CNN.com - Transcripts

Transcript Providers

Return to Transcripts main page

On the Story

Kerry Files FEC Complaint Against Swift Boat Group; Sporadic Fighting Reported Around Shiite Shrine

Aired August 21, 2004 - 10:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DREW GRIFFIN, CNN ANCHOR: Here's the latest headlines:
In Iraq, after a night of relative calm, fighting has resumed now outside a revered shrine in the Iraqi city of Najaf. Militiamen loyal to cleric Muqtada al-Sadr still hold the mosque, despite promising to hand it over to top Shiite religious leaders.

Another salvo in the war over political attack ads. A group of anti-Kerry Vietnam War veterans has released another TV spot on John Kerry's service record. Hours later, Kerry filed an official complaint with the Federal Election Commission, saying the group is illegally working with the Bush campaign. The Bush camp denies the allegation.

Philadelphia's fire department mourning the loss of two veteran firefighters this morning. Two men were caught in the basement of a rowhouse blaze, and rescuers just couldn't get there in time. Both died of smoke inhalation.

And some still photos from the Summer Games, as we tell you the U.S. is tops in medal counts with 41, including 18 gold. China second, Russia third. Australia and Germany are tied. Thirty-two medals are at stake this very day at the XXVIII Olympiad.

Keeping you informed, this is CNN, the most trusted name in news.

I'm Drew Griffin at CNN global headquarters in Atlanta. Now, ON THE STORY.

LIZ NEISLOSS, CNN U.N. PRODUCER: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week.

I'm Liz Neisloss, ON THE STORY of the United Nations, remembering its colleagues killed in a massive terrorist attack one year ago. What's changed since then?

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: I'm Jill Dougherty in Crawford, Texas, just down the road a piece from the Bush ranch, ON THE STORY of those attack ads and the barrage of charges coming both from the Bush and the Kerry campaigns.

GERRI WILLIS, CNNfn CORRESPONDENT: And I'm Gerri Willis, ON THE STORY of how new record oil prices are fueling fears of a recession, and what that could mean for your wallet. ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: And I'm Elizabeth Cohen, on the pros and cons of surgery to fight obesity.

We'll also be hearing later from CNN producer Kianne Sadeq about the standoff in Najaf and what she witnessed in a mosque under siege.

And we'll check in with CNN sports anchor Michelle Bonner on who's golden and who's not at the Olympic Games. E-mail us at cnn.com, ON THE STORY -- CNN.ONTHESTORY (sic).

Now to Jill Dougherty and the race for the White House.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent said the other day that if he's elected, the number of troops in Iraq will be significantly reduced within six months. I don't think it's a wise statement. You see, it sends the wrong signal.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The situation in Iraq is a mess. That's the president's responsibility, and he owes the American people an answer.

(END VIDEO CLIP)

DOUGHERTY: This campaign started out with both President Bush and Senator Kerry saying that each knew better how to deal with the situation in Iraq. But ironically, the way it's turning out, the debate is not over Iraq, but about Vietnam.

WILLIS: Jill, you know, we've been paying attention -- at the beginning of the week, at least -- to the troop-re-deployment story. And of course, just like everything else, it turns into a big political debate. I thought we'd get a break in August, but it doesn't seem likely.

DOUGHERTY: Not at all. In fact, I have to tell you, this week, it probably hit critical masse about Wednesday. But this debate over the attack ads is really fierce.

We've been sitting in filing centers, in fact, here in Crawford -- sitting in the filing center -- and literally, every few minutes you're either getting an e-mail, a call, cell phone call, a BlackBerry message, something, from these dueling campaigns. And sometimes it's even before official comments are made, they're rebutting each other. It's been really acrimonious, I'd have to say, about these attack ads.

COHEN: Jill, this group, the Swift Boat Veterans for the Truth -- we're watching their ad now -- is there any connection between them and the Republicans?

DOUGHERTY: Well, there was a big article in "The New York Times" this week, which really has even a chart, showing connections between some of the people who put these ads together, some of the people who were featured in the ads, and the White House, the Bush campaign, et cetera.

But the question is, is there a direct connection? In other words, does the White -- is the White House orchestrating this, or are these people who were linked in the past and may be even now to the campaign, but they are not directly doing the bidding of the White House?

So that's what the debate is. And the White House would say, yes, they've had connections. But it doesn't mean that we're calling the shots in this. Kerry people, of course, would think the opposite.

NEISLOSS: So, Jill this seems to have knocked everything else off the table. No discussion of domestic agenda, in particular. Why does it have so much traction, this story? Why the Vietnam story, 30 years ago? Why is it still grabbing people so much?

DOUGHERTY: Well, you know, I would have to say that there's a deep emotional content to all of this.

Sure, you know, you have the debate about what did Kerry do during the war, et cetera. But there's also that visceral response that people have to Vietnam. You know, people who remember Vietnam, went through Vietnam, still remember the debates. People who were -- you know, so-called, the longhair war protesters, et cetera, and people were split right down the middle. So it cuts to the heart of the emotional response.

And for Kerry, (AUDIO GAP) cuts both ways. He is both considered a hero of the Vietnam War, but also somebody who, when he came back, opposed the war and criticized some of the behavior of the U.S. Army. So that -- it's a very delicate balance and he's having to deal with this.

WILLIS: Of course, we've got the Republican convention coming up this week in New York City. What are you hearing about the direction of this? What kinds of ideas, attitudes, are they going to bring out and try to drive home with the American people, Jill?

DOUGHERTY: Well, you know, if you're dealing with -- I was just say, a delicate balance, and there's a delicate balance that the Republicans have, too, because after all, President Bush is the wartime president. And in a sense, that's good, because he can rally the nation, he can get support on that side.

But it also can be very frightening and concerning for people, especially if there were to be another attack in the United States. So, on the one hand, he has that positive side of being a wartime president. But it can get very scary. So he also has to balance that with a positive message. And that's what we are supposed to be hearing from the president: the other side of it, what does he want to do, if he is elected for the next four years? What kind of programs would he propose? NEISLOSS: Jill, do you have any sense that going into the convention, as we sort of wind into it, that there will be more of a discussion of domestic issues, that other issues -- there will be a moving on from this Vietnam debate?

DOUGHERTY: Well, one would hope, because obviously, this debate is really getting nowhere.

And you heard that from Senator John McCain. I mean, he made it very clear. He does support the president, but he has been critical of the attack ads coming in both directions. And yesterday, essentially, he said, a pox on both your houses, that these ads should end and we should simply say both served honorably during the Vietnam War, and that the FEC -- the Federal Elections Commission -- should be cracking down on this. Actually, that's the group that he blames for not really doing its job properly.

COHEN: Jill, it's interesting, because Kerry has had this band of men who have been around him, other veterans who have been very supportive. And now another group of veterans is attacking him. Is there some -- is there some sort of ideological difference between these two groups?

DOUGHERTY: Well, look at the way this evolved. You know, one of the men who was involved in that goes back years. He was debating John Kerry when they were both in their 20s.

So this goes back 30 -- more than 30 years. And a lot of it is very, very personal. And so, again, that's a danger zone for John Kerry because (AUDIO GAP) present himself as a person who is capable of taking over the reins of government and is capable of responding to something that might happen.

And interestingly, Scott McClellan who is the press secretary for the president, of course, used the word that -- Senator Kerry is "losing his cool." And if you kind of parse that, it's basically saying, well, if he loses his cool over these attack ads, what is he going to do if there's another real attack by terrorists, or another war?

NEISLOSS: So, Jill -- but the polls are still basically showing it's still a very close race at this point. Do you have a sense of what parts of the country, what states that Bush and Kerry really have to grapple with?

DOUGHERTY: You know, it's all the places they have been literally hop-scotching and following each other around to. And those are the battleground states. A lot of them have been -- we've been on the road recently in the Midwest. And these are states where you have -- they're literally split down the middle. Sometimes, you know, 48 to 46, statistically insignificant.

So --and if you look at the numbers, the Republicans who say they're going to vote for Bush are very, very entrenched. And to a slightly lesser degree, but still very strong, the Democrats are saying that they are entrenched, they're going to vote for Kerry. So what you're doing is -- what the candidates have to do, is center on those voters who are in the middle, who may be swayed. Let's say, some of the McCain voters. They have to pick them off and try to pull them over.

But right now, it is a very tough slog and they are right in the middle of it. Very early, I must add.

WILLIS: Well, Jill, I know you'll watch those-- that slicing and dicing of the electorate.

But one issue that could end up weighing heavily on voters' minds this fall -- it's oil prices. Mostly moving higher here. I'm on that story in two minutes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEVEN ROACH, CHIEF ECONOMIST, MORGAN STANLEY: Higher oil prices -- if they hit a strong economy, they will not hurt that much. If they hit a vulnerable economy, they will hurt a lot. And the U.S. right now, I think, is at its maximum state of vulnerability.

(END VIDEO CLIP)

WILLIS: That's Steven Roach. He's chief economist at Morgan Stanley, talking about the potential impact of record oil prices. They hit nearly $50 a barrel this week, before coming down just a bit. Just when the economy's recovery appeared to be firmly established, worries over oil prices are reviving talk of the "r" word: recession.

Welcome back. We're ON THE STORY.

