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Kofi Annan Urges World To Help Reconstruct Iraq; President Bush Campaigns Furiously In Florida; Flu Shortage Becomes Apparent As Season Begins In Nine States

Aired October 23, 2004 - 10:00   ET

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

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


BETTY NGUYEN, CNN ANCHOR: Now in the news. In Japan, cracked roads and rattled nerves after three strong earthquakes strike in the northwest. The tremors happened one after the other. The strongest measuring a magnitude 6.8. Blackouts, ruptured water mains, collapsed houses and a high-speed train derailment are now reported. Local media reports now say at least three are dead and hundreds injured.
Suicide car bombings kill 11 members of Iraq's security forces. The deadliest attack happened near a U.S. Marine base west of Baghdad. Another bomb went off at a National Guard camp in Samarra, which is north of Baghdad. There are no U.S. casualties.

And six U.S. soldiers are hurt after a roadside bomb hit the vehicle they were riding in. Officials say none of the soldiers' injuries are life threatening.

In Afghanistan, police report a suicide attack in downtown Kabul. The attacker had six grenades strapped to his body according to Kabul's police chief. The explosions blew the attacker apart and left six other people hurt. Two of those injured are peacekeepers.

And with just ten days until the presidential election, President Bush is rallying Republicans in Florida today. Here's a live look at Fort Myers where that event is taking place right now. He visits four areas in that state. John Kerry is stumping today in Colorado and New Mexico. Polls show a statistical tie with just ten days to go until the election.

I'm Betty Nguyen. ON THE STORY starts right now.

JEANNE MESERVE, CNN CORRESPONDENT: Welcome to CNN's ON THE STORY where our journalists have the inside word on the stories we covered this week. I'm Jeanne Meserve in Washington and the story of how different states are on guard for election day terrorism.

DANA BASH, CNN CORRESPONDENT: I'm Dana Bash in Ft. Myers, Florida on how the President is barnstorming this state starting right now and how his campaign is changing in these final days.

KELLY WALLACE, CNN CORRESPONDENT: I'm Kelly Wallace in quieter New York City on the story of how John Kerry also visits Florida today and how he is hoping some familiar Democratic faces will help get out the vote.

LIZ NEISLOSS, CNN CORRESPONDENT: I'm Liz Neisloss, also in New York on the story of that other country with looming elections, Iraq. A dangerous challenge for the United Nations.

ELIZABETH COHEN, CNN CORRESPONDENT: And I'm Elizabeth Cohen in Atlanta, on the story of how the flu is here already and the political debate over the vaccine shortage is getting louder.

We will be talking about all of these stories and we'll be starting now and later in the hour we will talk to "Sports Illustrated" reporter Melissa Segora about how the Red Sox made baseball history and what is going to matter in the World Series. Right now straight to Dana Bash in Ft. Myers, Florida and the Bush campaign.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Can you imagine being more liberal than Ted Kennedy? He can run, he can even run in camo, but he cannot hide.

(END VIDEO CLIP)

BASH: That was President Bush on Thursday mocking John Kerry's hunting trip. He was hunting geese and also mocking what he was wearing, that of course was camouflage and missing no opportunity to use the L word. We are likely to hear that, that is liberal, many times here in Fort Myers. This is the President's first stop of four here in Florida today. I'm Dana Bash, I'm on the story.

WALLACE: Dana, tough job competing with that large crowd behind you. I want to ask you though, you talked to these advisers (UNINTELLIGIBLE). What concerns them most right now?

BASH: What concerns them most now is probably pretty obvious, it is how incredibly close as you know, Kelly, all of the states are. Look at Florida, for example, it's absolutely neck and neck. The President today, for example is hitting four areas that he won big time. A big part of their strategy is, of course, rallying the base. That's what he is doing today. It's really just the game of chess that is so nail-biting for all -- for both campaigns, but particularly the Bush campaign. You see it where the President is going, not just within important states like Florida, but also sort of a map, the nine states that his senior advisers say are definitely up for grabs. That includes six that went Democratic last time that they are still working very hard to get in their column this time.

NEISLOSS: It sounds like a Red Sox pep rally behind you. What are the issues that are going to make the difference? What do you see the campaign talking about in terms of trying to get out and squeak out whatever little edge they can?

BASH: Well, Liz, it's interesting to see what President Bush did yesterday. The campaign sort of shifted not on the issues they're talking about but the way that they're framing them. The President gave a speech, his advisers said it would be retooled, a different, new stump speech. The ideas were not new but the way he is framing them is basically speaking directly to the voters. Appealing directly to them, saying you have a choice. This is not just about tax cuts or taxes but about your family budget. Not just about terrorism or something that seems far away but hard to grasp, but about your security. That's the way the President is framing it now. That is the way he is likely to frame it when he starts his speech right behind me today. That is the way that they hope to connect with voters. It's essentially what his campaign calls his closing arguments to try to beat out John Kerry. Again, still though, making it clear every time and time again that he thinks John Kerry is too liberal and that his record proves that he is somebody who is big government. They think that is really going to help, especially with what he is trying to do today, which is get the base out.

COHEN: Dana, this close to the election, does President Bush have a 24/7 pedal to the metal kind of schedule?

BASH: You would think so, Elizabeth. This past week, I'll just give you an example, certainly the President had a lot of stops. He went to several states. All of the states really that I mentioned just now that are important. But he was home for dinner three of the nights of the past week. Some Republicans privately are asking why he did not, for example, have a night rally in some of these important states like Pennsylvania, like Ohio. Why he went home. The Bush campaign says, look, they know what they are doing. They are going to be out there aggressively next week. They don't want to burn out their candidate and also point out that John Kerry does not have a more aggressive schedule than President Bush does. But certainly there have been some conversations with some Republicans who have been questioning why the President has not been working through day and night at these rallies.

MESERVE: Dana, the Bush campaign put on the air this week a strong ad known as "the wolves ad" chastising John Kerry for proposals to cut the intelligence budget many years ago I understand there's an interesting back story to that ad. Tell us about it.

BASH: Well, this is an ad that the Bush campaign actually cut five months ago when they were beginning to play up what is the biggest issue the President's campaign believed then and still believes now, which is terrorism. He has a 22-point advantage on that. But they decided to hold it because they did focus groups five months ago and they said it was so effective they said this is so effective, that they said if this is so effective, let's hold it to the end. That's exactly what they did. They released an ad, again, called "wolves" and the wolves are supposed to be a metaphor representing the threat. And it talks about John Kerry and a bill that he proposed ten years ago which we should point out never went anywhere which could have cut some intelligence funding. But the idea, the premise is that they believe that John Kerry will be weaker against terrorism than President Bush is. This is their -- almost their final punch. They have another ad coming out last week which is the final punch they say. It's going to be a very strong ad. Unclear if it will be on the negative side, if you will, as opposed to the positive that perhaps the campaigns like to end on. Pumping up their candidate as opposed to talking about their opponent.

WALLACE: Dana, here is something that is surprising. It seems a lot of Republicans, President Bush not spending a lot of time recently in Ohio. What's the deal with that?

BASH: That's what Ohio Republicans want to know. He was -- last time President Bush was there before yesterday was October 2nd. That was about 19 days that President Bush was not there. This is a very important state electorally. It has 20 electoral votes, that's a lot when you talk about the way the map is shaking out. And it's also historically very important to Republicans. It's a state, though, that has lost a lot of jobs. The President has been there a lot throughout the past year and a half. But the Bush campaign says don't worry. We are going to be back. We know what we are doing. They point out, Karl Rove points out to us that he's got seven stops there in the last week. The strategy is to get a lot of momentum at the end but there are some Ohio Republicans who are worried that he had this absence. While he was gone John Kerry was there five times talking about the job loss, talking about the fact that 200,000 people in that states do not have their jobs since the President took office. So there is some questioning of that strategy in the Republican world.

NEISLOSS: But Dana, if there is so much talk about how tight the race is and how close it could be, some people fear a deadlock, are you hearing behind the scenes talk about what will happen if there is a deadlock? Is it going to be a deja vu of 2000?

BASH: Certainly everybody is preparing for that. We sort of joke on the campaign trail, we countdown the days to the election, we countdown to the days until the recount starts. But we are crossing our fingers that does not happen. You hear stories, you see what's going on. Both sides are beefing up their legal operations in all of these battleground states. Lawsuits have already been filed here in Florida. But really they feel that if they keep pushing, particularly in these states, you know, again, it's a chess game. Nobody knows what's going to happen. But the Bush campaign is becoming a little bit more convinced that some of the blue states, states that have not gone Republican in a long time like Wisconsin, maybe Minnesota maybe even Iowa, are breaking their way. They hope if that shows in the next couple of days, perhaps other states also follow.

WALLACE: Dana Bash doing a great, amazing job battling with a few thousand people it seems there.

BASH: I'm used to it.

WALLACE: Exactly. Great job there. Well we are going to stick around with you in a second. Now we are going to turn to John Kerry. He's in Colorado. He'll be going to New Mexico and he will be making his way to Florida later today. I'm back on the story of the Kerry campaign right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN KERRY, PRESIDENTIAL CANDIDATE: The President says he is a leader. Well, Mr. President, look behind you. There's hardly anyone there.

