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On the Story

New Record Oil Prices, More New Jobs Give Mixed Economic Signals; Peterson Trial Starts in Calif

Aired June 05, 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.


BETTY NGUYEN, CNN ANCHOR: I'm Betty Nguyen at CNN Center in Atlanta. Here's a look at the headlines.
The health of former President Ronald Reagan. Reagan suffers from Alzheimer's Disease. At 93, he has lived longer than any other American president.

After saying his farewells in Rome, President Bush is in Paris, where he meets today with French President Jacques Chirac. Tomorrow, he'll be on the Normandy coast for ceremonies observing the 60th anniversary of D-Day.

Also on the road today, Pope John Paul II arriving in Switzerland. The pope says he'll try to convert new generations, or as he puts it, "men and women of the third millennium." It's the pope's first trip abroad since last September.

An armed man who took his bulldozer on a rampage through Granby, Colorado, has been found dead in the steel-reinforced cab of that vehicle. Police say he committed suicide. The bulldozer destroyed or damaged several downtown buildings in Granby. Police say the driver was angry about a zoning decision.

And those are the top stories at this hour. I'm Betty Nguyen. ON THE STORY starts right now.

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

I'm Kathleen Hays, ON THE STORY of a new record for oil prices and more new jobs.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace in New York ON THE STORY of presidential politics and how to make it through five more months of negative, sometimes misleading ads.

JOSIE BURKE, CNN SPORTS CORRESPONDENT: I'm Josie Burke at Belmont Park ON THE STORY of Smarty Jones, a modest colt trying to win the Triple Crown and just maybe revive the sport of kings.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: I'm Kelli Arena ON THE STORY of spy chief George Tenet picking his own departure time amid questions about bad intelligence before 9/11 and the Iraq war.

We'll talk to a reporter covering the first days of the Scott Peterson murder trial.

We'll go to France, where CNN's Christiane Amanpour sets the scene for ceremonies looking back 60 years to D-Day.

E-mail us at onthestory@cnn.com.

Now straight to Kathleen Hays and the oil outlook.

(BEGIN VIDEO CLIP)

ADEL AL-JUBEIR, SAUIDI FOREIGN POLICY ADVISER: If our customers require more oil, we will produce it. And so there was a subtle understanding among the OPEC members that this was also a possibility. SO we don't believe that there is going to be a shortage of crude oil in the market.

(END VIDEO CLIP)

HAYS: We don't believe there will be a shortage, says the adviser to the Saudi royal family, making the media rounds this week, after OPEC pledged to boost the supplies. Take the car down to the corner gas station, though, and watch those numbers spin. And even if the oil countries do what they say, it can be a long, slow pipeline.

BURKE: Kathleen, we are hearing so many different things from so many different people. Is there any one that we can really trust to know what - to tell us what's going to happen with the oil prices?

HAYS: Well, I'll tell you one thing that I think people in the oil market are pretty sure of is this: that oil prices will be -- we'll be lucky if we see $30 a barrel oil anytime soon.

Now after the announcement by the Saudis that they're going to boost output, UAE's going to jump in. That did help bring some relief to prices. And in fact, we had more information on Friday from the Department of Energy that because we've been importing oil -- everybody's worried about the oil shortage -- inventories rose. So after hitting a record high of $42.45 a barrel last week, oil prices closed lower at about $38.50.

But right now, experts are telling me, traders, that there's about a $10 premium in the price of oil because of worries about terrorists. Now, clearly, targeting oil facilities, oil-producing companies as part of their strategy to hurt some of these key nations like Saudi Arabia, to hurt the global economy.

WALLACE: Kathleen, what about the ripple effects on the economy, from these rising oil prices? Are people traveling less? Are people changing their, you know, vacation plans? What -- is it having a devastating impact on the economy?

HAYS: Well, you know, it isn't. And we're going to get to the jobs numbers in just a minute. Very strong in the month of May.

But -- actually, one of the estimates out there is that right now, this increase in gasoline prices amounts to about $100 billion tax on consumers. Remember, this is a $10 trillion economy though. And it was so funny this week to me in May, vehicle sales were the strongest they have been in five month. And you know what led the sales? Light trucks and SUVs.

So gas prices are up. Americans complain. We've done so many stories about how upset people are. But you offer them juicy incentives, give them the 0 percent financing, and they are still buying the gas guzzlers.

ARENA: That's amazing.

Well, you know, you did mention unemployment, which was - finally some good news on that front. So we're taking the jobless out of jobless recovery.

HAYS: Great news. This is the third month in a row now of a really strong jobs reports. And what's interesting about this, Kelli, is - you know, you covered so many things - you've covered business news for a long time. Remember the late '90s? This is the kind of report we used to get when the economy was really strong -- 248,000 jobs were created last month. Now a total of nearly a million jobs in three months, 1.4 million jobs.

If we keep going at this rate, President Bush could make his goal of 2.6 or 2.7 million jobs this year. So it's clearly good news. High- paid jobs are growing. The unemployment rate held steady. That's one of the negatives, but that's a lagging indicator. It's really hard to find a bad thing in this report, and yet a lot of Americans still feel worried about the economy.

BURKE: Kathleen, where are the new jobs being created? What sectors?

HAYS: Well, one of the more promising ones - and especially politically, Josie - is that they're being created in manufacturing, the fourth month in a row now of manufacturing jobs rising. And then you can see some numbers on the screen now -- construction up, retail, health care.

And it's interesting that jobs are growing in the battleground states, and this is a big deal for the president. But there was a jump in office jobs. The job gains were pretty much across the board. Again, it's really a sign that the economy has picked up some momentum.

You know, quickly, I'd like to mention, the unemployment rate for African-Americans remains at about 10 percent, 9.9. That is double the unemployment rate for the white population. So there are weaknesses. There is huge numbers of long-term unemployed. There's still people who have not jumped on board, even though the tide is turning.

WALLACE: And Kathleen, of course, this might be all good news for President Bush. Maybe not the best news for Democratic candidate John Kerry.

But here's what the Kerry folks are saying. They are saying there's still this middle class squeeze, that middle class people still just feel like they can't make ends meet. Health care costs are up, tuition costs are up.

How much is a sense of a perception, do Americans really feel like things are getting better?

HAYS: Well, you know, there -- there's a weekly poll that all of us in this business, economics world, watch very closely: ABC/Money magazine poll that comes out every Wednesday. And it has fallen back again. And one of the things people cited was higher gas price.

Another poll out in -- for the month of May on consumer confidence. Thirty percent of the people still think jobs are hard to get. These things turn very slowly.

But you can't blame people for being nervous, when they see gas prices up so much, dairy prices are up, tuition costs are up. You know, your co-pay is up, making the health-care costs squeeze. There's definitely a squeeze on the middle class. There was an interesting study out this week from the Urban Institute saying that when it comes time to pay for the Bush tax cuts, unless taxes are raised again, that the burden of the spending cuts are going to fall on middle class people.

So clearly, from the Democratic side, there's still a case to be made. The economy is not working well for everybody. But I think the Republicans are going to argue very forcefully, be patient, because this is turning. And in fact, I interviewed John -- Treasury Secretary John Snow this week on "THE FLIP SIDE" on CNNfn and he said, We won't rest. They are not satisfied because there are still too many people unemployed. But they're clearly, clearly feeling good that things are turning around.

But again, the gas-price story isn't going away and that's going to be something that's going to continue to bug consumers and haunt the White House.

ARENA: And retailers, I think, know that. I mean, the confidence is still low. And we're seeing a lot of rebates. Like, am I getting a new Hummer this week or what? I mean, there were some big rebates there.

HAYS: $10,000 on a Hummer.

ARENA: Hello!

HAYS: Of course, it's a $100,000 car. And that's one places where auto sales were actually down. They were down pretty sharply on the Hummers.

But it's interesting that the car sales are holding up so well because people are getting the incentives. And I think it's - it's - I think when you step back and look, what the oil experts are saying --another interview this week with the editor in chief of National Geographic - they have a big story about how the higher gas - gas and oil prices are making it feasible to bring oil out of the deep waters off the Gulf of Mexico, the tar sands up near Albert, Canada.

But they're - I think people are saying, forget cheap oil. The era of cheap oil is over. It's not that we're going to run out overnight -- but an interesting statistic before we close this. Over the last couple of years, U.S. consumption of oil has increased by about 300,000 barrels a day. You know how much it's increased in China? 1.2 million barrels a day. That's not going away. China, India, these other parts of the world, more demand for oil, limited supply. I think Americans are going to have to face up to the fact that, you know, we either have to allow drilling in places we don't want to, we find more fuel-efficient cars, something.

WALLACE: Well, Kathleen, from gas prices, booming economies to China, and now, moving to the supply and demand this week of news in the Laci Peterson case. We'll be talking to a colleague of ours in California who is covering the trial, and who has also interviewed Scott Peterson, the man charged with the murder of his wife and unborn son.

That's all ahead on ON THE STORY. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LEE PETERSON, SCOTT PETERSON'S FATHER: We're very pleased with our -- our defense team. I don't know how they could be any better.

JACKIE PETERSON, SCOTT PETERSON'S MOTHER: We know the truth is going to come out. That's all that matters.

(END VIDEO CLIP)

ARENA: Scott Peterson's parents, as their son's murder trial began this week in Redwood City, California. Prosecutors claim that Scott killed his wife, Laci. She was eight months pregnant when she disappeared Christmas Eve of 2002.