And guys, these oil prices -- I've got to tell you, the talk on Wall Street -- some people are whispering $60 a barrel, which will be very frightening, indeed. The big issue here, how high can they go, and why are they going so high? Demand, of course, from countries like China, like India, going higher and higher. But it's also just the fears that terrorists might do something, endanger oil supplies and those prices continue to rise.

COHEN: Gerri -- Gerri, tell us, why is it that oil prices are so important to the market? Why do they have such a big impact on other parts of market?

WILLIS: Well, it's interesting you ask that question, because every day, those oil prices were rising practically. You saw the stock market sell off.

The reason: it's a stealth tax on both consumers and businesses, surprising where the cost increases come -- you know, you see it in the price of plastic bags, for example, because petroleum is an important input there.

And one number I just wanted to share with you guys: for every penny that gas goes up at the pump, it takes $1.4 billion out of the hands of the consumers. So you can see it's a real stealth tax, ultimately, out there when prices rise.

DOUGHERTY: Gerri, this question came up out here in Crawford, at a briefing with Scott McClellan, the spokesman for the president. And we asked him -- long term, the administration says we want that energy bill passed. But it's been sitting there for three years, kind of dead in the water, at least stalled.

So what could, realistically, the Bush administration at this point do, short term, to bring those prices down?

WILLIS: Well, you know, it's very difficult, because it's very difficult to say how are you going to, you know, make sure there's a consistent and steady supply of oil. There's so little impact that we really have on it.

Of course, there's been the bill sitting there, languishing. But I think at the end of the day, Americans have to reduce their demand for oil and it's only been going up because of products like SUVs and other things. Americans using more and more oil.

I don't know if you guys remember -- but remember the phrase nonrenewable resource? There's only so much oil out there. And, of course, you know, when something's in short supply, its price goes up.

NEISLOSS: Well, one thing that hasn't been in short supply has been hype this week, Gerri, as you know, certainly, on Google. And, you know, we all know how popular it is. It's part of the vocabulary, really, now. When somebody wants to find out something about a person, they'll say, go Google him. So it's really into the popular culture.

But why so much hype about this initial public offering?

WILLIS: Yes, it's really part of the media, zeitgeist, you've got to say. Here we're looking at Google here. Internet search engine, went public this week, did pretty well.

The hype around this, of course, had to do with the way it was done. It was done -- what they called a Dutch auction. Basically, the folks who run Google said, Hey, we don't need help from Wall Street; we're going to do this ourselves. So of course there was a lot of eyes on how well this initial public offering came off.

They priced it at $85 a share. That first day it actually went up 18 percent. Pretty darn good. But a lot of questions out there about whether they could have raised more money if they had done it the old- fashioned way.

DOUGHERTY: So how did they miscalculate here?

WILLIS: Well, I don't think it's a case of miscalculation. There were a couple of possible missteps.

One thing that went wrong, just as this was -- during the quiet period where the company's not supposed to be talking about their stock offering at all, a story appeared in "Playboy," quoting both of the founders of the company, talking about the company itself. That's exactly what you don't want to have happen.

So there were a few missteps and I think a lot of institutional investors -- the pros out there, who typically put a lot of money in these kinds of investments -- had more questions about the process of the Dutch auction than they had answers and they stayed on the sidelines. Ultimately, it probably cost Google founders a chunk of change in terms of getting money for the company.

COHEN: Gerri, let's move on to another financial issue, and that is United airlines and the pensions for its pilots. The airline is really putting a lot of pressure on its pilots right now.

WILLIS: Right. What we've seen -- big story, headlines this week. United saying that possibly -- most likely in fact, the only way they could get out of Chapter 11 was to stop payment on pensions. They have a huge pension obligation of nearly $9 billion going out into the future.

Now, there is a federal government agency that ensures these pensions, which is the good news. The bad news: I don't think they're going to be able to cover the whole tab. In fact, they say they can pay all of it, but about $2 billion. So a lot of retirees out there. A lot of retirees to come, to be disappointed with what they would get in retirement.

The entire industry, really, is having difficulty here, you know. We're seeing other airlines withholding pay from pilots, asking for concessions on wages. And what we see going on, really is that there's been more and more competition. 9/11, of course, was very difficult for the industry and oil prices, again. Here you're seeing the impact of rising oil prices on a very important industry.

NEISLOSS: Well, Gerri, from the economy now, to Iraq, and the high-stakes standoff in Najaf. Not an easy story to cover, but we'll talk to our journalists right there, CNN producer Kianne Sadeq, when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I hate this side of me. I hate that I let myself be -- get where I'm at today.

(END VIDEO CLIP)

COHEN: That was Louisiana resident Jimmie Sanders (ph), talking about her longtime battle with obesity. She's now one of 40 people who will undergo gastric bypass with the hopes of finally losing weight, courtesy of the state.

Welcome back to ON THE STORY.

Now, Jimmie is an employee of the state of Louisiana, and they're going to see what happens if they pay for them -- for 40 of them -- to have gastric bypass surgery. She's more than 100 pounds overweight. Those are the rules when you -- when you have to have the surgery. It's about $30,000 a pop.

And I have to say, one of the most interesting things about covering this story this week has been the reaction from other people saying, Hey, these people got themselves into this situation. Why should the state pay for them to get out of it?

DOUGHETRY: Yes, you know, Elizabeth, this is -- it's really a fascinating story. But is there like a legal definition that obesity is an illness? Because so many people treat it as a lifestyle problem.

COHEN: Right, and more and more there's a recognition that obesity is a disease, just like any other disease, that it's not a personal flaw. It's not just an inability to control what you eat, that it is a disease. And that's why many private health insurance already pays for gastric bypass surgery. Many, many people are having their insurance pay for it.

And one of the reasons is that people -- even though there's not a lot of data on this, experts suspect that paying $30,000 now is less than what you would have to pay when, decades later, that overweight person develops heart disease, develops diabetes, has disabilities, misses work -- that you're better off paying for it now than later.

WILLIS: And Elizabeth, isn't there a failure rate with the diet -- the people who promote diet and exercise, as a way of preventing obesity?

COHEN: Right. Of course, the ideal way to lose weight is not to have a surgery, but to diet and exercise. But the failure rate for that is very, very high, some people say as high as about 95 percent, when you're talking about morbidly obese people, people who are more than 100 pounds overweight. So more and more, you hear experts who once would have waved the flag for diet and exercise, saying, you know, maybe this surgery is really what people need who are that heavy.

NEISLOSS: I'm guessing, Elizabeth, that people are going to be listening to this saying, Oh, great, I don't have to exercise or diet. I'll have the surgery.

Is insurance going to cover this?

COHEN: Insurance does, in many case, cover this. And there's several reasons why.

You shouldn't be so excited about this surgery if you just want to lose 10 pounds to look better in your bathing suit. You have to be 100 pounds overweight or more to get this surgery. So this is not for the vast majority of Americans who really need to lose much less than that.

Also, this is a heavy-duty surgery. I mean, this is a big deal. It takes a while to recover from it. One study shows that 2 percent of the people who get the surgery die within the first month. It changes the way you eat forever. It makes your stomach much smaller, so you simply can't eat as much.

So this isn't just some sort of happy, fun thing you go and do when you need to lose a little bit of weight.

DOUGHERTY: But let's say that somebody actually, you know, gets the surgery, but they still want to eat or still have that pattern of eating from before. Then what do they do?

COHEN: Right.

Well, first of all, what the doctors hope is that they don't have that pattern, because they give them counseling along with the surgery. But if the counseling doesn't help, and if there's still, let's say, overeating for emotional reasons, that stomach is much smaller after the surgery. And so if you overeat, you will become very ill, and that, of course, is really one of the tricks of the surgery, is that you simply can't eat as much as you used to because you will feel so sick.

WILLIS: Elizabeth, why Louisiana? You know, is there a Stroke Belt out there in the South, and is there a potential area for problems?

COHEN: Oh, absolutely. As a matter of fact, that's what people call it; they call it the Stroke Belt. Many of the Southern states, including Louisiana, have the highest rates of obesity. And so that's one of the reasons why Louisiana is undertaking this pilot program.

Another reason -- and this, again, is for state employees -- is that people come to work for the state of Louisiana as a young people and they tend to stay. They're still there decades later. So that state has a particular interest in learning, Should we make the investment now so that we don't have to pay later?

NEISLOSS: Now, Elizabeth, you also covered one of these medical- miracle stories this week, the story of the smallest premature baby. What can you tell us about that?

COHEN: Right. Madeline Mann -- she's an incredible young woman. She was born 15 years ago, weighing 9 ounces. That is less than a can of soda. She just celebrated her 15th birthday, and her doctors reported on her in the New England Journal of Medicine. You see her here.

What's incredible about her is that not only did she -- that was her when she was born. You can see her neonatologist's hand there. Not only did she defy the odds by surviving, she defied the odds by being healthy.

She's very little. You could probably tell when you saw her walking there in that pink outfit. She only ways about 60 pounds, and that's about half of what you would expect a 15-year-old girl to weigh. But she doesn't have any major problems. She doesn't have cerebral palsy; she doesn't have any neurological issues. She's got a touch of asthma. Her eyesight needs correcting.

But other than that, she's doing great. She's in the 83rd percentile academically. Here's another little preemie, a different girl who we profiled a couple years, who's also doing great six years later.

So preemies today really do incredibly well. And this girl, in particular, really defied the odds.

WILLIS: And Elizabeth, this really means a lot to a lot of people, because being a preemie isn't all that unusual any more, right?