(END VIDEO CLIP)

WALLACE: Democratic presidential candidate John Kerry in Iowa this week keeping up a steady drum beat of attacks against the incumbent and his policies. Welcome back. We are ON THE STORY.

BASH: Kelly, you know, I wanted to ask you, the Bush campaign is very focused not only on where they go but what they do in these days. You hear President Bush behind me at this large rally, but Bush officials are saying it's not just going to be this in the last week, he will also have smaller more intimate events because they think that is also effective. What is the Kerry campaign strategy in how he is going to spend this week?

WALLACE: Well, it is similar, Dana, because it was interesting. We saw Senator Kerry doing a number of policy speeches this past week as opposed to these big rallies. And reporters are even asking Mike McCurry, the top spokesman for the campaign what is the deal here? They feel there are still, believe it or not, some people who are just tuning in. And so they wanted to have the senator talking about substantive issues like women's issues, talking about leadership on international policy. Also having him talk about other health care matters so that they can sort of appeal to people who, believe it or not, might just be tuning in. Hard to believe that's the case. And then this coming week you will see a little bit of that but have him move more to the big rallies two to three rallies a day to really sort of pump up the volume, energize the base and get out the vote.

MESERVE: He also will be using surrogates, too, isn't he Kelly?

WALLACE: Jeanne, he is getting help, indeed. First, we should mention, Al Gore, former vice president Al Gore, he will be in Florida on Sunday. This is interesting because it could be sort of a controversial move having Al Gore go out there. But the campaign feeling that he can go out and particularly go to African American churches and really energize Democrats, energize African Americans, bringing up what happened in 2000. Jeanne, you know, still a lot of anger on the part of Democrats in Florida who believe they lost or this election was stolen from them. Then you will have the biggest Democrat of them all -- former President Bill Clinton. His first appearance since recovering from heart bypass surgery. He will be in Philadelphia with Senator Kerry on Monday. Then we understand he will do other traveling including Florida. One senior Kerry adviser is saying there is no one who energizes the Democratic base like Bill Clinton. So they are thrilled, Jeanne, he is turning out.

NEISLOSS: So will these celebrity campaigners help Kerry define who is Kerry? Which seems to have been a problem for his for a while defining himself. So is that part of the deal?

WALLACE: Well, Liz, that's a great question and a great point. It does not seem that they will help to define John Kerry. What it seems they will do is really try to energize Democrats, maybe energize some African Americans. There's been some sense that the African American community is not totally excited about John Kerry. Try to encourage Democrats about the stakes they believe are really here in this election and get them to the polls. But this has been the biggest issue for John Kerry, defining himself. Trying to make a case for why people who are angry with President Bush but who have not quite gotten behind the Kerry candidacy. And time is running out. I have aides saying people don't know who John Kerry really is. And they know they don't have a lot of time to answer that question for some of these undecided voters.

COHEN: Kelly, earlier in the show we saw this Bush ad that they are calling "wolves" where wolves are in the forest and it's supposed to make voters feel, gee, is John Kerry really going to keep us safe, and raise all sorts of national security issues. How does Kerry plan on counteracting those kinds of ads?

WALLACE: Well right away, Elizabeth, they talked -- put out a statement, called this, quote, "a desperate move by the Bush/Cheney campaign." Saying it will do anything to take attention away from what the Kerry campaign calls President Bush's quote "failed record." then they issued their own response ad, which is basically the tit- for-tat game we are seeing from both sides. They think this could backfire on the Bush Cheney team, but we can tell you this really gets to the heart of a concern for the Kerry campaign. They know that senator Kerry continues to be significantly behind President Bush in polls when it comes to the question who can keep you safer? Who can better handle terrorism? They have been trying everything they can. They have Kristen Breitweiser, a September 11th widow, as a very, very prominent speaker out there who has endorsed John Kerry, appearing now in one of his television ads. What they are trying to do in the final days is raise more and more questions about the President's handling of terrorism before and after September 11th hoping that plants seeds of doubt in some of these undecided voters minds. But, Elizabeth, they know this gets to the heart of a big challenge for Senator Kerry.

BASH: Kelly, we were talking about celebrity surrogates. I should point out that Arnold Schwarzenegger, we're told, is going to be in Ohio with President Bush the last weekend before Election Day. But I wanted to talk about terrorism. What Bush aides say is that they are thrilled that John Kerry is talking about terrorism because he is playing on their turf. He has a 22-point advantage about that. Every time he talks about terrorism, every time that's the Kerry headline, it's President Bush's - on his watch 5 million Americans have lost their health insurance and he's not talking about the millions who have lost jobs or the economy. How much is that a concern in the Kerry campaign?

WALLACE: Well, you know Dana, the Kerry advisers, they sort of say the voters are savvier. They can think about two things at once. In fact, Senator Kerry has a new line where he says we need a president who can do more than one thing at one time. They think people are focused on Iraq and terrorism as well as focusing on these domestic issues, the economy, health care and other issues like that. But there's no question, every time the dialogue is about terrorism, national security, the sense is that it's in the advantage of the President. But Dana, these Kerry advisers know they have to close the gap and they have to sort of answer questions that voters might have about John Kerry's handling of terrorism, handling of Iraq. So they feel they have to continue to pound away and raise questions. And they sort of look at the headlines and take information out in news stories where they feel the President is vulnerable. It remains to be seen if this is going to pay off, but that will be their strategy in the next several days. Hit the President hard on Iraq and terrorism while at the same time trying to keep the dialogue on the issues that Democrats usually have an advantage on, health care, economy, et cetera.

COHEN: Well, our Dana Bash is going to be on to the next campaign stop. Dana, thank you so much for joining us and for dealing with that loud crowd behind you.

BASH: Thank you.

COHEN: Now, one late-comer to the campaign caravan has been the flu vaccine shortage. Here's how political cartoonist Mike Keefe of the "Denver Post" views it. John Kerry is pointing at the flu vaccine syringe sand saying it is three quarters empty. And George Bush is on the other side saying it is one quarter full. All depends on how you look at it. I'm back on the flu story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BILL FIRST, (R) TENNESSEE: I hope that you and others make it very clear that I obtained my flu shot before the shortage was announced before it was known, before anyone knew anything about it.

(END VIDEO CLIP)

COHEN: That's a reminder of how political flu shots have become in recent days. The Republican leader in the U.S. Senate Bill Frist of Tennessee is painstakingly explaining he received his flu shot before the flu vaccine shortage was announced. Welcome back. We're ON THE STORY.

MESERVE: Elizabeth, it is not like this problem came out of the blue. Officials have known for years there were disincentives to manufacturer vaccine, that they were using antiquated technologies, so who gets the blame?

COHEN: Well, there's probably enough blame to go around, actually, Jeanne. There were reports from the General Accounting Office and the National Academy of Sciences and other groups for years saying a shortage is imminent. This is a train wreck basically waiting to happen. They went from having four companies making flu shots in the year 2000 to this company only one is actually distributing flu shots.

The reason is that it's not economically viable. Companies say we don't make enough money off of it, we're going to move on to something else. And President Bush's administration says we have been trying to give them incentives, we have been trying to get more companies involved, but obviously that has not worked. Some people say why didn't the President have a plan B?

NEISLOSS: So what are we talking about? How many flu shots are needed? How many do we have? How many -- how many are missing?

COHEN: Well, officially, when the company called Chiron that was supposed to make about half, nearly half of the nation's flu supply, when it was found some of those might be contaminated, that was 48 million shots that suddenly got yanked off the market. The government has gone to Canada, got 1.5 million there. They are hoping to get another 2.6 million from another company, Aventis in January. So in drips and drabs they are trying to make up that 48 million, which is nearly half the nation's supply. But they're not even going to come close. It takes months and months to make the flu vaccine. It's a painstaking process. There's no way they're going recoup those 48 million.

WALLACE: Elizabeth, put this in perspective for us, because this is getting so much attention in the newspapers, on television, in fact, the cover of one of the New York papers today, flu outbreak up in Harlem. How serious a flu season could we have this year? Give us some context.

COHEN: Well, unfortunately I don't have a crystal ball, so there's no way to know how serious the flu season is going to be. If I did I could make a lot of money off of that. It's very difficult to predict from year to year how bad it's going to be. Right now...

WALLACE: Do you have a sense, though, Elizabeth, that this could be more dangerous or a bigger threat than years past for any reason?

COHEN: No, there's no reason to think that except for fewer Americans will be vaccinated than, say, last year because there's less vaccine available. There's something called herd immunity, you want to get as much of your herd, as much of the country immunized. And then actually we protect each other.

If I am immunized and I see you and I shake hands with you, I won't give you the flu, because I've been immunized. Or at least hopefully that's how it works. So that's obviously going to be a problem, but right now, as of today, only about nine states have seen flu activity. It's only sporadic activity. The Centers for Disease Control says that is less than usual for this time of year. So there's no reason to expect that the flu season is going to be any worse than any other year.

MESERVE: Elizabeth, somebody said to me they were pessimistic that anything was going to change unless it was a bad flu season and a significant number of people died because they did not get their flu shot. Do you share that pessimism or do you think this really could turn things around in terms of the general preparations for flu season next year and beyond?