Gloria Gomez of CNN affiliate KOVR in Sacramento has been covering the case from the very beginning. She's interviewed Scott Peterson, and now she is following the trial.

We want to thank you for joining us. And I have to ask you, how do you think the prosecution measured up this week?

GLORIA GOMEZ, KOVR CORRESPONDENT: Well, actually, they were quite flat this week.

I mean, they did make some points with the jury. They did talk about the motive for the murder. They said that Scott Peterson was a trapped husband who didn't want the baby and didn't want the responsibilities of a child. They also painted Scott Peterson as a lying cheat, someone who obviously did not love his wife. They talked -- and actually played an audiotape of Scott Peterson on the phone with his former girlfriend Amber Frey, and he's talking to her about how much he loves her, how much he misses her during the preparation for his wife's vigil.

So obviously, the jury got that message that maybe he wasn't really involved in his marriage, didn't really want to be in his marriage. That was the point that prosecutors sent this week.

HAYS: Gloria, you know, it seems in the court of public opinion, the jury is already decided that Scott Peterson is guilty it seems. Many people think that this is just a -- again, what the prosecution has painted him as, a man who wanted to get rid of his wife so he murdered her.

But in the courtroom, the jury, what sense do you get so far of how this case is stacking up?

GOMEZ: Well, let me give you the dynamics inside the courtroom.

I can tell you that when the jury walks in, they have a direct view of Scott Peterson. Most of them don't look his way. They look down and then turn around and take their seats. Only two men yesterday, actually Thursday, actually looked at him and kind of smiled at him a little bit and then sat in their seats. That was the only time I really did see direct eye contact between jurors and Scott Peterson.

As far as Scott Peterson, when he walks into the courtroom -- this is before the jury walks in -- he comes in, and walks in with a swagger, with a big smile on his face, very, very confident in the courtroom.

WALLACE: Gloria, give us a sense, though, of the defense lawyer Mark Geragos. Obviously, very talented in the courtroom. And how significant was his opening statement when he talks about the child, Connor, and whether that baby was born -- or when the baby was found after - dead, that's the question.

GOMEZ: Right.

Well, as you know, Mark Geragos is very dynamic in the courtroom. He grabs everyone's attention. He did show the graphic autopsy photos of baby Connor. Of course, the jury was very disturbed in seeing those images.

But he did make an interesting point. He showed the jury those pictures because he wanted to show plastic around the baby's neck and arm. And he says that is part of the murder.

He also said that from the time Laci disappeared to the time the baby was recovered -- he said that baby had grown an extra two weeks. He goes, so that concludes, he said, that that baby was born alive. And he told the jury that he would prove it.

BURKE: Gloria, in terms of pre-trial publicity, this is right up there with O.J. Simpson.

You gave us a great sense of what it is like inside the courtroom. What is it like outside the courtroom? Is it a circus atmosphere?

GOMEZ: Absolutely. I mean, everybody is covering this case. This really captured the national attention from day one and it continues. We have all the national networks there, all the local stations there as well. Everybody covering. Everybody trying to get something from the families who talk.

Obviously, the families sit on each side of the courtroom. They ignore each other. They never talk. Of course, the Petersons have come out and said that they love the way Mark Geragos is doing his job. They said his job is easy because our son is innocent.

And another point I wanted to make about Mark Geragos. He is very dynamic in the courtroom, and tries to keep kind of a loose atmosphere in the courtroom. There was one particular instance on Wednesday when Mark Geragos was actually cross-examining someone from Trader Joes - he was a manager there. And that's a specialty store in Modesto. And at the very end, he said this witness, he says, on a personal note, he goes, do you guys still sell those turkey sticks? He goes, because those were my favorite. And of course everybody laughed in the courtroom.

I looked to see if the jury was laughing. Most of them were not.

ARENA: Hmm.

Gloria, lots of circumstantial evidence here in this case. And you can -- you can, I guess, prove that Scott Peterson may not be a wonderful husband, but that doesn't make somebody a murderer. Does this come down, really, to a few hairs and a pliers found on that boat?

GOMEZ: As far as any sort of forensic evidence, that is the only piece of evidence they have that has anything to do with forensic. It's a strand of hair, looped around a pair of pliers. Prosecutors contend that's Laci Peterson's hair, that he used it as part of the crime when he was actually disposing of her body in the bay.

The prosecution's theory is that Laci Peterson did not know about this boat. She never got in the vote other than when she was being disposed of. So how does a strand of hair get inside that boat? They're going to try to link that and let the jury know that the only way that piece of hair could have gotten on that boat was when Laci Peterson's body was being dumped out into the bay.

HAYS: Gloria, will it part of the evidence that the prosecution brings, that when the famous photos we saw of Scott Peterson with blond hair, with lots of money -- the impression was that he was getting ready to flee the country. The conclusion there, of course, if you're guilty (sic), you don't flee.

Does that enter into the case?

GOMEZ: Well, yes. They're going to say that, in fact, he had $15,000 cash; he had changed his appearance; he had a goatee; he colored his hair. They even interviewed Amy Rocha - they had her on the stand, which is Laci Peterson's little sister on Thursday. And they asked -- because she's a hairstylist, and she actually cut Scott Peterson's hair a lot. And they asked her, did he do that often? Did he ask to change his hair color? Did he - and she says, No, he never dyed his hair. I never dyed his hair. So they're almost showing like a pattern, like this was something he did intentionally to look different.

Now the defense is going to say, wait a minute, he wasn't trying to flee. He was simply trying to hide from the media, because he was under such a media scrutiny and crush that he just wanted to hide from them and that's why he was changing his appearance.

WALLACE: And Gloria, of course, you're only one of a handful of reporters who have actually interviewed Scott Peterson. I know that interview happened some time ago, but describe that for us. Did you sort of learn anything new about this man and the story that he is putting forward?

GOMEZ: Well, it's very interesting, because I had talked to Scott Peterson several times before I actually interviewed him. And when I told him that I was going to break the story, that the Rochas had just found out that he had a girlfriend, he looked at me and said, Well, are you going to talk about Laci in your report? I said, Scott, I'm going to say that you have a girlfriend and Laci's family just found out. Do you want to confirm you have a girlfriend? He said no. I said, Do you want to deny you have a girlfriend? He said, No, all I want to do is find Laci.

Then when I actually sat down with him during my interview with Scott, I asked him, Why didn't you just come clean then with me and tell me that you did have a girlfriend? He told me, Well, Gloria, it was part of a media ploy to keep you guys interested. That's why I refused to tell you the truth at the time.

BURKE: Gloria, thank you very much for your very unique insight and for getting up so early this morning to talk to us. Tell us quickly...

GOMEZ: Pleasure.

BURKE: ...what should we look for next week as this trial continues?

GOMEZ: Actually, they're going to have Amy Rocha back on the stand, that's Laci Peterson's little sister. She will be cross- examined by Mark Geragos.

Expect also to have Sharon Rocha, that's Laci Peterson's mother. And she's going to describe Scott Peterson's suspicious actions and behaviors right after Laci disappeared.

BURKE: Thanks again, Gloria.

GOMEZ: You're welcome.

BURKE: One diversion from trials and oil prices and politics is a great moments in sports history. Will Smarty Jones be the first horse in 26 years to win the Triple Crown? I'm back on that story when we continue in just a moment.

(BEGIN VIDEOTAPE)

ANNOUNCER: Josie Burke is a correspondent for CNN Sports. She joined CNN in 1998. Earlier, she covered the Dallas Cowboys for The Fort Worth Star Telegram. She graduated from Harvard.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN SERVIS, SMART JONES' TRAINER: There's so many twists to the story and it's gotten everybody involved and, nationwide, people have fallen in love with my horse.

(END VIDEO CLIP)

BURKE: Smarty Jones' trainer John Servis summing up pretty accurately how everyone seems to feel about Smarty Jones. They just love this horse. And today, he's going to try to do what most people believe is the most difficult thing in all of sports, and that is win the Triple Crown.

Welcome back to ON THE STORY. I'm Josie Burke at Belmont Park.

HAYS: Well, Josie, I'm one of those people. I love Smarty. I'm so excited about this race. It's so special to have a horse win it, it's so special to have a horse that, outside of the world of racing, wasn't known.

But what's amazing to me now, it's such a tough race to win. It's so hard to be a Triple Crown winner. But the odds so much favor him. I -- what's going on here?

BURKE: Well, it's hard to explain because we've seen this happen a lot in the past couple of years, and no horse has been an overwhelming favorite the way that Smarty Jones is.

A couple of things. Everyone has waited so long. It's been 26 years since a horse last won the Triple Crown. Everyone really wants him to. But people really believe that this horse can win, that he is the best horse, that we might not even have seen his best race yet. And part of that could have to do with the fact that -- you hate to say it, that maybe he is not running against the toughest crop of 3- year-olds, might not be the best year for horses in this class.

ARENA: Josie, also, the weather seems to be working in his favor too, right? I mean, a little wet, a little sloppy? Kind of his thing.

BURKE: Well, this horse can run in anything. Right now, it's not raining. The forecast says it might rain. And he has proven that he's really good on an off track. He won the Arkansas Derby on a muddy track, and then at the Kentucky Derby, when we all spoke last, it was torrential downpour right before the race and that didn't bother him at all.

So rain, shine, everyone still thinks that it would take something of his own doing for this horse to lose.

WALLACE: So no sign, Josie, that he's responding to the pressure at all?