COHEN: That's right. Being a preemie is not unusual any more.

One of the many reasons for that is that women are having babies later in life, which increases the chance that you're going to have a premature baby. Also, with IVF, people are having multiples. When you're having twins or triplets or quadruplets, more likely that those babies will come early.

So the neonatal intensive care units are fuller than ever.

DOUGHERTY: So the prognosis for her -- prognosis, or, you know, the predictions for her life -- I mean, will she eventually get to be the size of a regular person, or, you know, will all her development be normal? Do they know that down the road?

COHEN: You know, that's a good question. And they don't know that. And one of the reasons is that there's not a lot of data on how 9-ounce babies do, because -- well, she's the smallest. There aren't many babies anywhere in that age range.

But studies on micro-preemies in general show that they tend to be smaller later in life, but that they do tend to catch up -- not always completely. If she's 60 pounds at 15, the chances of her being a regular-weight adult are pretty small. She will continue to be petite, shall we say, probably for the rest of her life.

NEISLOSS: Well, from -- from medical miracles, we're going to now try to go back to Iraq.

ON THE STORY is coming up after the break.

GRIFFIN: I'm Drew Griffin at the CNN Center in Atlanta.

After a visit to hurricane-ravaged Florida, fund-raising now in the Hamptons on the agenda for the weekend for Senator John Kerry. The Kerry campaign has lodged a formal complaint with the Federal Election Commission over that negative TV commercial on Kerry's Vietnam war service record.

President Bush at his Texas ranch this week. His weekly radio address, just a short time ago, trumpeted the enactment three years ago of the No Child Left Behind Law.

(BEGIN AUDIO CLIP)

BUSH: We're already seeing hopeful results. Math scores are up from fourth to eighth grades across the country. Fourth-graders in urban schools are showing strong gains in both reading and math. And from Georgia, North Carolina and Maryland, to Illinois, Wisconsin and New Mexico, minority children are improving test scores and narrowing the achievement gap.

(END AUDIO CLIP)

GRIFFIN: Aides to the president say he is using his time at the ranch to get ready for the upcoming GOP convention.

Turning to Iraq, fresh violence in Najaf and Baghdad this morning. U.S. forces clashing again with Shiite fighters holed up at that mosque in Najaf. The U.S. military says it's resuming limited combat operations against those fighters who are loyal to a radical cleric.

And in Baghdad, there's been a deadly attack on U.S. troops -- insurgents hitting a U.S. military vehicle with a rocket-fired grenade. One U.S. soldier died, two others are hurt. Nearly 960 U.S. troops have been killed since the Iraq war started.

American Paul Hamm will keep the Olympic gold medal he won in gymnastics, but the International Gymnastics Federation has suspended three judges. They made a mistake in scoring Wednesday. The error cost a South Korean gymnast a gold medal.

Keeping you informed, this is CNN, the most trusted name in news. ON THE STORY continues after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY GENERAL: Our belief in the course of peace is undiminished. Our sense of mission is intact and our work goes on. And every day, we work to further the cause of peace. We feel beside us those we have loved and lost.

(END VIDEO CLIP)

NEISLOSS: U.N. Secretary-General Kofi Annan, remembering the 22 colleagues killed in a massive truck bombing of the U.N. mission in Baghdad one year ago this week. Terrorism fears still have the world body struggling to fill its role in the rebuilding of Iraq.

Welcome back to ON THE STORY.

Kofi Annan also said in his memorial message: How are we going to balance our role with our security fears? And this is a very familiar question, by now, for the U.N.

WILLIS: So, Liz, tell us: has there been any improvement in security for people of the U.N. in Iraq? NEISLOSS: Well, what's very interesting in looking at this memorial this week, it becomes very clear that in one year, the U.S. still is a really key target in Iraq. That still has not changed. U.N. employees who are supposed to be working inside Iraq, instead, are operating from Amman, Jordan; they are operating from Kuwait. Only recently, a very small team, the special envoy, the U.N. special envoy for Iraq, has gone back in with a very, very small group.

So what's clear is that for the foreseeable future, the U.N. remains what they call a key target.

DOUGHERTY: It seems that the U.N. has tried to remain, really, outside of the perview -- or, let's say, been connected to the post- conflict situation. In other words, they try to remain independent.

But they're often perceived by terrorists or others as kind of part of the intervention. How do they work that out? How do they try to remain outside of that, and not become targets?

NEISLOSS: Well, that has historically been one of the balancing acts that the U.N. has had to do, but now it's really clear that the U.N.'s -- what they consider a moral shield or the protection of the blue flag, really isn't there any more. And as Kofi Annan said again this week, we really are key targets of terrorists. It's no longer perhaps an accident. You're in a risky mission. Many U.N. staff realize that.

But the U.N. is really being targeted now. So that balancing act is harder than it ever was. The U.N. says it is stepping up security. They claim they are spending more money, worldwide. But I have to say, I heard many angry members of U.N. staff this week who say "show us the promised security reform." There has to be a reform in the management of the U.N. The U.N. still does not have a full-time professional security coordinator, which is very hard to believe at a time when Kofi Annan himself is an al-Qaeda target.

COHEN: Liz, another conflict that the U.N. has been involved with is in Sudan, and that's certainly been heating up. Can you go over who the two sides are and who's arming who?

NEISLOSS: Well, it's a -- it's another very tricky situation. It's hard to say that there isn't a conflict in Africa that isn't somewhat confusing.

But at this point, the conflict that's going on right now, that most people focusing on in the western part of the country, the Darfur region, it is three states really about the size of France, a very vast area. This conflict is rooted in differences between black Africans and ethnic Arabs in the area. The black Africans are farming peoples, traditionally, and the Arabs who have been in the area, are a nomadic people.

So there is a competition over resources that's been going on. There's been a steadily creeping southward of the desert in the region. So really, the environment has forced a lot of the conflict. And then recently, about a year ago, the black Africans decided that they were going to launch a rebellion. The government decided the way to put that down was to arm the Arab militias. What we are now all hearing about, the Janjaweed. So they have, as one U.N. official told me, unleashed, really, a genie in a bottle by arming the Janjaweed, and the government really has to decide if it wants to undo what it's done.

DOUGHERTY: So what pressure can be put on the government to actually stop it?

UNIDENTIFIED FEMALE: ...type of leader who will...

NEISLOSS: I'm -- can you repeat your question? I didn't -- I'm sorry, I didn't hear you.

DOUGHERTY: Sure. What pressure could realistically put on -- be put on the government to stop it?

NEISLOSS: That's a very good question.

A lot of focus, really, has been on sanctions as a tool. The Sudanese government right now is facing a deadline. The Security Council gave them 30 days to show progress to start protecting civilians, start disarming the Janjaweed militia.

But sanctions are really not, for the moment, a politically viable option. If you look at the Security Council, there are still members who are not supporting it. They don't have the stomach for sanctions right now. The Chinese, who have considerable oil interests in the Sudan, Pakistan, Algeria, not ready to go for sanctions. And for now, the U.S. is also considering other options. The U.S. is getting some terror help from Sudan.

They are seeing some progress on another war in the Sudan, a civil war in Sudan south. So they really don't necessarily want to upset that balance at this point.

I think the hope is being placed in the pressure coming from troops, peacekeeping troops, that may be put in place by the African Union. The Sudanese government is very concerned about that.

WILLIS: You say another flashpoint in Africa is Burundi. Tell us what's going on there, Liz.

NEISLOSS: Another very complicated story.

Many people have heard about a massacre which took place in Burundi. This was about 160 civilians, mostly women and children who were Tutsi refugees from neighboring Congo. They were slaughtered, basically, as they slept by Hutu extremists.

Now, this is a horrible story in itself. But what's really worrisome for diplomats for the U.N. and for everyone involved in the region, are the threats that seem to have come out of this particular incident. There is a lot of Hutu extremism still in the area. The wars that have been fought -- Congo had a three-year war, Rwanda had its own war. Millions of lives lost.

But at the heart of all this is still Hutu versus Tutsi fighting. And for now, Hutu extremism is really what's driving this. And as one U.N. official said, it's really a poison in the region. And there are a lot of fears that verbal threats -- Rwanda is now threatening to go into the Congo to get some of those who might have been responsible for the massacre. Burundi is also threatening to do so.

So we could see a lot of peace efforts fall to the wayside as a result of this massacre.

DOUGHERTY: In some of these cases around the world -- really, conflict zones -- the issue of Islamic extremism has come up.

Do you see that as a growing factor that complicates things that might have just been, you know, ethnic or religious?

NEISLOSS: Well, it's very interesting. There is a lot of talk at the U.N. about how to grapple with terrorism.

But a lot of issues are tempered by the Islamic member states. Those who are planning to take action, for example, Sudan -- it's a good example of how you can see some of the Islamic interests weighing in. There's a desire to fight against terrorism.

On the other hand, in Iraq -- for example, Pakistan, another Islamic state that wants to help fight the insurgency. But they have to deal with their own domestic issue issues. They don't want to be seen as a Muslim nation that is going in against brother Muslims. So it really is a tricky issue right now.

DOUGHERTY: OK, so, there is more to come and ON THE STORY will be back shortly.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQ INTERIM PRIME MINISTER: There is a very simple procedure that he abides by the -- by the resolution of the national conference, and by the conditions of the Iraqi government, to lay down the arms, dismantle his militias, leave the holy shrines.