COHEN: You know, Jeanne, I go back and forth. In some ways I think, wow, half the nation's flu shot supply yanked out in one fell swoop. That will make things change. But then I think, you know, this is such an incredibly difficult problem. Because what the government would have to do is either step in and say all right, private companies, you are not interested in making flu shots, we're going to take it over, we will make it. But that is probably not going to happen. That would take a lot of political will to say that the government is going to take over flu shot supply.

Another thing they could do is say to private companies make your flu shots, and we promise if you have some left over, as often happens, believe it or not, they have some left over at the end of the year, and they can't use it the next year because the strains are always changing, we will buy it from you. We will spend millions of dollars buying back completely useless flu shots. That would also take a lot of political will.

What taxpayer wants to hear we are spending millions of dollars on useless flu shots? So it would be a very -- some huge steps would need to be taken in order for this not to happen again. I don't really see that anyone necessarily is going to have that kind of courage or foresight.

NEISLOSS: So, what is the medical advice here? What are the elderly being told if they cannot get a shot? Do they stay at home and wear a mask? What's the advice?

COHEN: Well, the advice from the federal government is actually don't stand in these incredibly long lines. Some people actually have gotten very sick. Some elderly frail people have stood in line for hours, and it's been a problem. So, they're saying there's a little bit of time here. It's okay. Don't panic. There are more shots coming out all the time.

The way the flu shot system works, and I think a lot of people don't know this, the government or the private companies don't just dump a bunch of flu shots on the market in October and say, OK, this is it. They come out sporadically throughout the season over the next couple of months. So there is going to be more out there.

And what people can do, if they can't get a shot or if they're going to go, say, visiting your grandmother and she has not had a shot, wash your hands well. Make sure you're not sick. That's about the best you can do. There are some anti-viral medicines that are not in short supply so if someone does get the flu they can immediately go to their doctor. And hopefully these antivirals can help them.

MESERVE: From flu to what some state and local governments are prescribing for Election Day security. Back on that story in just a moment.

And baseball. We'll ask "Sports Illustrated's" Melissa Segora whether Red Sox fans will be celebrating next week, too.

And the United Nations oil-for-food scandal. Elizabeth Neisloss on following the money trail from Iraq to Europe and the United States. All ON THE STORY.

(COMMERCIAL BREAK)

NGUYEN: Good morning. I'm Betty Nguyen at CNN world headquarters here in Atlanta. In the news now, U.S. forces in Iraq say they have nabbed a major insurgent leader. The senior member of Abu Musab al Zarqawi's inner circle is in custody after an overnight raid in Fallujah. Five other suspected terrorists were caught in that operation. Multinational forces have been pounding the militant stronghold of Fallujah for several days.

A series of earthquakes has rocked northwestern Japan. The first had a magnitude of 6.8 followed by some strong aftershocks. At least one person died though some local media say three are dead. Buildings have crumbled, water and electrical services are down and a bullet train jumped the tracks.

In his weekly radio address, President Bush focused on homeland security. He says he is supporting some changes recommended by the September 11 commission.

(BEGIN AUDIO CLIP)

BUSH: Congress needs to create the position of the national intelligence director, with strong authority over the personnel and budgets of our intelligence agencies. These and other reforms are necessary to make our intelligence community more effective and to stay ahead of the threats. My administration has sent proposed legislation to Capitol Hill and we are working with Congress to pass a good bill. I urge Congress to act quickly so I can sign these needed reforms into law.

(END AUDIO CLIP)

NGUYEN: Now, he also used the broadcast opportunity to accuse John Kerry of having a fundamental misunderstanding of the war on terror.

That is the news here from Atlanta. Now ON THE STORY continues.

(BEGIN VIDEO CLIP)

ASA HUTCHINSON, HOMELAND SECURITY UNDERSECRETARY: At every area of concern we enhanced, we've ratcheted up the security measures that are in place.

(END VIDEO CLIP)

MESERVE: Homeland Security Undersecretary Asa Hutchinson and others have been warning for months that the U.S. is on guard for the campaign and election season. But come Election Day it's going to be cities and states keeping watch, too. Welcome back, we are ON THE STORY.

COHEN: Jeanne, calibrate for us just how much concern is there about terrorist activity on Election Day? Is it similar to all of these warnings that we have heard over the past several months about activity during the summer?

MESERVE: Well, as you know, there was a lot of concern after the Madrid bombings in particular that something would be done prior to Election Day to try and disrupt the electoral process. There were some pretty urgent words from some members of the administration. We saw the FBI and also ICE, Immigrations and Customs Enforcement stepping up surveillance and stepping up interrogations and so forth. But what we are told today is that there is no specific information indicating that polling station are going to be the target of any sort of threat on Election Day. They have nothing specific along those lines at all. There was some CIA informant who had given them some information about the possibility of strikes related to the election. That informant has now been discredited officials say. But they are still concerned. They say there is enough information coming up from different sources that they believe there is some measure of threat. But the federal government is playing this fairly quietly. I asked just yesterday are you taking any additional steps around the elections? Are you going to step up combat air patrols? Are you going to step up port security and the like? I was told, no, there are no special steps taken by the federal government in this instance though they remain concerned about the possibility as they always are.

NEISLOSS: You have to think there's not a great desire to talk a lot about this. There's obviously a very fine line between talking about the dangers, talking about the threats and voter intimidation. Do you have the feeling that the political season is playing at all into how this is being handled?

MESERVE: It definitely is playing some part in it, I know I'm preparing a spot on election poll security. I went to the Department of Homeland Security. I requested an interview and I was told no, we're not putting anybody out in public, nobody is going to be talking about this issue in explicit terms. The fact is that elections in this country are not run by the federal government. They are run by the states, they are run by the localities. And the federal government has not put out any guidance to the states and locals about how to handle things. However the National Governors' Association, the National Association of Secretaries of State did draw up a template which it sent around to election officials making suggestions how they should deal with communications, about alternative polling sites in case there is some kind of disruption. What I found in talking to secretaries of state and local registrars around the country is that what they are doing varies very widely. There are some that are saying we are not doing anything any differently than we did other years. Some are saying they are going to have some undercover police present around polling places. Some say they're stepping up security generally in the community. And others saying they are just not doing anything different at all. So it runs the gamut. In Massachusetts, I might add, you will see police in the polling places. But that's because in that state there is, in fact, a state law mandating that there be armed officers at polling sites. But that's the exception to the rule here. A lot of election officials are very concerned about that perception that you mentioned, Liz, that there could be voter intimidation. Some officials say to me frankly what they are more concerned about this year is the sort of intimidation they might see from partisans at the polls and from all the lawyers which both Democrats and Republicans say they are going to have on hand to police for any possible polling irregularities.

WALLACE: Jeanne, you know, one thing you hear from voters when you travel on the campaign is we want to see you all do more fact checks. You have been doing a series of them which are getting a tremendous amount of attention. In fact, one of your most recent after the final debate is getting lots of play. Let's take a listen to that.

(BEGIN VIDEO CLIP)

MESERVE (voice over): For this one night, at least, Tempe, Arizona, was the home of the whopper. Both candidates got facts wrong.

(END VIDEO CLIP)

WALLACE: And I know various news organizations are picking up your lead they loved it so much. But looking at that debate that night, Jeanne, and the issue of homeland security, are both candidates playing too loosely with the facts here?

MESERVE: Well, on homeland security, the criticism is they are not talking enough about it at all. There was a direct question about it in the first debate. It was really given short shrift by the candidates. The people who live and breathe homeland security say hey listen, this is a very serious issue. The candidates are talking a lot about the away game. Talking about what's happening in Iraq. They are talking about Afghanistan. They are not talking about what's happening here except in the most broad and general terms. John Kerry, for instance, has said on several occasions, 95 percent of the shipping containers coming into the country are not being inspected. Well, that's true, but he does not go on to say what he is going to do about it. He doesn't say whether it will be effective, he doesn't tell us whether that's going to bring commerce to a grinding halt. He does not tell us what the price tag on that is going to be and the same criticism of George W. Bush, they are not giving specifics on the homeland security issues. And they tend, the experts say, to view this as something very discreet, as something that involves firemen and policemen when in fact it's a very big and broad issue that deals with much larger issues like immigration policy and it involves the private sector. You just don't hear the candidates talking about this in the specificity that the experts, at least, would like to see.

WALLACE: Well, it's not just the U.S. election looming, whoever wins that election is going to face a massive challenge. Just weeks after being sworn in Iraq's election is set for the end of January. Is the U.N. doing enough to get ready? I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY GENERAL: Regardless of where we stood before the war, what we think about the reasons for the war, I think all our efforts should go into stabilizing Iraq and helping Iraqis take charge of their own destiny.

(END VIDEO CLIP)

NEISLOSS: United Nations Secretary General Kofi Annan calling for an international effort to stabilize Iraq. Meanwhile Iraq's foreign minister complained this week that the United Nations is not doing enough to help prepare for elections early next year. Welcome back. We're ON THE STORY.

WALLACE: Liz, help us understand something. I thought countries pledged money and also pledged that they would send personnel to help with the elections. Is that the case and is it just not people stepping up to what they've already pledged to do?