(LAUGHTER)

WALLACE: What about the trainer -- what about the trainers, though, and the people around him, the atmospherics? Because it's really been a circus atmosphere ever since the Derby, right?

BURKE: It really has.

Well, you have the jockey has tried to sequester himself and not talk to anyone too much. John Servis, the trainer on the other hand, has pretty much been out every day talking to the media. And I think it was two days ago he said something like, We all wish the race was right now. We're starting to understand the enormity of the situation.

So the people who can actually express themselves are saying that, Yeah, they're getting pretty nervous. But they don't see the horse succumbing to the pressure.

HAYS: Well, he won the Preakness by - what? - 11 1/2 lengths. So, yes, as you said, he's clearly, clearly the favorite.

You did an interesting piece this week, Josie, talking about what this means to the city of Philadelphia, particularly in light of some of their other sports teams and how they've struggled, and how maybe Smarty can break the curse.

BURKE: Exactly.

Philadelphia is such a great town, because it's a city of straight-shooters. And the one thing with Smarty Jones is, here, they are all hoping he can win, that they'll have something to hang their hat on. It's been more than two decades since they've had any kind of champion. But then, because it's Philadelphia, everyone is sort of going to watch like this, I think, because there's that dread that goes along with the hope that "We never win, we get so close."

Because Philadelphia, it's not like they never have a team that gets close to winning a championship. They always do and then something just happens. I mean, look at the Philadelphia Eagles the past three years in the NFC championship game, can't get to the super bowl.

So this is a very unique bond that has developed between the city and this horse. They're saying, Hey, you know what? If it takes a horse for us to call ourselves champions, we'll take it.

ARENA: Josie, I feel like I'm living through the novel that I read last year, "Seabiscuit." You know, you had so much attention on the sport when that book and movie came out. Now, of course, you've got Smarty Jones.

Have you seen an increase in overall interest in the sport?

BURKE: Well, they're seeing record crowds come out to the track. And we talked about this last year with Funny Cide, when Funny Cide had a chance to maybe win the Triple Crown. This was a horse that everyone thought was the people's horse, and that it was a horse that could bring fans back to racing. And it didn't really happen because Funny Cide didn't win the Triple Crown. And we're hearing the same things over and over again with this horse, Smarty Jones.

It would certainly be a different kind of test case if Smarty Jones won the Triple Crown, because sports -- horse racing in general, they're still getting the money, but it's off track, all of the betting is coming from other places. What they're look to do is get people back to the track, and that's what they're hoping Smarty Jones can accomplish.

WALLACE: And Josie, set the scene for the viewers today. How big of a crowd expected? What will happen today, and when is the race going to begin?

BURKE: Well, 6:38 is post time. So we have a huge build-up. They're expecting a record crowd, which means more than 103,000 people, especially if the weather holds, it could be way beyond that.

And there's a whole day of racing that kicks off at noon. This is the 11th race on a 13-race card.

HAYS: OK. So there's still time to get our bets in, even though the odds aren't so great on Smarty (sic).

Thanks, Josie. We'll be catching up with you at the U.S. Open next.

BURKE: Talk to you then.

HAYS: OK, great.

Coming up, we'll go to France and Christiane Amanpour on the celebrations surrounding the 60th anniversary of the D-Day invasion. Should the Germans have been invited? Can the Atlantic alliance survive Iraq? We're back on that story in a moment.

But first, we go to Atlanta and a check on what's making headlines at this hour.

NGUYEN: Good morning. I'm Betty Nguyen.

Ronald Reagan's health is deteriorating. The former president has been ill for many years with Alzheimer's Disease. Sources close to the situation say his health declined significantly over the past week or so. Mr. Reagan is 93 years old, making him the oldest former president in U.S. history. You'll want to stay with CNN for the very latest on his condition.

President Bush is in Paris right now where he'll meet with French President Jacques Chirac. Tomorrow, he heads to Normandy to observe the 60th anniversary of D-Day. Earlier today, he met with Italy's Prime Minister Silvio Berlusconi in Rome. Mr. Berlusconi has been one of Mr. Bush's strongest allies in the Iraq war.

Pope John Paul II touched down in Switzerland earlier this morning for his first pilgrimage in nine month. The 84-year-old pontiff will attend a youth rally this evening before presiding over Sunday's Mass. Up to a thousand extra police and soldiers are providing security for that visit.

And those are the top stories at this hour. I'm Betty Nguyen. ON THE STORY will be right back after a quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This weekend, I will go to France for the ceremonies marking the 60th anniversary of D-Day at a place where the fate of millions turned on the courage of thousands.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: I'm Christiane Amanpour in Colleville-Surmer in Normandy. This is the American wartime cemetery. There are more than 9,000 American veterans buried here, those who died that first day on D-Day, June 6, 1944, those who died battling for the fight to liberate first Normandy, and then the rest of France, and on through to Europe that ended World War II eventually.

WALLACE: Christiane, set the scene for us. President Bush, of course, coming there, expected to deliver a major speech, talking about D-Day, the strength of the Atlantic alliance at that time.

But a big contrast to now, especially over the war in Iraq.

AMANPOUR: Well, most certainly that is the case.

The Atlantic alliance, its greatest moment, its greatest achievement, its greatest success was considered to have been D-Day 60 years ago, and the unity that was forged then that really, you know, went towards a war of necessity to liberate France. It was the moment the democracies started to fight back against the tyranny that was fascism and nazism on the European continent.

So it was an amazing moment, and it stands throughout forever history as the greatest Atlantic alliance achievement.

By contrast, so many people -- and particularly in France and many parts in Europe -- are saying that today's struggle, the U.S. war in Iraq, is essentially the alliance's greatest failure. Because it was a failure, they say, to forge common goals, to forge a common strategy, to come up with a common post-war plan for Iraq. And so there are -- you know, in some ways, the rhetoric that President Bush chooses does have resonation with 60 years ago. But in many other ways, it's only a superficial comparison, because there's so much about the struggle in Iraq today that's different.

On the other hand, President Bush, President Chirac, some of the other leaders want to go forward. You can hear what's going on above me. It is the rehearsals for the fly-bys that will take place tomorrow, the celebrations, the commemorations of D-Day 60 years ago, and these are some of the airborne rehearsals taking place, that will take place tomorrow before President Bush, President Chirac, German Chancellor Gerhard Schroeder and some 20 other heads of state and heads of government as well as thousands of veterans as well who are coming.

ARENA: Christiane, I can't help but jump a little bit, given as many war zones you've been in, when I hear a plane fly overhead like that.

But getting back to the discussion. Do you think -- I mean, what is your sense? Is there still any good will left among European allies, when they remember just 60 short years ago we were celebrating such a strong alliance? Is there any of that political goodwill? That - just, is that still part of the chemistry and the relationship that currently exists today?

AMANPOUR: Well, if you talk purely about D-Day, and you see what's been happening in Normandy, and the way the French are reacting, the good will, the immense gratitude of the French towards the Americans and the British that liberated them exists and exists very, very strongly.

We were at a ceremony yesterday in (UNINTELLIGIBLE), and - that's not far from here, in which the officials of Normandy and many dignitaries from the French government and local governments were there. And they said, 60 years later we do not forget our liberators. And they spoke very eloquently and from the heart about the bravery, the sacrifice, the respect that they have for what those young men did for them so many years ago. And everybody says, we will never forget what America did for us and thank God that America came into the war.

But then you separate what's happening today in Iraq. And you have to report that 85 percent of the French people strongly disagree with the Iraqi war. The president of France still has sharp differences with the president of the United States over the Iraq war. And those discussions will be held today. Today's June 5, and today's a day reserved for bilateral relations. And they will talk about those issues.

But they'll also talk about how to try to, as much as possible, put that in a place where they can move forward and try to move forward to make Iraq a success. Because basically they know that for the good of the world, Iraq has to be a success, and therefore, the current U.N. resolution, and an attempt to get this new interim Iraqi government working is going to be the substance of their talks today.

HAYS: Christiane, interesting -- a poll out this week found that something like only 50 percent of the people asked could identify who the U.S. fought in World War II. Far fewer even knew what D-Day was.

But clearly, the veterans from the United States who are there now are reliving memories. This is an incredible moment for them.

Have you talked to those people? What do they think about this?

AMANPOUR: Do you mean 50 percent of American people?

HAYS: Yes. Yes.

AMANPOUR: Well, I can tell you 100 percent of European people know what that battle was about. They know. They remember. They know, because they've been taught and it's been ingrained in their memories and in their consciousness.

And even at the ceremony yesterday, there were young people there, and the French official said, This ceremony is not just dedicated as our mark of respect and thanks to those veterans, but it's dedicated to the young. Because they must never forget the sacrifice and they must always respect what was done for them and how they are able to live in liberty today.

It's truly tragic, I think, if 50 percent of the American people polled do not know what D-Day was about.

HAYS: And what about the veterans there you're speaking to?

AMANPOUR: You talk to these veterans, and you are humbled -- humbled -- by talking to these veterans. They are ordinary, many of them ordinary men who call themselves civilians in uniform who refuse to call themselves heroes. They say that they were doing their duty. Those days, you didn't second-guess. You just did your duty. And they say, We're glad we won and we glad we survived.

And they know, though, what they did and what that moment meant. And it's an enormous, enormously emotional experience, I have to tell you, especially for me and for many people who have covered wars, to see these veterans, and to know what they did, and to see those beaches, and to see the cliffs, and to know what they did and the courage it took to storm those beaches and storm up those cliffs and move on and fight an incredible war, and a war that was forced upon them. A war of true necessity.

