it affecting their morale on a day-to-day basis, the American forces?

ARRAF: You know, you probably know, soldiers are pretty, sort of focused, and focused on themselves, really, understandably. We're talking about young men, for the most part, from all sorts of places in the United States. And what they really -- what's affecting their morale essentially is that they're still here. And that they believe -- we have to remember, these are the troops who were in Baghdad, spent a year in Baghdad, felt like what they thought was very good work, cleaned it up, did public projects, had kids waving to them.

And then all of this pops up the Mehdi army. And what they're seeing is Baghdad, in their minds, falling apart again. It's as if, some of them say, that the last year was wasted. Now here, their morale is kept, I think, because they do -- as we heard from that specialist, feel that they have an enemy, somebody who will fight them face-to-face. And you hear a lot of comments like, I'm doing this so my 2-year-old son doesn't have to come back and do it some day.

So their morale is OK, regarding the mission, but they're very, very tired and longing to go home would not be an overstatement.

HINOJOSA: Jane, wondering whether or not you've been able to have any contact at all with the Iraqis to get a sense of their reaction to the beheading of Michael Berg?

And also, just an insight. I mean, Jane, you're out there with the Iraqi people. Most of the time you're talking, now you're embedded. What's going on with you, inside, as you're dealing with these both sides?

ARRAF: Regarding the beheading, we do see Iraqis and talk to them when we're out there in the streets. And most people are horrified.

But at the same time, I think something that we have to remember that we don't remind ourselves often enough, is that there is a vast reservoir of anger in this country and in this region anyway against the United States. And it's sad to say, but that is the truth. And it underpins a lot of things here. So it means there's not necessarily as much sympathy for such horrific acts, as you might expect.

MALVEAUX: Well, Jane, thank you so much, as always. You're doing an excellent job.

Tell us what's ON THE STORY for you in the next couple of days.

ARRAF: Well, we're going to keep going out with the soldiers from the 2nd Armored Cavalry regiment as they either get closer into the holy city here, or as there's some political progress made.

Now, there's a new governor here, a new police chief. The police station keeps coming under attack, mind you. Nothing here is easy. But we're following all of those military and political developments to see what happens in this most important of Shia cities.

MALVEAUX: Well, events in Iraq of course dominated the agenda here in Washington and the White House this week.

I'm back on that story after this.

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

BUSH: Their intention is to shake our will. Their intention is to shake our confidence. We will complete our mission. We will complete our task.

(END VIDEO CLIP)

MALVEAUX: We will complete the task, says President Bush Wednesday, reacting to the pictures of the Nicholas Berg beheading.

Welcome back, we're on that story.

WALLACE: Suzanne, of course, we know this White House says it never focuses on the polls. Yet we know some new numbers have come out. Dramatic slippage for the president when it come to handling Iraq. And this one, handling terrorism, under 50 percent.

How concerned are White House officials behind the scenes?

MALVEAUX: Honestly, White House officials are concerned about these number, because these are not -- these are not good number. Historically, when you look at these numbers and it dips below 50 percent, at this stage of the game, then you're in trouble, essentially.

But they do feel that there is a chance they can turn things around. They're looking at the June 30 deadline, the transfer of power to the Iraqi people, as saying this could be a turning point. It's going to take an international face here. This is something that we are not going to necessarily have responsibility over. Perhaps we'll see those numbers go up.

But very significant here. We are talking about 46 percent approval rating. That is the lowest in his presidency. We are also talking about very interesting numbers when you look at Kerry. There have been polls that now show Kerry at 51 percent, to Bush, you know, hovering somewhere around 40-something. That does not bode well for this administration.

HINOJOSA: So, Suzanne, is there a sense of scrambling in the White House? I mean, you've got Laura Bush out there, who's now on this new Internet campaign. And then you've got Condi Rice and Colin Powell out there doing their public-relations tours.

So are they scrambling and just kind of trying to send these people out and see if that works?

MALVEAUX: Well, there's definitely a strategy. There's a very aggressive strategy taking place here.