NEISLOSS: Well, countries have pledged money and part of the problem is some of that money is not coming through. But for the United Nations the big problem is countries are supposed to pledge troops, and they have just haven't coughed up the troops. In fact, Kofi Annan pointedly said this week, look a lot of the countries that are saying the United Nations should get in are not coming out and supplying troops. It's a very tricky issue to offer troops to go into Iraq. Domestically it's not popular in many countries. You have car bombings, you have kidnappings, it's a very tough sell. But this week we did see one contribution come forward. The tiny country of Fiji. And some people might think, Fiji, I'm thinking that might be a place I can go for vacation, but interestingly Fiji, for a small country, is actually a fairly large contributor to peacekeeping troops. But in this case they are giving about 130 troops. The U.N. really needs thousands more for their own protection so it still is undetermined whether the U.N. will be able to go back in in any large numbers.

COHEN: Liz there was some news this week about the oil-for-food program. Can you talk a bit about what that program does and if it's getting into trouble?

NEISLOSS: Well, the program was a massive humanitarian program. In the end it basically sold something like $65 billion worth of oil. And it's now being called an unbelievable leaky sieve for corruption. It is clear that Saddam Hussein had some sort of pay to play scheme going on in order to sell his oil, in order to sell goods to Iraq you might have had to pay a bribe or take some sort of voucher from him. But names are not really being identified yet. There were 4500 names released this week by Paul Volcker, the man who is in charge of the investigation for the United Nations. They are names of companies, but this guy refused to name actual individuals saying I'm not judging guilt or innocence yet. But Volcker has got a lot of competition. He has five congressional committees looking into oil-for-food, there's also a federal investigation. And he said there has not been complete cooperation in getting information from the congressional committees.

MESERVE: So when can we expect to get the definitive word on just how big and how bad this situation was?

NEISLOSS: Well, first I guess it depends on whose word you want to get since we have so many competing investigations. But Paul Volcker, who is this towering guy -- he is 6'8 and looming over the microphones as the press was firing questions at him. And he said I am not going to have anything really ready, maybe an interim report in a few months but nothing until the middle of next year. He has got dozens of countries he is going through, he's got tens of thousands of documents. He had a lot of journalists asking him very specific questions about documents, about individuals. He said, look, I don't know every document that is in this investigation. He is asking for patience. He is warning against leaks. He is worried that some of the clamor and the impatience is going to ruin his investigation.

WALLACE: Liz, you have roamed through the halls of the U.N. and talked to diplomats all the time, how much are they focused on the upcoming election in the United States?

NEISLOSS: It's not something that you hear an awful lot about. Diplomats are very squeamish to talk about any sort of election. They want to stick to the basic issues and they are very scared to go out on a limb on certainly the U.S. election. The U.S. being the big powerhouse of the United Nations.

COHEN: Now, Liz, the funnest part of your week was probably getting to watch Ricky Martin at the U.N. I understand he did not sing but he still had some interesting things to say.

NEISLOSS: Yeah. We had a little la vida loca at the United Nations this week. Ricky Martin who is obviously the sex symbol rock star musician came to the U.N. to talk about something that is a very difficult issue, child sex exploitation. The tourism industry, it's apparently a $7 billion industry. Ricky Martin has become somewhat of a spokesperson for the issue. He said a few years ago he got letters from Harvard students who brought the issue to his attention and he really has been campaigning to uncover what is a big industry. It's in many countries around the world. And he's hoping that his public service announcements, his efforts will really shine a little spotlight on the problem.

WALLACE: Liz, some perks of the job, right? Covering the U.N. you get to cover Ricky Martin.

NEISLOSS: Different from the normal diplomat you could say, sure.

WALLACE: That's right. Well, Liz, we'll leave it there with you. We of course will be talking to you in future weeks and will be talking right to each other after this show.

Up next, a country split down the middle. Polarized, divided, not by politics, but we are talking about baseball here. We are back on that story with "Sports Illustrated" Melissa Segora right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We never gave up! We never gave up!

(END VIDEO CLIP)

COHEN: The chants of "we never gave up" echoing from Boston throughout the Red Sox Nation this week. If the League Championships weren't enough, the World Series begins tonight. Welcome back. We are on the story. Joining us from New York from our sister company, "Sports Illustrated," its baseball coverage team, is Melissa Segora. Melissa welcome to ON THE STORY. How does it look? We have these two teams pitted against each other. Give us an overview. Who is the best? Who has got good defense? Who has got good offense?

MELISSA SEGORA, "SPORTS ILLUSTRATED": Well now we are expecting a high voltage series. That's for sure. So far in this postseason we have seen twice as many home runs as we did during the regular season. Both these teams, both the Red Sox and the St. Louis Cardinals have explosive lineups both powerful, both capable of muscling the ball whenever, wherever they would like. As for pitching, that is going to be the wild card in the series. Defensively St. Louis is stocked with lots of Gold Gloves out there. And the Red Sox have made some trades that have definitely helped to solidify their defense this year.

MESERVE: Melissa, are there some particular players we could keep our eye on?

SEGORA: Absolutely. For the St. Louis Cardinals look to Albert Pujols. He's a guy, when I talk to scouts, I ask what is his weak spot? How do you get this guy out? They said if you can answer that question, you can have a job in Major League Baseball, that's for sure. You pitch him high, you pitch him low, you pitch him inside, you pitch him outside, he is going to knock the ball. As for the Red Sox, sort of a player that flies under the radar a little bit is their leadoff hitter Johnny Damon. He is a guy who has a lot of speed on the base path. If he gets on base he can distract pitchers because he is so speedy and can steal a base.

WALLACE: Melissa, true confessions, the New Yorker on this panel here. As you can imagine, there's upset in our household and others about the New York Yankees up three games to none and then losing to the Boston Red Sox. I know you have been talking to people. What is the sense behind the scenes of what went wrong for the New York Yankees?

SEGORA: Well, you know, there was a lot of speculation all year long as to how the Yankees are going to hold up. They won over 100 games, yes, but there were some chinks in the armor all along. There were a lot of questions surrounding the Yankees pitching. And that is the one component that did fall apart in the series. The one thing I read yesterday is from the "Daily News" Mike Lupica saying these are really George Steinbrenner's all-stars and money really can't buy you love and it certainly can't buy you heart. What we saw from the Red Sox/Yankees series is this, that the depth of George Steinbrenner's pockets did not make up for the strength of spirit for the Boston Red Sox. They were really a resilient team and just had a lot more heart out there than I think people expected.

COHEN: Well, Melissa, as the Bostonian on this panel, I'd like to ask you, you talked about that heart, you talked about that spirit, how much is that expected to help the Red Sox in the World Series?

SEGORA: I would actually consider that a key component. On paper the St. Louis Cardinals look like the much better team. They're defensively considered to be by many one of the best defensive teams to ever play the game in the history of baseball. That's saying quite a bit. Offensively they have one of the most muscular lineups, powerful in their two through their five spots on their rotation. And their pitching is a contact hitting -- they get the ball in play. When you have that solid defense right behind you that certainly does help. Boston needs to be careful on one front, though, they were acting as if they had won the World Series when they beat the Yankees earlier this week. They need to redirect that energy into the Cardinals this week. And if they're able to sort of channel that, that resilience we have seen all along, we should expect great things from them. They are the biggest odds favorite.

MESERVE: Elizabeth, I'm a Bostonian too, by the way, and rooting for the Red Sox in this one. But Melissa, is there an X factor here? Something that we have not taken into consideration yet that could influence the outcome of this Series?

SEGORA: Well, it's something that has been taken into consideration, for me the biggest X factor will be Curt Schilling. Here is a guy who is literally hanging on by a thread. Curt Schilling has had stitches to stabilize a weak right ankle. If he can get on and if he can stay healthy through the series, he is going to be an X factor.

WALLACE: Melissa, thank you very much for being ON THE STORY. We hope you will come on the program again. I'm told I can ask you one more question. OK, here is my question then. My question is, can the Red Sox handle winning? You have seen lots of people saying this is a team, the fans especially are so used to that sense of choking, in the end losing, how will they handle it if they actually win?

SEGORA: That's a really good question. My contention has always been that if Boston wins the entire city is going to lose their identity. So, we wish Bostonians the best of luck in that capacity.

WALLACE: All right. Well, Melissa, thank you again a second time for being ON THE STORY and we'll look forward to having you on again. I'm following John Kerry this week. You know he is a Bostonian. You know he will trying to watch the Red Sox up in the next several days. We will be right back ON THE STORY right after this. Stay with us.

ANNOUNCER: Dana Reeve, Christopher Reeve's widow was in the news this week. What's her story? More when we return.

(COMMERCIAL BREAK)

ANNOUNCER: Dana Reeve, what's her story? Christopher Reeve's widow Dana is a singer and actress who largely put her career on hold to care for her children and husband after he was paralyzed in a 1995 horse riding accident. An advocate for spinal cord research, Dana serves on the board of the Christopher Reeve Paralysis Foundation. This week she spoke at a rally for John Kerry in Ohio.

(BEGIN VIDEO CLIP)

DANA REEVE, WIDOW: I don't think it's a secret that my husband was a strong advocate for medical research. He had every plan to walk again.

(END VIDEO CLIP) ANNOUNCER: Christopher Reeve died on October 10.