(END VIDEO CLIP)

NEISLOSS: A warning from Iraq's interim Prime Minister Ayad Allawi to the militant Shiite cleric Muqtada al-Sadr. Al-Sadr has been at the center of this long standoff between his militia, U.S. and Iraqi forces in Najaf, the site of one of Shia Islam's holiest shrines.

Now joining us from Najaf is CNN producer Kianne Sadeq.

Kianne, it seems as if you blink, you may miss a development in this story. And yet not that much seems to have changed. What is actually going on right now? KIANNE SADEQ, CNN PRODUCER: Well, right now, I just got back from the shrine, actually, and I was talk to some of the top aides of Muqtada al-Sadr. And I spoke to one of his aides, Sheikh Ali Masem (ph). And he mentioned to me that, in fact, they have not had any sort of official communication regarding any negotiations with the government or the National Council.

They did mention negotiations with the office of al-Sistani regarding the handover of the key. But they have asked for negotiations with the government, with the National Council. They said that they have not heard anything yet, since the last time the delegation was here.

COHEN: Kianne, you've done such incredible work from Najaf this week. Can you tell us, what is the atmosphere there? What does it feel like?

SADEQ: Well, it's -- it's a difficult place right now. I mean, there's lots of -- you know, you're constantly hearing gunfire, explosions throughout the night.

And we've -- you know, we've come -- we've been very close (UNINTELLIGIBLE) going through the shrine (ph). It's -- I guess it's a very tens atmosphere right now. Lots of people are very stressed out about the situation and about -- you know, about leaving their home. Lots of sniper fire. It's just a very tense place right now. And that's near the Imam Ali Shrine, the holy city of Najaf, lots of destruction over there -- lots of destruction -- Mehdi Army all over the place, the U.S. military, as well as the Iraqi police.

So at this moment, it's a very tense atmosphere here. Everyone seems to be mad at everybody.

DOUGHERTY: Kianne, who actually supports al-Sadr? Because I've read some stories that say there's a class dimension to this -- that the lower classes support him, the middle class and upper do not.

Is that true?

SADEQ: Well, it's more of a -- it's -- I guess it's -- they come from the al-Sadr movement, which was actually started by Sayed Muqtada's al-Sadr great grandfather and then his father, the Ayatollah Muhammed Sadr al-Sadr (ph). And they just belonged to this al-Sadr movement.

Now there is -- there are a lot of, you know, analysis about this regarding the fact that -- you know, the fact that they are more humble to the lower class and that there are -- you know, more of the lower class belongs to this, follows this al-Sadr movement. But there are more people faithful to the al-Sadr movement as started by Sayed Muqtada al-Sadr's great-grandfather -- Sayed Muqtada al-Sadr's grandfather, and then his father. They find him to be a savior of theirs, mainly during the regime under Saddam Hussein. And he was sort of somebody they could go to, to find their religion again and to find some kind of peace. That's what -- that's what they see him as. So they would always be faithful to this al-Sadr movement, because it's -- you know, they find he has been there for them, for a very long time.

WILLIS: Al-Sadr, though -- from his point of view, what is he driving towards? What does he hope to accomplish, and what is his ambition?

SADEQ: Well, I mean, I've asked this question many times and I've followed many of his sermons and talks and I think his main problem here is the presence of multinational forces, or the U.S., the occupying forces, as he calls it. He does not want to be occupied by anybody. He wants everybody who is not Iraqi to leave Iraq. And then he wants an election process to happen.

NEISLOSS: Kianne, so much is being made of the sort of delicate steps that the U.S. military has been taking. They pull back during Friday prayers. They are trying to do their best, during (ph) the military, to protect a very holy site.

Do you get that feeling on the ground? Is there an awareness of -- by Najaf residents that any of this is being done? There -- that there is even an effort going on?

SADEQ: Well, yes, in fact there is. And, I mean, the Najafi citizens actually support the Americans and -- in some senses -- you know, in some ways, say, "Fine, let them be here. Since they're here, let them be here. Let's just stop this fighting."

But as for -- you know, as for the groups from the al-Sadr movement, they consider them as an occupier, as an occupying force. And, therefore, you know, it becomes -- you know, it just -- that's where the conflict is at.

But a lot of people in this area do, in fact -- you know, do, in fact, realize that this is a -- you know that this is an effort, and are fine with it. I think there's a lot -- there's a -- the mutual feeling among everyone is that they want this to stop. These people believe that the United States is helping, and if these people don't, that's -- you know, that's an issue that, I guess, you can say -- you know, has to weigh itself over here.

WILLIS: Kianne, thanks so much.

One pleasant distraction from the troubles of the world this month is the Olympics. We'll go inside the games with CNN sports anchor Michelle Bonner when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PAUL HAMM, OLYMPIC GOLD MEDALIST: First of all, I'll just, you know, say how, you know, amazing of a night it was. It was so emotional. After I had that mistake on vault, I thought for sure that I had cost myself any medal, really. I thought for sure that the gold medal was out of the question.

(END VIDEO CLIP)

COHEN: That's U.S. gymnast Paul Hamm reflecting on his stunning comeback to win a gold medal. It's just one of several fascinating stories one week into this summer's Olympic Games in Athens.

And joining us to talk about what's been happening is CNN sports anchor Michelle Bonner.

Michelle, that was just incredible to watch that comeback. He had had such problems with his vault earlier.

MICHELLE BONNER, CNN SPORTS ANCHOR: I know, and falling into the judge's table. But what's even more remarkable this morning is that the International Gymnastics Federation had to review tapes, because technically Paul Hamm should not be the Olympic gold medalist in the men's all around. Tae-young of South Korea had actually done his performance and was scored on a start value of 9.9. It should have been, after review of the tapes, scored on a start value of 10.0. And had it been scored on a 10.0, he would have gotten those 0.10 points that he needed and he would be the Olympic gold medalist. Tae-young of South Korea would be.

(CROSSTALK)

COHEN: How could it -- what does it mean to start on a 10, versus starting on a 9.9?

BONNER: Degree of difficulty, what elements you are performing in your routine, whether it's on vault or the parallel bars, pommel horse. The degree of difficulty and the actual movements that the gymnasts use, such as the picture of Paul Hamm you're looking at, his arms stretched out. When they're completely straight and holding it for a minimum of 3 second, something like that, that's how you're scored. And also, you know, the different moves, the flips and the tumbles, and things. That is how it's scored on a certain degree of difficulty. And Tae-young of South Korea was given a start value for his routine on a 9.9 when it was technically the hardest of all of the performance and it should have been awarded a start value of 10.0.

WILLIS: Hey, Michelle, Paul actually had a really interesting personal story too. His twin also competing in the Olympics. How is it that two people in the same family could be so talented?

COHEN: Right. How could it be that you have twins -- we have -- Paul Hamm has a twin, we've heard -- and how could it be that two boys doing the same thing?

BONNER: You know, I mean, obviously, it's just like anyone else, which -- and it's funny, because these two guys, actually, when they learned gymnastics, they learned gymnastics by swinging from the rafters of their family's barn when they were little. And their dad actually made makeshift apparatus. Like he used a tree stump for a pummel horse. But it's just like anyone. You know, you can have two of the best in any event, whether it's gymnastics, track and field -- regardless, you could have two world record holders, and at the same time, there's no explanation as for why one come up better than the other one. I mean, it's all individual, when it comes right down to it, essentially.

COHEN: And, Michelle, will Hamm have to now give back his gold medal?

BONNER: No. I should have pointed that out earlier, Elizabeth. He gets to keep his gold medal. The results will not change. It's an unfortunate mistake. And the three judges who scored it on a 9.9 have been suspended by the International Gymnastics Federation today.

COHEN: Now, the U.S. basketball team, which of course everyone has called the Dream Team, done so well in past Olympics -- what is going on?

BONNER: Well, that's just it.

In the past, they were the Dream Team. But they don't have -- I mean, you got to remember, the Dream Team was made up of the Michael Jordans, the Charles Barkley -- you know, that type of team.

This team, the two biggest superstars that they're riding on are Allen Iverson and Tim Duncan. They have some of the young guys, obviously, in the LeBron James, Imeka Okafor, those kinds of things.

But the difference with this team, they only had a month and a half to actually practice together. And nobody is really going to use that as an excuse. Some of these other teams, though, do spend the better part of a year together, especially on the ladies' side of thing.

But as far as the men's basketball team, the biggest problem with this team is nobody can shoot. This is a group of guys that are made up with going to the basket, lay-ups or dunking. This is not a team that can shoot outside. And when you talk about the Dream Team, you go back to old school basketball, when you think about like the Larry Bird era, Magic Johnson era, those guys could shoot from the outside. Nobody on this men's basketball team can do that.

COHEN: And that's a problem, having a team where nobody's able to shoot.

Well, thank you, Michelle Bonner, for joining us to talk about the Olympics.

We'll have more ON THE STORY when we return.

(BEGIN VIDEOTAPE)

ANNOUNCER: A Chicago criminal trial made national headlines this week because of a very famous juror: Oprah Winfrey. What's her story, more when we return. (END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Oprah Winfrey: what's her story? The television talk- show host was one of 12 jurors who found a 27-year-old man guilty of murder this week.

OPRAH WINFREY, TALK SHOW HOST: This was, like, a world I've read about and certainly am aware of, but this was a reality check.

ANNOUNCER: Winfrey says she was impressed with the experience, and plans to make it the subject of one of her shows next week, with fellow jurors as guests.