I mean, first of all, what you have is that there have been conservative Republicans who have come forward, very publicly -- quietly, they've been complaining to the White House for the last couple of weeks. But now publicly, they're come out and saying, Look, we are still with you here, but things are not working with this administration when it comes to Iraq policy. We need to make some adjustments, some changes. Those are voices that the administration is listening to at this time.

STARR: Now, Suzanne, he -- the president also still is trying to hit the domestic issues on the campaign trail if you will, going out, constantly during every week, talking about education, talking about jobs.

Is he making any headway there?

MALVEAUX: Well, you know, he had three education events this week. He was traveling, and really nobody -- I mean, it got buried for all of the bad news in Iraq. One thing that is happening that you had mentioned before is that Laura Bush, they're now putting her out there more often. There's even -- there's an Internet site, she's on Yahoo! and Shopping Network, Food Network, these kind of things, to attract the female vote, women voters out there.

They are trying to -- they're in a situation here where it's difficult for them, because they're trying to focus -- shift the focus on the domestic agenda. But this is an administration that said, This is a wartime president. Look at his record as commander in chief. When the news is bad, it reflects badly on the administration. So they really are in a very delicate situation here.

They're not giving up. They still think they can turn things around. But a very precarious situation after such a damaging week.

WALLACE: And, Suzanne, how worried are they about John Kerry in the context of -- as he talks more and more about Iraq, the prisoner- abuse scandal? Because I understand -- I think, Karl Rove, one of the president's top political advisers, going out this weekend drumming up or -- you know, increasing the charge that John Kerry's playing politics on Iraq.

How much is that a strategy to put the focus on Kerry and take it away from the president?

MALVEAUX: Well, one thing that they're doing is that they're essentially saying that people are overplaying a lot of what's happening here. They talk about Kerry doing that, they talk about some of the very powerful Democratic senators that were call for Rumsfeld's resignation, saying, you are overreaching here, that this is becoming a political situation.

That is a -- that's an indication here of some concern from the administration that, yes, that could have an impact. What they are seeing, and what they say, however, is that if you look at this week's events, that is the reason why these polls are dipping as they are. They don't believe that Kerry necessarily is the reason why he is losing popularity and approval.

So they feel like they have Kerry in a place where they want him. He's somewhat in a box. But at the same time, they have got to turn things around in Iraq. HINOJOSA: So, Suzanne, you see him every day, up close. Have you noticed any kind of shift, any kind of frustration from the president, just through your eyes?

MALVEAUX: That's a very good question. We get up close sometimes.

There -- I can tell you, over the last month or so, he goes on the road a lot and he's dealing with people. He make a lot of jokes. He's very comfortable with audiences. There have been some occasions where it does seem that he is out of step. That is something that people are looking at, they're watching they're observing. I think, in general, there is a frustration here that people are not paying attention to the domestic agenda, to that message, that so much of it is negative.

The strategy here is, is to emphasize and to say, look, this is the exception, the prison-abuse scandal. We're going to get over this beheading. Things are going to get better. But it has become more difficult for the president.

STARR: Well, looking for a distraction from the front page? What about the sports page? We're ON THE STORY of horse racing and back in a moment.

(COMMERCIAL BREAK)

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

Joining us in Atlanta, sports correspondent Michelle Bonner. And today, one of the big events of the sports year, the Preakness -- the next stop after the Kentucky Derby in the race for the Triple Crown.

Michelle, not all of us are horse racing experts, but tell us about this race and who about Smarty Jones?

MICHELLE BONNER, CNN SPORTS CORRESPONDENT: Well, I'll tell you this is the second leg of the Triple Crown, the 129th running of the Preakness. And Smarty Jones is the 8-5 morning favorite.

Obviously, he's the favorite because he won the Derby. This was an unknown horse two weeks ago that comes in and wins the Derby. And, of course, this is a legitimate chance for a horse to win the first Triple Crown since 1978, since Affirmed did it 26 years ago.

MALVEAUX: So tell us what it's like. I mean, what is the atmosphere? What is the sense of the day?

BONNER: The sense of the day is people would love to see this horse -- and I mentioned that it was a relative unknown.