MESERVE: Thanks to my colleagues and thank you for watching ON THE STORY. We'll be back next week. Coming up: PEOPLE IN THE NEWS focusing this week on Ralph Nader and Colin Powell. Straight ahead, what's making news right 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 October 23, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: Now in the news. In Japan, cracked roads and rattled nerves after three strong earthquakes strike in the northwest. The tremors happened one after the other. The strongest measuring a magnitude 6.8. Blackouts, ruptured water mains, collapsed houses and a high-speed train derailment are now reported. Local media reports now say at least three are dead and hundreds injured.
Suicide car bombings kill 11 members of Iraq's security forces. The deadliest attack happened near a U.S. Marine base west of Baghdad. Another bomb went off at a National Guard camp in Samarra, which is north of Baghdad. There are no U.S. casualties.

And six U.S. soldiers are hurt after a roadside bomb hit the vehicle they were riding in. Officials say none of the soldiers' injuries are life threatening.

In Afghanistan, police report a suicide attack in downtown Kabul. The attacker had six grenades strapped to his body according to Kabul's police chief. The explosions blew the attacker apart and left six other people hurt. Two of those injured are peacekeepers.

And with just ten days until the presidential election, President Bush is rallying Republicans in Florida today. Here's a live look at Fort Myers where that event is taking place right now. He visits four areas in that state. John Kerry is stumping today in Colorado and New Mexico. Polls show a statistical tie with just ten days to go until the election.

I'm Betty Nguyen. ON THE STORY starts right now.

JEANNE MESERVE, CNN CORRESPONDENT: Welcome to CNN's ON THE STORY where our journalists have the inside word on the stories we covered this week. I'm Jeanne Meserve in Washington and the story of how different states are on guard for election day terrorism.

DANA BASH, CNN CORRESPONDENT: I'm Dana Bash in Ft. Myers, Florida on how the President is barnstorming this state starting right now and how his campaign is changing in these final days.

KELLY WALLACE, CNN CORRESPONDENT: I'm Kelly Wallace in quieter New York City on the story of how John Kerry also visits Florida today and how he is hoping some familiar Democratic faces will help get out the vote.

LIZ NEISLOSS, CNN CORRESPONDENT: I'm Liz Neisloss, also in New York on the story of that other country with looming elections, Iraq. A dangerous challenge for the United Nations.

ELIZABETH COHEN, CNN CORRESPONDENT: And I'm Elizabeth Cohen in Atlanta, on the story of how the flu is here already and the political debate over the vaccine shortage is getting louder.

We will be talking about all of these stories and we'll be starting now and later in the hour we will talk to "Sports Illustrated" reporter Melissa Segora about how the Red Sox made baseball history and what is going to matter in the World Series. Right now straight to Dana Bash in Ft. Myers, Florida and the Bush campaign.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Can you imagine being more liberal than Ted Kennedy? He can run, he can even run in camo, but he cannot hide.

(END VIDEO CLIP)

BASH: That was President Bush on Thursday mocking John Kerry's hunting trip. He was hunting geese and also mocking what he was wearing, that of course was camouflage and missing no opportunity to use the L word. We are likely to hear that, that is liberal, many times here in Fort Myers. This is the President's first stop of four here in Florida today. I'm Dana Bash, I'm on the story.

WALLACE: Dana, tough job competing with that large crowd behind you. I want to ask you though, you talked to these advisers (UNINTELLIGIBLE). What concerns them most right now?

BASH: What concerns them most now is probably pretty obvious, it is how incredibly close as you know, Kelly, all of the states are. Look at Florida, for example, it's absolutely neck and neck. The President today, for example is hitting four areas that he won big time. A big part of their strategy is, of course, rallying the base. That's what he is doing today. It's really just the game of chess that is so nail-biting for all -- for both campaigns, but particularly the Bush campaign. You see it where the President is going, not just within important states like Florida, but also sort of a map, the nine states that his senior advisers say are definitely up for grabs. That includes six that went Democratic last time that they are still working very hard to get in their column this time.

NEISLOSS: It sounds like a Red Sox pep rally behind you. What are the issues that are going to make the difference? What do you see the campaign talking about in terms of trying to get out and squeak out whatever little edge they can?

BASH: Well, Liz, it's interesting to see what President Bush did yesterday. The campaign sort of shifted not on the issues they're talking about but the way that they're framing them. The President gave a speech, his advisers said it would be retooled, a different, new stump speech. The ideas were not new but the way he is framing them is basically speaking directly to the voters. Appealing directly to them, saying you have a choice. This is not just about tax cuts or taxes but about your family budget. Not just about terrorism or something that seems far away but hard to grasp, but about your security. That's the way the President is framing it now. That is the way he is likely to frame it when he starts his speech right behind me today. That is the way that they hope to connect with voters. It's essentially what his campaign calls his closing arguments to try to beat out John Kerry. Again, still though, making it clear every time and time again that he thinks John Kerry is too liberal and that his record proves that he is somebody who is big government. They think that is really going to help, especially with what he is trying to do today, which is get the base out.

COHEN: Dana, this close to the election, does President Bush have a 24/7 pedal to the metal kind of schedule?

BASH: You would think so, Elizabeth. This past week, I'll just give you an example, certainly the President had a lot of stops. He went to several states. All of the states really that I mentioned just now that are important. But he was home for dinner three of the nights of the past week. Some Republicans privately are asking why he did not, for example, have a night rally in some of these important states like Pennsylvania, like Ohio. Why he went home. The Bush campaign says, look, they know what they are doing. They are going to be out there aggressively next week. They don't want to burn out their candidate and also point out that John Kerry does not have a more aggressive schedule than President Bush does. But certainly there have been some conversations with some Republicans who have been questioning why the President has not been working through day and night at these rallies.

MESERVE: Dana, the Bush campaign put on the air this week a strong ad known as "the wolves ad" chastising John Kerry for proposals to cut the intelligence budget many years ago I understand there's an interesting back story to that ad. Tell us about it.

BASH: Well, this is an ad that the Bush campaign actually cut five months ago when they were beginning to play up what is the biggest issue the President's campaign believed then and still believes now, which is terrorism. He has a 22-point advantage on that. But they decided to hold it because they did focus groups five months ago and they said it was so effective they said this is so effective, that they said if this is so effective, let's hold it to the end. That's exactly what they did. They released an ad, again, called "wolves" and the wolves are supposed to be a metaphor representing the threat. And it talks about John Kerry and a bill that he proposed ten years ago which we should point out never went anywhere which could have cut some intelligence funding. But the idea, the premise is that they believe that John Kerry will be weaker against terrorism than President Bush is. This is their -- almost their final punch. They have another ad coming out last week which is the final punch they say. It's going to be a very strong ad. Unclear if it will be on the negative side, if you will, as opposed to the positive that perhaps the campaigns like to end on. Pumping up their candidate as opposed to talking about their opponent.

WALLACE: Dana, here is something that is surprising. It seems a lot of Republicans, President Bush not spending a lot of time recently in Ohio. What's the deal with that?

BASH: That's what Ohio Republicans want to know. He was -- last time President Bush was there before yesterday was October 2nd. That was about 19 days that President Bush was not there. This is a very important state electorally. It has 20 electoral votes, that's a lot when you talk about the way the map is shaking out. And it's also historically very important to Republicans. It's a state, though, that has lost a lot of jobs. The President has been there a lot throughout the past year and a half. But the Bush campaign says don't worry. We are going to be back. We know what we are doing. They point out, Karl Rove points out to us that he's got seven stops there in the last week. The strategy is to get a lot of momentum at the end but there are some Ohio Republicans who are worried that he had this absence. While he was gone John Kerry was there five times talking about the job loss, talking about the fact that 200,000 people in that states do not have their jobs since the President took office. So there is some questioning of that strategy in the Republican world.

NEISLOSS: But Dana, if there is so much talk about how tight the race is and how close it could be, some people fear a deadlock, are you hearing behind the scenes talk about what will happen if there is a deadlock? Is it going to be a deja vu of 2000?

BASH: Certainly everybody is preparing for that. We sort of joke on the campaign trail, we countdown the days to the election, we countdown to the days until the recount starts. But we are crossing our fingers that does not happen. You hear stories, you see what's going on. Both sides are beefing up their legal operations in all of these battleground states. Lawsuits have already been filed here in Florida. But really they feel that if they keep pushing, particularly in these states, you know, again, it's a chess game. Nobody knows what's going to happen. But the Bush campaign is becoming a little bit more convinced that some of the blue states, states that have not gone Republican in a long time like Wisconsin, maybe Minnesota maybe even Iowa, are breaking their way. They hope if that shows in the next couple of days, perhaps other states also follow.

WALLACE: Dana Bash doing a great, amazing job battling with a few thousand people it seems there.

BASH: I'm used to it.

WALLACE: Exactly. Great job there. Well we are going to stick around with you in a second. Now we are going to turn to John Kerry. He's in Colorado. He'll be going to New Mexico and he will be making his way to Florida later today. I'm back on the story of the Kerry campaign right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN KERRY, PRESIDENTIAL CANDIDATE: The President says he is a leader. Well, Mr. President, look behind you. There's hardly anyone there.

(END VIDEO CLIP)

WALLACE: Democratic presidential candidate John Kerry in Iowa this week keeping up a steady drum beat of attacks against the incumbent and his policies. Welcome back. We are ON THE STORY.