(END VIDEOTAPE)

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

Up next, a check of stories in the news now.

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

Aired August 21, 2004 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DREW GRIFFIN, CNN ANCHOR: Here's the latest headlines:
In Iraq, after a night of relative calm, fighting has resumed now outside a revered shrine in the Iraqi city of Najaf. Militiamen loyal to cleric Muqtada al-Sadr still hold the mosque, despite promising to hand it over to top Shiite religious leaders.

Another salvo in the war over political attack ads. A group of anti-Kerry Vietnam War veterans has released another TV spot on John Kerry's service record. Hours later, Kerry filed an official complaint with the Federal Election Commission, saying the group is illegally working with the Bush campaign. The Bush camp denies the allegation.

Philadelphia's fire department mourning the loss of two veteran firefighters this morning. Two men were caught in the basement of a rowhouse blaze, and rescuers just couldn't get there in time. Both died of smoke inhalation.

And some still photos from the Summer Games, as we tell you the U.S. is tops in medal counts with 41, including 18 gold. China second, Russia third. Australia and Germany are tied. Thirty-two medals are at stake this very day at the XXVIII Olympiad.

Keeping you informed, this is CNN, the most trusted name in news.

I'm Drew Griffin at CNN global headquarters in Atlanta. Now, ON THE STORY.

LIZ NEISLOSS, CNN U.N. PRODUCER: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week.

I'm Liz Neisloss, ON THE STORY of the United Nations, remembering its colleagues killed in a massive terrorist attack one year ago. What's changed since then?

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: I'm Jill Dougherty in Crawford, Texas, just down the road a piece from the Bush ranch, ON THE STORY of those attack ads and the barrage of charges coming both from the Bush and the Kerry campaigns.

GERRI WILLIS, CNNfn CORRESPONDENT: And I'm Gerri Willis, ON THE STORY of how new record oil prices are fueling fears of a recession, and what that could mean for your wallet. ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: And I'm Elizabeth Cohen, on the pros and cons of surgery to fight obesity.

We'll also be hearing later from CNN producer Kianne Sadeq about the standoff in Najaf and what she witnessed in a mosque under siege.

And we'll check in with CNN sports anchor Michelle Bonner on who's golden and who's not at the Olympic Games. E-mail us at cnn.com, ON THE STORY -- CNN.ONTHESTORY (sic).

Now to Jill Dougherty and the race for the White House.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent said the other day that if he's elected, the number of troops in Iraq will be significantly reduced within six months. I don't think it's a wise statement. You see, it sends the wrong signal.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The situation in Iraq is a mess. That's the president's responsibility, and he owes the American people an answer.

(END VIDEO CLIP)

DOUGHERTY: This campaign started out with both President Bush and Senator Kerry saying that each knew better how to deal with the situation in Iraq. But ironically, the way it's turning out, the debate is not over Iraq, but about Vietnam.

WILLIS: Jill, you know, we've been paying attention -- at the beginning of the week, at least -- to the troop-re-deployment story. And of course, just like everything else, it turns into a big political debate. I thought we'd get a break in August, but it doesn't seem likely.

DOUGHERTY: Not at all. In fact, I have to tell you, this week, it probably hit critical masse about Wednesday. But this debate over the attack ads is really fierce.

We've been sitting in filing centers, in fact, here in Crawford -- sitting in the filing center -- and literally, every few minutes you're either getting an e-mail, a call, cell phone call, a BlackBerry message, something, from these dueling campaigns. And sometimes it's even before official comments are made, they're rebutting each other. It's been really acrimonious, I'd have to say, about these attack ads.

COHEN: Jill, this group, the Swift Boat Veterans for the Truth -- we're watching their ad now -- is there any connection between them and the Republicans?

DOUGHERTY: Well, there was a big article in "The New York Times" this week, which really has even a chart, showing connections between some of the people who put these ads together, some of the people who were featured in the ads, and the White House, the Bush campaign, et cetera.

But the question is, is there a direct connection? In other words, does the White -- is the White House orchestrating this, or are these people who were linked in the past and may be even now to the campaign, but they are not directly doing the bidding of the White House?

So that's what the debate is. And the White House would say, yes, they've had connections. But it doesn't mean that we're calling the shots in this. Kerry people, of course, would think the opposite.

NEISLOSS: So, Jill this seems to have knocked everything else off the table. No discussion of domestic agenda, in particular. Why does it have so much traction, this story? Why the Vietnam story, 30 years ago? Why is it still grabbing people so much?

DOUGHERTY: Well, you know, I would have to say that there's a deep emotional content to all of this.

Sure, you know, you have the debate about what did Kerry do during the war, et cetera. But there's also that visceral response that people have to Vietnam. You know, people who remember Vietnam, went through Vietnam, still remember the debates. People who were -- you know, so-called, the longhair war protesters, et cetera, and people were split right down the middle. So it cuts to the heart of the emotional response.

And for Kerry, (AUDIO GAP) cuts both ways. He is both considered a hero of the Vietnam War, but also somebody who, when he came back, opposed the war and criticized some of the behavior of the U.S. Army. So that -- it's a very delicate balance and he's having to deal with this.

WILLIS: Of course, we've got the Republican convention coming up this week in New York City. What are you hearing about the direction of this? What kinds of ideas, attitudes, are they going to bring out and try to drive home with the American people, Jill?

DOUGHERTY: Well, you know, if you're dealing with -- I was just say, a delicate balance, and there's a delicate balance that the Republicans have, too, because after all, President Bush is the wartime president. And in a sense, that's good, because he can rally the nation, he can get support on that side.

But it also can be very frightening and concerning for people, especially if there were to be another attack in the United States. So, on the one hand, he has that positive side of being a wartime president. But it can get very scary. So he also has to balance that with a positive message. And that's what we are supposed to be hearing from the president: the other side of it, what does he want to do, if he is elected for the next four years? What kind of programs would he propose? NEISLOSS: Jill, do you have any sense that going into the convention, as we sort of wind into it, that there will be more of a discussion of domestic issues, that other issues -- there will be a moving on from this Vietnam debate?

DOUGHERTY: Well, one would hope, because obviously, this debate is really getting nowhere.

And you heard that from Senator John McCain. I mean, he made it very clear. He does support the president, but he has been critical of the attack ads coming in both directions. And yesterday, essentially, he said, a pox on both your houses, that these ads should end and we should simply say both served honorably during the Vietnam War, and that the FEC -- the Federal Elections Commission -- should be cracking down on this. Actually, that's the group that he blames for not really doing its job properly.

COHEN: Jill, it's interesting, because Kerry has had this band of men who have been around him, other veterans who have been very supportive. And now another group of veterans is attacking him. Is there some -- is there some sort of ideological difference between these two groups?

DOUGHERTY: Well, look at the way this evolved. You know, one of the men who was involved in that goes back years. He was debating John Kerry when they were both in their 20s.

So this goes back 30 -- more than 30 years. And a lot of it is very, very personal. And so, again, that's a danger zone for John Kerry because (AUDIO GAP) present himself as a person who is capable of taking over the reins of government and is capable of responding to something that might happen.

And interestingly, Scott McClellan who is the press secretary for the president, of course, used the word that -- Senator Kerry is "losing his cool." And if you kind of parse that, it's basically saying, well, if he loses his cool over these attack ads, what is he going to do if there's another real attack by terrorists, or another war?

NEISLOSS: So, Jill -- but the polls are still basically showing it's still a very close race at this point. Do you have a sense of what parts of the country, what states that Bush and Kerry really have to grapple with?

DOUGHERTY: You know, it's all the places they have been literally hop-scotching and following each other around to. And those are the battleground states. A lot of them have been -- we've been on the road recently in the Midwest. And these are states where you have -- they're literally split down the middle. Sometimes, you know, 48 to 46, statistically insignificant.

So --and if you look at the numbers, the Republicans who say they're going to vote for Bush are very, very entrenched. And to a slightly lesser degree, but still very strong, the Democrats are saying that they are entrenched, they're going to vote for Kerry. So what you're doing is -- what the candidates have to do, is center on those voters who are in the middle, who may be swayed. Let's say, some of the McCain voters. They have to pick them off and try to pull them over.

But right now, it is a very tough slog and they are right in the middle of it. Very early, I must add.

WILLIS: Well, Jill, I know you'll watch those-- that slicing and dicing of the electorate.

But one issue that could end up weighing heavily on voters' minds this fall -- it's oil prices. Mostly moving higher here. I'm on that story in two minutes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEVEN ROACH, CHIEF ECONOMIST, MORGAN STANLEY: Higher oil prices -- if they hit a strong economy, they will not hurt that much. If they hit a vulnerable economy, they will hurt a lot. And the U.S. right now, I think, is at its maximum state of vulnerability.

(END VIDEO CLIP)

WILLIS: That's Steven Roach. He's chief economist at Morgan Stanley, talking about the potential impact of record oil prices. They hit nearly $50 a barrel this week, before coming down just a bit. Just when the economy's recovery appeared to be firmly established, worries over oil prices are reviving talk of the "r" word: recession.

Welcome back. We're ON THE STORY.

And guys, these oil prices -- I've got to tell you, the talk on Wall Street -- some people are whispering $60 a barrel, which will be very frightening, indeed. The big issue here, how high can they go, and why are they going so high? Demand, of course, from countries like China, like India, going higher and higher. But it's also just the fears that terrorists might do something, endanger oil supplies and those prices continue to rise.