It's such a great story with a little bit of tragedy mixed in. You know, the owners of this horse, they are a -- separated mother of two, you know, 28 years ago, divorced father of three. They're recovering alcoholics who meet through a common friend at their 12- step program. And then in 1986 I believe -- '84, '86, you know, they buy this farm. They call it Someday Farm. And through a little bit of tragedy, their original trainer and his wife was murdered by the trainer's wife's son over a money dispute. And then they have this horse on February 28, 2001, that they name -- which was a nickname of the owners, Pat Chapman -- the owner, her mother, it was her mother's nickname once. So they name this horse Smarty Jones, who was also born on the same day that Pat Chapman's mother was born on.

This horse nearly dies, they say, in getting into a starting gate last July, bangs his head in the starting gate, kind of throws his head up. And the doctors say that when they arrived at the hospital, you know, part of the tissue from his eye is hanging off, and that they weren't sure if his eye socket was still attached.

So this is such a remarkable story about this particular horse. The owners, a relative unknown trainer and jockey. And here's this horse, who is the first undefeated Derby winner since Seattle Slew back in '77. So it is a great story. People would love to see this horse be the first in 26 years to win the Triple Crown.

WALLACE: And Michelle, that's incredible story, rags to riches, really.

How has life changed for Smarty Jones and all the people around him since the surprise win in the Derby?

BONNER: You know, that's a great question, because the owner -- the trainer, John Servis, yesterday was so surprised to see how many people showed up for, you know, an interview.

I mean, these were relative unknowns. They come from modest -- and you talk about rags to riches -- you know, they were racing on a fairly modest level, compared to some of the big names in this race, like Imperialism. This is a horse that no one ever expected to be doing the things that it is doing right now.

Now some of the downside to this is that it has had so many starts this year that the trainer, John Servis, also didn't -- was contemplating not running this horse. He said that if he saw anything over the last two weeks that could even remotely damage this horse, that he wasn't going to run him in this particular race. If he doesn't win the Preakness, I should say, then they're not going to run him in the Belmont in three weeks.

HINOJOSA: So, Michelle, unlike me, you go to a lot of sports event. So just put it into context.

Do you love horse racing? How does it compare to, like, a basketball game, hockey? I mean, what -- is it, like, fabulous and wonderful and you love it, or is it -- just doesn't compare?

BONNER: Well, you know, it's funny, because it's the fastest two minutes in sports. But when you have these big races, when you have the Derby -- the Kentucky Derby two weeks ago, the Preakness, and then in three weeks, the Belmont Stakes. And when you have the idea of a horse, one horse winning all three races, that's exciting. But horse racing throughout the year, most people will tell you they do not watch your average horse racing on TV.

But I'll tell you what, the numbers for the Derby this year were phenomenal. And people do watch it. It's only, you know, two minutes, but they do tune in for it.

MALVEAUX: Well, Michelle, enjoy the two minutes there, and you'll have to fill us in on how it goes.

BONNER: I will.

MALVEAUX: Thanks a lot, Michelle Bonner. We'll be watching the race with new understanding, thank to her.

And more ON THE STORY coming up.

(BEGIN VIDEOTAPE)

ANNOUNCER: A member of a political dynasty is in the news this week, Sonia Gandhi. What's her story? More when we come back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Sonia Gandhi. What's her story? The Italian-born heir to the Gandhi political dynasty is now set to become prime minister of India. Her India National Congress Party and their allies captured a slim majority of seats in parliament Thursday, forcing the current prime minister to resign.

The victory marks the latest return of the Gandhi family, a political force since the country's independence in 1947. Gandhi is the widow of slain Indian leader Rajeed Gandhi, and daughter-in-law of Indian leader Indira Gandhi, who served for 15 years before her assassination in 1984. India's general election was scheduled over three weeks to accommodate more than 670 million voters.

(END VIDEOTAPE)

STARR: Thanks to my colleagues and thank you for watching ON THE STORY. We'll be next week.

Kelly Wallace will be anchoring "INSIDE POLITICS SUNDAY" right here.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Howard Stern and Alanis Morissettte.

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

And at 1:00 p.m. Eastern, 10 a.m. Pacific, CNN's "IN THE MONEY."

Coming up right now, a check of the top stories.

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