BASH: Kelly, you know, I wanted to ask you, the Bush campaign is very focused not only on where they go but what they do in these days. You hear President Bush behind me at this large rally, but Bush officials are saying it's not just going to be this in the last week, he will also have smaller more intimate events because they think that is also effective. What is the Kerry campaign strategy in how he is going to spend this week?

WALLACE: Well, it is similar, Dana, because it was interesting. We saw Senator Kerry doing a number of policy speeches this past week as opposed to these big rallies. And reporters are even asking Mike McCurry, the top spokesman for the campaign what is the deal here? They feel there are still, believe it or not, some people who are just tuning in. And so they wanted to have the senator talking about substantive issues like women's issues, talking about leadership on international policy. Also having him talk about other health care matters so that they can sort of appeal to people who, believe it or not, might just be tuning in. Hard to believe that's the case. And then this coming week you will see a little bit of that but have him move more to the big rallies two to three rallies a day to really sort of pump up the volume, energize the base and get out the vote.

MESERVE: He also will be using surrogates, too, isn't he Kelly?

WALLACE: Jeanne, he is getting help, indeed. First, we should mention, Al Gore, former vice president Al Gore, he will be in Florida on Sunday. This is interesting because it could be sort of a controversial move having Al Gore go out there. But the campaign feeling that he can go out and particularly go to African American churches and really energize Democrats, energize African Americans, bringing up what happened in 2000. Jeanne, you know, still a lot of anger on the part of Democrats in Florida who believe they lost or this election was stolen from them. Then you will have the biggest Democrat of them all -- former President Bill Clinton. His first appearance since recovering from heart bypass surgery. He will be in Philadelphia with Senator Kerry on Monday. Then we understand he will do other traveling including Florida. One senior Kerry adviser is saying there is no one who energizes the Democratic base like Bill Clinton. So they are thrilled, Jeanne, he is turning out.

NEISLOSS: So will these celebrity campaigners help Kerry define who is Kerry? Which seems to have been a problem for his for a while defining himself. So is that part of the deal?

WALLACE: Well, Liz, that's a great question and a great point. It does not seem that they will help to define John Kerry. What it seems they will do is really try to energize Democrats, maybe energize some African Americans. There's been some sense that the African American community is not totally excited about John Kerry. Try to encourage Democrats about the stakes they believe are really here in this election and get them to the polls. But this has been the biggest issue for John Kerry, defining himself. Trying to make a case for why people who are angry with President Bush but who have not quite gotten behind the Kerry candidacy. And time is running out. I have aides saying people don't know who John Kerry really is. And they know they don't have a lot of time to answer that question for some of these undecided voters.

COHEN: Kelly, earlier in the show we saw this Bush ad that they are calling "wolves" where wolves are in the forest and it's supposed to make voters feel, gee, is John Kerry really going to keep us safe, and raise all sorts of national security issues. How does Kerry plan on counteracting those kinds of ads?

WALLACE: Well right away, Elizabeth, they talked -- put out a statement, called this, quote, "a desperate move by the Bush/Cheney campaign." Saying it will do anything to take attention away from what the Kerry campaign calls President Bush's quote "failed record." then they issued their own response ad, which is basically the tit- for-tat game we are seeing from both sides. They think this could backfire on the Bush Cheney team, but we can tell you this really gets to the heart of a concern for the Kerry campaign. They know that senator Kerry continues to be significantly behind President Bush in polls when it comes to the question who can keep you safer? Who can better handle terrorism? They have been trying everything they can. They have Kristen Breitweiser, a September 11th widow, as a very, very prominent speaker out there who has endorsed John Kerry, appearing now in one of his television ads. What they are trying to do in the final days is raise more and more questions about the President's handling of terrorism before and after September 11th hoping that plants seeds of doubt in some of these undecided voters minds. But, Elizabeth, they know this gets to the heart of a big challenge for Senator Kerry.

BASH: Kelly, we were talking about celebrity surrogates. I should point out that Arnold Schwarzenegger, we're told, is going to be in Ohio with President Bush the last weekend before Election Day. But I wanted to talk about terrorism. What Bush aides say is that they are thrilled that John Kerry is talking about terrorism because he is playing on their turf. He has a 22-point advantage about that. Every time he talks about terrorism, every time that's the Kerry headline, it's President Bush's - on his watch 5 million Americans have lost their health insurance and he's not talking about the millions who have lost jobs or the economy. How much is that a concern in the Kerry campaign?

WALLACE: Well, you know Dana, the Kerry advisers, they sort of say the voters are savvier. They can think about two things at once. In fact, Senator Kerry has a new line where he says we need a president who can do more than one thing at one time. They think people are focused on Iraq and terrorism as well as focusing on these domestic issues, the economy, health care and other issues like that. But there's no question, every time the dialogue is about terrorism, national security, the sense is that it's in the advantage of the President. But Dana, these Kerry advisers know they have to close the gap and they have to sort of answer questions that voters might have about John Kerry's handling of terrorism, handling of Iraq. So they feel they have to continue to pound away and raise questions. And they sort of look at the headlines and take information out in news stories where they feel the President is vulnerable. It remains to be seen if this is going to pay off, but that will be their strategy in the next several days. Hit the President hard on Iraq and terrorism while at the same time trying to keep the dialogue on the issues that Democrats usually have an advantage on, health care, economy, et cetera.

COHEN: Well, our Dana Bash is going to be on to the next campaign stop. Dana, thank you so much for joining us and for dealing with that loud crowd behind you.

BASH: Thank you.

COHEN: Now, one late-comer to the campaign caravan has been the flu vaccine shortage. Here's how political cartoonist Mike Keefe of the "Denver Post" views it. John Kerry is pointing at the flu vaccine syringe sand saying it is three quarters empty. And George Bush is on the other side saying it is one quarter full. All depends on how you look at it. I'm back on the flu story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BILL FIRST, (R) TENNESSEE: I hope that you and others make it very clear that I obtained my flu shot before the shortage was announced before it was known, before anyone knew anything about it.

(END VIDEO CLIP)

COHEN: That's a reminder of how political flu shots have become in recent days. The Republican leader in the U.S. Senate Bill Frist of Tennessee is painstakingly explaining he received his flu shot before the flu vaccine shortage was announced. Welcome back. We're ON THE STORY.

MESERVE: Elizabeth, it is not like this problem came out of the blue. Officials have known for years there were disincentives to manufacturer vaccine, that they were using antiquated technologies, so who gets the blame?

COHEN: Well, there's probably enough blame to go around, actually, Jeanne. There were reports from the General Accounting Office and the National Academy of Sciences and other groups for years saying a shortage is imminent. This is a train wreck basically waiting to happen. They went from having four companies making flu shots in the year 2000 to this company only one is actually distributing flu shots.

The reason is that it's not economically viable. Companies say we don't make enough money off of it, we're going to move on to something else. And President Bush's administration says we have been trying to give them incentives, we have been trying to get more companies involved, but obviously that has not worked. Some people say why didn't the President have a plan B?

NEISLOSS: So what are we talking about? How many flu shots are needed? How many do we have? How many -- how many are missing?

COHEN: Well, officially, when the company called Chiron that was supposed to make about half, nearly half of the nation's flu supply, when it was found some of those might be contaminated, that was 48 million shots that suddenly got yanked off the market. The government has gone to Canada, got 1.5 million there. They are hoping to get another 2.6 million from another company, Aventis in January. So in drips and drabs they are trying to make up that 48 million, which is nearly half the nation's supply. But they're not even going to come close. It takes months and months to make the flu vaccine. It's a painstaking process. There's no way they're going recoup those 48 million.

WALLACE: Elizabeth, put this in perspective for us, because this is getting so much attention in the newspapers, on television, in fact, the cover of one of the New York papers today, flu outbreak up in Harlem. How serious a flu season could we have this year? Give us some context.

COHEN: Well, unfortunately I don't have a crystal ball, so there's no way to know how serious the flu season is going to be. If I did I could make a lot of money off of that. It's very difficult to predict from year to year how bad it's going to be. Right now...

WALLACE: Do you have a sense, though, Elizabeth, that this could be more dangerous or a bigger threat than years past for any reason?

COHEN: No, there's no reason to think that except for fewer Americans will be vaccinated than, say, last year because there's less vaccine available. There's something called herd immunity, you want to get as much of your herd, as much of the country immunized. And then actually we protect each other.

If I am immunized and I see you and I shake hands with you, I won't give you the flu, because I've been immunized. Or at least hopefully that's how it works. So that's obviously going to be a problem, but right now, as of today, only about nine states have seen flu activity. It's only sporadic activity. The Centers for Disease Control says that is less than usual for this time of year. So there's no reason to expect that the flu season is going to be any worse than any other year.

MESERVE: Elizabeth, somebody said to me they were pessimistic that anything was going to change unless it was a bad flu season and a significant number of people died because they did not get their flu shot. Do you share that pessimism or do you think this really could turn things around in terms of the general preparations for flu season next year and beyond?

COHEN: You know, Jeanne, I go back and forth. In some ways I think, wow, half the nation's flu shot supply yanked out in one fell swoop. That will make things change. But then I think, you know, this is such an incredibly difficult problem. Because what the government would have to do is either step in and say all right, private companies, you are not interested in making flu shots, we're going to take it over, we will make it. But that is probably not going to happen. That would take a lot of political will to say that the government is going to take over flu shot supply.