COHEN: Gerri -- Gerri, tell us, why is it that oil prices are so important to the market? Why do they have such a big impact on other parts of market?

WILLIS: Well, it's interesting you ask that question, because every day, those oil prices were rising practically. You saw the stock market sell off.

The reason: it's a stealth tax on both consumers and businesses, surprising where the cost increases come -- you know, you see it in the price of plastic bags, for example, because petroleum is an important input there.

And one number I just wanted to share with you guys: for every penny that gas goes up at the pump, it takes $1.4 billion out of the hands of the consumers. So you can see it's a real stealth tax, ultimately, out there when prices rise.

DOUGHERTY: Gerri, this question came up out here in Crawford, at a briefing with Scott McClellan, the spokesman for the president. And we asked him -- long term, the administration says we want that energy bill passed. But it's been sitting there for three years, kind of dead in the water, at least stalled.

So what could, realistically, the Bush administration at this point do, short term, to bring those prices down?

WILLIS: Well, you know, it's very difficult, because it's very difficult to say how are you going to, you know, make sure there's a consistent and steady supply of oil. There's so little impact that we really have on it.

Of course, there's been the bill sitting there, languishing. But I think at the end of the day, Americans have to reduce their demand for oil and it's only been going up because of products like SUVs and other things. Americans using more and more oil.

I don't know if you guys remember -- but remember the phrase nonrenewable resource? There's only so much oil out there. And, of course, you know, when something's in short supply, its price goes up.

NEISLOSS: Well, one thing that hasn't been in short supply has been hype this week, Gerri, as you know, certainly, on Google. And, you know, we all know how popular it is. It's part of the vocabulary, really, now. When somebody wants to find out something about a person, they'll say, go Google him. So it's really into the popular culture.

But why so much hype about this initial public offering?

WILLIS: Yes, it's really part of the media, zeitgeist, you've got to say. Here we're looking at Google here. Internet search engine, went public this week, did pretty well.

The hype around this, of course, had to do with the way it was done. It was done -- what they called a Dutch auction. Basically, the folks who run Google said, Hey, we don't need help from Wall Street; we're going to do this ourselves. So of course there was a lot of eyes on how well this initial public offering came off.

They priced it at $85 a share. That first day it actually went up 18 percent. Pretty darn good. But a lot of questions out there about whether they could have raised more money if they had done it the old- fashioned way.

DOUGHERTY: So how did they miscalculate here?

WILLIS: Well, I don't think it's a case of miscalculation. There were a couple of possible missteps.

One thing that went wrong, just as this was -- during the quiet period where the company's not supposed to be talking about their stock offering at all, a story appeared in "Playboy," quoting both of the founders of the company, talking about the company itself. That's exactly what you don't want to have happen.

So there were a few missteps and I think a lot of institutional investors -- the pros out there, who typically put a lot of money in these kinds of investments -- had more questions about the process of the Dutch auction than they had answers and they stayed on the sidelines. Ultimately, it probably cost Google founders a chunk of change in terms of getting money for the company.

COHEN: Gerri, let's move on to another financial issue, and that is United airlines and the pensions for its pilots. The airline is really putting a lot of pressure on its pilots right now.

WILLIS: Right. What we've seen -- big story, headlines this week. United saying that possibly -- most likely in fact, the only way they could get out of Chapter 11 was to stop payment on pensions. They have a huge pension obligation of nearly $9 billion going out into the future.

Now, there is a federal government agency that ensures these pensions, which is the good news. The bad news: I don't think they're going to be able to cover the whole tab. In fact, they say they can pay all of it, but about $2 billion. So a lot of retirees out there. A lot of retirees to come, to be disappointed with what they would get in retirement.

The entire industry, really, is having difficulty here, you know. We're seeing other airlines withholding pay from pilots, asking for concessions on wages. And what we see going on, really is that there's been more and more competition. 9/11, of course, was very difficult for the industry and oil prices, again. Here you're seeing the impact of rising oil prices on a very important industry.

NEISLOSS: Well, Gerri, from the economy now, to Iraq, and the high-stakes standoff in Najaf. Not an easy story to cover, but we'll talk to our journalists right there, CNN producer Kianne Sadeq, when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I hate this side of me. I hate that I let myself be -- get where I'm at today.

(END VIDEO CLIP)

COHEN: That was Louisiana resident Jimmie Sanders (ph), talking about her longtime battle with obesity. She's now one of 40 people who will undergo gastric bypass with the hopes of finally losing weight, courtesy of the state.

Welcome back to ON THE STORY.

Now, Jimmie is an employee of the state of Louisiana, and they're going to see what happens if they pay for them -- for 40 of them -- to have gastric bypass surgery. She's more than 100 pounds overweight. Those are the rules when you -- when you have to have the surgery. It's about $30,000 a pop.

And I have to say, one of the most interesting things about covering this story this week has been the reaction from other people saying, Hey, these people got themselves into this situation. Why should the state pay for them to get out of it?

DOUGHETRY: Yes, you know, Elizabeth, this is -- it's really a fascinating story. But is there like a legal definition that obesity is an illness? Because so many people treat it as a lifestyle problem.

COHEN: Right, and more and more there's a recognition that obesity is a disease, just like any other disease, that it's not a personal flaw. It's not just an inability to control what you eat, that it is a disease. And that's why many private health insurance already pays for gastric bypass surgery. Many, many people are having their insurance pay for it.

And one of the reasons is that people -- even though there's not a lot of data on this, experts suspect that paying $30,000 now is less than what you would have to pay when, decades later, that overweight person develops heart disease, develops diabetes, has disabilities, misses work -- that you're better off paying for it now than later.

WILLIS: And Elizabeth, isn't there a failure rate with the diet -- the people who promote diet and exercise, as a way of preventing obesity?

COHEN: Right. Of course, the ideal way to lose weight is not to have a surgery, but to diet and exercise. But the failure rate for that is very, very high, some people say as high as about 95 percent, when you're talking about morbidly obese people, people who are more than 100 pounds overweight. So more and more, you hear experts who once would have waved the flag for diet and exercise, saying, you know, maybe this surgery is really what people need who are that heavy.

NEISLOSS: I'm guessing, Elizabeth, that people are going to be listening to this saying, Oh, great, I don't have to exercise or diet. I'll have the surgery.

Is insurance going to cover this?

COHEN: Insurance does, in many case, cover this. And there's several reasons why.

You shouldn't be so excited about this surgery if you just want to lose 10 pounds to look better in your bathing suit. You have to be 100 pounds overweight or more to get this surgery. So this is not for the vast majority of Americans who really need to lose much less than that.

Also, this is a heavy-duty surgery. I mean, this is a big deal. It takes a while to recover from it. One study shows that 2 percent of the people who get the surgery die within the first month. It changes the way you eat forever. It makes your stomach much smaller, so you simply can't eat as much.

So this isn't just some sort of happy, fun thing you go and do when you need to lose a little bit of weight.

DOUGHERTY: But let's say that somebody actually, you know, gets the surgery, but they still want to eat or still have that pattern of eating from before. Then what do they do?

COHEN: Right.

Well, first of all, what the doctors hope is that they don't have that pattern, because they give them counseling along with the surgery. But if the counseling doesn't help, and if there's still, let's say, overeating for emotional reasons, that stomach is much smaller after the surgery. And so if you overeat, you will become very ill, and that, of course, is really one of the tricks of the surgery, is that you simply can't eat as much as you used to because you will feel so sick.

WILLIS: Elizabeth, why Louisiana? You know, is there a Stroke Belt out there in the South, and is there a potential area for problems?

COHEN: Oh, absolutely. As a matter of fact, that's what people call it; they call it the Stroke Belt. Many of the Southern states, including Louisiana, have the highest rates of obesity. And so that's one of the reasons why Louisiana is undertaking this pilot program.

Another reason -- and this, again, is for state employees -- is that people come to work for the state of Louisiana as a young people and they tend to stay. They're still there decades later. So that state has a particular interest in learning, Should we make the investment now so that we don't have to pay later?

NEISLOSS: Now, Elizabeth, you also covered one of these medical- miracle stories this week, the story of the smallest premature baby. What can you tell us about that?

COHEN: Right. Madeline Mann -- she's an incredible young woman. She was born 15 years ago, weighing 9 ounces. That is less than a can of soda. She just celebrated her 15th birthday, and her doctors reported on her in the New England Journal of Medicine. You see her here.

What's incredible about her is that not only did she -- that was her when she was born. You can see her neonatologist's hand there. Not only did she defy the odds by surviving, she defied the odds by being healthy.

She's very little. You could probably tell when you saw her walking there in that pink outfit. She only ways about 60 pounds, and that's about half of what you would expect a 15-year-old girl to weigh. But she doesn't have any major problems. She doesn't have cerebral palsy; she doesn't have any neurological issues. She's got a touch of asthma. Her eyesight needs correcting.

But other than that, she's doing great. She's in the 83rd percentile academically. Here's another little preemie, a different girl who we profiled a couple years, who's also doing great six years later.

So preemies today really do incredibly well. And this girl, in particular, really defied the odds.

WILLIS: And Elizabeth, this really means a lot to a lot of people, because being a preemie isn't all that unusual any more, right?

COHEN: That's right. Being a preemie is not unusual any more.