WALLACE: Well, Christiane, the D-Day anniversary, war and peace, all of that also on the agenda of Democratic presidential candidate John Kerry this week. At the same time, some warnings that senator Kerry could be overplaying his own military background.

I'm back on the campaign story in a moment. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The sitting president of the United States for the first time in the history of any incumbent in America has spent $80 million over eight weeks distorting my record, misleading America.

(END VIDEO CLIP)

WALLACE: John Kerry at a campaign rally in Missouri this week, saying he's getting smeared by President Bush.

Of course, though, get ready. Most of us expect more to come, more negative ads. Not just from the candidates, but from the groups on the sidelines, too.

Welcome back. We are ON THE STORY.

ARENA: Kelly, how are voters responding to these ads? I mean, we've heard so much about people just getting their information from political ads and not really doing their own research.

What are you hearing?

WALLACE: Well, it's interesting, Kelli.

First all, everyone's a little bit to blame. There are some distortions in ads coming from the Bush campaign, from the Kerry campaign, and these independent groups, many of them running anti-Bush ads.

It's very interesting. The Annenberg School at the University of Pennsylvania conducted a survey in the 18 battleground states, and even though most Americans said they don't trust these campaign commercials, what they're hearing seems to impact what they feel about the candidates.

An example: John Kerry was running an ad weeks ago saying that George Bush has said he wants to send jobs overseas. Well, President Bush never said that. His chief economist sort of talked about how outsourcing could be good in some ways for the economy. But when you asked voters, 61 percent said they believed George W. Bush wants to send jobs overseas. So you can see how some of these distortions start impacting voter's own feelings.

AMANPOUR: Kelly, it's Christiane in Colleville here.

You know, you can't help, when you're sitting here, and you see all these crosses and some Stars of David and you see what it meant to have that incredible alliance all these years ago and that lasted pretty much until today. You can't help but know how much the American presidential election is a big part of European politics and of world politics. People overseas are looking to this election very, very closely and paying very, very close attention.

And it's no secret, it's been reported many times before that many, many people are -- you know, there's a high percentage of negative views towards this administration, towards President Bush. And I'm wondering whether that -- is it at all playing in the campaign in the United States, or whether those kinds of issues are simply not part of the campaign.

WALLACE: Christiane, it absolutely is playing in this campaign, in two ways.

First of all, John Kerry himself although he got himself into a little bit of trouble several weeks ago, when he sort of said that he has heard from leaders or heard from people who have talked to leaders, other leaders on the world stage who would like to see a change in the White House. And then the Republicans responded, saying, Look, Americans will elect a president, not the Europeans.

But most -- more recently, you are seeing John Kerry use this issue, Christiane. He is talking about leadership. He is talking about trying to restore in his words America's strength, and alliances with the world. He doesn't have a lot of dramatic differences with President Bush, for example, when it comes to Iraq. He voted for the Iraqi war resolution. He thinks Americans need to stay in Iraq. But what he is trying to say is what he would do differently is get more international troops inside that country, restore America's standing in the world, improve those alliances. And that is something the Kerry campaign thinks could be successful for them.

HAYS: Kelly, is it tougher now for Kerry to attack Bush on the economy? Jobs are picking up pretty soundly. The battleground states even seeing stronger jobs growth.

Can John Kerry win by attacking tax cuts and pushing Medicare reform?

WALLACE: This is a tough one for him, Kathleen, because of course everybody has to be happy, right? When you have more jobs created in this country? And the Democrats had been hoping the economy could be one of their key issues, thinking President Bush's credibility on this issue could be one of their greatest vulnerabilities.

What they're trying to say is job creation is good, but still, there have not been enough jobs created. They're blaming it on President Bush's tax cut for the wealthy, and they're saying that the middle class is still feeling the squeeze. That is something you'll still hear from John Kerry this week, and they are saying he is the one that Americans can trust to restore the economy as well.

Again, if the economy keeps improving, and Americans start feeling things are getting better, it's obviously going to be good news for President Bush, and not very good news for John Kerry.

ARENA: Well, Kelly, one thing that seems to be sliding until after the presidential election is finding a new CIA director, after George Tenet quit this week. I'm back on that story in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: He told me he was resigning for personal reasons. I told him I'm sorry he's leaving. He's done a superb job.

(END VIDEO CLIP) ARENA: President Bush praising CIA Director George Tenet after Tenet resigned this week. And no mention at the White House of the intelligence failures by the CIA and others that preceded the 9/11 terrorist attacks or the war in Iraq.

Welcome back. We're ON THE STORY.

AMANPOUR: So, Kelli, these are obviously huge intelligence failures, that CIA Director George Tenet has taken the hit for. It's obviously made a lot of news in Europe and around the world. And when people say that they're leaving for personal reasons, or to spend more time with their family, many people raise an eyebrow and they want to know what's behind it.

What is the story behind the story of that resignation?

ARENA: Well, you know, the White House and Tenet himself insists that he was not pushed out. That this was, in fact, to spend more time with his wife and teenaged son.

There's lots of speculation, though, that he quit ahead of some pretty scathing reports that are expected out in coming weeks -- one from the Senate Intelligence Committee, one from the 9/11 commission -- that will pretty squarely blame the CIA for some of those intelligence failures. Really be an indictment against the intelligence community as a whole.

And there was the suggestion that he took the fall that he took the hit before that, for this administration, and went on his merry way. But of course, vehement denials all across the board from everyone, even those closest to Tenet, saying that he really was just exhausted, that he had had enough. It was -- he had been on this hamster wheel for a really long time -- second longest-serving CIA director, for seven years. No one could say that he hadn't had his hands full. That's for sure.

WALLACE: And it was quite emotional, Kelli, as we watched...

AMANPOUR: Can I ask...

WALLACE: Oh, I'm sorry, Christiane. I was just asking, Kelli, it was quite emotional watching George Tenet when he was saying goodbye to the CIA staff there.

But Kelli, here's a question, is the White House -- what are you hearing from your sources? Is the White House going to sit back for a while, wait for these reports to come out, see what changes everyone feels needs to be made in terms of the CIA infrastructure before naming another official nominee to be CIA director?

ARENA: You know, Kelly, it's pretty much a split down the middle. You have those that argue that the president need to show a commitment to the war on terror, that an organization like CIA cannot be without its most senior leadership, especially at this time of heightened threat, and the president needs to go ahead and nominate someone, perhaps someone that won't be very controversial, like Senate Intelligence Committee member Porter Goss, who does have an intelligence history and move ahead, and show a real commitment.

There are others who say there is no way, no matter what the president does, it will be a hotly contested -- on the Hill, that any confirmation process would be - would be brutal. That he should, in respect to the election, wait. And also in respect to waiting for the 9/11 -- I'm sorry, I said Senator Goss. It's Congressman Goss. I just caught myself.

But the -- there's a lot of expectation that the 9/11 commission will come out with a total restructuring of how this all works, how intelligence gathering is done. And some say, Well, you know what, maybe it's better to wait until we hear what they have to say and how this whole thing is going to work before we start putting anybody in charge of it.

AMANPOUR: I just wanted to ask you, you mentioned a report that is going to be very scathing about the intelligence failures.

But when it comes to Iraq, for instance, on weapons of mass destruction, as you know, so many analysts and people, certainly abroad and of course in the U.S. as well, believed that the intelligence, at least some of it, was manipulated and was cherry- picked to suit a political point of view, and a strategy that the administration wanted to pursue.

Is that going to be at all contained in any of these reports that you are talking about?

ARENA: Well, I think, unfortunately, George Tenet's most famous line will be, "it's a slam dunk." That will be part of his legacy.

I think that they're pretty much, Christiane, looking at everything in this arena. They are going to look at what the intelligence was, whether or not it was presented in an accurate fashion and how much a part that played in policy, absolutely.

HAYS: But we know the knives were out for his back for a long time. Richard Shelby, Republican senator, a longtime opponent. Many people say this was a man who was a great bureaucrat in Washington but not a great director of the CIA.

How do you think he's going to go down in history?

ARENA: You know, he is well-loved by the rank and file. People who work with him, respect him. They say that he's a straight-shooter. They say that he speaks his mind, that he was hard working. Very well respected. You saw that when he spoke to his colleagues, and he gave - he gave his farewell address. Lots of applause. He even joked when the applause went on for so long, he says, this feels like a State of the Union, you know, because the applause was going on for so long.

But he is very well loved. And I can tell you, from the law enforcement side of things, that they thought that he was moving things forward and that he was doing a good job.

HAYS: Well, an end of an era, and we'll see when the new one begins.

Before we go, we wanted to thank our Christiane Amanpour, taking time out from covering the D-Day celebrations, remembrances. And we'll look forward to seeing her again soon.

We're back ON THE STORY right after this.

(BEGIN VIDEOTAPE)

ANNOUNCER: Australian sports star Cathy Freeman was back in the news this week. What's her story? We'll tell you after the break.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Cathy Freeman, what's her story? The world-class runner Friday became the first person to carry the Olympic torch for this year's Athens game. The flame is on its way to Greece for the opening ceremony August 13.

Four years ago, Freeman lit the concord (ph) at the Sydney games ceremony before winning the gold that year in the 400-meter run. More than 3,000 people will carry the torch on six continents.

(END VIDEOTAPE)

HAYS: Thanks so much to my colleagues and thank you for watching ON THE STORY. Hope you enjoyed it. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Laci Peterson.