Another thing they could do is say to private companies make your flu shots, and we promise if you have some left over, as often happens, believe it or not, they have some left over at the end of the year, and they can't use it the next year because the strains are always changing, we will buy it from you. We will spend millions of dollars buying back completely useless flu shots. That would also take a lot of political will.

What taxpayer wants to hear we are spending millions of dollars on useless flu shots? So it would be a very -- some huge steps would need to be taken in order for this not to happen again. I don't really see that anyone necessarily is going to have that kind of courage or foresight.

NEISLOSS: So, what is the medical advice here? What are the elderly being told if they cannot get a shot? Do they stay at home and wear a mask? What's the advice?

COHEN: Well, the advice from the federal government is actually don't stand in these incredibly long lines. Some people actually have gotten very sick. Some elderly frail people have stood in line for hours, and it's been a problem. So, they're saying there's a little bit of time here. It's okay. Don't panic. There are more shots coming out all the time.

The way the flu shot system works, and I think a lot of people don't know this, the government or the private companies don't just dump a bunch of flu shots on the market in October and say, OK, this is it. They come out sporadically throughout the season over the next couple of months. So there is going to be more out there.

And what people can do, if they can't get a shot or if they're going to go, say, visiting your grandmother and she has not had a shot, wash your hands well. Make sure you're not sick. That's about the best you can do. There are some anti-viral medicines that are not in short supply so if someone does get the flu they can immediately go to their doctor. And hopefully these antivirals can help them.

MESERVE: From flu to what some state and local governments are prescribing for Election Day security. Back on that story in just a moment.

And baseball. We'll ask "Sports Illustrated's" Melissa Segora whether Red Sox fans will be celebrating next week, too.

And the United Nations oil-for-food scandal. Elizabeth Neisloss on following the money trail from Iraq to Europe and the United States. All ON THE STORY.

(COMMERCIAL BREAK)

NGUYEN: Good morning. I'm Betty Nguyen at CNN world headquarters here in Atlanta. In the news now, U.S. forces in Iraq say they have nabbed a major insurgent leader. The senior member of Abu Musab al Zarqawi's inner circle is in custody after an overnight raid in Fallujah. Five other suspected terrorists were caught in that operation. Multinational forces have been pounding the militant stronghold of Fallujah for several days.

A series of earthquakes has rocked northwestern Japan. The first had a magnitude of 6.8 followed by some strong aftershocks. At least one person died though some local media say three are dead. Buildings have crumbled, water and electrical services are down and a bullet train jumped the tracks.

In his weekly radio address, President Bush focused on homeland security. He says he is supporting some changes recommended by the September 11 commission.

(BEGIN AUDIO CLIP)

BUSH: Congress needs to create the position of the national intelligence director, with strong authority over the personnel and budgets of our intelligence agencies. These and other reforms are necessary to make our intelligence community more effective and to stay ahead of the threats. My administration has sent proposed legislation to Capitol Hill and we are working with Congress to pass a good bill. I urge Congress to act quickly so I can sign these needed reforms into law.

(END AUDIO CLIP)

NGUYEN: Now, he also used the broadcast opportunity to accuse John Kerry of having a fundamental misunderstanding of the war on terror.

That is the news here from Atlanta. Now ON THE STORY continues.

(BEGIN VIDEO CLIP)

ASA HUTCHINSON, HOMELAND SECURITY UNDERSECRETARY: At every area of concern we enhanced, we've ratcheted up the security measures that are in place.

(END VIDEO CLIP)

MESERVE: Homeland Security Undersecretary Asa Hutchinson and others have been warning for months that the U.S. is on guard for the campaign and election season. But come Election Day it's going to be cities and states keeping watch, too. Welcome back, we are ON THE STORY.

COHEN: Jeanne, calibrate for us just how much concern is there about terrorist activity on Election Day? Is it similar to all of these warnings that we have heard over the past several months about activity during the summer?

MESERVE: Well, as you know, there was a lot of concern after the Madrid bombings in particular that something would be done prior to Election Day to try and disrupt the electoral process. There were some pretty urgent words from some members of the administration. We saw the FBI and also ICE, Immigrations and Customs Enforcement stepping up surveillance and stepping up interrogations and so forth. But what we are told today is that there is no specific information indicating that polling station are going to be the target of any sort of threat on Election Day. They have nothing specific along those lines at all. There was some CIA informant who had given them some information about the possibility of strikes related to the election. That informant has now been discredited officials say. But they are still concerned. They say there is enough information coming up from different sources that they believe there is some measure of threat. But the federal government is playing this fairly quietly. I asked just yesterday are you taking any additional steps around the elections? Are you going to step up combat air patrols? Are you going to step up port security and the like? I was told, no, there are no special steps taken by the federal government in this instance though they remain concerned about the possibility as they always are.

NEISLOSS: You have to think there's not a great desire to talk a lot about this. There's obviously a very fine line between talking about the dangers, talking about the threats and voter intimidation. Do you have the feeling that the political season is playing at all into how this is being handled?

MESERVE: It definitely is playing some part in it, I know I'm preparing a spot on election poll security. I went to the Department of Homeland Security. I requested an interview and I was told no, we're not putting anybody out in public, nobody is going to be talking about this issue in explicit terms. The fact is that elections in this country are not run by the federal government. They are run by the states, they are run by the localities. And the federal government has not put out any guidance to the states and locals about how to handle things. However the National Governors' Association, the National Association of Secretaries of State did draw up a template which it sent around to election officials making suggestions how they should deal with communications, about alternative polling sites in case there is some kind of disruption. What I found in talking to secretaries of state and local registrars around the country is that what they are doing varies very widely. There are some that are saying we are not doing anything any differently than we did other years. Some are saying they are going to have some undercover police present around polling places. Some say they're stepping up security generally in the community. And others saying they are just not doing anything different at all. So it runs the gamut. In Massachusetts, I might add, you will see police in the polling places. But that's because in that state there is, in fact, a state law mandating that there be armed officers at polling sites. But that's the exception to the rule here. A lot of election officials are very concerned about that perception that you mentioned, Liz, that there could be voter intimidation. Some officials say to me frankly what they are more concerned about this year is the sort of intimidation they might see from partisans at the polls and from all the lawyers which both Democrats and Republicans say they are going to have on hand to police for any possible polling irregularities.

WALLACE: Jeanne, you know, one thing you hear from voters when you travel on the campaign is we want to see you all do more fact checks. You have been doing a series of them which are getting a tremendous amount of attention. In fact, one of your most recent after the final debate is getting lots of play. Let's take a listen to that.

(BEGIN VIDEO CLIP)

MESERVE (voice over): For this one night, at least, Tempe, Arizona, was the home of the whopper. Both candidates got facts wrong.

(END VIDEO CLIP)

WALLACE: And I know various news organizations are picking up your lead they loved it so much. But looking at that debate that night, Jeanne, and the issue of homeland security, are both candidates playing too loosely with the facts here?

MESERVE: Well, on homeland security, the criticism is they are not talking enough about it at all. There was a direct question about it in the first debate. It was really given short shrift by the candidates. The people who live and breathe homeland security say hey listen, this is a very serious issue. The candidates are talking a lot about the away game. Talking about what's happening in Iraq. They are talking about Afghanistan. They are not talking about what's happening here except in the most broad and general terms. John Kerry, for instance, has said on several occasions, 95 percent of the shipping containers coming into the country are not being inspected. Well, that's true, but he does not go on to say what he is going to do about it. He doesn't say whether it will be effective, he doesn't tell us whether that's going to bring commerce to a grinding halt. He does not tell us what the price tag on that is going to be and the same criticism of George W. Bush, they are not giving specifics on the homeland security issues. And they tend, the experts say, to view this as something very discreet, as something that involves firemen and policemen when in fact it's a very big and broad issue that deals with much larger issues like immigration policy and it involves the private sector. You just don't hear the candidates talking about this in the specificity that the experts, at least, would like to see.

WALLACE: Well, it's not just the U.S. election looming, whoever wins that election is going to face a massive challenge. Just weeks after being sworn in Iraq's election is set for the end of January. Is the U.N. doing enough to get ready? I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY GENERAL: Regardless of where we stood before the war, what we think about the reasons for the war, I think all our efforts should go into stabilizing Iraq and helping Iraqis take charge of their own destiny.

(END VIDEO CLIP)

NEISLOSS: United Nations Secretary General Kofi Annan calling for an international effort to stabilize Iraq. Meanwhile Iraq's foreign minister complained this week that the United Nations is not doing enough to help prepare for elections early next year. Welcome back. We're ON THE STORY.

WALLACE: Liz, help us understand something. I thought countries pledged money and also pledged that they would send personnel to help with the elections. Is that the case and is it just not people stepping up to what they've already pledged to do?