One of the many reasons for that is that women are having babies later in life, which increases the chance that you're going to have a premature baby. Also, with IVF, people are having multiples. When you're having twins or triplets or quadruplets, more likely that those babies will come early.

So the neonatal intensive care units are fuller than ever.

DOUGHERTY: So the prognosis for her -- prognosis, or, you know, the predictions for her life -- I mean, will she eventually get to be the size of a regular person, or, you know, will all her development be normal? Do they know that down the road?

COHEN: You know, that's a good question. And they don't know that. And one of the reasons is that there's not a lot of data on how 9-ounce babies do, because -- well, she's the smallest. There aren't many babies anywhere in that age range.

But studies on micro-preemies in general show that they tend to be smaller later in life, but that they do tend to catch up -- not always completely. If she's 60 pounds at 15, the chances of her being a regular-weight adult are pretty small. She will continue to be petite, shall we say, probably for the rest of her life.

NEISLOSS: Well, from -- from medical miracles, we're going to now try to go back to Iraq.

ON THE STORY is coming up after the break.

GRIFFIN: I'm Drew Griffin at the CNN Center in Atlanta.

After a visit to hurricane-ravaged Florida, fund-raising now in the Hamptons on the agenda for the weekend for Senator John Kerry. The Kerry campaign has lodged a formal complaint with the Federal Election Commission over that negative TV commercial on Kerry's Vietnam war service record.

President Bush at his Texas ranch this week. His weekly radio address, just a short time ago, trumpeted the enactment three years ago of the No Child Left Behind Law.

(BEGIN AUDIO CLIP)

BUSH: We're already seeing hopeful results. Math scores are up from fourth to eighth grades across the country. Fourth-graders in urban schools are showing strong gains in both reading and math. And from Georgia, North Carolina and Maryland, to Illinois, Wisconsin and New Mexico, minority children are improving test scores and narrowing the achievement gap.

(END AUDIO CLIP)

GRIFFIN: Aides to the president say he is using his time at the ranch to get ready for the upcoming GOP convention.

Turning to Iraq, fresh violence in Najaf and Baghdad this morning. U.S. forces clashing again with Shiite fighters holed up at that mosque in Najaf. The U.S. military says it's resuming limited combat operations against those fighters who are loyal to a radical cleric.

And in Baghdad, there's been a deadly attack on U.S. troops -- insurgents hitting a U.S. military vehicle with a rocket-fired grenade. One U.S. soldier died, two others are hurt. Nearly 960 U.S. troops have been killed since the Iraq war started.

American Paul Hamm will keep the Olympic gold medal he won in gymnastics, but the International Gymnastics Federation has suspended three judges. They made a mistake in scoring Wednesday. The error cost a South Korean gymnast a gold medal.

Keeping you informed, this is CNN, the most trusted name in news. ON THE STORY continues after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY GENERAL: Our belief in the course of peace is undiminished. Our sense of mission is intact and our work goes on. And every day, we work to further the cause of peace. We feel beside us those we have loved and lost.

(END VIDEO CLIP)

NEISLOSS: U.N. Secretary-General Kofi Annan, remembering the 22 colleagues killed in a massive truck bombing of the U.N. mission in Baghdad one year ago this week. Terrorism fears still have the world body struggling to fill its role in the rebuilding of Iraq.

Welcome back to ON THE STORY.

Kofi Annan also said in his memorial message: How are we going to balance our role with our security fears? And this is a very familiar question, by now, for the U.N.

WILLIS: So, Liz, tell us: has there been any improvement in security for people of the U.N. in Iraq? NEISLOSS: Well, what's very interesting in looking at this memorial this week, it becomes very clear that in one year, the U.S. still is a really key target in Iraq. That still has not changed. U.N. employees who are supposed to be working inside Iraq, instead, are operating from Amman, Jordan; they are operating from Kuwait. Only recently, a very small team, the special envoy, the U.N. special envoy for Iraq, has gone back in with a very, very small group.

So what's clear is that for the foreseeable future, the U.N. remains what they call a key target.

DOUGHERTY: It seems that the U.N. has tried to remain, really, outside of the perview -- or, let's say, been connected to the post- conflict situation. In other words, they try to remain independent.

But they're often perceived by terrorists or others as kind of part of the intervention. How do they work that out? How do they try to remain outside of that, and not become targets?

NEISLOSS: Well, that has historically been one of the balancing acts that the U.N. has had to do, but now it's really clear that the U.N.'s -- what they consider a moral shield or the protection of the blue flag, really isn't there any more. And as Kofi Annan said again this week, we really are key targets of terrorists. It's no longer perhaps an accident. You're in a risky mission. Many U.N. staff realize that.

But the U.N. is really being targeted now. So that balancing act is harder than it ever was. The U.N. says it is stepping up security. They claim they are spending more money, worldwide. But I have to say, I heard many angry members of U.N. staff this week who say "show us the promised security reform." There has to be a reform in the management of the U.N. The U.N. still does not have a full-time professional security coordinator, which is very hard to believe at a time when Kofi Annan himself is an al-Qaeda target.

COHEN: Liz, another conflict that the U.N. has been involved with is in Sudan, and that's certainly been heating up. Can you go over who the two sides are and who's arming who?

NEISLOSS: Well, it's a -- it's another very tricky situation. It's hard to say that there isn't a conflict in Africa that isn't somewhat confusing.

But at this point, the conflict that's going on right now, that most people focusing on in the western part of the country, the Darfur region, it is three states really about the size of France, a very vast area. This conflict is rooted in differences between black Africans and ethnic Arabs in the area. The black Africans are farming peoples, traditionally, and the Arabs who have been in the area, are a nomadic people.

So there is a competition over resources that's been going on. There's been a steadily creeping southward of the desert in the region. So really, the environment has forced a lot of the conflict. And then recently, about a year ago, the black Africans decided that they were going to launch a rebellion. The government decided the way to put that down was to arm the Arab militias. What we are now all hearing about, the Janjaweed. So they have, as one U.N. official told me, unleashed, really, a genie in a bottle by arming the Janjaweed, and the government really has to decide if it wants to undo what it's done.

DOUGHERTY: So what pressure can be put on the government to actually stop it?

UNIDENTIFIED FEMALE: ...type of leader who will...

NEISLOSS: I'm -- can you repeat your question? I didn't -- I'm sorry, I didn't hear you.

DOUGHERTY: Sure. What pressure could realistically put on -- be put on the government to stop it?

NEISLOSS: That's a very good question.

A lot of focus, really, has been on sanctions as a tool. The Sudanese government right now is facing a deadline. The Security Council gave them 30 days to show progress to start protecting civilians, start disarming the Janjaweed militia.

But sanctions are really not, for the moment, a politically viable option. If you look at the Security Council, there are still members who are not supporting it. They don't have the stomach for sanctions right now. The Chinese, who have considerable oil interests in the Sudan, Pakistan, Algeria, not ready to go for sanctions. And for now, the U.S. is also considering other options. The U.S. is getting some terror help from Sudan.

They are seeing some progress on another war in the Sudan, a civil war in Sudan south. So they really don't necessarily want to upset that balance at this point.

I think the hope is being placed in the pressure coming from troops, peacekeeping troops, that may be put in place by the African Union. The Sudanese government is very concerned about that.

WILLIS: You say another flashpoint in Africa is Burundi. Tell us what's going on there, Liz.

NEISLOSS: Another very complicated story.

Many people have heard about a massacre which took place in Burundi. This was about 160 civilians, mostly women and children who were Tutsi refugees from neighboring Congo. They were slaughtered, basically, as they slept by Hutu extremists.

Now, this is a horrible story in itself. But what's really worrisome for diplomats for the U.N. and for everyone involved in the region, are the threats that seem to have come out of this particular incident. There is a lot of Hutu extremism still in the area. The wars that have been fought -- Congo had a three-year war, Rwanda had its own war. Millions of lives lost.

But at the heart of all this is still Hutu versus Tutsi fighting. And for now, Hutu extremism is really what's driving this. And as one U.N. official said, it's really a poison in the region. And there are a lot of fears that verbal threats -- Rwanda is now threatening to go into the Congo to get some of those who might have been responsible for the massacre. Burundi is also threatening to do so.

So we could see a lot of peace efforts fall to the wayside as a result of this massacre.

DOUGHERTY: In some of these cases around the world -- really, conflict zones -- the issue of Islamic extremism has come up.

Do you see that as a growing factor that complicates things that might have just been, you know, ethnic or religious?

NEISLOSS: Well, it's very interesting. There is a lot of talk at the U.N. about how to grapple with terrorism.

But a lot of issues are tempered by the Islamic member states. Those who are planning to take action, for example, Sudan -- it's a good example of how you can see some of the Islamic interests weighing in. There's a desire to fight against terrorism.

On the other hand, in Iraq -- for example, Pakistan, another Islamic state that wants to help fight the insurgency. But they have to deal with their own domestic issue issues. They don't want to be seen as a Muslim nation that is going in against brother Muslims. So it really is a tricky issue right now.

DOUGHERTY: OK, so, there is more to come and ON THE STORY will be back shortly.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQ INTERIM PRIME MINISTER: There is a very simple procedure that he abides by the -- by the resolution of the national conference, and by the conditions of the Iraqi government, to lay down the arms, dismantle his militias, leave the holy shrines.