Coming up right, a check of the top stories.

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Aired June 5, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: I'm Betty Nguyen at CNN Center in Atlanta. Here's a look at the headlines.
The health of former President Ronald Reagan. Reagan suffers from Alzheimer's Disease. At 93, he has lived longer than any other American president.

After saying his farewells in Rome, President Bush is in Paris, where he meets today with French President Jacques Chirac. Tomorrow, he'll be on the Normandy coast for ceremonies observing the 60th anniversary of D-Day.

Also on the road today, Pope John Paul II arriving in Switzerland. The pope says he'll try to convert new generations, or as he puts it, "men and women of the third millennium." It's the pope's first trip abroad since last September.

An armed man who took his bulldozer on a rampage through Granby, Colorado, has been found dead in the steel-reinforced cab of that vehicle. Police say he committed suicide. The bulldozer destroyed or damaged several downtown buildings in Granby. Police say the driver was angry about a zoning decision.

And those are the top stories at this hour. I'm Betty Nguyen. ON THE STORY starts right now.

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

I'm Kathleen Hays, ON THE STORY of a new record for oil prices and more new jobs.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace in New York ON THE STORY of presidential politics and how to make it through five more months of negative, sometimes misleading ads.

JOSIE BURKE, CNN SPORTS CORRESPONDENT: I'm Josie Burke at Belmont Park ON THE STORY of Smarty Jones, a modest colt trying to win the Triple Crown and just maybe revive the sport of kings.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: I'm Kelli Arena ON THE STORY of spy chief George Tenet picking his own departure time amid questions about bad intelligence before 9/11 and the Iraq war.

We'll talk to a reporter covering the first days of the Scott Peterson murder trial.

We'll go to France, where CNN's Christiane Amanpour sets the scene for ceremonies looking back 60 years to D-Day.

E-mail us at onthestory@cnn.com.

Now straight to Kathleen Hays and the oil outlook.

(BEGIN VIDEO CLIP)

ADEL AL-JUBEIR, SAUIDI FOREIGN POLICY ADVISER: If our customers require more oil, we will produce it. And so there was a subtle understanding among the OPEC members that this was also a possibility. SO we don't believe that there is going to be a shortage of crude oil in the market.

(END VIDEO CLIP)

HAYS: We don't believe there will be a shortage, says the adviser to the Saudi royal family, making the media rounds this week, after OPEC pledged to boost the supplies. Take the car down to the corner gas station, though, and watch those numbers spin. And even if the oil countries do what they say, it can be a long, slow pipeline.

BURKE: Kathleen, we are hearing so many different things from so many different people. Is there any one that we can really trust to know what - to tell us what's going to happen with the oil prices?

HAYS: Well, I'll tell you one thing that I think people in the oil market are pretty sure of is this: that oil prices will be -- we'll be lucky if we see $30 a barrel oil anytime soon.

Now after the announcement by the Saudis that they're going to boost output, UAE's going to jump in. That did help bring some relief to prices. And in fact, we had more information on Friday from the Department of Energy that because we've been importing oil -- everybody's worried about the oil shortage -- inventories rose. So after hitting a record high of $42.45 a barrel last week, oil prices closed lower at about $38.50.

But right now, experts are telling me, traders, that there's about a $10 premium in the price of oil because of worries about terrorists. Now, clearly, targeting oil facilities, oil-producing companies as part of their strategy to hurt some of these key nations like Saudi Arabia, to hurt the global economy.

WALLACE: Kathleen, what about the ripple effects on the economy, from these rising oil prices? Are people traveling less? Are people changing their, you know, vacation plans? What -- is it having a devastating impact on the economy?

HAYS: Well, you know, it isn't. And we're going to get to the jobs numbers in just a minute. Very strong in the month of May.

But -- actually, one of the estimates out there is that right now, this increase in gasoline prices amounts to about $100 billion tax on consumers. Remember, this is a $10 trillion economy though. And it was so funny this week to me in May, vehicle sales were the strongest they have been in five month. And you know what led the sales? Light trucks and SUVs.

So gas prices are up. Americans complain. We've done so many stories about how upset people are. But you offer them juicy incentives, give them the 0 percent financing, and they are still buying the gas guzzlers.

ARENA: That's amazing.

Well, you know, you did mention unemployment, which was - finally some good news on that front. So we're taking the jobless out of jobless recovery.

HAYS: Great news. This is the third month in a row now of a really strong jobs reports. And what's interesting about this, Kelli, is - you know, you covered so many things - you've covered business news for a long time. Remember the late '90s? This is the kind of report we used to get when the economy was really strong -- 248,000 jobs were created last month. Now a total of nearly a million jobs in three months, 1.4 million jobs.

If we keep going at this rate, President Bush could make his goal of 2.6 or 2.7 million jobs this year. So it's clearly good news. High- paid jobs are growing. The unemployment rate held steady. That's one of the negatives, but that's a lagging indicator. It's really hard to find a bad thing in this report, and yet a lot of Americans still feel worried about the economy.

BURKE: Kathleen, where are the new jobs being created? What sectors?

HAYS: Well, one of the more promising ones - and especially politically, Josie - is that they're being created in manufacturing, the fourth month in a row now of manufacturing jobs rising. And then you can see some numbers on the screen now -- construction up, retail, health care.

And it's interesting that jobs are growing in the battleground states, and this is a big deal for the president. But there was a jump in office jobs. The job gains were pretty much across the board. Again, it's really a sign that the economy has picked up some momentum.

You know, quickly, I'd like to mention, the unemployment rate for African-Americans remains at about 10 percent, 9.9. That is double the unemployment rate for the white population. So there are weaknesses. There is huge numbers of long-term unemployed. There's still people who have not jumped on board, even though the tide is turning.

WALLACE: And Kathleen, of course, this might be all good news for President Bush. Maybe not the best news for Democratic candidate John Kerry.

But here's what the Kerry folks are saying. They are saying there's still this middle class squeeze, that middle class people still just feel like they can't make ends meet. Health care costs are up, tuition costs are up.

How much is a sense of a perception, do Americans really feel like things are getting better?

HAYS: Well, you know, there -- there's a weekly poll that all of us in this business, economics world, watch very closely: ABC/Money magazine poll that comes out every Wednesday. And it has fallen back again. And one of the things people cited was higher gas price.

Another poll out in -- for the month of May on consumer confidence. Thirty percent of the people still think jobs are hard to get. These things turn very slowly.

But you can't blame people for being nervous, when they see gas prices up so much, dairy prices are up, tuition costs are up. You know, your co-pay is up, making the health-care costs squeeze. There's definitely a squeeze on the middle class. There was an interesting study out this week from the Urban Institute saying that when it comes time to pay for the Bush tax cuts, unless taxes are raised again, that the burden of the spending cuts are going to fall on middle class people.

So clearly, from the Democratic side, there's still a case to be made. The economy is not working well for everybody. But I think the Republicans are going to argue very forcefully, be patient, because this is turning. And in fact, I interviewed John -- Treasury Secretary John Snow this week on "THE FLIP SIDE" on CNNfn and he said, We won't rest. They are not satisfied because there are still too many people unemployed. But they're clearly, clearly feeling good that things are turning around.

But again, the gas-price story isn't going away and that's going to be something that's going to continue to bug consumers and haunt the White House.

ARENA: And retailers, I think, know that. I mean, the confidence is still low. And we're seeing a lot of rebates. Like, am I getting a new Hummer this week or what? I mean, there were some big rebates there.

HAYS: $10,000 on a Hummer.

ARENA: Hello!

HAYS: Of course, it's a $100,000 car. And that's one places where auto sales were actually down. They were down pretty sharply on the Hummers.

But it's interesting that the car sales are holding up so well because people are getting the incentives. And I think it's - it's - I think when you step back and look, what the oil experts are saying --another interview this week with the editor in chief of National Geographic - they have a big story about how the higher gas - gas and oil prices are making it feasible to bring oil out of the deep waters off the Gulf of Mexico, the tar sands up near Albert, Canada.

But they're - I think people are saying, forget cheap oil. The era of cheap oil is over. It's not that we're going to run out overnight -- but an interesting statistic before we close this. Over the last couple of years, U.S. consumption of oil has increased by about 300,000 barrels a day. You know how much it's increased in China? 1.2 million barrels a day. That's not going away. China, India, these other parts of the world, more demand for oil, limited supply. I think Americans are going to have to face up to the fact that, you know, we either have to allow drilling in places we don't want to, we find more fuel-efficient cars, something.

WALLACE: Well, Kathleen, from gas prices, booming economies to China, and now, moving to the supply and demand this week of news in the Laci Peterson case. We'll be talking to a colleague of ours in California who is covering the trial, and who has also interviewed Scott Peterson, the man charged with the murder of his wife and unborn son.

That's all ahead on ON THE STORY. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LEE PETERSON, SCOTT PETERSON'S FATHER: We're very pleased with our -- our defense team. I don't know how they could be any better.

JACKIE PETERSON, SCOTT PETERSON'S MOTHER: We know the truth is going to come out. That's all that matters.

(END VIDEO CLIP)

ARENA: Scott Peterson's parents, as their son's murder trial began this week in Redwood City, California. Prosecutors claim that Scott killed his wife, Laci. She was eight months pregnant when she disappeared Christmas Eve of 2002.

Gloria Gomez of CNN affiliate KOVR in Sacramento has been covering the case from the very beginning. She's interviewed Scott Peterson, and now she is following the trial.