NEISLOSS: Well, countries have pledged money and part of the problem is some of that money is not coming through. But for the United Nations the big problem is countries are supposed to pledge troops, and they have just haven't coughed up the troops. In fact, Kofi Annan pointedly said this week, look a lot of the countries that are saying the United Nations should get in are not coming out and supplying troops. It's a very tricky issue to offer troops to go into Iraq. Domestically it's not popular in many countries. You have car bombings, you have kidnappings, it's a very tough sell. But this week we did see one contribution come forward. The tiny country of Fiji. And some people might think, Fiji, I'm thinking that might be a place I can go for vacation, but interestingly Fiji, for a small country, is actually a fairly large contributor to peacekeeping troops. But in this case they are giving about 130 troops. The U.N. really needs thousands more for their own protection so it still is undetermined whether the U.N. will be able to go back in in any large numbers.

COHEN: Liz there was some news this week about the oil-for-food program. Can you talk a bit about what that program does and if it's getting into trouble?

NEISLOSS: Well, the program was a massive humanitarian program. In the end it basically sold something like $65 billion worth of oil. And it's now being called an unbelievable leaky sieve for corruption. It is clear that Saddam Hussein had some sort of pay to play scheme going on in order to sell his oil, in order to sell goods to Iraq you might have had to pay a bribe or take some sort of voucher from him. But names are not really being identified yet. There were 4500 names released this week by Paul Volcker, the man who is in charge of the investigation for the United Nations. They are names of companies, but this guy refused to name actual individuals saying I'm not judging guilt or innocence yet. But Volcker has got a lot of competition. He has five congressional committees looking into oil-for-food, there's also a federal investigation. And he said there has not been complete cooperation in getting information from the congressional committees.

MESERVE: So when can we expect to get the definitive word on just how big and how bad this situation was?

NEISLOSS: Well, first I guess it depends on whose word you want to get since we have so many competing investigations. But Paul Volcker, who is this towering guy -- he is 6'8 and looming over the microphones as the press was firing questions at him. And he said I am not going to have anything really ready, maybe an interim report in a few months but nothing until the middle of next year. He has got dozens of countries he is going through, he's got tens of thousands of documents. He had a lot of journalists asking him very specific questions about documents, about individuals. He said, look, I don't know every document that is in this investigation. He is asking for patience. He is warning against leaks. He is worried that some of the clamor and the impatience is going to ruin his investigation.

WALLACE: Liz, you have roamed through the halls of the U.N. and talked to diplomats all the time, how much are they focused on the upcoming election in the United States?

NEISLOSS: It's not something that you hear an awful lot about. Diplomats are very squeamish to talk about any sort of election. They want to stick to the basic issues and they are very scared to go out on a limb on certainly the U.S. election. The U.S. being the big powerhouse of the United Nations.

COHEN: Now, Liz, the funnest part of your week was probably getting to watch Ricky Martin at the U.N. I understand he did not sing but he still had some interesting things to say.

NEISLOSS: Yeah. We had a little la vida loca at the United Nations this week. Ricky Martin who is obviously the sex symbol rock star musician came to the U.N. to talk about something that is a very difficult issue, child sex exploitation. The tourism industry, it's apparently a $7 billion industry. Ricky Martin has become somewhat of a spokesperson for the issue. He said a few years ago he got letters from Harvard students who brought the issue to his attention and he really has been campaigning to uncover what is a big industry. It's in many countries around the world. And he's hoping that his public service announcements, his efforts will really shine a little spotlight on the problem.

WALLACE: Liz, some perks of the job, right? Covering the U.N. you get to cover Ricky Martin.

NEISLOSS: Different from the normal diplomat you could say, sure.

WALLACE: That's right. Well, Liz, we'll leave it there with you. We of course will be talking to you in future weeks and will be talking right to each other after this show.

Up next, a country split down the middle. Polarized, divided, not by politics, but we are talking about baseball here. We are back on that story with "Sports Illustrated" Melissa Segora right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We never gave up! We never gave up!

(END VIDEO CLIP)

COHEN: The chants of "we never gave up" echoing from Boston throughout the Red Sox Nation this week. If the League Championships weren't enough, the World Series begins tonight. Welcome back. We are on the story. Joining us from New York from our sister company, "Sports Illustrated," its baseball coverage team, is Melissa Segora. Melissa welcome to ON THE STORY. How does it look? We have these two teams pitted against each other. Give us an overview. Who is the best? Who has got good defense? Who has got good offense?

MELISSA SEGORA, "SPORTS ILLUSTRATED": Well now we are expecting a high voltage series. That's for sure. So far in this postseason we have seen twice as many home runs as we did during the regular season. Both these teams, both the Red Sox and the St. Louis Cardinals have explosive lineups both powerful, both capable of muscling the ball whenever, wherever they would like. As for pitching, that is going to be the wild card in the series. Defensively St. Louis is stocked with lots of Gold Gloves out there. And the Red Sox have made some trades that have definitely helped to solidify their defense this year.

MESERVE: Melissa, are there some particular players we could keep our eye on?

SEGORA: Absolutely. For the St. Louis Cardinals look to Albert Pujols. He's a guy, when I talk to scouts, I ask what is his weak spot? How do you get this guy out? They said if you can answer that question, you can have a job in Major League Baseball, that's for sure. You pitch him high, you pitch him low, you pitch him inside, you pitch him outside, he is going to knock the ball. As for the Red Sox, sort of a player that flies under the radar a little bit is their leadoff hitter Johnny Damon. He is a guy who has a lot of speed on the base path. If he gets on base he can distract pitchers because he is so speedy and can steal a base.

WALLACE: Melissa, true confessions, the New Yorker on this panel here. As you can imagine, there's upset in our household and others about the New York Yankees up three games to none and then losing to the Boston Red Sox. I know you have been talking to people. What is the sense behind the scenes of what went wrong for the New York Yankees?

SEGORA: Well, you know, there was a lot of speculation all year long as to how the Yankees are going to hold up. They won over 100 games, yes, but there were some chinks in the armor all along. There were a lot of questions surrounding the Yankees pitching. And that is the one component that did fall apart in the series. The one thing I read yesterday is from the "Daily News" Mike Lupica saying these are really George Steinbrenner's all-stars and money really can't buy you love and it certainly can't buy you heart. What we saw from the Red Sox/Yankees series is this, that the depth of George Steinbrenner's pockets did not make up for the strength of spirit for the Boston Red Sox. They were really a resilient team and just had a lot more heart out there than I think people expected.

COHEN: Well, Melissa, as the Bostonian on this panel, I'd like to ask you, you talked about that heart, you talked about that spirit, how much is that expected to help the Red Sox in the World Series?

SEGORA: I would actually consider that a key component. On paper the St. Louis Cardinals look like the much better team. They're defensively considered to be by many one of the best defensive teams to ever play the game in the history of baseball. That's saying quite a bit. Offensively they have one of the most muscular lineups, powerful in their two through their five spots on their rotation. And their pitching is a contact hitting -- they get the ball in play. When you have that solid defense right behind you that certainly does help. Boston needs to be careful on one front, though, they were acting as if they had won the World Series when they beat the Yankees earlier this week. They need to redirect that energy into the Cardinals this week. And if they're able to sort of channel that, that resilience we have seen all along, we should expect great things from them. They are the biggest odds favorite.

MESERVE: Elizabeth, I'm a Bostonian too, by the way, and rooting for the Red Sox in this one. But Melissa, is there an X factor here? Something that we have not taken into consideration yet that could influence the outcome of this Series?

SEGORA: Well, it's something that has been taken into consideration, for me the biggest X factor will be Curt Schilling. Here is a guy who is literally hanging on by a thread. Curt Schilling has had stitches to stabilize a weak right ankle. If he can get on and if he can stay healthy through the series, he is going to be an X factor.

WALLACE: Melissa, thank you very much for being ON THE STORY. We hope you will come on the program again. I'm told I can ask you one more question. OK, here is my question then. My question is, can the Red Sox handle winning? You have seen lots of people saying this is a team, the fans especially are so used to that sense of choking, in the end losing, how will they handle it if they actually win?

SEGORA: That's a really good question. My contention has always been that if Boston wins the entire city is going to lose their identity. So, we wish Bostonians the best of luck in that capacity.

WALLACE: All right. Well, Melissa, thank you again a second time for being ON THE STORY and we'll look forward to having you on again. I'm following John Kerry this week. You know he is a Bostonian. You know he will trying to watch the Red Sox up in the next several days. We will be right back ON THE STORY right after this. Stay with us.

ANNOUNCER: Dana Reeve, Christopher Reeve's widow was in the news this week. What's her story? More when we return.

(COMMERCIAL BREAK)

ANNOUNCER: Dana Reeve, what's her story? Christopher Reeve's widow Dana is a singer and actress who largely put her career on hold to care for her children and husband after he was paralyzed in a 1995 horse riding accident. An advocate for spinal cord research, Dana serves on the board of the Christopher Reeve Paralysis Foundation. This week she spoke at a rally for John Kerry in Ohio.

(BEGIN VIDEO CLIP)

DANA REEVE, WIDOW: I don't think it's a secret that my husband was a strong advocate for medical research. He had every plan to walk again.

(END VIDEO CLIP) ANNOUNCER: Christopher Reeve died on October 10.

MESERVE: Thanks to my colleagues and thank you for watching ON THE STORY. We'll be back next week. Coming up: PEOPLE IN THE NEWS focusing this week on Ralph Nader and Colin Powell. Straight ahead, what's making news right now.

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