(END VIDEO CLIP)

NEISLOSS: A warning from Iraq's interim Prime Minister Ayad Allawi to the militant Shiite cleric Muqtada al-Sadr. Al-Sadr has been at the center of this long standoff between his militia, U.S. and Iraqi forces in Najaf, the site of one of Shia Islam's holiest shrines.

Now joining us from Najaf is CNN producer Kianne Sadeq.

Kianne, it seems as if you blink, you may miss a development in this story. And yet not that much seems to have changed. What is actually going on right now? KIANNE SADEQ, CNN PRODUCER: Well, right now, I just got back from the shrine, actually, and I was talk to some of the top aides of Muqtada al-Sadr. And I spoke to one of his aides, Sheikh Ali Masem (ph). And he mentioned to me that, in fact, they have not had any sort of official communication regarding any negotiations with the government or the National Council.

They did mention negotiations with the office of al-Sistani regarding the handover of the key. But they have asked for negotiations with the government, with the National Council. They said that they have not heard anything yet, since the last time the delegation was here.

COHEN: Kianne, you've done such incredible work from Najaf this week. Can you tell us, what is the atmosphere there? What does it feel like?

SADEQ: Well, it's -- it's a difficult place right now. I mean, there's lots of -- you know, you're constantly hearing gunfire, explosions throughout the night.

And we've -- you know, we've come -- we've been very close (UNINTELLIGIBLE) going through the shrine (ph). It's -- I guess it's a very tens atmosphere right now. Lots of people are very stressed out about the situation and about -- you know, about leaving their home. Lots of sniper fire. It's just a very tense place right now. And that's near the Imam Ali Shrine, the holy city of Najaf, lots of destruction over there -- lots of destruction -- Mehdi Army all over the place, the U.S. military, as well as the Iraqi police.

So at this moment, it's a very tense atmosphere here. Everyone seems to be mad at everybody.

DOUGHERTY: Kianne, who actually supports al-Sadr? Because I've read some stories that say there's a class dimension to this -- that the lower classes support him, the middle class and upper do not.

Is that true?

SADEQ: Well, it's more of a -- it's -- I guess it's -- they come from the al-Sadr movement, which was actually started by Sayed Muqtada's al-Sadr great grandfather and then his father, the Ayatollah Muhammed Sadr al-Sadr (ph). And they just belonged to this al-Sadr movement.

Now there is -- there are a lot of, you know, analysis about this regarding the fact that -- you know, the fact that they are more humble to the lower class and that there are -- you know, more of the lower class belongs to this, follows this al-Sadr movement. But there are more people faithful to the al-Sadr movement as started by Sayed Muqtada al-Sadr's great-grandfather -- Sayed Muqtada al-Sadr's grandfather, and then his father. They find him to be a savior of theirs, mainly during the regime under Saddam Hussein. And he was sort of somebody they could go to, to find their religion again and to find some kind of peace. That's what -- that's what they see him as. So they would always be faithful to this al-Sadr movement, because it's -- you know, they find he has been there for them, for a very long time.

WILLIS: Al-Sadr, though -- from his point of view, what is he driving towards? What does he hope to accomplish, and what is his ambition?

SADEQ: Well, I mean, I've asked this question many times and I've followed many of his sermons and talks and I think his main problem here is the presence of multinational forces, or the U.S., the occupying forces, as he calls it. He does not want to be occupied by anybody. He wants everybody who is not Iraqi to leave Iraq. And then he wants an election process to happen.

NEISLOSS: Kianne, so much is being made of the sort of delicate steps that the U.S. military has been taking. They pull back during Friday prayers. They are trying to do their best, during (ph) the military, to protect a very holy site.

Do you get that feeling on the ground? Is there an awareness of -- by Najaf residents that any of this is being done? There -- that there is even an effort going on?

SADEQ: Well, yes, in fact there is. And, I mean, the Najafi citizens actually support the Americans and -- in some senses -- you know, in some ways, say, "Fine, let them be here. Since they're here, let them be here. Let's just stop this fighting."

But as for -- you know, as for the groups from the al-Sadr movement, they consider them as an occupier, as an occupying force. And, therefore, you know, it becomes -- you know, it just -- that's where the conflict is at.

But a lot of people in this area do, in fact -- you know, do, in fact, realize that this is a -- you know that this is an effort, and are fine with it. I think there's a lot -- there's a -- the mutual feeling among everyone is that they want this to stop. These people believe that the United States is helping, and if these people don't, that's -- you know, that's an issue that, I guess, you can say -- you know, has to weigh itself over here.

WILLIS: Kianne, thanks so much.

One pleasant distraction from the troubles of the world this month is the Olympics. We'll go inside the games with CNN sports anchor Michelle Bonner when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PAUL HAMM, OLYMPIC GOLD MEDALIST: First of all, I'll just, you know, say how, you know, amazing of a night it was. It was so emotional. After I had that mistake on vault, I thought for sure that I had cost myself any medal, really. I thought for sure that the gold medal was out of the question.

(END VIDEO CLIP)

COHEN: That's U.S. gymnast Paul Hamm reflecting on his stunning comeback to win a gold medal. It's just one of several fascinating stories one week into this summer's Olympic Games in Athens.

And joining us to talk about what's been happening is CNN sports anchor Michelle Bonner.

Michelle, that was just incredible to watch that comeback. He had had such problems with his vault earlier.

MICHELLE BONNER, CNN SPORTS ANCHOR: I know, and falling into the judge's table. But what's even more remarkable this morning is that the International Gymnastics Federation had to review tapes, because technically Paul Hamm should not be the Olympic gold medalist in the men's all around. Tae-young of South Korea had actually done his performance and was scored on a start value of 9.9. It should have been, after review of the tapes, scored on a start value of 10.0. And had it been scored on a 10.0, he would have gotten those 0.10 points that he needed and he would be the Olympic gold medalist. Tae-young of South Korea would be.

(CROSSTALK)

COHEN: How could it -- what does it mean to start on a 10, versus starting on a 9.9?

BONNER: Degree of difficulty, what elements you are performing in your routine, whether it's on vault or the parallel bars, pommel horse. The degree of difficulty and the actual movements that the gymnasts use, such as the picture of Paul Hamm you're looking at, his arms stretched out. When they're completely straight and holding it for a minimum of 3 second, something like that, that's how you're scored. And also, you know, the different moves, the flips and the tumbles, and things. That is how it's scored on a certain degree of difficulty. And Tae-young of South Korea was given a start value for his routine on a 9.9 when it was technically the hardest of all of the performance and it should have been awarded a start value of 10.0.

WILLIS: Hey, Michelle, Paul actually had a really interesting personal story too. His twin also competing in the Olympics. How is it that two people in the same family could be so talented?

COHEN: Right. How could it be that you have twins -- we have -- Paul Hamm has a twin, we've heard -- and how could it be that two boys doing the same thing?

BONNER: You know, I mean, obviously, it's just like anyone else, which -- and it's funny, because these two guys, actually, when they learned gymnastics, they learned gymnastics by swinging from the rafters of their family's barn when they were little. And their dad actually made makeshift apparatus. Like he used a tree stump for a pummel horse. But it's just like anyone. You know, you can have two of the best in any event, whether it's gymnastics, track and field -- regardless, you could have two world record holders, and at the same time, there's no explanation as for why one come up better than the other one. I mean, it's all individual, when it comes right down to it, essentially.

COHEN: And, Michelle, will Hamm have to now give back his gold medal?

BONNER: No. I should have pointed that out earlier, Elizabeth. He gets to keep his gold medal. The results will not change. It's an unfortunate mistake. And the three judges who scored it on a 9.9 have been suspended by the International Gymnastics Federation today.

COHEN: Now, the U.S. basketball team, which of course everyone has called the Dream Team, done so well in past Olympics -- what is going on?

BONNER: Well, that's just it.

In the past, they were the Dream Team. But they don't have -- I mean, you got to remember, the Dream Team was made up of the Michael Jordans, the Charles Barkley -- you know, that type of team.

This team, the two biggest superstars that they're riding on are Allen Iverson and Tim Duncan. They have some of the young guys, obviously, in the LeBron James, Imeka Okafor, those kinds of things.

But the difference with this team, they only had a month and a half to actually practice together. And nobody is really going to use that as an excuse. Some of these other teams, though, do spend the better part of a year together, especially on the ladies' side of thing.

But as far as the men's basketball team, the biggest problem with this team is nobody can shoot. This is a group of guys that are made up with going to the basket, lay-ups or dunking. This is not a team that can shoot outside. And when you talk about the Dream Team, you go back to old school basketball, when you think about like the Larry Bird era, Magic Johnson era, those guys could shoot from the outside. Nobody on this men's basketball team can do that.

COHEN: And that's a problem, having a team where nobody's able to shoot.

Well, thank you, Michelle Bonner, for joining us to talk about the Olympics.

We'll have more ON THE STORY when we return.

(BEGIN VIDEOTAPE)

ANNOUNCER: A Chicago criminal trial made national headlines this week because of a very famous juror: Oprah Winfrey. What's her story, more when we return. (END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Oprah Winfrey: what's her story? The television talk- show host was one of 12 jurors who found a 27-year-old man guilty of murder this week.

OPRAH WINFREY, TALK SHOW HOST: This was, like, a world I've read about and certainly am aware of, but this was a reality check.

ANNOUNCER: Winfrey says she was impressed with the experience, and plans to make it the subject of one of her shows next week, with fellow jurors as guests.

(END VIDEOTAPE)

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

Up next, a check of stories in the news now.

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