We want to thank you for joining us. And I have to ask you, how do you think the prosecution measured up this week?

GLORIA GOMEZ, KOVR CORRESPONDENT: Well, actually, they were quite flat this week.

I mean, they did make some points with the jury. They did talk about the motive for the murder. They said that Scott Peterson was a trapped husband who didn't want the baby and didn't want the responsibilities of a child. They also painted Scott Peterson as a lying cheat, someone who obviously did not love his wife. They talked -- and actually played an audiotape of Scott Peterson on the phone with his former girlfriend Amber Frey, and he's talking to her about how much he loves her, how much he misses her during the preparation for his wife's vigil.

So obviously, the jury got that message that maybe he wasn't really involved in his marriage, didn't really want to be in his marriage. That was the point that prosecutors sent this week.

HAYS: Gloria, you know, it seems in the court of public opinion, the jury is already decided that Scott Peterson is guilty it seems. Many people think that this is just a -- again, what the prosecution has painted him as, a man who wanted to get rid of his wife so he murdered her.

But in the courtroom, the jury, what sense do you get so far of how this case is stacking up?

GOMEZ: Well, let me give you the dynamics inside the courtroom.

I can tell you that when the jury walks in, they have a direct view of Scott Peterson. Most of them don't look his way. They look down and then turn around and take their seats. Only two men yesterday, actually Thursday, actually looked at him and kind of smiled at him a little bit and then sat in their seats. That was the only time I really did see direct eye contact between jurors and Scott Peterson.

As far as Scott Peterson, when he walks into the courtroom -- this is before the jury walks in -- he comes in, and walks in with a swagger, with a big smile on his face, very, very confident in the courtroom.

WALLACE: Gloria, give us a sense, though, of the defense lawyer Mark Geragos. Obviously, very talented in the courtroom. And how significant was his opening statement when he talks about the child, Connor, and whether that baby was born -- or when the baby was found after - dead, that's the question.

GOMEZ: Right.

Well, as you know, Mark Geragos is very dynamic in the courtroom. He grabs everyone's attention. He did show the graphic autopsy photos of baby Connor. Of course, the jury was very disturbed in seeing those images.

But he did make an interesting point. He showed the jury those pictures because he wanted to show plastic around the baby's neck and arm. And he says that is part of the murder.

He also said that from the time Laci disappeared to the time the baby was recovered -- he said that baby had grown an extra two weeks. He goes, so that concludes, he said, that that baby was born alive. And he told the jury that he would prove it.

BURKE: Gloria, in terms of pre-trial publicity, this is right up there with O.J. Simpson.

You gave us a great sense of what it is like inside the courtroom. What is it like outside the courtroom? Is it a circus atmosphere?

GOMEZ: Absolutely. I mean, everybody is covering this case. This really captured the national attention from day one and it continues. We have all the national networks there, all the local stations there as well. Everybody covering. Everybody trying to get something from the families who talk.

Obviously, the families sit on each side of the courtroom. They ignore each other. They never talk. Of course, the Petersons have come out and said that they love the way Mark Geragos is doing his job. They said his job is easy because our son is innocent.

And another point I wanted to make about Mark Geragos. He is very dynamic in the courtroom, and tries to keep kind of a loose atmosphere in the courtroom. There was one particular instance on Wednesday when Mark Geragos was actually cross-examining someone from Trader Joes - he was a manager there. And that's a specialty store in Modesto. And at the very end, he said this witness, he says, on a personal note, he goes, do you guys still sell those turkey sticks? He goes, because those were my favorite. And of course everybody laughed in the courtroom.

I looked to see if the jury was laughing. Most of them were not.

ARENA: Hmm.

Gloria, lots of circumstantial evidence here in this case. And you can -- you can, I guess, prove that Scott Peterson may not be a wonderful husband, but that doesn't make somebody a murderer. Does this come down, really, to a few hairs and a pliers found on that boat?

GOMEZ: As far as any sort of forensic evidence, that is the only piece of evidence they have that has anything to do with forensic. It's a strand of hair, looped around a pair of pliers. Prosecutors contend that's Laci Peterson's hair, that he used it as part of the crime when he was actually disposing of her body in the bay.

The prosecution's theory is that Laci Peterson did not know about this boat. She never got in the vote other than when she was being disposed of. So how does a strand of hair get inside that boat? They're going to try to link that and let the jury know that the only way that piece of hair could have gotten on that boat was when Laci Peterson's body was being dumped out into the bay.

HAYS: Gloria, will it part of the evidence that the prosecution brings, that when the famous photos we saw of Scott Peterson with blond hair, with lots of money -- the impression was that he was getting ready to flee the country. The conclusion there, of course, if you're guilty (sic), you don't flee.

Does that enter into the case?

GOMEZ: Well, yes. They're going to say that, in fact, he had $15,000 cash; he had changed his appearance; he had a goatee; he colored his hair. They even interviewed Amy Rocha - they had her on the stand, which is Laci Peterson's little sister on Thursday. And they asked -- because she's a hairstylist, and she actually cut Scott Peterson's hair a lot. And they asked her, did he do that often? Did he ask to change his hair color? Did he - and she says, No, he never dyed his hair. I never dyed his hair. So they're almost showing like a pattern, like this was something he did intentionally to look different.

Now the defense is going to say, wait a minute, he wasn't trying to flee. He was simply trying to hide from the media, because he was under such a media scrutiny and crush that he just wanted to hide from them and that's why he was changing his appearance.

WALLACE: And Gloria, of course, you're only one of a handful of reporters who have actually interviewed Scott Peterson. I know that interview happened some time ago, but describe that for us. Did you sort of learn anything new about this man and the story that he is putting forward?

GOMEZ: Well, it's very interesting, because I had talked to Scott Peterson several times before I actually interviewed him. And when I told him that I was going to break the story, that the Rochas had just found out that he had a girlfriend, he looked at me and said, Well, are you going to talk about Laci in your report? I said, Scott, I'm going to say that you have a girlfriend and Laci's family just found out. Do you want to confirm you have a girlfriend? He said no. I said, Do you want to deny you have a girlfriend? He said, No, all I want to do is find Laci.

Then when I actually sat down with him during my interview with Scott, I asked him, Why didn't you just come clean then with me and tell me that you did have a girlfriend? He told me, Well, Gloria, it was part of a media ploy to keep you guys interested. That's why I refused to tell you the truth at the time.

BURKE: Gloria, thank you very much for your very unique insight and for getting up so early this morning to talk to us. Tell us quickly...

GOMEZ: Pleasure.

BURKE: ...what should we look for next week as this trial continues?

GOMEZ: Actually, they're going to have Amy Rocha back on the stand, that's Laci Peterson's little sister. She will be cross- examined by Mark Geragos.

Expect also to have Sharon Rocha, that's Laci Peterson's mother. And she's going to describe Scott Peterson's suspicious actions and behaviors right after Laci disappeared.

BURKE: Thanks again, Gloria.

GOMEZ: You're welcome.

BURKE: One diversion from trials and oil prices and politics is a great moments in sports history. Will Smarty Jones be the first horse in 26 years to win the Triple Crown? I'm back on that story when we continue in just a moment.

(BEGIN VIDEOTAPE)

ANNOUNCER: Josie Burke is a correspondent for CNN Sports. She joined CNN in 1998. Earlier, she covered the Dallas Cowboys for The Fort Worth Star Telegram. She graduated from Harvard.

(END VIDEOTAPE)

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(BEGIN VIDEO CLIP)

JOHN SERVIS, SMART JONES' TRAINER: There's so many twists to the story and it's gotten everybody involved and, nationwide, people have fallen in love with my horse.

(END VIDEO CLIP)

BURKE: Smarty Jones' trainer John Servis summing up pretty accurately how everyone seems to feel about Smarty Jones. They just love this horse. And today, he's going to try to do what most people believe is the most difficult thing in all of sports, and that is win the Triple Crown.

Welcome back to ON THE STORY. I'm Josie Burke at Belmont Park.

HAYS: Well, Josie, I'm one of those people. I love Smarty. I'm so excited about this race. It's so special to have a horse win it, it's so special to have a horse that, outside of the world of racing, wasn't known.

But what's amazing to me now, it's such a tough race to win. It's so hard to be a Triple Crown winner. But the odds so much favor him. I -- what's going on here?

BURKE: Well, it's hard to explain because we've seen this happen a lot in the past couple of years, and no horse has been an overwhelming favorite the way that Smarty Jones is.

A couple of things. Everyone has waited so long. It's been 26 years since a horse last won the Triple Crown. Everyone really wants him to. But people really believe that this horse can win, that he is the best horse, that we might not even have seen his best race yet. And part of that could have to do with the fact that -- you hate to say it, that maybe he is not running against the toughest crop of 3- year-olds, might not be the best year for horses in this class.

ARENA: Josie, also, the weather seems to be working in his favor too, right? I mean, a little wet, a little sloppy? Kind of his thing.

BURKE: Well, this horse can run in anything. Right now, it's not raining. The forecast says it might rain. And he has proven that he's really good on an off track. He won the Arkansas Derby on a muddy track, and then at the Kentucky Derby, when we all spoke last, it was torrential downpour right before the race and that didn't bother him at all.

So rain, shine, everyone still thinks that it would take something of his own doing for this horse to lose.

WALLACE: So no sign, Josie, that he's responding to the pressure at all?

(LAUGHTER)

WALLACE: What about the trainer -- what about the trainers, though, and the people around him, the atmospherics? Because it's really been a circus atmosphere ever since the Derby, right?

BURKE: It really has.

Well, you have the jockey has tried to sequester himself and not talk to anyone too much. John Servis, the trainer on the other hand, has pretty much been out every day talking to the media. And I think it was two days ago he said something like, We all wish the race was right now. We're starting to understand the enormity of the situation.

So the people who can actually express themselves are saying that, Yeah, they're getting pretty nervous. But they don't see the horse succumbing to the pressure.

HAYS: Well, he won the Preakness by - what? - 11 1/2 lengths. So, yes, as you said, he's clearly, clearly the favorite.

You did an interesting piece this week, Josie, talking about what this means to the city of Philadelphia, particularly in light of some of their other sports teams and how they've struggled, and how maybe Smarty can break the curse.

BURKE: Exactly.

Philadelphia is such a great town, because it's a city of straight-shooters. And the one thing with Smarty Jones is, here, they are all hoping he can win, that they'll have something to hang their hat on. It's been more than two decades since they've had any kind of champion. But then, because it's Philadelphia, everyone is sort of going to watch like this, I think, because there's that dread that goes along with the hope that "We never win, we get so close."

Because Philadelphia, it's not like they never have a team that gets close to winning a championship. They always do and then something just happens. I mean, look at the Philadelphia Eagles the past three years in the NFC championship game, can't get to the super bowl.

So this is a very unique bond that has developed between the city and this horse. They're saying, Hey, you know what? If it takes a horse for us to call ourselves champions, we'll take it.

ARENA: Josie, I feel like I'm living through the novel that I read last year, "Seabiscuit." You know, you had so much attention on the sport when that book and movie came out. Now, of course, you've got Smarty Jones.

Have you seen an increase in overall interest in the sport?

BURKE: Well, they're seeing record crowds come out to the track. And we talked about this last year with Funny Cide, when Funny Cide had a chance to maybe win the Triple Crown. This was a horse that everyone thought was the people's horse, and that it was a horse that could bring fans back to racing. And it didn't really happen because Funny Cide didn't win the Triple Crown. And we're hearing the same things over and over again with this horse, Smarty Jones.

It would certainly be a different kind of test case if Smarty Jones won the Triple Crown, because sports -- horse racing in general, they're still getting the money, but it's off track, all of the betting is coming from other places. What they're look to do is get people back to the track, and that's what they're hoping Smarty Jones can accomplish.

WALLACE: And Josie, set the scene for the viewers today. How big of a crowd expected? What will happen today, and when is the race going to begin?

BURKE: Well, 6:38 is post time. So we have a huge build-up. They're expecting a record crowd, which means more than 103,000 people, especially if the weather holds, it could be way beyond that.

And there's a whole day of racing that kicks off at noon. This is the 11th race on a 13-race card.

HAYS: OK. So there's still time to get our bets in, even though the odds aren't so great on Smarty (sic).

Thanks, Josie. We'll be catching up with you at the U.S. Open next.

BURKE: Talk to you then.

HAYS: OK, great.

Coming up, we'll go to France and Christiane Amanpour on the celebrations surrounding the 60th anniversary of the D-Day invasion. Should the Germans have been invited? Can the Atlantic alliance survive Iraq? We're back on that story in a moment.

But first, we go to Atlanta and a check on what's making headlines at this hour.

NGUYEN: Good morning. I'm Betty Nguyen.

Ronald Reagan's health is deteriorating. The former president has been ill for many years with Alzheimer's Disease. Sources close to the situation say his health declined significantly over the past week or so. Mr. Reagan is 93 years old, making him the oldest former president in U.S. history. You'll want to stay with CNN for the very latest on his condition.

President Bush is in Paris right now where he'll meet with French President Jacques Chirac. Tomorrow, he heads to Normandy to observe the 60th anniversary of D-Day. Earlier today, he met with Italy's Prime Minister Silvio Berlusconi in Rome. Mr. Berlusconi has been one of Mr. Bush's strongest allies in the Iraq war.

Pope John Paul II touched down in Switzerland earlier this morning for his first pilgrimage in nine month. The 84-year-old pontiff will attend a youth rally this evening before presiding over Sunday's Mass. Up to a thousand extra police and soldiers are providing security for that visit.

And those are the top stories at this hour. I'm Betty Nguyen. ON THE STORY will be right back after a quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This weekend, I will go to France for the ceremonies marking the 60th anniversary of D-Day at a place where the fate of millions turned on the courage of thousands.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: I'm Christiane Amanpour in Colleville-Surmer in Normandy. This is the American wartime cemetery. There are more than 9,000 American veterans buried here, those who died that first day on D-Day, June 6, 1944, those who died battling for the fight to liberate first Normandy, and then the rest of France, and on through to Europe that ended World War II eventually.

WALLACE: Christiane, set the scene for us. President Bush, of course, coming there, expected to deliver a major speech, talking about D-Day, the strength of the Atlantic alliance at that time.

But a big contrast to now, especially over the war in Iraq.

AMANPOUR: Well, most certainly that is the case.

The Atlantic alliance, its greatest moment, its greatest achievement, its greatest success was considered to have been D-Day 60 years ago, and the unity that was forged then that really, you know, went towards a war of necessity to liberate France. It was the moment the democracies started to fight back against the tyranny that was fascism and nazism on the European continent.

So it was an amazing moment, and it stands throughout forever history as the greatest Atlantic alliance achievement.

By contrast, so many people -- and particularly in France and many parts in Europe -- are saying that today's struggle, the U.S. war in Iraq, is essentially the alliance's greatest failure. Because it was a failure, they say, to forge common goals, to forge a common strategy, to come up with a common post-war plan for Iraq. And so there are -- you know, in some ways, the rhetoric that President Bush chooses does have resonation with 60 years ago. But in many other ways, it's only a superficial comparison, because there's so much about the struggle in Iraq today that's different.

On the other hand, President Bush, President Chirac, some of the other leaders want to go forward. You can hear what's going on above me. It is the rehearsals for the fly-bys that will take place tomorrow, the celebrations, the commemorations of D-Day 60 years ago, and these are some of the airborne rehearsals taking place, that will take place tomorrow before President Bush, President Chirac, German Chancellor Gerhard Schroeder and some 20 other heads of state and heads of government as well as thousands of veterans as well who are coming.

ARENA: Christiane, I can't help but jump a little bit, given as many war zones you've been in, when I hear a plane fly overhead like that.

But getting back to the discussion. Do you think -- I mean, what is your sense? Is there still any good will left among European allies, when they remember just 60 short years ago we were celebrating such a strong alliance? Is there any of that political goodwill? That - just, is that still part of the chemistry and the relationship that currently exists today?

AMANPOUR: Well, if you talk purely about D-Day, and you see what's been happening in Normandy, and the way the French are reacting, the good will, the immense gratitude of the French towards the Americans and the British that liberated them exists and exists very, very strongly.

We were at a ceremony yesterday in (UNINTELLIGIBLE), and - that's not far from here, in which the officials of Normandy and many dignitaries from the French government and local governments were there. And they said, 60 years later we do not forget our liberators. And they spoke very eloquently and from the heart about the bravery, the sacrifice, the respect that they have for what those young men did for them so many years ago. And everybody says, we will never forget what America did for us and thank God that America came into the war.

But then you separate what's happening today in Iraq. And you have to report that 85 percent of the French people strongly disagree with the Iraqi war. The president of France still has sharp differences with the president of the United States over the Iraq war. And those discussions will be held today. Today's June 5, and today's a day reserved for bilateral relations. And they will talk about those issues.

But they'll also talk about how to try to, as much as possible, put that in a place where they can move forward and try to move forward to make Iraq a success. Because basically they know that for the good of the world, Iraq has to be a success, and therefore, the current U.N. resolution, and an attempt to get this new interim Iraqi government working is going to be the substance of their talks today.

HAYS: Christiane, interesting -- a poll out this week found that something like only 50 percent of the people asked could identify who the U.S. fought in World War II. Far fewer even knew what D-Day was.

But clearly, the veterans from the United States who are there now are reliving memories. This is an incredible moment for them.

Have you talked to those people? What do they think about this?

AMANPOUR: Do you mean 50 percent of American people?

HAYS: Yes. Yes.

AMANPOUR: Well, I can tell you 100 percent of European people know what that battle was about. They know. They remember. They know, because they've been taught and it's been ingrained in their memories and in their consciousness.

And even at the ceremony yesterday, there were young people there, and the French official said, This ceremony is not just dedicated as our mark of respect and thanks to those veterans, but it's dedicated to the young. Because they must never forget the sacrifice and they must always respect what was done for them and how they are able to live in liberty today.

It's truly tragic, I think, if 50 percent of the American people polled do not know what D-Day was about.

HAYS: And what about the veterans there you're speaking to?

AMANPOUR: You talk to these veterans, and you are humbled -- humbled -- by talking to these veterans. They are ordinary, many of them ordinary men who call themselves civilians in uniform who refuse to call themselves heroes. They say that they were doing their duty. Those days, you didn't second-guess. You just did your duty. And they say, We're glad we won and we glad we survived.

And they know, though, what they did and what that moment meant. And it's an enormous, enormously emotional experience, I have to tell you, especially for me and for many people who have covered wars, to see these veterans, and to know what they did, and to see those beaches, and to see the cliffs, and to know what they did and the courage it took to storm those beaches and storm up those cliffs and move on and fight an incredible war, and a war that was forced upon them. A war of true necessity.

WALLACE: Well, Christiane, the D-Day anniversary, war and peace, all of that also on the agenda of Democratic presidential candidate John Kerry this week. At the same time, some warnings that senator Kerry could be overplaying his own military background.

I'm back on the campaign story in a moment. Stay with us.

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(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The sitting president of the United States for the first time in the history of any incumbent in America has spent $80 million over eight weeks distorting my record, misleading America.

(END VIDEO CLIP)

WALLACE: John Kerry at a campaign rally in Missouri this week, saying he's getting smeared by President Bush.

Of course, though, get ready. Most of us expect more to come, more negative ads. Not just from the candidates, but from the groups on the sidelines, too.

Welcome back. We are ON THE STORY.

ARENA: Kelly, how are voters responding to these ads? I mean, we've heard so much about people just getting their information from political ads and not really doing their own research.

What are you hearing?

WALLACE: Well, it's interesting, Kelli.

First all, everyone's a little bit to blame. There are some distortions in ads coming from the Bush campaign, from the Kerry campaign, and these independent groups, many of them running anti-Bush ads.

It's very interesting. The Annenberg School at the University of Pennsylvania conducted a survey in the 18 battleground states, and even though most Americans said they don't trust these campaign commercials, what they're hearing seems to impact what they feel about the candidates.

An example: John Kerry was running an ad weeks ago saying that George Bush has said he wants to send jobs overseas. Well, President Bush never said that. His chief economist sort of talked about how outsourcing could be good in some ways for the economy. But when you asked voters, 61 percent said they believed George W. Bush wants to send jobs overseas. So you can see how some of these distortions start impacting voter's own feelings.

AMANPOUR: Kelly, it's Christiane in Colleville here.

You know, you can't help, when you're sitting here, and you see all these crosses and some Stars of David and you see what it meant to have that incredible alliance all these years ago and that lasted pretty much until today. You can't help but know how much the American presidential election is a big part of European politics and of world politics. People overseas are looking to this election very, very closely and paying very, very close attention.

And it's no secret, it's been reported many times before that many, many people are -- you know, there's a high percentage of negative views towards this administration, towards President Bush. And I'm wondering whether that -- is it at all playing in the campaign in the United States, or whether those kinds of issues are simply not part of the campaign.

WALLACE: Christiane, it absolutely is playing in this campaign, in two ways.

First of all, John Kerry himself although he got himself into a little bit of trouble several weeks ago, when he sort of said that he has heard from leaders or heard from people who have talked to leaders, other leaders on the world stage who would like to see a change in the White House. And then the Republicans responded, saying, Look, Americans will elect a president, not the Europeans.

But most -- more recently, you are seeing John Kerry use this issue, Christiane. He is talking about leadership. He is talking about trying to restore in his words America's strength, and alliances with the world. He doesn't have a lot of dramatic differences with President Bush, for example, when it comes to Iraq. He voted for the Iraqi war resolution. He thinks Americans need to stay in Iraq. But what he is trying to say is what he would do differently is get more international troops inside that country, restore America's standing in the world, improve those alliances. And that is something the Kerry campaign thinks could be successful for them.

HAYS: Kelly, is it tougher now for Kerry to attack Bush on the economy? Jobs are picking up pretty soundly. The battleground states even seeing stronger jobs growth.

Can John Kerry win by attacking tax cuts and pushing Medicare reform?

WALLACE: This is a tough one for him, Kathleen, because of course everybody has to be happy, right? When you have more jobs created in this country? And the Democrats had been hoping the economy could be one of their key issues, thinking President Bush's credibility on this issue could be one of their greatest vulnerabilities.

What they're trying to say is job creation is good, but still, there have not been enough jobs created. They're blaming it on President Bush's tax cut for the wealthy, and they're saying that the middle class is still feeling the squeeze. That is something you'll still hear from John Kerry this week, and they are saying he is the one that Americans can trust to restore the economy as well.

Again, if the economy keeps improving, and Americans start feeling things are getting better, it's obviously going to be good news for President Bush, and not very good news for John Kerry.

ARENA: Well, Kelly, one thing that seems to be sliding until after the presidential election is finding a new CIA director, after George Tenet quit this week. I'm back on that story in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: He told me he was resigning for personal reasons. I told him I'm sorry he's leaving. He's done a superb job.

(END VIDEO CLIP) ARENA: President Bush praising CIA Director George Tenet after Tenet resigned this week. And no mention at the White House of the intelligence failures by the CIA and others that preceded the 9/11 terrorist attacks or the war in Iraq.

Welcome back. We're ON THE STORY.

AMANPOUR: So, Kelli, these are obviously huge intelligence failures, that CIA Director George Tenet has taken the hit for. It's obviously made a lot of news in Europe and around the world. And when people say that they're leaving for personal reasons, or to spend more time with their family, many people raise an eyebrow and they want to know what's behind it.

What is the story behind the story of that resignation?

ARENA: Well, you know, the White House and Tenet himself insists that he was not pushed out. That this was, in fact, to spend more time with his wife and teenaged son.

There's lots of speculation, though, that he quit ahead of some pretty scathing reports that are expected out in coming weeks -- one from the Senate Intelligence Committee, one from the 9/11 commission -- that will pretty squarely blame the CIA for some of those intelligence failures. Really be an indictment against the intelligence community as a whole.

And there was the suggestion that he took the fall that he took the hit before that, for this administration, and went on his merry way. But of course, vehement denials all across the board from everyone, even those closest to Tenet, saying that he really was just exhausted, that he had had enough. It was -- he had been on this hamster wheel for a really long time -- second longest-serving CIA director, for seven years. No one could say that he hadn't had his hands full. That's for sure.

WALLACE: And it was quite emotional, Kelli, as we watched...

AMANPOUR: Can I ask...

WALLACE: Oh, I'm sorry, Christiane. I was just asking, Kelli, it was quite emotional watching George Tenet when he was saying goodbye to the CIA staff there.

But Kelli, here's a question, is the White House -- what are you hearing from your sources? Is the White House going to sit back for a while, wait for these reports to come out, see what changes everyone feels needs to be made in terms of the CIA infrastructure before naming another official nominee to be CIA director?

ARENA: You know, Kelly, it's pretty much a split down the middle. You have those that argue that the president need to show a commitment to the war on terror, that an organization like CIA cannot be without its most senior leadership, especially at this time of heightened threat, and the president needs to go ahead and nominate someone, perhaps someone that won't be very controversial, like Senate Intelligence Committee member Porter Goss, who does have an intelligence history and move ahead, and show a real commitment.

There are others who say there is no way, no matter what the president does, it will be a hotly contested -- on the Hill, that any confirmation process would be - would be brutal. That he should, in respect to the election, wait. And also in respect to waiting for the 9/11 -- I'm sorry, I said Senator Goss. It's Congressman Goss. I just caught myself.

But the -- there's a lot of expectation that the 9/11 commission will come out with a total restructuring of how this all works, how intelligence gathering is done. And some say, Well, you know what, maybe it's better to wait until we hear what they have to say and how this whole thing is going to work before we start putting anybody in charge of it.

AMANPOUR: I just wanted to ask you, you mentioned a report that is going to be very scathing about the intelligence failures.

But when it comes to Iraq, for instance, on weapons of mass destruction, as you know, so many analysts and people, certainly abroad and of course in the U.S. as well, believed that the intelligence, at least some of it, was manipulated and was cherry- picked to suit a political point of view, and a strategy that the administration wanted to pursue.

Is that going to be at all contained in any of these reports that you are talking about?

ARENA: Well, I think, unfortunately, George Tenet's most famous line will be, "it's a slam dunk." That will be part of his legacy.

I think that they're pretty much, Christiane, looking at everything in this arena. They are going to look at what the intelligence was, whether or not it was presented in an accurate fashion and how much a part that played in policy, absolutely.

HAYS: But we know the knives were out for his back for a long time. Richard Shelby, Republican senator, a longtime opponent. Many people say this was a man who was a great bureaucrat in Washington but not a great director of the CIA.

How do you think he's going to go down in history?

ARENA: You know, he is well-loved by the rank and file. People who work with him, respect him. They say that he's a straight-shooter. They say that he speaks his mind, that he was hard working. Very well respected. You saw that when he spoke to his colleagues, and he gave - he gave his farewell address. Lots of applause. He even joked when the applause went on for so long, he says, this feels like a State of the Union, you know, because the applause was going on for so long.

But he is very well loved. And I can tell you, from the law enforcement side of things, that they thought that he was moving things forward and that he was doing a good job.

HAYS: Well, an end of an era, and we'll see when the new one begins.

Before we go, we wanted to thank our Christiane Amanpour, taking time out from covering the D-Day celebrations, remembrances. And we'll look forward to seeing her again soon.

We're back ON THE STORY right after this.

(BEGIN VIDEOTAPE)

ANNOUNCER: Australian sports star Cathy Freeman was back in the news this week. What's her story? We'll tell you after the break.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Cathy Freeman, what's her story? The world-class runner Friday became the first person to carry the Olympic torch for this year's Athens game. The flame is on its way to Greece for the opening ceremony August 13.

Four years ago, Freeman lit the concord (ph) at the Sydney games ceremony before winning the gold that year in the 400-meter run. More than 3,000 people will carry the torch on six continents.

(END VIDEOTAPE)

HAYS: Thanks so much to my colleagues and thank you for watching ON THE STORY. Hope you enjoyed it. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Laci Peterson.

Coming up right, a check of the top stories.

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